Domestic tax paid shipments declined an estimated -13.6%, to 12.7 million barrels, marking a loss of more than 1.9 million barrels in March 2024 versus March 2023, according to Beer Institute (BI) chief economist Andrew Heritage, citing estimates from the Alcohol and Tobacco Tax and Trade Bureau (TTB).
The steep year-over-year (YoY) decline follows two months of growth, including the “strongest monthly growth almost in three years” in February. Year-to-date (YTD), domestic tax paids are now down -1.8%, a decline of nearly 658,000 barrels versus the first three months of 2023.
Total supply (domestics + imports) were also down in Q1 (-0.4%).
While the latest numbers are daunting, Heritage noted the TTB continues to revise and update its estimates, and domestic tax paids for January and February were actually larger than initially forecasted: January +2.6% YoY (previously estimated at +1.8%) and February +9.5% (previously +7.6%).
Estimated state shipments declined -11.6% YoY, to nearly 14.7 million barrels, and are now down -0.5% YTD. All 50 states recorded YoY declines in March, including large beer states such as Texas (-18.5%), California (-6.5%), Florida (-18%), New York (-7.4%) and Ohio (-18.1%).
California (+4.7%) and New York (+3.3%) remain in the black through Q1, while Florida (-2.4%) and Ohio (-2.5%) are negative YTD. Texas is nearly flat (+0.1%).
Ten other states have increased shipments YTD through March: Alaska (+8.7%), Iowa (+1%), Kansas (+2.1%), Nevada (+1.1%), New Hampshire (+4.7%), New Mexico (+1%), North Dakota (+4.3%), Oklahoma (+6.4%), Oregon (+3.9%), Utah (+9%), Washington (+2.4%) and Wisconsin (+2%).
“March typically sees an uptick in shipments volume, but brewers decelerated shipments given mixed economic signals about the state of the consumer and after front-loading supply in February given labor uncertainties,” Heritage wrote.
Imports were also down in March, declining -4.5% YoY and -5.1% YTD. Mexican imports, which have driven the majority of imports growth, “lost some momentum in March,” declining -5.6% YoY. However, Mexican imports are still up YTD (+7.6%), ahead of Q1 2023 by about 576,000 barrels.
The Netherlands, the second largest imports contributor, recorded a +30.3% increase YoY, pushing the country just positive YTD, at +0.1%. Guatemala (+2.1%) and Vietnam (+425.2%) were the only other countries in the top 10 to record increases YTD.
Germany (+42.9%), Belgium (+10.1%) and Guatemala (+10.5%) recorded YoY gains in March, but remain in decline YTD through Q1.
“Beer is experiencing a mix of positive and negative indicators at the moment,” Heritage wrote. “Wholesalers are reporting strong growth in inventories following strong shipments growth earlier in the year. Depletions readings have been mixed with some strong weeks for beer while others lag last year.
“Brewers will accelerate shipments in advance of summer selling season,” he continued. “Unlike liquor and wine, beer has largely adjusted inventories to meet consumer demand after post-pandemic oversupply. Despite some bumps in the road so far in 2024, the remainder of the year should gain volume in comparison to last year.”
The BI’s economic reports for April will be released on June 7.