By Nicki Bourlioufas

Australia might be in recession, the worst since the Great Depression, but official data shows alcohol sales are soaring and propping up economic activity at a time when spending is falling on many other goods. But few Australians admit to drinking more.

When Australia released its economic growth statistics last week for the second quarter of 2020, it confirmed the dire COVID-19 induced recession. But there was good news for the alcohol beverages industry – alcohol sales are jumping.

Click here to go to a survey and tell us if you are drinking more during the COVID-19 pandemic.

And believe it or not, the alcoholic beverages category of household spending was second biggest contributor to growth in total household spending (accounting for around two-thirds Australia’s GDP) over the year to June 30, as detailed in the chart below.

The official table from the Australian Bureau of Statistics (ABS) shows household spending on alcohol jumped 17.4% over the year to June 30, 2020 and 13.0% in the June quarter – more than any other category listed for both time periods. Those increases came as total Australian household spending fell by 12.7% over the year and 12.1% during the quarter.

So while trading restrictions placed on Australian pubs, bars and restaurants over the second quarter saw on-premise alcohol sales drop, off-premise, they jumped. In other words, Australians are spending more on alcoholic beverages to drink at home.

What’s interesting is that while alcohol sales are soaring, most Australians say they are NOT drinking more.

According to a survey conducted by the ABS in June 2020, only 14% of Australians said they were drinking more alcohol through COVID-19, with most, 72%, reported drinking the same level, while 15% reported drinking less alcohol. But that data is self-reported, and relies on a personal judgment (or honesty).

More objective sales data from the ABS on actual alcohol sales suggests more than 14% of Australians are drinking more alcohol given the big national jump in sales – either that or those 14% drinking more are drinking A LOT more through COVID-19. Enough to push second-quarter national alcohol sales up 13%.

Economic recession bites

Australia, like most developed economies around the globe is now firmly in recession. The economy shrank 7.0% in the June quarter, the largest quarterly fall on record, following a fall of 0.3 per cent in the March quarter 2020.  The combined effect of the COVID-19 pandemic and the community and government responses to it led to the unprecedented drop in GDP.

Head of National Accounts at the ABS, Michael Smedes said: “The global pandemic and associated containment policies led to a 7.0 per cent fall in GDP for the June quarter. This is, by a wide margin, the largest fall in quarterly GDP since records began in 1959.”