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The water of life and death: a brief economic history of spirits


  • Lara Cockx
  • Giulia Meloni
  • Jo Swinnen


Spirits represent around 50% of global alcohol consumption. This sector is much less studied than other alcohol beverages such as wine or beer. This paper reviews the economic history of spirits and analyses 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 distil alcohol. Initially this alcohol was used for medicinal purposes. Only in the middle ages did spirits become a widespread drink and did commercial production and markets. 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. The spirits industry has concentrated, but less so than e.g. the brewery industry. Recent developments in the spirits industry include premiumization, the growth of craft spirits and the introduction of terroir for spirits.

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  • Lara Cockx & Giulia Meloni & Jo Swinnen, 2019. "The water of life and death: a brief economic history of spirits," Working Papers of LICOS - Centre for Institutions and Economic Performance 649086, KU Leuven, Faculty of Economics and Business (FEB), LICOS - Centre for Institutions and Economic Performance.
  • Handle: RePEc:ete:licosp:649086
    Note: paper number 417

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    References listed on IDEAS

    1. Swinnen, Johan & Briski, Devin, 2017. "Beeronomics: How Beer Explains the World," OUP Catalogue, Oxford University Press, number 9780198808305.
    2. Meloni, Giulia & Swinnen, Johan, 2016. "The Political and Economic History of Vineyard Planting Rights in Europe: From Montesquieu to the European Union," Journal of Wine Economics, Cambridge University Press, vol. 11(3), pages 379-413, December.
    3. Anderson, Kym, 2020. "Consumer Taxes on Alcohol: An International Comparison over Time," Journal of Wine Economics, Cambridge University Press, vol. 15(1), pages 42-70, February.
    4. Kym Anderson & Giulia Meloni & Johan Swinnen, 2018. "Global Alcohol Markets: Evolving Consumption Patterns, Regulations, and Industrial Organizations," Annual Review of Resource Economics, Annual Reviews, vol. 10(1), pages 105-132, October.
    5. Poelmans, Eline & Swinnen, Johan F.M., 2011. "From Monasteries to Multinationals (and Back): A Historical Review of the Beer Economy," Journal of Wine Economics, Cambridge University Press, vol. 6(2), pages 196-216, October.
    6. Meloni, Giulia & Swinnen, Johan, 2014. "The Rise and Fall of the World's Largest Wine Exporter—And Its Institutional Legacy," Journal of Wine Economics, Cambridge University Press, vol. 9(1), pages 3-33, May.
    7. Meloni, Giulia & Swinnen, Johan, 2013. "The Political Economy of European Wine Regulations," Journal of Wine Economics, Cambridge University Press, vol. 8(3), pages 244-284, December.
    8. Johan Fourie & Dieter Fintel, 2014. "Settler skills and colonial development: the Huguenot wine-makers in eighteenth-century Dutch South Africa," Economic History Review, Economic History Society, vol. 67(4), pages 932-963, November.
    9. Warner, J. & Her, M. & Gmel, G. & Rehm, J., 2001. "Can legislation prevent debauchery? Mother Gin and public health in 18th-century England," American Journal of Public Health, American Public Health Association, vol. 91(3), pages 375-384.
    10. Koen Deconinck & Eline Poelmans & Johan Swinnen, 2016. "How beer created Belgium (and the Netherlands): the contribution of beer taxes to war finance during the Dutch Revolt," Business History, Taylor & Francis Journals, vol. 58(5), pages 694-724, July.
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    1. Anderson, Kym, 2020. "Consumer Taxes on Alcohol: An International Comparison over Time," Journal of Wine Economics, Cambridge University Press, vol. 15(1), pages 42-70, February.

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