Friday, 11 July 2008

Vice Stocks and the Brewing Industry

"Vice industries" are thought to be relatively safe in times of recession, as people look to escape from their current troubles by gambling, smoking, drinking, etc. While a recession remains elusive by traditional definitions, the current economic situation is far from ideal, especially with regard to consumer confidence. So what has the slowdown meant for vice industries in general, and beer in particular?

Apparently, the last year has not been a good one for casinos, as recent articles in The Economist and The Wall Street Journal make abundantly clear.

Is the same true for brewers? Let's take a look at the stock prices of a few large brewers, including A-B, Sam Adams, and Molson Coors over the same time period.

All three brewers seem to have done fairly well in a weak market. Perhaps beer stocks are more resilient than gambling stocks in times of economic slowdown?

(Data from Yahoo! Finance)

UPDATE: Megan McArdle now has a post up on the same topic.

1 comment:

Douglas said...

Goes to prove that your best bet is beer.