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Alcohol sales zoom 62%

Changes in Utah’s population among reasons for increase

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Despite Utahns' reputation for drinking little, state liquor stores and licensed restaurants are now selling a staggering 62 percent more alcoholic beverages by volume than they did a decade ago.

But such increases may not mean that Utahns are drinking more alcohol overall, just that they are drinking more of the "harder" alcoholic drinks available from the state liquor and wine stores.

The big hike in sales is not just from growth in population. When controlling for that by calculating consumption on a per-person rate, those sales have foamed up by 24 percent since 1996.

"Now it seems like every day is the day before Christmas" at crowded state stores, said Kenneth Wynn, director of the Utah Department of Alcoholic Beverage Control.

To explain, the Beer Institute estimates that beer sales here — including the low-alcohol (3.2 percent) beer sold in grocery and convenience stores — dropped 4.7 percent over the past decade.

Because beer far outsells other types of alcohol here, when the sales decrease from beer is coupled with the increase in purchases of other harder drinks, the result is an overall 2.5 percent drop in per-person consumption of alcohol of all types since 1996.

Helping to confirm that, the Utah Division of Substance Abuse and Mental Health says its annual surveys show that overall use of alcohol has decreased over the past decade. "So, I think maybe we are seeing a change in where people are buying alcohol, with more people going to state liquor stores," said Brent Kelsey, assistant director of that division.

Wynn said similar shifts may be happening nationally. "I went to a convention recently where August Busch IV (president of Anheuser-Busch, Inc.) talked to us. He said his company's beer sales have been down 4 or 5 percent over the past five years or so, and that his company is looking to go into the liquor business" with some harder drinks.

Wynn said about increases of state sales, "We just kind of shake our heads and don't know why it is happening. We just know that there is a growing market, and we are trying to keep it supplied."

That increase is also benefitting the state treasury by nearly doubling collections over the decade from a special tax on alcohol to help the school lunch program; more than doubling the profits from liquor stores, which go to the state general fund; and more than doubling the sales taxes from alcohol. Annual treasury benefits from such sales are now nearly $70 million.

Some changes in Utah's population may also help explain, in part, the increase in sales of harder drinks.

Among them is that the percentage of Utahns who are members of the abstinence-preaching The Church of Jesus Christ of Latter-day Saints is decreasing. The number of LDS members who consider themselves active in the church also appears to be dropping. The number of tourists to Utah is increasing. Alcohol is now available in more restaurants. And the variety of products available here is increasing.

The data

The sales increase at state liquor stores was found by a Deseret Morning News analysis of state data for years between 1996 and 2006. Preliminary data for fiscal 2006, which just ended on June 30, was obtained through a state open-records law request.

The state calculates the per-capita consumption of alcohol by dividing the number of gallons sold through the state liquor store system by the state's population each year. That does not include sales of low-alcohol (3.2 percent) beer at grocery and other stores.

Per-person consumption in Utah increased from 1.59 gallons per person in 1996 to 1.96 in 2006 — a 24 percent increase.

The actual, overall gallons of alcoholic beverages sold by state liquor stores and licensed restaurants increased even more as Utah's population grew — from 3.17 million gallons in 1996 to 5.13 million gallons in 2006, a 62 percent increase.

Sales of some types of beverages increased more than others. The sale of "heavy beers" sold in liquor stores increased 139 percent over the decade; rum was up 107 percent; and wine by 63 percent.

Among other types of drinks, vodka was up 54 percent; tequila, 52 percent; "miscellaneous liquor," 43 percent; brandy, 42 percent; gin, 20 percent; and whiskey 14 percent.

Some think that Utahns actually consume more than even those figures suggest. For example, William Christoffersen, president of the Utah Beer Wholesalers Association, said many Utahns likely bring back big supplies of heavy beer when they visit neighboring states because taxes and costs are much lower there.

Despite increases in the sales of harder liquor, when other data for regular beer sales is added, it appears that overall per-capita alcohol consumption dropped over the decade.

The Beer Institute estimates that per-capita sales in Utah of all beer were actually down between 1996 and 2005 (the last year with data available) — from 12.8 gallons per person to 12.2 gallons in 2005, a 4.7 percent drop.

When its figures for beer are added to state figures for wine and spirits for the period from 1996 to 2005, it shows an overall drop of 2.5 percent in per-capita consumption for alcohol of all types.

Kelsey said state surveys on alcohol use and abuse also consistently show drops in recent years. For example, the number of Utahns reporting they had used alcohol within a month of being surveyed dropped from 27.9 percent in 1996 to 20.8 percent in 2005, a 25 percent decrease.

Also, studies say Utahns still drink the least alcohol of all Americans — probably because the LDS Church preaches abstinence, and more than 70 percent of Utahns are LDS.

Estimates for 2004 from the Beer Institute for alcohol of all types ranked Utah dead last among states in per capita consumption, at 14 gallons per person. The next lowest state was Kansas at 20.7 gallons.

Nevada was No. 1 with 40.4 gallons per person. The national average was 24.9 gallons per person — or 78 percent higher than in Utah.

The benefits

But the increased sales at state liquor stores have fattened the state treasury.

Utah charges a special 13 percent tax on such sales to help support the school lunch program. Its collections increased 93 percent over the decade, from $10.7 million in 1996 to $21 million in fiscal 2006.

Profits from sales at state liquor stores also go into the state general fund. They increased 112 percent in the decade, from $5.3 million in 1996 to $11.6 million in 2006.

And the state and local governments split money that comes from sales tax collected by state liquor stores. It increased 118 percent over the decade, from 22.2 million 2006 to $47 million in 2006.

In short, local governments and schools are gulping nearly $70 million a year in tax benefits from state liquor store sales.

But alcohol comes with a price, too. Kelsey said that while overall alcohol use appears to be declining, the cost to taxpayers to treat problem drinkers is increasing. He said that is because privately funded treatment is disappearing. "So it's become a public taxpayer-funded system," he said.

"Because services are not as available, a lot of people go to emergency rooms or end up in jails or prison — where treatment is the most expensive," Kelsey said.

When asked to guess why state liquor stores are selling so much more per Utahn, Wynn said, "The demographics of the state are changing."

One such change is that the percentage of Utahns who are LDS is diminishing.

Sam Otterstrom, a Brigham Young University geology professor who watches demographic trends in Utah, said that in 1995, 75 percent of Utahns were LDS. Now, the latest figures show that 71.1 percent are. Of course, as more people who are not LDS move to Utah, that could help increase drinking here or consumption of harder drinks.

The percentage of LDS members who consider themselves "very active" in their religion also may be decreasing. Longtime Utah pollster Dan Jones said that over the past 20 years, he has noticed a trend where fewer LDS members consider themselves "very active," while more consider themselves "somewhat active."

A survey he conducted for the Deseret Morning News and KSL last month showed that 83 percent of those LDS members questioned considered themselves "very active," 12 percent considered themselves "somewhat active" and 5 percent considered themselves "not active."

Otterstrom also suggests that the increasing number of tourists to the state could be partially behind the increased drinking figures.

In 1996, Utah had 17 million visitors from out of state. In 2005, it had 18.2 million — an increase of 7.1 percent, according to the Utah Office of Tourism.

Wynn adds, "After the Olympics, we were discovered. There are more tourists. The Sundance Film Festival got bigger. It used to be that after Sundance, it would slow down here and my guys in the warehouse could take some time off. But it isn't that way anymore." Attendance at the Sundance festival went from 15,500 in 1996 to 53,000 in 2006.

Leigh von der Esch, director of the Utah Office of Tourism, said of the increase in per-person alcohol consumption: "Absolutely, I think tourists are tied to it."

But she said another development may have even more to do with it: an increase in the number of restaurants with liquor licenses. Wynn added, "I'd guess that maybe there is a quarter more licenses" that have gone to restaurants in the past decade.

"I enjoy an occasional glass of wine," von der Esch said. "The selection in most restaurants is much better than it was years ago, so maybe more people decide to enjoy a drink. ... When we have Wine Spectator magazine choose the Blue Boar restaurant (in Heber) as its favorite restaurant anywhere, you know there have been changes here."

Wynn also said that while the state has added only a couple of liquor stores in the past decade, many have been expanded — sometimes doubling in size — to offer a wider variety of products.

"And people are tending to buy up" to higher-priced beverages, he said. "Instead of buying a bottle of tequila for $15, they are buying a bottle for $40 or $50."

Wynn adds he does not well understand why that is happening. "I don't know if it is better, or if it is the prestige of buying more expensive items," he said. But he said that is helping to increase profits and taxes collected.

E-mail: lee@desnews.com