The Dominican Republic: Beer consumption severely hit by Covid-19 pandemic

The new coronavirus pandemic has put pressure on some of Dominican Republic’s traditionally more robust sectors, even at levels that could hardly have been anticipated, in the opinion of economist Henri Hebrard, the Dominican Today reported on August 27.

According to the researcher, one of the sectors most severely hit by the country’s health and economic crisis is that of beer, which has seen its sales plummet by 41.9% in March to June compared to the same period of 2019. The peak fall of 73% was registered in April, according to data from the General Directorate of Internal Taxes (DGII).

However, for Hebrard, this decline in the beer sector, in particular, lead to more concern about the characteristics of this industry, which has a robust, productive chain by involving, in addition to direct jobs, a wide range of suppliers and services such as printing, fuel consumption, investment in advertising and other areas.

“These commercial relationships have an impact on the economy, and a very important one,” Hebrard said.

On the other hand, the economist said that distilled products such as rum and whiskey, instead of losing ground, have increased their sales by 8.4%

As a direct consequence, the expert points out that the market share of alcoholic beverages has increased, leaving beer with a share of only 51%, the lowest in recent history. In comparison, rum and whiskey have increased to 35% and 10%, respectively.

Hebrard specified that this phenomenon is not unique to the Dominican Republic, since multinationals such as Heineken, Coors, and AB InBev also reported red numbers.

The expert pointed out that one of the consequences of this sector’s losses is a drop in tax collections. Between January and June of 2020, the DGII did not receive some RD$2,133.6 million in selective tax on beer consumption compared to 2019, a fall of 26.2% according to data from the tax collector.

He indicated that although other alcoholic products such as rum and whiskey have improved their sales, the increase in collections resulting from the sales of these drinks does not compensate for the losses of the treasury due to the fall in beer.

As for beer, the economist sees its outlook and recovery still uncertain for this year and predicts that the industry’s situation will persist during the remainder of 2020.

28 August, 2020