Whiskey for sale at Norman Goodfellows – for around R60,000 a bottle.
  • It used to be that, rain or shine, you could count on people to drink – and on booze companies to offer a hedge against recession.
  • Recent numbers suggest things have been so bad for so long in South Africa that this is no longer the case.
  • Even the legendary annual Norman Goodfellows catalogue of hugely expensive drinks shows that belts are tightening.
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Investing in booze producers was always a sure-fire way to make a decent return. People drink when they’re happy, and they drink more when they’re sad. So it was always a good bet in positive times, as well as a hedge against recession.

But South Africa’s business cycle has been so negative for so long, even booze producers are struggling these days.

Distell, the country’s biggest drinks distributor, warned recently that it was seeing declines in sales volumes, amidst subdued demand for its products, which include Klipdrift, Amarula, Savanna, and Bain’s.

See also: SAB could be forced to start brewing iconic Irish beer Guinness in South Africa – if South Africans take a real liking to it

AB InBev, which makes everything from Budweiser to Castle, is feeling the brunt of a long running decline in beer demand globally, but South Africans are also cutting back on their favourite tipple.

Whiskey imports are also declining. Whiskey imports fell 11% in value year on year between 2017 to 2018. That’s significant for a heavily-marketed category that includes top-end brands drunk by people with large disposable incomes, and is yet another indicator of a slowing domestic economy.

Even Blue Label telecoms (the owner of a big chunk of Cell C for its sins), named after its founder brothers favourite whiskey, which has a long tradition of cracking a bottle for every deal they did, would have been buying less as deal-flow has slowed.

See also: SA imports 42 million bottles of Scotch a year - and those producers refuse to allow 'whisky-flavoured' cane here

And Norman Goodfellows' usually bold annual Christmas drinks catalogue is a shadow of its former self, when it reached legendary proportions.

The liquor merchant still advertises a range of 50-year-old whiskies priced north of half a million rand a bottle, but its layout, size and tone is more modest than in previous years.

“The booze industry is not immune and is a very good indicator of liquidity. We have definitely seen a move to ‘lower and less’. There are still a couple of big hitters with decent spend but on balance the belts are tighter,” says Norman Goodfellows director Carrie Adams.

Bruce Whitfield is a multi-platform award-winning financial journalist and broadcaster.

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