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POLITICS: PennAve

Rumors of bourbon shortage lack proof

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Food and Drink,PennAve,Joseph Lawler,Economy,Inflation,Magazine

They were some of the more ominous headlines published this year.

“Better stock up; whiskey apocalypse is here,” warned Punch magazine.

“We're drinking whiskey faster than distillers can make more,” screamed Smithsonian.

“Bourbon shortage has whiskey industry over a barrel,” Time cautioned.

Relax, bourbon aficionados: There’s no shortage of bourbon, now or looming.

The Internet-wide scare appears to be the product of the sensationalization of a few unrelated stories cobbled together to scare an American public that recently has become crazed for bourbon.

At the center of it all is one May press release issued by Buffalo Trace, which says it is the oldest continuously operating U.S. distillery. Buffalo Trace master distiller Harlen Wheatley warned that “we’re distilling more than we have in last 40 years” but “it’s hard to keep up” with growing demand. The result? “A shortage with no end in sight,” according to the Frankfort, Ky., distillery.

That alone might not have been enough to spark a panic, but, separately, reports surfaced around the same time of a barrel shortage. Bourbon must be aged in new barrels, but the trade publication The Spirits Business reported that the “harsh, wet winter” led to a “shortfall in the amount of lumber delivered to cooperages over the past six months” that “has heavily impacted the number of new American oak barrels available to distilleries.”

Those two data points — Buffalo Trace’s struggles and the supposed barrel crisis — were enough to spark dozens of national stories claiming that the country would run out of bourbon, especially high-quality versions that must be aged for four to eight years or even longer.

But Buffalo Trace is not the entire industry. And whiskey is subject to the same laws of supply and demand as any other commodity.

In mid-June, Buffalo Trace President and CEO Mark Brown appeared on Fox News to explain that the purpose of the press release was “to communicate with our customers” that if they couldn't find a particular Buffalo Trace product “that the problem wasn't with the retailer or the distributor but that we simply did not have enough whiskey made eight years ago to supply the current demand.”

Brown acknowledged, though, that the problem was “brand-specific.”

Frank Coleman, a spokesman for the Distilled Spirits Council trade group, responded that he would tell bourbon drinkers “walk, don’t run to your local liquor store.”

“There is definitely adequate supply to meet the demand,” Coleman said, citing new production capacity in bourbon and Tennessee whiskeys, and the doubling in the number of American distilleries since 2008. Contrary to popular belief, bourbon does not need to come from Kentucky -- today there are bourbon distillers all over the country, including in states such as California and Massachusetts.

If demand does outstrip supply, which is not a not a given, “quality will shift up in price, and lower-priced products will go down in quality,” said Charles K. Cowdery, author of Bourbon, Straight: The Uncut and Unfiltered Story of American Whiskey.

But so far there is little evidence of runaway prices. Whiskey prices have risen at the exact same rate as overall inflation over the past year, and fell in April and May, according to the Bureau of Labor Statistics.

And as for the barrel shortage? An actual shortage of barrels wouldn’t affect the market for at least four years, which is the industry standard for how long a Kentucky straight bourbon must age.

And if barrel supply issues do generate bourbon price increases down the road, consumers will just have to drink cheaper bourbons. There are many good ones available, Cowdery said.

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Author:

Joseph Lawler

Economics Writer
The Washington Examiner

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