After plummeting in 2020, on-trade sales recovered well in 2021, with total volume sales rising to exceed those seen in 2019. Despite a rebounding on-trade, the off-trade was also strong as at-home consumption remained popular.
In 2021, recovery of alcoholic drinks sales surpassed expectations. Consumers seeking to resume their normal lifestyles and meet up with friends and family after confinements and restrictions in 2020 benefited sales.
During 2021, the rollout of vaccinations in Panama advanced, with 57% of the population being completely vaccinated by the end of the year. This enabled an easing of restrictions and economic recovery.
Despite the economic recovery, unemployment remains a major concern in 2021. This has made consumers more price sensitive and cautious over their spending with many people actively seeking out lower priced alternatives to their favourite brands in a bid to maximise their budgets.
Thanks to an easing of COVID-19 restrictions in 2021, although supermarkets and discounters remain the most relevant distribution channels in sales of alcoholic drinks, independent small grocers, which were the most negatively impacted by lockdown and home seclusion, were able to recover. The nascent channel of e-commerce also saw rapid growth as the number of internet users continued increasing, making consumers more confident in making purchases via this channel.
During 2021, curfews were maintained in the country in response to the COVID-19 pandemic. The lifting of these curfews was dependent on the numbers of COVID-19 cases reported as well as the death toll.
The IBTM (Impuesto de Transferencia de Bienes Muebles or Tax Transfer of Movable Goods) is the country's retail tax and is imposed on alcoholic drinks at 10% of retail price, which is higher than the standard IBTM of 7%. The higher mark-ups in the on-trade mean that low tax rates have little impact on prices in bars and restaurants.
Since the 2016 completion of the expansion of the Panama Canal, the country’s role as a regional logistics hub has become even more important and this has reduced unemployment and raised incomes in a country in which beer in particular is already considered to be affordable by most of the population. The country is also attracting growing numbers of affluent expatriate retirees thanks to its image as a warm and safe country that presents an attractive option as a haven for retirees.
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Understand the latest market trends and future growth opportunities for the Alcoholic Drinks industry in Panama with research from Euromonitor International's team of in-country analysts – experts by industry and geographic specialisation.
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Alcoholic drinks is the aggregation of beer, wine, spirits, cider/perry and RTDs.See All of Our Definitions
This report originates from Passport, our Alcoholic Drinks research and analysis database.
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