Domestic tax paid shipments for the first half of 2023 declined -5.9% year-over-year (YoY), to nearly 77.16 million barrels, according to estimates from the Beer Institute through June.
The decline was mainly driven by an -8.1% YoY decline in Q2, BI VP of research Danelle Kosmal wrote.
The BI’s monthly economic reports use numbers from the Alcohol and Tobacco Tax and Trade Bureau (TTB). These numbers are estimates, and are subject to change as more data comes in throughout the year.
A change has already been recorded for May. The BI previously estimated May’s domestic tax paid shipments to be 13.3 million barrels, a -7.7% decline YoY. The TTB has since reported a “much bigger decline” than initial estimates, with tax paids on 12.68 million barrels, a -12.2% decline YoY.
The TTB could still revise that number, Kosmal wrote. However, May remains the largest YoY decline so far this year.
Domestic tax paid shipments for June were 15.1 million barrels, a -6.4% decline YoY and a loss of nearly 16.14 million barrels. Shipments have now declined five out of the six months recorded by the BI so far this year, with the exception of February, which eked out a +1 YoY increase. February also had the smallest barralage of the year (10.97 million barrels).
Top 3 Beer States Record YoY State Shipment Declines
Beer producers shipped an estimated 18.42 million barrels of beer to wholesalers in June, a -3.8% decline YoY.
All three of the largest beer states in the U.S. recorded YoY declines in June: No. 1 Texas (-11%), No. 2 California (-5.5%) and No. 3 New York (-11.2%).
Total state shipments continue to be down YTD, declining -2.4% versus the same period in 2022. Texas (-2.6%) and California (-5.9%) are also down YTD, while New York is essentially flat (+0.1%).
Despite Texas’ declines, the state continues to widen the gap between itself and California as the No. 1 state by shipment volume, a title it’s held since March.
Washington (+14.5%) and Pennsylvania (+5.3%) recorded the largest YoY volume gains in June. Washington is also the only state among the top 10 to increase state shipment volume YTD through the first half of the year (+7.4%).
Oregon (+9.2%), North Carolina (+3.5%), Alabama (+6%), Ohio (+2.2%), Florida (+1%) and Oklahoma (+4.2%) also recorded YoY gains in June.
Kosmal also gave a look at the “overall softening trends for alcohol” through the first half of 2023:
- Hard liquor depletions -1.4% YTD (-4% when excluding canned cocktails);
- Wine depletions -6% YTD;
- Beer depletions -3.3% YTD, “performing slightly better than shipments so far in 2023.”
Import Draft Volume Struggling, Even for Mexican Imports
Imports had a shinier month, despite also recording YoY declines. Import shipment volume for June was down -0.9% YoY, at 3.66 million barrels. The small decline follows a +5.2% YoY increase in May and -11% YoY decline in April.
Year-to-date (YTD) import shipments are down -0.8%, to nearly 20.12 million barrels.
Imports continue to be dominated by Mexican imports, which grew +6.5% YoY in June and +1.8% YTD. Canada (+2.1%) and Germany (+6.7%) also recorded YoY gains. Nearly every other country recorded volume declines, including the Netherlands (-30.2%), Ireland (-61.5%), Italy (-28.8%) and Belgium (-28%).
Kosmal also dove into package types in the latest report, noting that Mexican import volume increased for both imported bottles (+1.8% YoY) and cans (+18.6%), but was down significantly for draft (-23.8%).
Total imported draft declined -28.6% YoY in June.
“Draft performance continues to be an area of concern for beer, even within Mexican imports,” Kosmal wrote.
Top draft beer accounts have reported struggles to Brewbound about getting kegs of popular Mexican imports from Constellation Brands.
Maggie Bowman, VP of communication for Constellation’s beer division, told Brewbound that the company had set “aside a select number of kegs that didn’t meet our quality standards, even though they do not pose a health or safety risk.” She added that “new kegs are now flowing through the system but we will be on allocation for a bit because of the holds we put on and the subsequent production ramp-up.”
Some draft accounts expect to be out of Constellation draft through September.
The BI’s economic reports for July are scheduled to be released September 7.