Aug 27, 2021 - COVID

Arkansans bring happy hour home during the pandemic

Data: Department of Finance and Administration; Chart: Danielle Alberti/Axios

Bars and restaurants took financial hits last year as the pandemic drastically limited their business, but it doesn't appear to have impacted the consumption of alcohol in Arkansas.

What's happening: After nine years of growth, the taxes collected on the sale of beer, liquor and mixed drinks in the state dropped 6% to $32 million in 2020.

  • This compares with an all-time high of $35 million in 2019, according to the state Department of Finance and Administration.
  • No entity collects data on total state alcohol sales, so tax collections are the best indicator of consumption.

By the numbers:

  • Arkansas collected nearly 31% less on mixed drinks in 2020 compared to 2019, likely due to temporary pandemic-related bar closures and limited operating hours.
  • Yes, but: Taxes collected on liquor sales at stores grew nearly 23% in 2020 to $15.2 million, presumably because consumers had to bring happy hour home.
  • Taxes collected on beer sales were up 15% to $4.8 million in 2020.

What they're saying: Macadoodles' growth manager, Ernie Olsen, said 2020 sales were strong at the package store chain because bars were closed. As those establishments reopened, there's been a "slowdown in sales."

  • Hannah Withers, co-owner of Fayetteville's Maxine's Tap Room, told Axios that in 2020, the business brought in about 30% of the revenue it had in 2019. So far in 2021, sales have been about 50% of 2019 revenue.

Why it matters: While collections were down, it's likely that alcohol consumption in Arkansas continues to climb. In 2020, U.S. alcohol consumption logged its biggest gain in nearly 20 years, according to the International Wine and Spirit Research.

  • Pre-pandemic, collections were trending upward. Taxes collected in 2019 were 54% higher than those in 2011.

The bottom line: Withers hopes the pandemic isn't changing consumer behavior, driving them away from social activities and bars like hers.

  • Maxine's gives people a place where they can block the outside world for a while. "We sell intimacy," she said.

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