Some people (not those under 18), would have got up this morning with a hangover, not a pleasant reminder of the holiday cheer but the New Year is a cause for celebration and a time when the liquor market may see demand doubling. As HIDAT ARKEBE, FORTUNE’S STAFF WRITER discovers, the demand is not for increased production and butcheries lament decreased sales as the action shifts from the small bar to the home. The boost in sales is created by individual buyers for home consumption, including family holiday parties. It would be useful to obtain hard statistics for movements in the liquor market in recent years.
People drink more for holidays, but that is not creating increased demand for more production, at least not at the National Alcohol & Liquor Factory.
“The holiday demand pressure does not reach to distillers’ point, but we are constantly pushing our limits over the past few years to meet the ever increasing demand,” said Kokebe Kembi, the liquor maker’s marketing manager.
The distribution of the liquors is, however, making more money on holidays for those buying the company’s products in bulk. Muluken Asgedoma has been distributing liquor for the past year to pubs and clubs, and he has always enjoyed the holiday season’s demand.
“Business usually shoots on holidays,” he said, “and this New Year, mine has almost doubled.”
But the demand comes not from his originally targeted pubs and clubs but individual buyers who buy for home consumption, as well as the increased number of people coming to his store, where he has a small bar with five bar stools.
His original plan to target pubs and clubs was wrong, he now says, as they buy products directly from the producers and importers, like Coskal.
Coskal Ethiopia Ltd has imported and distributed Diageo’s red and black label Johnnie Walker for the past 50 years. Holidays have meant double demand for the products, and Coskal has never failed to meet the demand, the company says.
Their customers on regular days are the smaller wholesalers, the pubs and clubs.
“But the holiday demand increase mainly comes from retail sales,” Abenet Tsegaye sales manager of COSKAL Ethiopia Plc told Fortune. “People buy a bottle or two for holiday consumption, but the number is so high it has significant impact on us.”
Among their cheaper products is King Roberts, a blended whiskey product of Ian Macleod distillers in Scotland. It is sold for 285 Br a bottle, and demand for it is growing.
The holiday market that is so enjoyed in the liquor sector actually brings less business for butcher’s store owners.
“Holidays are not so good for our business. People spend their time at home with friends and family while having their drinks home. Our businesses that sell drinks in glass on the spot usually have no customers especially during the daytime,” said Abebe Bedilu, who owns a pub and butchery. “Loyal customers of the house buy bottles of drinks from me, which compensates for the slowdown of the service on holidays,” he continued, adding, “We try to create a holiday atmosphere by having big coffee ceremony.”
Business will continue as usual in terms of price and volume of sale; all that changes with the holiday is the setting.
Discounts and special holiday schemes are not a big part of the alcohol market this New Year. Coskal has decided to go without its usual holiday discounts “due to our limited stock”, according to Abenet.
The main reason behind the shortage is scarcity of hard currency and transportation from the Djibouti port.
“Liquor business comes way down on the list of priorities when access to both hard currency and port transportation are concerned,” he said.
At Balezaf Alcohol & Liquor Factory, they have not seen any compelling reasons to give discounts, as demand remains the same, according to the company’s marketing manager, Tamirat Mamo. Even on holidays, the company’s sales remain the same, he explained.
Neither Balezaf nor National is offering any discounts.
“Demand on the holiday is not really strong enough to affect the production and stock,” Tamirat explained. He continued, “We do not think demand changes much since liquor is not something that can be consumed in bulk. One can have 10 beers a day on a holiday; but even if you consider it at household level, consumption would not be more than one or two bottles. We do not feel the need to promote our product by discount or other schemes, since we have been in peoples’ minds and hearts for more than 60 years, which gives us a comparative advantage.”
At National, which is undertaking an expansion, they are taking advantage of the New Year by giving away samples of a new product which they are promoting.
Kokebe said “New Year is actually the best time to promote new products”.
Unlike National and Balezaf, Black Lion, which joined the market a year and a half ago, is upbeat about the market and boosting production to 25,000lt a day, according to Robel Biniam General manager of EMA Trading Plc. An exclusive dealer of Capts Black Lion, sister company of SubMiller, a British company.
“Our customers’ demand is increasing every time since the day we went to market,” he said, adding, “We are trying to meet peoples’ demand starting from those people who cannot afford to buy the imported products.”
In the absence of discounts and special offers and incentives, some buyers resort to people with access to the duty free market, although formal businesses do not always buy from those for lack of receipts.
Mostly these suppliers are airline flight attendants. For some the appeal is not only the cheapness of the products but also the trust in the genuineness. One consumer bought from such a source five Red Labels, seven Black Labels and three vodkas for a house party he plans to have for the holiday. But the “Duty Free” pitch has exposed some unaware buyers, like Muluken, to bootlegged products in the bottles of the original.
The flight attendants buy Red Label for 18 dollars (375 Br) and Black Label for 37 dollars (772 Br), and sell them for 500 Br and 1,150 Br, significantly cheaper than the 640 Br and 1,220 Br charged by importers.
A distributor said that he makes a 15 Br profit on a bottle of local liquor and 30 Br on imported ones, reasoning that the 600 Br he pays for imported liquors could buy him 10 bottles of local liquor.
But the requirement of receipts for resale has meant that most people who come with duty free products are mostly looking for individual buyers that need it for home consumptions and for parties.
Those close to the industry say that the consumption is growing though the years but the Central Statistics Agency (CSA) does not have data on alcohol consumption in Ethiopia. However, the WHO Global Status Report on Alcohol, an old report released in 2004, showed that per capita consumption of pure alcohol was 0.91 litres, considering consumers from the age of 15 up. The unrecorded (non-commercial) alcohol consumption is estimated to be 1.0 litres. Consumption, however, is down on the list compared to other populous African countries like Nigeria.
Alcohol’s impact on the health of consumers also warrants attention.
Selam Abera (MD), a psychiatrist who works at the American Medical Center, said that she is being exposed to a growing number of alcohol addicts. The number comes next to cigarette and khat addiction, she says. But she assumes a much bigger number of addicted people.
“It is only the attitude; lack of knowledge that alcoholism is a problem, keeps people away,” she says.
She also emphasised that people should be careful about consuming the traditional tella and tej, both of which are considered light non-alcholic drinks but which are also dangerous for health and should be consumed cautiously as any other hard liquor.
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