Alcohol Tax Will Have Little Effect On Drinkers' Spirits

December 30, 1990|By Michael James | Michael James,Staff writer

It doesn't look as though the coming rise in liquor prices will affect the buying habits of Howard County's drinking clientele, which local merchants say show no sign of budget-induced temperance.

In many liquor stores, signs show the before-and-after effect of the new federal excise tax on alcohol that starts Tuesday. Most increases range from $2 to $4 for bottles of wine, half-gallons of liquor and cases of beer.

But beer and wine drinkers don't seem flustered by the increases, merchants say.

While price boosts will be met with a few boos from consumers, it would appear that drinking -- referred to by some business owners as a luxury and by some as a necessity -- won't be dried up by fiscal constraints.

"A few people have commented here and there, but I haven't heard any bitter complaints," said Neill Lochridge, the manager of Dorsey's Search Liquors in Columbia. "Most drinkers are brand-loyal, and I don't think they'd let a $3 increase stop them from buying their brand."

The tax on wholesale liquors is part of the federal deficit-reduction plan and is expected to cause a "shifting pattern" rather than a significant decrease in consumer liquor buying, said Marvin Bond, assistant state comptroller.

Most consumers in Maryland and throughout the country have been stocking up on their brand liquors for the past two weeks, meaning most businesses will have booming sales in December and light months in January and February, Bond said.

And although most Maryland consumers are "niche buyers" who typically only buy liquor falling in a certain price range, past excise tax increases have shown that even the bargain-hunters will not discontinue their drinking habits, Bond said.

"A $3 or $4 increase will probably throw Dewar's, Chivas Regal and even old rotgut scotch out of those niche buyer's price ranges," Bond said.

"Some people will just stop buying, at least temporarily. But will it make people quit drinking? It's conceivable, but a little far-fetched."

But not everyone shares that view. Some liquor-store owners remain skeptical about the consistency of the drinking public.

"I'm gearing down as far as my purchasing goes. I'm expecting my worst January in 16 years," said Joe Lucido, part-owner of the Spirit Shop in Ellicott City. This December, however, has been his best in 16 years.

People will eventually curtail their drinking if prices continue to rise, Lucido said.

"I think the long-term effect will be that people will take another look at their drinking. Customers allow themselves a certain amount of money for luxury, and booze is a small luxury," Lucido said. "I'm not sure we're going to get business back as easy as people think we are."

Other liquor store owners say that they don't expect their business will be hurt.

At Jason's Liquors, one of Ellicott City's busiest stores, the increase of a case of National Bohemian beer from $6.85 to $8.50 will be "a shock to some" and will likely discourage price-conscious buyers, said John Bassett, the wine buyer for Jason's.

"But they'll be back. The least expensive will still be the least expensive. It'll just cost a little more," Bassett said. "People don't let taxes run their life. I'm not sure I've cut down on my driving since gasoline prices went up."

The $2 to $4 increases are essentially across-the-board, meaning that the largest percentage increases will be seen on cheaper beers and "bag-in-the-bottle" wines selling for less than $10.

But whereas an increase from $8 to $10 for a case of beer will be viewed as a hefty jump, the expected increase from $30 to $32 for a bottle of cognac "won't even bat an eyelash," Bassett said.

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