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[jvd99]

5 hours ago, mortre said:

I'm not very versed in the legalities of secondary market as it doesn't interest me. Correct me if I am wrong but I was under the impression that it was only illegal to sell without a license, so I don't think the buyer is actually breaking the law. Also, sharing or trading wouldn't be illegal unless money was involved. After all, if it was then it would also be illegal to bring a bottle to share at your buddies bbq.

Wouldn't the seller/flipper be able to get a license anyway? I'm wanting to say the license in WA is a yearly fee of something like $150, so that doesn't seem so burdensome for someone flipping a $90 bottle for $500 etc.

Chuck Cowdery just addressed this issue in a December 4, 2017 post on his website.  According to Chuck, under federal law, both participants to a secondary sale are in violation of the law.  This is how Chuck ended his post which is spot on for some of the discussions here:

 

"The mental gymnastics secondary market participants use to rationalize their illegal behavior can be stunning. The only sound argument is that prosecutions are rare, so you probably won't get caught. But don’t kid yourself. You are breaking the law and the risk of life-changing consequences will always be there." 

 

Find the full article here: http://chuckcowdery.blogspot.com

Edited January 7, 2018 by jbutler
Fixed formatting

[EarthQuake]

1 hour ago, mortre said:

I'm not very versed in the legalities of secondary market as it doesn't interest me. Correct me if I am wrong but I was under the impression that it was only illegal to sell without a license, so I don't think the buyer is actually breaking the law. Also, sharing or trading wouldn't be illegal unless money was involved. After all, if it was then it would also be illegal to bring a bottle to share at your buddies bbq.

Wouldn't the seller/flipper be able to get a license anyway? I'm wanting to say the license in WA is a yearly fee of something like $150, so that doesn't seem so burdensome for someone flipping a $90 bottle for $500 etc.

Sent from my Pixel 2 using Tapatalk
 

There are a number of potentially illegal parts of this and it depends on where both parties live. As far as I know:

 

1. Selling alcohol without a license is always illegal

2. Shipping alcohol without a license is illegal in most cases, but as a practical matter is not something that would generally be prosecuted (people send alcohol gifts every day of the week), unless you're doing it on a business-like scale

3. Shipping alcohol into or out of certain states is illegal even with a license, the laws governing alcohol shipping in/out/to various states are rather complex

4. I do not believe it is a crime to buy alcohol from someone who is not licensed. Alcohol is not a banned substance like various drugs so there is no criminality in owning or purchasing it unless you're a minor, you're purchasing for a minor, etc. Though different states may have more complex or detailed laws in this regard.

5. Trading or exchanging alcohol should not violate any laws unless you're giving it to a minor, but again if you're shipping you may be violating other laws. If exchanging alcohol is illegal most households break the law every Christmas.

 

I'm not a lawyer though, so don't quote me.

Edited January 7, 2018 by EarthQuake

[EarthQuake]

21 minutes ago, jvd99 said:

Chuck Cowdery just addressed this issue in a December 4, 2017 post on his website.  According to Chuck, under federal law, both participants to a secondary sale are in violation of the law.  This is how Chuck ended his post which is spot on for some of the discussions here:

 

"The mental gymnastics secondary market participants use to rationalize their illegal behavior can be stunning. The only sound argument is that prosecutions are rare, so you probably won't get caught. But don’t kid yourself. You are breaking the law and the risk of life-changing consequences will always be there." 

 

Find the full article here: http://chuckcowdery.blogspot.com

I just read this and his conclusions do not seem to make sense. For sellers, sure, but there is nothing in the law he cites that defines someone purchasing alcohol as a "dealer". The law defines "Dealer. Any person who sells, or offers for sale, any distilled spirits, wines, or beer.". Yet, Chuck claims "For virtually all secondary market participants, both parties to a transaction are 'dealers' under the law.", which there appears to be no basis for.

 

Source: https://www.ecfr.gov/cgi-bin/text-idx?SID=ff9ae1bc3a8c8e87e681137a13033b2f&mc=true&node=se27.1.31_11&rgn=div8

 

Again, I'm not a lawyer, but neither is Chuck (as far as I am aware at least).  

Edited January 7, 2018 by EarthQuake

[mortre]

I thought it was funny that in his conclusion he stated that there was "an argument" that you wouldn't meet the dealer definition of you were buying for consumption. I honestly can't see an argument for you being a dealer if you are buying for consumption.

Sent from my Pixel 2 using Tapatalk

[mbroo5880i]

I have no dog in this fight nor a position on the legalities of secondary market alcohol sales.  However, I would say if you purchase a good or service from someone you know has no legal authority to sell it or who is selling it in violation of existing statute or regulation, you might be found complicit in some manner, if either of you get caught.

[Harry in WashDC]

29 minutes ago, EarthQuake said:

. . .

 

Again, I'm not a lawyer, but neither is Chuck (as far as I am aware at least).  

I'm pretty sure Chuck is. Here's a piece from his "profile" on his blog: "Cowdery also works as a marketing writer for a variety of commercial clients, and is an attorney. He lives in Chicago, Illinois."

[EarthQuake]

4 minutes ago, Harry in WashDC said:

I'm pretty sure Chuck is. Here's a piece from his "profile" on his blog: "Cowdery also works as a marketing writer for a variety of commercial clients, and is an attorney. He lives in Chicago, Illinois."

Touche. Well, that serves me for not doing my research before saying something like that.

Edited January 7, 2018 by EarthQuake

[Bbstout]

13 hours ago, BottledInBond said:

The idiot paying for it is what maintains the market for this stuff. If people stopped being willing to pay $500 for a WLW or whatever the secondary market would go away, or eventually prices would creep further towards retail until it wouldn’t be worth people’s time to hunt around for bottles to flip just for profits. Do I think a person is an idiot for paying $2K or more for a bottle of PVW23? Absolutely,  because I don’t even really like that whiskey that much in the first place and would much rather have a bunch of other bottles. Do I think the person on the selling end of that is a scumbag? No. I think he probably has many better things he can do with $2K than drink that overhyped (and over-oaked) bottle in many cases, and he is thinking logically.

 

I just sick of how frequently people make the “illegal” comments. As yet another example, I know that there are many members of this forum that enjoy a cigar, including me. I also know that many of them enjoy smoking Cuban cigars which they got in the USA illegally, including me.  Do we bark at those people as being criminal scum for smoking an illegal cigar? Do we slander them for supporting a communist dictatorship enemy? Nope, we generally treat them as refined gentlemen (or gentlewomen?) who appreciate the finer things in life. But as you say, they shouldn’t have the right to smoke a Cuban cigar (they sort of do depending on how the get them now, but they were totally illegal for 40+ years as a fair caveat). There is just too much hupocrisy when the only thing many people on this site call out as criminal is people reselling a bottle at a profit. 

I have smoked communist cigars in Minnesota and risked being arrested but then flew to Belize for a fishing trip and enjoyed a Romeo y Julieta from Cuba and a dram of aged Havana club and it was totally legal. 

 

I have never sold a bottle secondary but have no problem with anyone who does. Supply and demand. If a long time member of this board bought ORVW 10 for $40 8 years ago and someone is willing to pay $400 for it and is happy as a pig in shit then who are we to argue? That member could buy 7-8 bottles of RY10 with the proceeds. Both parties are happy. I think that all of us who have been on this forum for many years have to accept the fact that the boom is far from over and embrace the remaining bourbon and rye gems on the market before they disappear as well.

[Bbstout]

On January 5, 2018 at 1:05 PM, Fishin49er said:

I get what you're saying but I think for most of us we're only annoyed by it because it's the hobby we're passionate about. If you found a vintage vinyl record at a thrift store for $5 but you knew you could sell it online for a couple hundred dollar profit, would you not do it? I'm also big into fly fishing. I once found a fly reel spool at a deep discount in Cabela's, I bought it and sold it for about an $80 profit. I don't think that makes me a bad guy. I recently acquired a bottle of ORVW10 for $80. The idea of selling it for $400-$500 and using all that profit to buy a bunch of other bourbon definitely crossed my mind.  At the end of the day it's all about supply and demand, if there's people out there willing to pay the secondary prices there will always be a secondary market. On the other hand, I just saw a GTS for sale in a store for $400, is that any different?

You made money on a fly fishing reel? LOL...I have only lost a lot of money on fly fishing gear.

Many  years ago I found a warehouse full of vinyl in Florida and bought boxes for a nickel each. Not anymore. I also bought some Bitcoin when it was $500 a coin...should I feel guilty if I sell it for $16,000?

[jvd99]

11 hours ago, mortre said:

I thought it was funny that in his conclusion he stated that there was "an argument" that you wouldn't meet the dealer definition of you were buying for consumption. I honestly can't see an argument for you being a dealer if you are buying for consumption.

An analogous situation would be the receipt of stolen goods with knowledge they were stolen.  This is a crime in every jurisdiction.  Similarly, a person buying a bottle on the secondary market with knowledge the seller was not a licensed dealer could be considered complicit in a criminal act. The argument would be that even if you bought for personal consumption, your participation in a prohibited transaction could subject you to criminal liability.  The statute does not specifically state this, but laws are rarely applied as written and are often liberally interpreted by prosecutors to achieve certain prosecutorial, public policy or political goals.  Basically, if the feds want to make an example of someone purchasing on the secondary for personal consumption, they will.  An equally strong argument against such an interpretation exists, but would cost tens of thousands of dollars in attorney's fees to fight a criminal case in federal court.   Unfortunately, there is no concrete answer one way or the other, which is why Chuck, as any good lawyer would, was talking about a variety of 'arguments' that could be based on the statute, many of which have serious real world consequences.

[jvd99]

8 hours ago, Bbstout said:

You made money on a fly fishing reel? LOL...I have only lost a lot of money on fly fishing gear.

Many  years ago I found a warehouse full of vinyl in Florida and bought boxes for a nickel each. Not anymore. I also bought some Bitcoin when it was $500 a coin...should I feel guilty if I sell it for $16,000?

Yes, you should have sold the BitCoin at $20,000 

[mortre]

An analogous situation would be the receipt of stolen goods with knowledge they were stolen.  This is a crime in every jurisdiction.  Similarly, a person buying a bottle on the secondary market with knowledge the seller was not a licensed dealer could be considered complicit in a criminal act. The argument would be that even if you bought for personal consumption, your participation in a prohibited transaction could subject you to criminal liability.  The statute does not specifically state this, but laws are rarely applied as written and are often liberally interpreted by prosecutors to achieve certain prosecutorial, public policy or political goals.  Basically, if the feds want to make an example of someone purchasing on the secondary for personal consumption, they will.  An equally strong argument against such an interpretation exists, but would cost tens of thousands of dollars in attorney's fees to fight a criminal case in federal court.   Unfortunately, there is no concrete answer one way or the other, which is why Chuck, as any good lawyer would, was talking about a variety of 'arguments' that could be based on the statute, many of which have serious real world consequences.

Our justice system has been based on the idea that if there is not a law against it, it is defacto legal. There are laws on the books regarding knowingly purchasing stolen goods.

WA state was unable to bring charges against a person running an animal brothel despite one of their patrons dying. They spent months trying to figure out a way to charge them in the death. But since there was no law against that activity....

Sent from my Pixel 2 using Tapatalk

[DCFan]

I think we've all heard enough legalese to last us what remaining decades we have on our lifespans. Yes there is a strong resale market, to which I've stated the cause for, but it is what it is. So let's all pour a drink of that golden nectar we all love, in a dosage that would put @0895 to shame, and savor the goodness of our bourbons.  

Edited January 7, 2018 by DCFan

[jvd99]

2 hours ago, mortre said:

Our justice system has been based on the idea that if there is not a law against it, it is defacto legal. There are laws on the books regarding knowingly purchasing stolen goods.

WA state was unable to bring charges against a person running an animal brothel despite one of their patrons dying. They spent months trying to figure out a way to charge them in the death. But since there was no law against that activity....

I think you missed the point of my post.  In any event, the law is not black and white, it's a all a gray area, which is why we have an adversarial system where both sides advance opposing legal arguments and a judge interprets the law based on the unique facts of each individual case.  If the law only prohibited the verbatim text written in a criminal statute, there would be no place for police discretion, prosecutorial discretion, lawyers or courts interpreting the law, etc.  For example, there are plenty of laws prohibiting "disorderly conduct," but no statute would completely define that term.  Such an endeavor would be foolish because literally millions of acts could be considered disorderly and could not possibly be written into a statute.  The statute may include certain general types of prohibited conduct, but the list would be preceded by non-limiting language or a qualifying phrase such as, "including but not limited to...." because the drafters of the statute would want the police and prosecutors to have the flexibility to use the statute to keep the peace beyond what was exactly written in the statute.  The courts would then define other types of conduct not listed in the statute as being disorderly or not through court cases.  This is how legal precedent is set.  The US Constitution is another useful example.  The Second Amendment says nothing about concealed carry, yet the Supreme Court says the States cannot completely prohibit concealed carry.  All I'm saying is that language is imperfect, the legislature who drafts the laws are imperfect and no law is so perfectly written that it is not open to interpretation.   As such, anyone participating in the secondary market should be aware that the applicable federal statute could possibly (and I repeat "could possibly") subject both participants to legal liability depending on how far prosecutors will push the boundaries of what's covered in the criminal statute and whether a court will ultimately agree.  But finding out an answer could be a painful and expensive journey if you're the defendant.  I get the last sentence of Chuck's post now more than ever.  This is exasperating, I'm signing off on this one.   

 

(Sorry DCFan - I know the legal mumbo jumbo is annoying)

Edited January 7, 2018 by jvd99

[Charlutz]

1 hour ago, jvd99 said:

[lots of responsive, thoughtful analysis]

Kudos to you, jvd. I didn’t make it past ‘animal brothel.’ 

[flahute]

The discussion here seems to have gotten pretty far away from the point of the original question. Though the legality question is a valid one (that has been discussed here ad nauseam in the past) the original post asked about the profiteering angle and how it made him feel. That's a different issue and a tricky one to navigate as it's a very grey issue.

 

I used to be in a number of facebook groups and one other forum (where buying/selling was allowed). I've slowly dropped out of all but one of them.

(Full disclosure: I was once a buyer in these groups but have never sold. I did complete a couple trades (for equal secondary value at the time). I have not participated in this in a few years now at this point as the prices have gotten so out of sight. I was lucky to be in "early" relatively speaking and saw the writing on the wall for continued price increases so I bought a bunch of what I liked and averaged that price against what I purchased at retail to arrive at an average price per bottle that was in my max price comfort zone. It has been impossible to come in under that max price ever since.)

 

I've dropped out of all but one group because I grew weary of the attitudes and personality types in the groups. I remain in one of them to continue to monitor pricing.

What made me weary was what is mentioned in the OP - pure raw greed. If some of the people involved are bourbon lovers first, it's hard to tell. Maybe they are but are also driven by greed which allows them to profit to further their pursuit of bourbon. Either way it gets old fast. You get the people who are always trying to find the new upper level for what they can sell something for. You get the guys who offer a bit less than asking price who get laughed out of the room. If someone does sell something at less than market price (because they don't know better or just want to move it fast) it's a feeding frenzy. Arguments then ensue. 

Then you have the guys who seem to be treating this as a business. Selling all the time (and buying if they think they can turn around and sell for a higher price). Some of these guys have big egos and seem to see themselves as 'big players'. Others feed that ego for reasons unknown. It's all accompanied by the self absorbed "look at me" posts that are part and parcel of the instant gratification internet/social media environment we live in.

Then you get the guys who don't even try to hide it. They post from the liquor store "is this any good?" or "what is this worth?" so they can clear a shelf and start selling from the parking lot with the crotch shot photos. The classic Johnny Come Latelys who heard that bourbon is hot and are now trying to profit from it.

Last but not least, the forgeries are now a real thing. As pricing got higher and higher the forgeries became a real concern. There have been a few high profile outings of people creating and selling the fakes. Some of these guys were the "big players" mentioned above who let it get to their head. It's foolish to buy on secondary at this point.

All of this occurs in an environment that is devoid of the joy of sharing knowledge and helping others like we have here. As a good friend of mine once said, "[insert name of Facebook site here] is a cesspool of toxic fuckery". 

 

Bourbon is supposed to be fun. None of that garbage is fun.

That is one of many reasons why this site is the best.

[BottledInBond]

On the original topic of the OP, I have never had a Facebook account 

[DCFan]

1 hour ago, flahute said:

Bourbon is supposed to be fun. None of that garbage is fun.

That is one of many reasons why this site is the best.

I for one appreciate that SB is strictly for the enjoyment and edification of bourbon and all talk of selling, trading, and appraising is not allowed. Even if it's not expressly stated in the rules, the admins and other posters are quick to squash all such talk and everyone eventually complies.

 

When a brand new poster comes on the board and his/her first post is about trade valuation you can see what that poster is all about. I'll never forget that fairly new poster from Az who came on with a pic of his Weller stash and all he wanted was anyones help in securing additional Wellers. To his credit he started branching out but now is in a frenzied search to secure every known bourbon currently sold in the US. I'm sure he buys on the secondary market and that's his prerogative but he's not buying and trading on the board. 

 

Disclaimer I have gotten some samples from one poster here but we arranged that thru PM's which is where such transactions are supposed to take place.

[JTaylor]

Sorry, not sorry if I opened a can of worms... this is a hot topic in our community and I wanted to hear what other people on here felt about this. I thought I knew before I joined the fb group what I was in for, and freedom loving American that I am, I thought I could tolerate it and even come to understand it, but seeing that amount of greed every day, day in and day out within what I thought was going to be a group not unlike this one, got to be too much. I joined well before the BTAC stuff hit and prior to that it was a decent and interesting group. Like I said, there was good info on store picks, guys doing giveaways, etc... but once the secondary sales started happening it just got to be a site full of profit hunters instead of bourbon lovers. I even posted something there to that effect and got pretty much slammed... 

I'm all for selling your commodity for whatever price the market will bear, but selling bottled water in Flint for $300 / case is morally indefensible. Maybe I'm wrong, but I see the bourbon profiteering in much the same vein.

[flahute]

5 hours ago, JTaylor said:

Sorry, not sorry if I opened a can of worms... this is a hot topic in our community and I wanted to hear what other people on here felt about this. I thought I knew before I joined the fb group what I was in for, and freedom loving American that I am, I thought I could tolerate it and even come to understand it, but seeing that amount of greed every day, day in and day out within what I thought was going to be a group not unlike this one, got to be too much. I joined well before the BTAC stuff hit and prior to that it was a decent and interesting group. Like I said, there was good info on store picks, guys doing giveaways, etc... but once the secondary sales started happening it just got to be a site full of profit hunters instead of bourbon lovers. I even posted something there to that effect and got pretty much slammed... 

I'm all for selling your commodity for whatever price the market will bear, but selling bottled water in Flint for $300 / case is morally indefensible. Maybe I'm wrong, but I see the bourbon profiteering in much the same vein.

I think your opinion of these groups is spot on. There's a Willett facebook group. It used to be a place where people shared knowledge and tasting notes so others didn't have to always buy bliind. When Willett's barrel program was halted, it was a place to trade bottles and a way for people too far away from Kentucky to buy from those who could get them. Then prices exploded and it turned into a full on secondary B/S/T group with all the same issues I noted above. There was one guy who acted like god who clearly stalked the gift shop and who had some kind of insider knowledge as to when the good stuff would hit. He'd buy as many as he could and then would immediately turn around and sell for 3-4x his cost. This is about when Willett started charging more and more to discourage secondary sales. They also started enforcing bottle limits. So this guy would bring all of his mules and still get a dozen bottles or so. Eventually Willett got wise to him and banned him from buying. But the damage was already done by him and others like him who would line up in their cars outside the gate waiting for the gift shop to open so they could pounce. Willett prices are through the roof at retail because of these guys.

 

Eventually the administrator of the Willett group cut off any buying and selling. It's been pretty dead in that group ever since. Everyone wanted to profit from Willett instead of discussing it.

[berto]

On 1/8/2018 at 7:27 AM, JTaylor said:

 

I'm all for selling your commodity for whatever price the market will bear, but selling bottled water in Flint for $300 / case is morally indefensible. Maybe I'm wrong, but I see the bourbon profiteering in much the same vein.

Water is necessary while bourbon is not.  The folks in Flint faced with drinking poisoned water or shelling out $300/case for potable water are in a situation that isn't comparable to a bourbon enthusiast deciding between paying secondary for his bourbon of lust vs. paying less for something that he might not want quite so much or paying nothing at all and moving on with life.  You're comparing a necessity to a luxury good.    

[Harry in WashDC]

BACK ON THREAD.  I don't Facebook all that much - once every three months or so just to cut down on the "100 events await you!!!" emails.  I do have a dozen or so whiskey blogs bookmarked, but I use them ONLY for head's up announcements (Fred "Camera Boy" Minnick) or excellent info (Chuck's and Mike's).  I also subscribe to some non-whiskey blogs but usually just read (Gary;s beer, theginisin.com, etc.).  I can tell you that the couple of gin blogs I follow have nowhere near the "guess what this is worth!!" or "I just bought this (see picture)" postings of most active whiskey blogs.

 

BUT, I don't really follow any of the distillers' Facebook pages.  Anybody have opinions on whether that would be worthwhile?

 

[Aside - animal brothel?  My cats do disappear at night on occasion . . . I better check my wallet.)

[berto]

I'm active on reddit and facebook.  The big facebook secondary groups are a shitshow.  The local facebook group I'm in is the best thing ever.  It's a bunch of people looking out for each other and alerting the group when bottles show up.  We get together for tastings and trade and sell within the group.  There are bar owners and store owners and gms and clerks and distro guys.  There's an unspoken no asshole rule.  We started out as a handful of strangers trying to have a tasting and we've grown to 60+.  Reddit is fun and there's an active trading community. 

[DonutsNBourbon]

12 minutes ago, berto said:

I'm active on reddit and facebook.  The big facebook secondary groups are a shitshow.  The local facebook group I'm in is the best thing ever.  It's a bunch of people looking out for each other and alerting the group when bottles show up.  We get together for tastings and trade and sell within the group.  There are bar owners and store owners and gms and clerks and distro guys.  There's an unspoken no asshole rule.  We started out as a handful of strangers trying to have a tasting and we've grown to 60+.  Reddit is fun and there's an active trading community. 

now that's the type of facebook group I'd like to be in, sounds like a lot of fun.

 

I've cleaned up the thread a bit guys, let's stay on track here.

[JTaylor]

2 hours ago, berto said:

Water is necessary while bourbon is not.  You're comparing a necessity to a luxury good.    

Speak for yourself buddy!