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I was just wondering what the profit margin on a bottle of bourbon would be? And is that why all of the distilleries are bought up large companies?
The taxman has a heavy hand in the game.
Between taxes and other regulatory requirements, and the long aging cycle, the whiskey business takes a lot of financial muscle. The very design of the taxation and regulatory scheme favors large producers and has, deliberately, since the first US excise tax was imposed in the 18th century. Another factor is the three-tier distribution system, in which producers must sell to wholesalers and are forbidden to sell directly to retailers. Consequently, the retail price of liquor bears no relationship to the actual cost of making the product.
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