By Christopher McCollum

It was reported several months ago that the producer of Captain Morgan Rum, Diageo PLC (NYSE: DEO), was going to be getting a new factory in the U.S. Virgin Islands, along with $2.7B USD in tax credits and benefits over the next 30 years, which sparked a bit of controversy as they are a British owned company. With this struck deal, Diageo will be moving the Captain Morgan operations from Puerto Rico, where they’ve been operating for generations, to St. Croix in the Virgin Islands, while potentially putting the rum culture in jeopardy.

Puerto Rican representatives claim that this business move will cost Puerto Rico about $120M annually in lost tax revenue, which at this point in time is an even harder pill to swallow than in the past. In March of 2009, Puerto Rico’s governor, Luis Fortuno, declared that the government there is bankrupt, with a deficit of more than $3B USD, making it the highest deficit-per-capita in the United States. Over the ensuing months, there have been plans implemented to lay off potentially 30,000 government workers, and to slash salaries across the board in an effort to save money. Union protests have been going on all over San Juan’s financial districts, and the unemployment rate on the Island of Enchantment will soar to potentially 17%.

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A collection formerly owned by a late US whisky enthusiast, purported to be the largest and most varied collection of spirits yet to appear at auction, will be presented for bidding later this year by Bonhams Fine Art Auctioneers & Valuers. The extremely rare collection is said to contain close to 3,000 bottles of whisky.

Well-respected auctioneers of art, pictures, collectables and motor cars, Bonhams also employs a whisky specialist named Martin Green. In a statement released yesterday, Green told BBC News that in his more than 20 years of conducting whisky auctions, “this is the most exciting collection I have ever handled.”

The collection had formerly belonged to a California man named Willard Folsom, who spent 18 years gathering Scotch malts after reading a newspaper article about them in the popular American paper USA Today. According to the BBC report, Whisky from places ranging from Orkney to Speyside to the Lowlands is represented in the collection, including many commemorative bottles never to be released again by distillers. “The sale of the collection provides the opportunity to buy many collectables of the future,” Green says.

Folsom was a former United Airlines worker who toured Scotland with his family, building his collection as they traveled. He died last year at age 64. Although the whisky is to be auctioned by Bonhams in Edinburgh on November 18th of this year, there is a strong possibility that any remaining stock will be returned to the states and sold in New York, as well as in Hong Kong sometime in early 2010.

The Raleigh News and Observer reported yesterday that top-shelf liquor prices in North Carolina will begin to fall drastically as of August 1, 2009, as the depression crunch continues forcing consumers to opt against buying high-quality liquors. In order to boost sales, brands like Grey Goose are slashing prices competitively as incentives for buyers.

“High-end booze has been taking a sales hit as consumers have increasingly turned to bargain-priced liquor,” wrote journalist Mark Johnson. “Distillers of the good stuff are chopping their prices to hang on to recession-weary customers.”

In reality, “free market in action” may not be the best way to describe this instance of sudden price drops, since the prices of the various available brands themselves aren’t the only factors working against consumers of quality spirits. With economic constraints greatly limiting expendable income, regular consumers and frequent buyers are literally being forced to trade quality for quantity. Therefore, long term effects resulting from prices falling, especially in this case, may not look so good in terms of state revenue.

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Look out, ya’ll: it appears that Kid Rock is hoping to stimulate the poor economy with a Michigan-based beer brand of his own design. Conrad Doucette of Maxim Magazine tells us “The beer will be ‘an American lager’ and will be suitable for parties, Pistons games, and BBQs all summer long. Snobby sots need not apply!” What this translates to is “Kid Rock plans to bottle a Budweiser-clone in the center of the failing auto industry capital of the world.”

There are both good and bad elements here. The good has to do with the help this may provide in the way of jobs in the Michigan area. The down side: it’s questionable whether any amount of rejoicing that dozens of Michiganders will be getting these jobs will outweigh the tears many of us will cry in our craft brews at the notion of a “Kid Rock brand beer.”

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Yesterday the New York Times featured a recipe for a cleverly-named cocktail, which they call “The Market Crash”. As much as alcohol and its particular relation to the present economic situation the world-over is discussed on this Web site, I felt that this one must be added to the cavalcade of crash-cocktails we’ll no doubt continue to enjoy for the next several months (at least). That being said, do you have a recession-themed beverage that you would like to recommend to Culture of Spirits? If so, email it to us by clicking here.

And now, on to that recipe…

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Today the Associated Press reports that liquor laws, especially those which prohibit sale of spirits on Sundays, may be repealed in an effort to boost individual state economies.

AP writer Brock Vergakis writes, “In Utah, and across the country, governors and lawmakers faced with budget deficits are advocating loosening laws that restrict alcohol consumption in the hopes of boosting tax revenues.” Alabama, Connecticut, Georgia, Indiana, Minnesota and Texas all plan to end present bans on Sunday liquor sales with hopes of boosting revenue with the day’s worth of sales added to weekly figures.

State governments choosing to capitalize on alcohol sales may never have picked a better time, in spite of the recession, as liquor sales are on the rise just about everywhere. Across the US during the year of 2008, the Distilled Spirits Council of the United States (DISCUS) reports that sales rose 2.8 percent from 2007 to $18.7 billion in 2008, according to revenues reported by liquor suppliers. For instance, in Perham, Minnesota, the local municipal liquor store saw an increase in sales by nearly a half million dollars during this period; nearly a 33% gain.

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Yet again, we see that another portion of the United States is reporting liquor sales on the rise, in spite of the looming recession:

Liquor Sales up in Idaho

According to Idaho resident and restaurant owner Dan Willie, “In a recession or in a so-called recession people tend to drink more, and that’s been historically true in the great depression… I don’t know if they are drinking to drown their sorrows or just spending more time in bars and restaurants.” Willie says the bar in his restaurant picked up sales in December, and has maintained steadily ever since.

Yet again, it appears that the business of wine, beer, and spirits may be the ultimate “recession-proof” industry.

Let’s face it; nearly everyone I know is a health-freak these days (myself included). Granted, this mentality from time-to-time does seem to gravitate toward and hover around particular areas of the US (and the world, for that matter). Still, no matter where you go, what seems to clench the deal is seeing fast food restaurants like McDonalds and Taco Bell making renewed efforts to provide healthier alternatives to the time-tested standards on their menus; from the inclusion of whole-wheat buns with Premium Chicken sandwiches, to Taco Bell’s “Fresco” menu, which offers low-cal alternatives to items on the regular menu, available upon request.

It isn’t surprising, therefore, that the alcohol industry poses no exception to the trend toward lower caloric intake, organic components, and even environmentally “green” standards. Beverage World recently reported that sales of premium spirits are up 92 percent in the last year, in spite of the downward trends seen in the American economy. Similarly, USA Today points out that demand for organic spirits, especially in conjunction with drinks mixed using organic fruit juices and other natural flavoring, also appears to be on the rise.  (more…)