Economic Impact of the Alcohol Beverage Industry
The alcohol beverage industry is a large part of the global economy. It provides significant revenue and employment numbers in countries all over the world. The beer and spirits industries have benefited from a recent trend of premiumization. This trend involves consumers trading up to more expensive products while brewers focus on improving the overall mix of products in their portfolio.
Employment
The alcohol industry is a significant employer, and employment in bars, restaurants, and other hospitality outlets alone creates 2.03 million jobs in the United States. The sector also employs many people in marketing, manufacturing, and distribution.
Increasingly, consumers are choosing to diversify their drink choices in line with a wellness and sustainability mindset. As such, the beverage industry must find ways to appeal to this group of consumers by promoting better products for them and the environment.
The alcoholic beverages industry has a strong political presence, with campaign contributions from alcohol producers and trade associations often used to support candidates running for office. These organizations have a significant influence on federal and state government policy, as well as local communities.
Revenue
The alcoholic beverages industry includes companies that produce beer, wine, spirits, and other distilled products. These are typically sold to other producers, wholesalers, and distributors and directly to consumers.
These companies manufacture and sell products as commodities, and the value of these goods is based on their production costs, taxes, and other factors. This allows the industry to generate significant revenue opportunities.
For example, the tax derived from your happy-hour cocktail, fine wine, or tailgate beer is a significant source of revenue for federal, state, and local governments. This money can be applied to various social service programs, such as those that improve community residents’ quality of life.
However, the alcoholic drinks market remains challenged by issues such as supply chain disruptions, container shortages, rising packaging costs, and other economic pressures. These will impact some suppliers significantly, and some brands may need to adjust their near-term strategies to accommodate these challenges.
Exports
The alcohol beverage industry is global, and exports represent a significant part of its economic impact. There are many ways to market your product abroad, including trade shows, international media and events, and other exceptional export opportunities.
Several organizations can help you access the export potential of your beer, wine, and spirits. These include trade development seminars, market research studies, dedicated export guidance tools, and more.
Aside from these resources, there is a lot of information available on the Internet that can help you start your own global business. For example, many websites provide alcohol data and market trends spanning over 150 countries.
Taxes
Many types of taxes impact the alcohol beverage industry. Some include sales and use taxes, excise taxes, taxes on alcoholic beverages, and more.
If you operate a business that provides food and drinks, you are required to collect sales and use taxes on your gross receipts from the sale of alcoholic beverages. The tax rates are 9% for alcoholic beverages and 6% for food, non-alcoholic drinks, and other merchandise.
You may also be required to pay admission and amusement tax if you provide alcoholic beverages at a venue where guests can partake in tastings of the products being sold. However, if your event is free to the public and only you are charging for the alcoholic beverages, then the 9% sales tax will not apply.
In addition, you must keep records of all alcoholic beverages you sell or import into the state. The Commissioner of Revenue Services requires that you keep these records in a safe place for three years.