|Illinois residents tapped out with beer, study says|
|Written by Drew Zimmerman, Daily Vidette Senior Staff|
|Tuesday, 10 July 2012 17:58|
Per capita consumption of beer and beer shipments are both down in the state of Illinois, according to a study by the Beer Institute based out of Washington D.C.
The per capita consumption rate fell from 56 six-packs to 53 from 2007 to 2011. This decrease can be attributed the state of our economy, according to Bob Myers, president of government relations for the Associated Beer Distributors of Illinois.
"When we are in a good economy we find that people spend more for beer, buying high-end, imported or craft beer," Myers said. "In a downturned economy they go with low-level or domestic beer."
Taxation also plays a strong role in beer consumption, he added.
"Beer is a unique product in that it’s taxed at every step of production," Myers explained. "A beer can be taxed five times before the consumer pops the top on it."
First, the manufacturer pays a federal excise tax. When the brewer sells to the distributor a state excise tax, which is 23.1 cents per gallon for the state of Illinois, is paid. In Chicago, a Cook County tax of nine cents per gallon is paid, as well as a Chicago excise tax of 29 cents per gallon. Finally, there is the state sales tax paid by the consumer.
"By the time it reaches the consumer, 45 percent of the cost is taxed," Myers said.
Illinois has the highest beer tax rate in the Midwest, according to Myers. This is partially due to beer tax increases made by former Governor George Ryan in 1999 and Governor Pat Quinn in 2009.
Wisconsin has a tax of six cents per gallon while Kentucky’s tax is eight cents per gallon. These tax differences cost the state of Illinois $1.5 million in cross-border sales, Myers added.
In addition to economic issues, factors such as the weather also play a role in beer distribution. Bad weather on holidays with significant beer sales, such as Independence Day, has a negative effect on consumption.
Although beer consumption is down, beer sales have been up in 2012 by 3.9 percent.
On a local level, 707 Liquors in Normal has offered many sales on beer and hard liquor alike in order to increase sales.
According to Surjit Singh, owner of 707 Liquors, the store offered a fourth of July sale on various beers. Since half of the store’s sales are on beer and the rest on liquor, there are also many discounts and sales on hard liquor products such as Captain Morgan and Jack Daniels.
The decrease of shipments in Illinois dropped the state out of its long-held fifth position to sixth in the nation behind California, Texas, Florida, New York and Pennsylvania.
New Hampshire was the highest ranked state by per capita consumption. It was followed by North Dakota, Montana, South Dakota and Nevada.
According to the Beer Institute website, the organization was created in 1986 to represent the
industry before Congress, state legislatures and public forums across the country. It is committed to developing sound public policy that focuses on community involvement and personal responsibility.