The Water of Life and Death: A Brief Economic History of Spirits

Abstract

Spirits represent around 50% of global alcohol consumption. This sector is much less studied than other alcoholic beverages such as wine or beer. This paper reviews the economic history of spirits and analyzes recent trends in the spirits markets. The technology to produce spirits is more complex than for wine or beer. Distillation was known in ancient Chinese, Indian, Greek, and Egyptian societies, but it took innovations by the Arabs to distill alcohol. Initially, this alcohol was used for medicinal purposes. Only in the Middle Ages did spirits become a widespread drink. The Industrial Revolution created a large consumer market and reduced the cost of spirits, contributing to excess consumption and alcoholism. Governments have intervened extensively in spirits markets to reduce excessive consumption and to raise taxes. There have been significant changes in spirits consumption and trade over time. Over the past 50 years, the share of spirits in global alcohol consumption increased from around 30% to around 50%. In the past decades, there was strong growth in emerging markets, including in China and India. Recent developments in the spirits industry include premiumization, the growth of craft spirits, and the introduction of terroir for spirits. (JEL Classifications: L51, L66, N40, Q11, Q18)

Wine and France: A Brief History

“…Starting in the mid-eighth century under the Abbasid caliphs in Baghdad (the famed House of Wisdom), scholars at Islamic centres of knowledge greatly enhanced our understanding of medicine, astronomy, mathematics, and chemistryor rather its ancestor, alchemylong before any hint of a European Renaissance. Their studies included distillation (Forbes 1948;Cockx et al 2020) as a tool to find 'fundamental' substances. Arab and Persian scholars such as Ja'far Al Sâdiq (702-764), Zakariyyā Râzî (854-925), Al-Zahrawi (Albucassis, 936-1031), Ibn Sina (Avicenna, 980-1037), or Ibn Rushd (Averroes, 1126-1198) improved the art of distillation and designed alembics (al-anbiq).…”

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“…The aim of this study is to contribute to the marketing knowledge of spirits through research into Serbian rakija producers, with an emphasis on the marketing of these beverages. Despite accounting for more than half of the world's alcohol use, spirits are much less studied than most other alcoholic beverages (Cockx et al, 2021). To the best of our knowledge, the marketing of Serbian rakija producers has not been investigated to date, and with this research the authors are willing to closing that gap.…”

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