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Beer - a financial tranquilizer? An empirical analysis of brewery equity risk and return 2010-23

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  • Fretheim, Torun
  • Gjolberg, Ole
  • Steen, Marie

Abstract

In uncertain times, investors look for safe havens. In this article, we examine whether brewery equity is resistant to market downturns. The brewery sector is by many believed to be little affected by general economic booms and busts. Brewery stock typically has a beta below unity, which supports the argument that adding brewery stocks to a financial portfolio dampens portfolio return fluctuations. Our empirical analysis of 14 breweries located in different parts of the world – from Africa to Europe and North America to Asia – does, however, suggest that viewing beer as a financial tranquilizer may be overly optimistic. Analyzing monthly returns during the period of turbulence 2020 – 2023, and comparing the results with those from the more stable period 2010 – 2019, we show that brewery stocks are far from being recession-proof, in many cases not even recession-resistant. During the period of turbulence, all but five brewery stocks exhibited risk-adjusted returns significantly below that of the overall market. Furthermore, the correlation with the overall market increased substantially for five of the 14 breweries, and beta increased for seven of the companies. Our results provide nuance to the popular belief that brewery stocks are defensive and a place to invest when the future looks scary.

Suggested Citation

  • Fretheim, Torun & Gjolberg, Ole & Steen, Marie, 2025. "Beer - a financial tranquilizer? An empirical analysis of brewery equity risk and return 2010-23," Finance Research Letters, Elsevier, vol. 85(PC).
    • Handle: RePEc:eee:finlet:v:85:y:2025:i:pc:s1544612325013728
    DOI: 10.1016/j.frl.2025.108117
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    References listed on IDEAS

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