Slowndown in economy and job losses are some of the bitter flavours of the current times. But not everyone is worried - certainly not the alcohol and cigarette makers. They enjoy the luxury of loyal customers who rarely let them down, rather tend to consume more and more of both as they try to ward off their despair.
There is enough evidence, both in Pakistan and elsewhere, that per capita spending on personal care, food and entertainment items in the region nosedived by 16 percent during the last two quarters - showing how badly the slowdown in economy has squeezed consumers pocket in general. But the case is different for drinkers and smokers, as latest numbers reveal that alcohol consumption in North America and Central Europe is consistently rising - registering an average growth of 21 percent during the last six months.
Pakistan, although not widely known for alcohol consumption for obvious reasons, is no exception to the rule and has witnessed a strong resilience from domestic alcohol consumers, who have helped grow the sales of countrys only listed alcohol maker, Murree Brewery, by 27 percent in the last six months.
Some may argue that this increase largely reflects the substitution effect of higher end consumers shifting to the cheaper local brands. But, this is countered by the argument that by the same effect, the companys own consumers must have shifted to cheaper, possibly unbranded, liquor.
Pakistani smokers are a tough breed too - they have cut eating out, new clothing and so forth, but nothing has shaken their determination to smoke another cigarette. The countrys premium cigarette manufacturer Pakistan Tobaccos sales went up by a staggering 34 percent in the last six months - a time when every other consumption item was going downhill (15%) and cigarette prices were on the rise. Although, Pakistan is not often found leading the regional charts, but here it holds a rather unwanted distinction of having the highest per capita tobacco consumption in South Asia.
Where this immunity comes from is a much debated topic; some cite the addictive nature of these products that makes it recession proof, while others say that people use it more to kill time and gloom. Whatever the case is, the industry offers investors a fine way to hedge against investment losses in a slowdown, just so long as smokers and drinkers intoxicate their way out of the recession. Too bad not many of these firms are listed in Pakistan though.