Quote Originally Posted by JayMonster View Post
He does actually answer the question in the same paragraph, explaining some of the same points you have here (sell off excess during slowdows, predominantly).

I'm not sure about things like "freeing up space"... For what? New stock that is further from being salable?

The point he was trying to get at was simply, "why sell to somebody else at wholesale only to make a fraction of the profit? "

And the answer as is friend (and you) point out is that there my be a short term profit gain ny starving off the non-distillers during good times, but they would then also be killing their future glut hedge.
Well, warehouse space is finite. So it's definitely a good idea, for instance, to sell off stock that doesn't meet your brands' profiles. Or even stock that does, but it's profile that is already oversupplied, even if the distillery's supplies are generally tight.

There are costs associated with aging and ultimately bottling whiskey. I don't think that when they sell a barrel to an indy that the are making a "fraction of the profit." I imagine that their asking, and getting, just what they think they need for the transaction to make good business sense.

At any rate, the only factor the writer could muster to answer his question was oversupply. I'm contending that there are more factors at play.