'Dom index' links Champagne sales to economy
Published Friday, August 12, 2011 6:31PM PDT
Some in B.C.'s wine industry say they're seeing a decline in sales of high-end booze during tough economic times -- a phenomenon that's been nicknamed the "Dom index."
Economists consider liquor sales to be a lagging indicator echoing what's happening in the market. A recent downturn in liquor sales at some B.C. stores is reminding some merchants of what happened during the 2008 economic slowdown.
"Champagne is the canary in the coal mine. As soon as Champagne stops selling, we know that people are nervous," Robert Simpson of Liberty Wine Merchants told CTV News.
He says he can tell how well the markets are doing by how many $300 bottles of Dom Perignon he sells. As stock markets fluctuated wildly over the last week, the expensive bubbly languished on the shelves.
He witnessed a similar trend in 2008; between August and September of that year, he didn't sell a single bottle of the pricey wine.
In contrast, cheaper sparkling wines and Prosecco have gained in popularity, and domestic products are also doing well. According to the Liquor Distribution Branch of B.C., sales of Canadian sparkling wine increased 15 per cent from 2009 to 2010.
Mike Raffan of Township 7 Winery in Langley says price-conscious consumers are looking for deals and quality in a wide range of B.C. wines.
"The B.C. VQA sales are actually showing growth for the last 12 to 14 months," he said.
The trend might extend to beer as well. Eli Gershkovitch, owner of Vancouver's Steamworks Brewing Co., says that consumers will always want a drink, but their tastes might change along with the economy.
"There's an old saying that when times are good, beer is good, and when times are bad, beer is better. And I think in these sort of unsettled times, establishments needs to be very conscious of their value proposition," he said.
With a report from CTV British Columbia's Bhinder Sajan