Convergence in National Alcohol Consumption Patterns: New Global Indicators

Abstract

With increasing globalisation and interactions between cultures, countries are converging in many ways, including in their consumption patterns. The extent to which this has been the case in alcohol consumption has been the subject of previous studies, but those studies have been limited in scope to a specific region or group of high-income countries or to just one or two types of alcohol. The present study updates earlier findings, covers all countries of the world since 1961, and introduces two new summary indicators to capture additional dimensions of the extent of convergence in total alcohol consumption and in its mix of beverages. It also distinguishes countries according to whether their alcoholic focus was on wine, beer, or spirits in the early 1960s as well as their geographic regions and their real percapita incomes. For recent years, we add expenditure data and compare alcohol with soft drink retail expenditure, and we show the difference it makes when unrecorded alcohol volumes are included as part of total alcohol consumption. The final section summarizes our findings and suggests that further research could provide new demand elasticity estimates and use econometrics to explain the varying extents of convergence over time, space, and beverage type.

Global Alcohol Markets: Evolving Consumption Patterns, Regulations, and Industrial Organizations

“…If consumers switch from quantity to quality of consumption as their incomes rise, the inverted U-shaped curve would be flatter for alcohol expenditure. Holmes and Anderson (2017b) indeed find that expenditures on alcohol rise with income at low income levels (as with volume), but do not decline with income growth at higher income levels ( Figure 3).…”

“…When alcohol expenditure data are disaggregated into the three key beverage types, they reveal that while both wine and beer expenditures rise with aggregate expenditure, spending on spirits peaks at an aggregate national expenditure level of $27,800 per capita (in 2015 US dollars) and declines thereafter (Holmes and Anderson, 2017b).…”

Australian wine industry competitiveness: why so slow to emerge?

“…For countries whose trade costs are too high for their wines to be internationally tradable, production is determined by the domestic demand for wine – which historically has differed greatly across countries, even controlling for income differences (Holmes and Anderson ). Domestic demand is also relevant to smaller firms unable to cover the fixed cost of entering export markets, and even to a complete industry if it is too small to be able to afford generic promotion abroad.…”

“…Since the early 1960s, Australia's wine consumption per capita has increased faster than per capita income, at the expense of beer – the opposite of the global trend: the share of wine in Australia's total alcohol consumption was only half that of the world as a whole in 1960 but, by the mid‐1970s, annual wine consumption per capita was twice its early 1960s average of 7 L in Australia, and it reached three times that earlier level by the turn of the century (Holmes and Anderson , b). Its per capita consumption level is now above the much‐diminished levels of Argentina, Chile and Spain, and more than half of France and Italy.…”

Introduction to the Issue

“…… In wines more than 100 euro there is no correlation between ratings and price." Terence C. Mills (Mills, 2018) refers to a paper by Holmes, A. J., and Anderson, K.'s Journal of Wine Economics article on "Convergence in national alcohol consumption patterns: New global indicators" (Holmes and Anderson, 2017). He re-analyses the data using techniques appropriate for a composition and "introduces a statistic that can validly track the variation in national shares around the global mean through time.…”