Taking a shot at reselling rare bourbon not a smooth move
A few lucky Pennsylvanians will get to buy a rare bourbon for, well, a fifth of its market value, but state police will be watching to make sure they don't flip it for a quick profit.
The Pennsylvania Liquor Control Board is in the midst of a limited-release lottery for two rare bourbons — Old Rip Van Winkle 25-year and E.H. Taylor Four Grain. Anyone caught selling liquor without a license faces a misdemeanor charge and, on top of any fines, could be sentenced to pay an additional $4 per fluid ounce and have the bottle confiscated.
“Liquor Enforcement officers regularly monitor channels people might use to resell bottles bought through the PLCB lottery,” said Ryan Tarkowski, a state police spokesman.
In December, troopers responded to a Craigslist advertisement and purchased a bottle of Pappy Van Winkle 20-year from a York County man who bought the bottle through a PLCB lottery release. State police charged him with a misdemeanor for selling liquor without a license. In 2015, state police nabbed a man at Duquesne University trying to sell a bottle of Pappy Van Winkle through Craigslist.
Craigslist is a popular online platform to sell rare or limited-edition whiskey, although it's illegal, according to Bottle Blue Book, a website that tracks the market value of rare whiskey.
Bottle Blue Book says other secondary market locations include social media pages on Reddit or Facebook, which are hard to find because many are private or secret. Facebook purged many secondary market sites last year in an effort to curb such transactions.
A private Facebook page called “Bourbon Secondary Market” boasted more than 18,000 members in June 2016, according to what can be publicly viewed on the page. It describes itself as a place where “bourbon aficionados and collectors” can buy, sell and trade “where the law permits.”
Bottle Blue Book recommends those looking to connect with a network of rare bourbon enthusiasts to seek out local bourbon clubs or specialty brokers.
In light of previous attempts by lottery winners to resell limited-release libations on secondary markets, the PLCB updated its lottery terms and conditions to remind Pennsylvania residents that reselling the rare bourbons without a license is against the law.
Demand for the rare bourbons has driven up the cost in secondary markets.
For example, a bottle of Old Rip Van Winkle 10-year, with a manufacturer's suggested retail price of $40 is going for upward of $360 a bottle in secondary markets, according to Bottle Blue Book.
Drew Fogle, a member of the Pittsburgh Bourbon Club, a group of bourbon-loving friends, said he's “fairly against” the practice of flipping a rare bourbon for profit.
“I don't appreciate it because it makes it really difficult for someone like me to get it,” he said.
“It's probably 90 to 95 percent hype,” he said. “Is it good bourbon? Yes, but then again you could buy an incredibly good bourbon that‘s been aged for eight years that's $30.”
At Butcher and the Rye in Downtown Pittsburgh, sampling three rare Pappy Van Winkle bourbons would cost nearly $1,000. For 15-year Pappy, which has an MSRP of $79 a bottle and a secondary market price of $875, a one-ounce pour is $250; for 20-year, with an MSRP of $129 and secondary market price of $1,180, it's $300 an ounce; and for 23-year, with an MSRP of $249 and a secondary market price of $2,280, it's $400 an ounce.
Brian Haara, a Louisville lawyer who runs the Sipp'n Corn blog, said a few factors have combined to create the secondary market surge.
“In my view, bourbon's secondary market has expanded due to a combination of short supply of truly premium bottles, hype over ‘limited-edition' releases, removal of age statements on many brands and market hysteria commonly seen with other ‘collectibles,' ” he said via email. “These factors have led enthusiasts to hoard hundreds and sometimes thousands of bottles, and it has created incentives for profiteering.”
The latest PLCB-run lottery is a limited release of 10 bottles of Old Rip Van Winkle's 25-year and 270 bottles of E.H. Taylor Four Grain straight bourbon. The PLCB says each 750-milliliter bottle of Old Rip Van Winkle 25-year, which was first distilled in 1989, has an MSRP of $1,899. The 100-proof rare bourbon can sell for more than $10,000 on secondary markets, according to Bottle Blue Book.
E.H. Taylor Four Grain is going for $79.99 a bottle at retail and between $225 and $255 on secondary markets.
Participation in the lottery is limited to Pennsylvania residents and licensees, and one bottle of each brand per household. As of Thursday morning, 2,752 entries were submitted for a Van Winkle bottle, and 3,376 for E.H. Taylor, according to the PLCB.
Participants have until 11 p.m. Saturday to opt in to one or both of the lotteries.
Kevin Zwick is a Tribune-Review staff writer. Reach him at 724-850-2856, firstname.lastname@example.org or via Twitter @kevinjzwick.