“The industry is under assault, and Peter Cressy is our protector,” said Jon Taffer, Nightclub & Bar Media Group President, as he introduced Dr. Peter Cressy, President and Chief Executive Officer of the Distilled Spirits Council (DISCUS).
Cressy is always looking out for bar and nightclub businesses, wholesalers and distributors around the U.S., and his hard work and tenacity hasn’t gone unnoticed.
In his keynote speech at The Nightclub & Bar Convention and Trade Show, “Navigating Political and Commercial Roadblocks on the Path to Economic Recovery,” Cressy said that because all nightclub and bar owners are under licensing and registration restrictions, owners must find out what they can do and need to do in order to protect themselves from further regulation that may infringe on their businesses. For Cressy, this starts with understanding where the industry was a decade ago and where it’s going.
Unemployment in the industry hovers around 12%, and though the industry isn’t recession proof, Cressy noted that it is recession resilient. The spirits industry is up 2% in volume since 2010, with revenue increasing 2.3%. This growth, albeit slower than the rate experienced prior to the recession, has a lot to do with the consistent growth in the premium and super premium spirits industry. This trend faltered in the past few years, but has seen a comeback in the past year and a half. Cressy noted that liquor categories such as vodka, all whiskies (especially Irish whiskey and singl malt Scotch) and tequila are consistently growing in popularity and revenue, and something bar and nightclub owners should take seriously when considering their backbar.
Although the industry is seeing resurgence in specific markets, Cressy warned that the biggest threat preventing business from getting to where it once was remains, in his words, “Taxes, taxes, taxes.”
“By defeating taxes, we can save the industry,” Cressy said. DISCUS enlisted a grassroots movement in 2010 to repeal taxes on spirits and has seen success in places such as Boston, San Francisco and Baltimore. What’s more, a tax hike could result in 200,000 industry jobs eliminated, hundreds of small businesses being lost.
“As FET (Federal Excise Tax) go up, employment rates go down,” Cressy said.
To combat these tax increases, Cressy said that the industry needs to continue communicating the benefits of moderate drinking. “For the first time, the government says drinking is OK and good for your health,” Cressy noted.
This also means continuing to educate about underage drinking prevention, fighting drunk driving but also preventing ignition interlock from becoming universal. Although DISCUS favors ignition nterlock as penalty for repeat or high BAC drunk drivers, Cressy noted that mandatory interlocks are detrimental to the nightclub and bar industry, punish responsible consumers and will not solve the real problem.
Cressy put out a call to action, imploring his listeners to engage local officials, write to local legislators, identify threats early and get the press involved, as well as the restaurant and hotel industry. By calling everything “a hospitality tax” rather than a liquor tax, for example, industry pros can demonstrate the negative impact such increases have on all facets of the industry, Cressy said. “Taxes on alcohol hurt the middle class the most. Taxes are poor social policy because they don’t solve the problem. We’re already over-regulated.”
However, consumer confidence is returning and on-premise businesses are reaping the rewards of a more postive economic scenario.
Cressy concluded by stating that by being proactive in addressing taxes, interlock and other challenges head on, while also emphasizing the benefits of moderate consumption and the responsible stance of the indusry, bars and nightclubs across the U.S. will see monetary benefits. After all, Cressy said, “2011 is the beginning of a real Renaissance.”