Demographics, taxes play role in beer sales

U.S. consumption drops for 3rd consecutive year

With the Bavarian Oktoberfest beer festival in Munich wrapping up earlier this month, the Beer Institute and 24/7 WALL ST. tried to determine the state whose residents drank more beer per capita. The winner: New Hampshire. Enlarge photo

Matthias Schrader/Associated Press

With the Bavarian Oktoberfest beer festival in Munich wrapping up earlier this month, the Beer Institute and 24/7 WALL ST. tried to determine the state whose residents drank more beer per capita. The winner: New Hampshire.

Beer consumption in the United States has fallen for the third consecutive year, according to a report by the Beer Institute, a lobbying group.

Since 2008, beer consumption has fallen as much as 11 percent in some states. Americans still, however, consume a massive amount of the foamy beverage – an estimated 6.3 billion gallons in 2011. Nationwide, 28.3 gallons of beer a year were consumed for every American of legal age.

Some states consume far less than others. In Connecticut, only 21.8 gallons were purchased per resident in 2011. In Utah, it was just 19.2 gallons. In three states, however, the Beer Institute estimates that more than 40 gallons of beer were consumed per person. Based on Beer Institute’s report, 24/7 Wall St. identified the 10 states that drink the most beer.

In an interview with Beer Institute Chief Economist Lester Jones, he discussed the factors that cause beer consumption per capita to be higher in some states. Jones pointed out that the numbers can be misleading. The report measures the total amount of beer sold in the state. It does not, however, indicate how much actually is consumed by residents of that state.

So-called “blue laws,” are state laws that prohibit the sale of liquor on Sundays. Other state regulation does not allow beer sales at gas stations, convenience stores or grocery stores. These laws likely encourage thirsty residents to drive across state lines to purchase beer.

In fact, many of the states on 24/7 Wall St.’s list have few of those restrictive laws. In eight of the 10 states, beer is sold legally at gas stations and convenience stores. The sale of beer on Sundays also is legal in all 10 states.

According to Jones, there is an even more important reason for residents to seek out some states to purchase beer: taxes. New Hampshire has the highest per capita alcohol consumption because “anyone who is driving through or lives on the border of New Hampshire will probably opt for the 5 percent or 6 percent savings, and just go into the state to buy their alcohol there,” he said. As a result, it is common for New Hampshire liquor stores to be visited by residents of Massachusetts, Vermont and Maine.

Despite the other factors that can influence consumption, there appears to be a strong relationship between the amount of beer purchased in a state and the prevalence of drinking – both casual and heavy – within the state. Based on a Centers for Disease Control survey for 2011, all 10 states had a larger-than-average proportion of residents who reported binge drinking. Even in states such as New Hampshire, where outside purchasers account for a good portion of total beer sales, 65.8 percent of those surveyed reported having at least one alcoholic beverage in the last 30 days, the second-highest percentage in the country.

In North Dakota, South Dakota and Montana, high consumption appears to be driven by the type of jobs in the state. Relative to the rest of the country, these states have booming energy, farming and construction industries. Jones said these jobs traditionally are filled by men aged 25 to 54, which is the core beer-drinking demographics.

The Beer Institute calculated the total amount of beer sold in the state each year, and, dividing it by the total population older than 21, estimated the average consumption per person. 24/7 Wall St. reviewed the 10 states with the highest consumption in gallons per capita in 2011. In addition, the Beer Institute provided data on alcohol taxes, rules and regulations related to the consumption of beer and liquor, and changes in consumption dating back to 2003. 24/7 Wall St. also reviewed heavy-drinking and binge-drinking data provided for 2011 by the CDC.

The top 10 states in per capita beer drinking, from number 1 to number 10, were: New Hampshire, North Dakota, Montana, South Dakota, Nevada, Wisconsin, Vermont, Texas, Nebraska and Delaware.

Here’s the tale of the keg for the top three:

No. 3 – Montana

Per capita consumption: 40.6 gallons.

Total consumption: 29,640,123 gallons (eighth lowest in total consumption).

Percentage change in consumption 2003-11: -5.1 percent (18th highest).

Percentage binge drinkers: 20.8 percent (ninth highest).

Population density: 6.9/square mile (third lowest).

Montana is just one of three states where the average adult drinks more than 40 gallons of beer a year. Montana has very few restrictions on selling beer, allowing Sunday sales as well as permitting grocery and convenience stores to sell beer. In 2010, 20.8 percent of adults in Montana were binge drinkers, one of the highest proportions in the country. However, consumption overall has declined by 2.2 gallons per capita since 2003. As of last July, Montana charged $4.30 in taxes for a 31-gallon barrel of beer, lower than most of its neighbors but far more than the 59 cents Wyoming charged. Unlike Wyoming, however, Montana has no sales tax.

No. 2 – North Dakota

Per capita consumption: 42.2 gallons.

Total consumption: 20,711,472 gallons (fifth lowest in total).

Percentage change in consumption 2003-11: -4.5 percent (15th highest).

Percentage binge drinkers: 23.8 percent (second highest).

Population density: 9.9/square mile (fourth lowest).

In 2003, North Dakota consumed more beer than any other state in the country, with the average resident guzzling more than 44 gallons per year. But beer drinking declined 4.5 percent between 2003 and 2012, with the average North Dakotan now drinking just more than 42 gallons. Jones of the Beer Institute says the decline in consumption could have been higher except that the state’s recent oil boom has attracted many young males, who statistically drink more beer than the population as a whole. Nearly 24 percent of the state’s population are binge drinkers, which is the second-highest rate of all states. However, the 6.5 percent of the population considered heavy drinkers is slightly less than the national average.

No. 1 – New Hampshire

Per capita consumption: 43.0 gallons.

Total consumption: 41,994,894 gallons (13th lowest).

Percentage change in consumption 2003-11: -1.8% (sixth highest).

Percentage binge drinkers: 18.7 percent (21st highest).

Population density: 147.2/square mile (21st highest).

While beer consumption in New Hampshire fell 1.8 percent between 2003 and 2011, it declined 7.5 percent nationally. Nearly 66 percent of people had a drink in the last 30 days through 2011, second only to Wisconsin. Although the state has the highest per-capita consumption, only 18.7 percent of the population are considered binge drinkers, just slightly over the 18.3 percent national rate. New Hampshire has a tax of 30 cents per gallon of beer. In neighboring Vermont, it runs as high as 55 cents a gallon if alcohol content is more than 6 percent. Jones believes New Hampshire has the highest beer consumption partly because Vermont and Massachusetts residents come there to purchase alcohol.

© 2012 USA TODAY. All rights reserved.

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