The cost of spirits

[jburlowski]

There have been various threads on the cost of bourbon, taxes, the impact of the various state ABCs, etc.

I came across this article that explains how it all adds up (in this instance in North Carolina).

Some excerpts:

The distiller's base price for a case of 12 bottles of Aristocrat Vodka, for example, is $5.79 – just less than 50 cents a bottle.

Then a federal excise tax, distiller's freight charges and bailment charges for the warehouse storage are added, and that case's price goes up to $32.91.

Then the local ABC board tacks on a 39 percent markup that's used to generate profit, bringing that price to $45.74, and then state taxes, additional markups and another bailment surcharge bring the case to a total of $61.92. With bottle charges added and an 8 percent sales tax added, that's $5.67 per bottle purchased at the ABC store.

[BourbonJoe]

After reading that I'm pissed off again John. :hot:

Joe :usflag:

[barturtle]

And I'd be willing to bet that at least 10% of that base price of $0.50 per bottle is made up of taxes too...payroll taxes, property taxes, energy taxes, etc.

[dgonano]

It just doesn't cost much to distill cheap(or premium) vodka. No aging of spirit, etc. Packaging is most likely the highest cost.

[jburlowski]

It just doesn't cost much to distill cheap(or premium) vodka. No aging of spirit, etc. Packaging is most likely the highest cost.

Agree. But I'm willing to bet the rest of the economics (e.g., taxes and markups) apply comparably to bourbon and other aged spirits.

[ShewDawg]

Discussed this article with a buddy and he pointed me to this document:

http://www.taxfoundation.org/taxdata/show/245.html

Interesting to see what other states charge

[ggilbertva]

I would be so much easier and cheaper to just distill our own stuff.

[ratcheer]

Looks like AL is fourth worst, behind only Oregon, Washington, and Virginia. I told y'all it is bad, here. :smiley_acbt:

Tim

[Old Lamplighter]

And I'd be willing to bet that at least 10% of that base price of $0.50 per bottle is made up of taxes too...payroll taxes, property taxes, energy taxes, etc.

Great subject for discussion....something I've suspected for some time that is shackled with taxes like just about everything else in this country now.....sad thing is, about to get a lot worse in the forseeable future. Better stop or this is going to get moved to the politics, controversy, etc., arena herein.

[loose proton]

Looks like AL is fourth worst, behind only Oregon, Washington, and Virginia...

[cowdery]

Taxes on alcohol, especially spirits, are outrageous because it is considered socially beneficial to make alcohol much more expensive than it needs to be, considering the cost of production and delivery. This is manipulation of the tax code for social engineering purposes and it is supported equally by liberals and conservatives.

Prohibition itself made strange bedfellows of liberals and conservatives, liberals who believed the abolition of alcohol would improve the human condition, uplifting the poor in particular, and conservatives who believed alcohol consumption was a sin and usually occasioned additional sinning. Plus drunk workers were bad for industrial productivity.

One could argue that high taxes help keep alcohol legal, since however much politicians might like to earn points by attacking Big Alcohol, they are loath to give up all those tax dollars.

It should be noted that most, though not all, taxes on alcohol are taxes on the alcohol content, meaning that the tax bite for the cheapest vodka in the store is the same, in absolute dollars, as for the most expensive one.

With state and local taxes, some are based on price, so buyers of premium spirits do pay more, but most are based on alcohol content, without regard for the product's price.

So the difference in price among products that have the same alcohol content is generally not attributable to taxes.

[tommyboy38]

I would be so much easier and cheaper to just distill our own stuff.

[OscarV]

It should be noted that most, though not all, taxes on alcohol are taxes on the alcohol content, meaning that the tax bite for the cheapest vodka in the store is the same, in "absolute dollars", as for the most expensive one.

(I added " " in the above quote)

My question then is this, what does that convert to in stolichnaya dollars?

Sorry, couldn't resist.

Real question now, is the Fed tax on beer and wine the same amount per proof as spirits?

[ratcheer]

Real question now, is the Fed tax on beer and wine the same amount per proof as spirits?

No, the chart linked to in one of the early posts in this thread shows how all three are taxed, by state.

http://www.taxfoundation.org/taxdata/show/245.html

Tim

[ThomasH]

Another component that drives up the cost of premiium vodka is the marketing costs. The product and package are minor costs. Beer and wine aren't taxed at anywhere near the rate that distiled spirits are. It has been stated previously that distilled spirits are the most over taxed product in America. Until recently, the federal taxes on beer hadn't changed since 1951!

Thomas

[loose proton]

I would be so much easier and cheaper to just distill our own stuff.

I'm considering going into the premium brandy biz. One thing that is VERY evident is the artistry, skill, science, and experience involved in producing a quality product. You factor that in, and you'll find its easier to buy good bourbon than to make it at home. My name is not Russel or Beam or Handy or Van Winkle or ... so there's no way I know how to make the good stuff without a huge amount of costly practice.

[Thesh]

Don't know what happened with this

http://democrats.assembly.ca.gov/members/a24/News_Room/Press/20090302AD24PR01.aspx

It's crazy how you can say "290% increase on spirit tax, 1100% on win tax, 400% on beer tax" and have people say that they are OK with it. They already raised the cost by 1% with the increase in sales tax.

I hate this state...

[barturtle]

There's been an 1100% increase in the win tax? Maybe that explains the Raiders' performance this season.

[ErichPryde]

There's been an 1100% increase in the win tax? Maybe that explains the Raiders' performance this season.

..................

:slappin:

[Thesh]

There's been an 1100% increase in the win tax? Maybe that explains the Raiders' performance this season.

OK, now explain the previous 5 seasons...