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Tough economic times drive South Africans to cheaper drink

| Wine and liquor

EuroMonitor International's latest market research shows that inflation, rising fuel costs and higher taxation forced drinkers to slash their booze bills last year.

Higher-end whisky and brandy took a dive as consumers turned to cheaper vodka, beer and wine.

"Some low-income consumers are notably shifting to more affordable beer or even to illegally produced alcoholic drinks," EuroMonitor researchers said.

"Many consumers are also shifting towards more affordable options within spirits, such as economy rum and vodka.

"However, some economy spirits are suffering from these trends, with cane spirits notably seeing a 4% total volume decline in 2015."

According to the World Health Organisation, SA has the highest alcohol consumption rate in Africa and one of the highest in the world.

It estimates that South Africa's drinking population consumes 27.1 litres of alcohol per capita per year compared with a global average of 6.2 litres.

However, local experts predict that cash-strapped consumers will continue to cut down on the hard stuff this year.

The latest liquor consumption patterns report, released four months ago by the SA Wine Industry Information & Systems, showed that South Africans consumed almost four billion litres of alcohol worth R96.5-billion last year.

"With a population growth of 2% and annual volume growth of only 1%, the per capita consumption is declining by at least 1% per year," industry analyst Elias Holtzkampt said in the report.

Consumption patterns show that the domestic wine market increased by 7.7% last year due to new female consumers in the sweet red and rosé sector in cities, while the weak rand put a dent in whisky sales, said the research report.

"Most of our whisky is imported, so the minute the exchange rate worsens, whisky becomes more expensive and there is a segment of the whisky consumer [market] that is also price-sensitive," said the local research company's executive manager, Yvette van der Merwe.

But the wealthy are still drinking top-of-the-range whisky.

"The higher income category are not doing too badly because their jobs are more recession-proof than others'.

"You will [also] always have young people who want to make an impression so they would go for expensive whisky just because they can ... just to show off," said economist Dawie Roodt.

He said drinkers in the lower income category were likely to change their spending habits to either buy cheaper alcohol or drink their booze at home.

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