The recession is hitting alcohol sales, like most other products. The consumption of spirits had been expected to grow by 1.5 percent this year, but will only inch up by 0.5 percent.

Also, consumers are drinking at home more, and imbibing cheaper drinks. Restaurant and bar sales are down, as people decide to stay home. As a result, retailers should benefit, but they, like restaurants, are finding that consumers are spending less per bottle. Instead of buying $12 to $20 bottles of wine, they are buying bottles under $10. Retailers are finding that revenues are flat or declining, overall.

Retailers are responding by changing the allocation of shelf space from liquors priced at $30 and above to those in the $17 to $21 range. For example, Finlandia, in the lower range, has seen its December sales rise dramatically. Liquor producers are also promoting their brands through liquor tastings in stores, and by encouraging gifts of alcohol in the holiday season. Some subscribers of the New York Times and the Chicago Tribune have been given a free Absolut vodka bottle sweater, dubbed the "Absolut Cozy" to induce more gifts of the vodka brand.

Exceptions exist, however, at the very high end of the market. For instance, sales of $60 Glenrothes Scotch Whisky are up by 20 percent. It is surmised that rich people are still rich.

(Updated January 15, 2002)