From the FT:
A marijuana hangover is starting to hit the beer industry.
At the beginning of last month, Colorado became the first US state to allow the sale of pot for recreational use. The end of pot's prohibition has rattled the beer industry for years, raising fears that consumers will be able to - legally - get their buzzes from new places.
New data from GuestMetrics, which tracks US beer sales, confirms these fears by offering evidence that pot appears to have eaten into Colorado beer sales in January.
Beer sales fell 4.9 per cent across the US last month, but 9.2 per cent in Colorado. Moreover, beer's share of total alcohol sales also fell more in Colorado than in the rest of the country.
Bill Pecoriello, of GuestMetrics, says that pot legalisation is the likely culprit:
There are obviously a lot of ways to look at the data but the below (see chart) tells the story in a fairly simple/clear manner, and makes a case that during the first month of pot legalisation in Colorado taking place, that there does indeed appear to be an impact on beer trends relative to the rest of the country.
Mr Pecoriello said that last January's beer sales were not affected by weather or other factors, suggesting that the data does in fact tell the story.
Recent research focused on the impact of alcohol taxation and variation of legal drinking ages supports Mr Pecoriello's findings.
A study by Mark Anderson, of Montana State University, and Daniel Rees, of University of Colorado-Denver, finds that marijuana tends to serve as a substitute for alcohol and suggests "legalisation of recreational marijuana in Colorado and Washington will lead to increased marijuana consumption coupled with decreased alcohol consumption".
Beer industry insiders have quietly worried about this dynamic and the possibility that it could worsen as pot sales begin in Washington state and in other states as they consider legalisation for some time.
Some day we may have marijuana-related trade disputes, although they may be a long way off. Here's one possibility: Does legalizing marijuana nullify or impair the benefits of tariff concessions on beer?
