Anyone up for a good rumor/fact?

[bobbyc]

I was told today by someone who should know, that the last of the United Distillers Inventory was sold. One lot of 37,000 barrels and a smaller number to someone else. Speculation?

[cowdery]

I'm surprised there was any left. I doubt any of it was Stitzel-Weller wheater. I've got to believe Julian already had all of that. Probably something from new Bernheim. The other possibility would be Charlie Medley whiskey from Owensboro.

[bobbyc]

It was supposed to be Bernhiem stuff. HH has had the distillery since after the fire in 1996 so there's a possibility some could be as young as 7 or 8 years. I don't think it would have been wheat , well the small lot may have been. The big lot went to someone who saw their inventory shrink a bit in the last couple of weeks.

Again by someone who should know.

[Barrel_Proof]

Very interesting. I'm not sure I own 37,000 of anything, 'cept pennies, perhaps.

[cowdery]

Buying 37,000 barrels to replace 19,000? Interesting. The price must have been right.

Can you imagine what goes into production and inventory planning for these distilleries? Imagine a business where you have to predict what your sales will be in 2008 and beyond right now, and make production decisions based on that projection. How do they do it?

From the end of WWII forward, the distilleries were constantly adding production capacity and increasing production. When sales began to decline in the early 70s, production kept increasing and quickly outstripped demand. Throughout the 70s and into the 80s, inventories of old whiskey grew rapidly, so that some companies were selling 10 year old bourbon at 4 year old prices, a boon for drinkers but murder on the bottom lines. Through consolidation, export growth and presumably better planning, the industry got production under control finally in the 1990s.

[OneCubeOnly]

Chuck--to a certain extent you've lost me here--can you EVER have too much old whiskey? I realize there are periods when production and demand are out of sync, but I always assumed that unsold stock ages, demand and value go up, and it's eventually sold!? (ie. 4yr old mediocre stuff may become a 12yo gem, and increases the bottom line down the road!?)

Also, don't the distilleries always have blends to fall back on, for supply and individual barrels that don't sell?

[cowdery]

I always assumed that unsold stock ages, demand and value go up, and it's eventually sold!?

Nope, at least not until pretty recently. Only in the late 80s did the industry begin to figure out how to sell extra-aged whiskey at a premium price.

Beginning in the early 70s, demand was collapsing even as production continued to increase, leading to rapid build-up of inventories. The belief at the time was that most bourbon peaked at about six years in wood. After six years, you had to try to slow down the aging (rotation to cool warehouse locations), or stop it altogether by dumping and keeping the whiskey in stainless steel until you decided what to do with it, an expensive proposition. Even when they started to discover that there was a market for older bourbon in Japan and, eventually, even in the United States, they had way more of it than the market demanded, and it was getting older every day, so many distillers used it up and closed their distilleries. Lots of distilleries were dark for long periods of time during the late 70s and early 80s. Of course, lots of distilleries shut down for good too.

Only in the last decade has it gotten to the point that all of the active distilleries keep a pretty regular production schedule year to year.

[OneCubeOnly]

Interesting!! Gosh, that time period is when today's Pappy 20 and 23 would have been made...as if we need one more reason to appreciate them!

[Black85L98]

I should keep my mouth shut but older is not better in all cases. A good 4YO may be just that. 5 may be a little old and 10 could be un-drinkable. Of course I still do not see why they could not bottle and store it. Sell when the market is right.