Tax revenue from alcoholic beverage sales hits record

ANKENY – Increased consumption of liquor and wine products pushed the tax take of state and local governmental entities to a record level in fiscal 2011, officials said Thursday.

The Iowa Alcoholic Beverages Division (ABD) transferred a record $107 million to state and local authorities during the 12-month period that ended June 30 as a result of increased spirit sales.

Preliminary figures released Thursday indicated that the revenues generated via sales of liquor, wine and beer in Iowa the past fiscal year was up more than $7 million over fiscal 2010 and about $2 million above the previous yearly record set in fiscal 2009, said ABD spokeswoman Tonya Dusold.

Liquor sales during the recently completed 2011 fiscal year totaled $221.1 million, which was up about 5 percent over the previous year. Total gallons sold of 4.56 million also were about 3.7 percent higher and marked a record level compared to the previous high of about 4.5 million gallons, Dusold said.

Wine sales were up more than 6 percent in fiscal 2011 on sales of $6.5 million, while beer slipped slightly to $12.8 million in sales on 75 million gallons – a drop of about 1.5 percent.

“Beer has been pretty flat for a couple of years now,” said Dusold, who noted that beer sales had hovered at the $14 million level for a number of years before declining while spirit sales have climbed.

Dusold said the sour economy appeared to be influencing drinkers' tastes because five alcoholic beverages in the state's top 10 sellers were so-called value brand vodka products that are priced lower.

“You're seeing some of those value brands doing very well right now,” she said. “They're shopping more mid to lower shelf, a little less at the top shelf.”

Also, ABD officials noted that million-dollar sales days for the agency used to only occur around holidays, such as New Years and Independence Day. But last fiscal year, nearly 50 percent of division's business days broke the million-dollar mar -- with a single day topping 2 million dollars in sales, which helped propel total spirits sales to $10 million over the previous year and the highest since fiscal year 1988 when the state became the exclusive wholesaler of spirits.

ABD Administrator Stephen Larson said the agency focuses on serving its retail customers by providing a wider variety of products, while at the same time emphasizing education and responsible regulation has laid a foundation for success.

"ABD pays close attention to the products leading the market while evaluating results. Fiscal year 2011 revealed consumers are gravitating to more convenient choices including flavored products of premixed, ready-to-drink cocktails,” Larson said in a statement.

"But our success is also mirrored in our efforts to provide educational resources to our partners that increase regulatory compliance and social responsibility," he added. "We balance our goal of generating revenue for the state with the desire to lead the effort to ensure laws and regulations are followed in addition to promoting the health and welfare of Iowans."

The majority of funds generated by the Alcoholic Beverages Division go to the state's general fund. Additional funds are used for city and county programs and a small percentage goes to the Iowa Partnership for Economic Progress (IPEP) for Iowa native wine and beer promotion. The remaining funds are earmarked for substance abuse funding.

The 10 top-selling liquor brands in Iowa and cases sold through June 2011 (FY2010 rank)

1. Black Velvet 51,383 (1)

2. Captain Morgan's Original 41,405 (2)

3. Hawkeye Vodka 36,329 (3)

4. Five O'Clock Vodka 25,687 (4)

5. Smirnoff Vodka 16,199 (7)

6. Barton Vodka 16,015 (6)

7. Phillips Vodka 15,652 (8)

8. Jack Daniel's Black Label, 15,182 (5)

9. Bacardi Light Rum 13,324 (9)

10. McCormick Vodka 13,258 (10)

Source: Iowa Alcoholic Beverages Division