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Thread: profit margin

  1. #1
    Apprentice
    Join Date
    Sep 2005
    Location
    Zebulon Ga
    Posts
    39

    profit margin

    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?
    David

  2. #2
    Bourbonian of the Year 2003 and Super Moderator
    Join Date
    Feb 2002
    Location
    Kentucky
    Posts
    2,942

    Re: profit margin

    The taxman has a heavy hand in the game.
    ___Bobby Cox___
    ____________

    May you have wonderful things thought of to do...

  3. #3
    Bourbonian of the Year 2002 and Guru
    Join Date
    Sep 1999
    Location
    Chicago
    Posts
    12,656

    Re: profit margin

    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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