Economy Down, Addictions Up?

Do people drink more or less during a recession?

According to a report from Mintel, a consumer research firm, "sin stocks" historically have performed well during times of economic recession. "Chocolate, cigarettes and alcohol again seem relatively recession-proof," comments Marcia Mogelonsky, senior analyst at Mintel.

Lest anyone think that somehow the tobacco dragon has been tamed after 45 years of public health announcements (surely no one can afford cigarettes anymore?), Mintel documents that "cigarette and tobacco product sales increased 44% from 2003 to 2007 to $103 billion.” Moreover, “as price and tax increases continue to take hold, Mintel projects that the cigarette and tobacco market will grow 28% through 2011 (to $132 billion).”

There is also a bull market for chocolate: “Innovative, dark and premium chocolates are extremely popular, so Mintel expects Americans to continue indulging in this favorite treat. The market research firm predicts 4% annual sales increases each year for the next six years.”

As for alcohol, a mixed picture: “Motivated by high gas prices and expensive bar tabs, more Americans are opting to drink at home. But that doesn't mean they're drinking less. New research from Mintel reveals the market for at-home alcohol is expected to reach $77.8 billion in 2008, a 32% increase from 2003.” Mintel expects in-home alcohol sales to rise as much as 5% per year.

However, earlier studies of the matter have been inconclusive. Melissa Healy reported in the Los Angeles Times that the connection between “hard times and hard drinking isn't clear. In the U.S., a state's alcohol consumption declined by 3% for every one percentage point increase in that state's unemployment rate, according to one study. But another study found that rates of binge drinking went up 8% when unemployment rose 5%. The increase in binge drinking was concentrated most heavily among adults who were still employed.”

In the Los Angeles Times article, Andrew Barnes of the UCLA School of Health Services, estimates that “during this economic decline, those who drink alcohol will consume 12% less (10% less nationally), there will be a 13% reduction in alcohol-impaired driving, and a 1.2% decrease (1% nationally) in the number of people who drink at all. The probability of being a heavy drinker (consuming 60 or more drinks per month) is predicted to decline in California by 31%.”

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