MONTREAL - Quebecers' lust for the good life has them bucking a national trend towards slower alcohol sales as the provincial liquor board reported rising profits and sales despite the recession.
"We haven't felt the economic slowdown," said spokeswoman Isabelle Mirizzi.
"People are consuming more and more better quality wines, especially red varieties."
The Societe des alcools du Quebec said Friday its first-quarter profits rose 12.8 per cent to $187 million as wine lovers drove up sales by 7.3 per cent. The SAQ earned $21.2 million more from the sale of wine, spirits and beer than it did a year earlier.
Sales for the period ended June 20 grew by $37.1 million to $555.1 million compared to the same period in 2008.
The resiliency of the Quebec liquor market is a reflection of a cultural lifestyle, said Mirizzi.
"Quebecers like their wine and have long adapted it to their way of life."
While they aren't willing to give up their good bottle, Quebecers have increasingly consumed their wine at home as they shun restaurants to save money, she noted.
Net sales in its outlets to consumers, retailers and institutions, including restaurants, increased 6.9 per cent to $488 million. Wholesale grocer network sales were up 9.6 per cent to $67.1 million.
In fact, wines remained the drink of choice for Quebecers, accounting for 77 per cent of total alcohol sales. Nearly 32 million litres of wines were sold, up six per cent.
Spirits sold in retail outlets and specialized stores increased nearly five per cent to 4.3 million litres. Beers, cider and other products, including coolers were stable at 3.1 million litres.
In much of the rest of Canada, the economic slowdown and high unemployment have caused several quarters of same-store sales decreases.
"It's a tough environment," said Trevor Johnson of National Bank Financial, who covers the Liquor Stores Income Fund (TSX:LIF.UN), the private operator in Alberta and British Columbia."
"Everybody is just downgrading and that's what is happening with liquor," Johnson said in an interview.
Ontario sales have softened as well, especially in regions of the province hardest hit by the recession, including those dependent on the auto sector. The Liquor Control Board of Ontario had forecast the recession would cause sales in the fiscal year ending April 2010 to decrease by 2.5 per cent.
In the first quarter, ended June 20, sales rose 2.3 per cent to $950 million. Spirits were up the most, gaining 4.3 per cent to $346 million, beer grew 3.8 per cent to $224 million, and wine gained 1.1 per cent to $330 million. About 80 per cent of beer is sold in Ontario through the retail network Beer Stores.
Spokesman Chris Layton said Ontario consumers are looking for value by purchasing larger volumes of cheaper priced products. It's a similar trend to the recession of the early 1990s.
"They're stretching their dollars, they're not buying the more expensive items," he said, adding that sales of premium Ontario VQA wines have soared by double-digits.
