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Venezuelan drinks market down 10%
Impact International / March 1, 1996

By Larry Luxner

Venezuela's market for imported and locally produced liquors plummeted by 10% last year, a drop blamed on the country's general economic problems and strict exchange controls instituted by President Rafael Caldera.

According to the U.S. Embassy in Caracas, total sales during the first eight months of 1995 came to just over seven million cases -- or an estimated 12 million cases for the entire year -- compared to 1994 sales of nearly 14 million cases.

Sales by category were as follows: rum, 3 million cases; locally produced hard liquors and cordials, 2 million cases; imported cordials and brandies, 600,000 cases; imported whisky, 500,000 cases; imported gin, cognac and vodka, 300,000 cases; locally produced whisky, 250,000 cases; locally bottled whisky, 250,000 cases, and imported pousse-cafes, 200,000 cases.

In addition, over 600,000 cases of wine were imported, while local wine production under the Pomar Reserva label surpassed 150,000 cases (not counting wines produced locally from imported musts, for which no statistics are available).

Up until the late 1980s, imported whisky was extremely popular among Venezuelans who could afford it, but the fall of real wages and the depreciation of the bolívar, the national currency, soon meant that only the highest-income sectors could consume imported whisky. In 1994, Venezuela imported $70 million worth of whisky. That number will be sharply lower for 1995, due to limits placed on the availability of dollars for whisky and other luxury imports. As a consequence, local whisky brands have become more and more popular among the middle class. So has "white rum," or aguardiente. In 1995, the market share of lower-priced aguardientes increased considerably, to the detriment of aged rums.

According to the U.S. Embassy, "Venezuelans have never acquired a taste for bourbons, and the trade estimates annual imports of bourbons at less than 10,000 cases, mostly by hotels, bars and restaurants catering to Americans."

The trend toward lower-priced liquors will probably continue as the bolívar continues to fall; it now trades unofficially at 405 to the dollar, after having been artificially pegged at 170 to the dollar for several years.

Venezuela currently has around 20,000 outlets for alcoholic beverage sales; some 65% of all liquors are sold through supermarkets, 25% through liquor stores and 10% through bars and restaurants. The country's largest liquor producers are Industrias Pampero, owned by United Distillers; Licorerías Unidas, owned by Seagram's, and Santa Teresa, owned partly by Allied Domecq.

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