Wholesalers, Retailers, and The Aftermark - Who's profiting from skyrocketing whisky prices?

Wholesalers, Retailers, and The Aftermark - Who's profiting from skyrocketing whisky prices?

With murder, theft, and bribery highjacking the whisky news, this year’s headlines have read like they were ripped straight out of the latest Netflix crime drama. Just last week, there was a fatal stabbing over a box of bourbon. Earlier in this year trucks carrying Pappy Van Winkle were stalked as they left wholesalers with drivers being offered bribes for cases of whisky.

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Pappy is Already Impossible to Get, and There's Even Less in 2015

Pappy is Already Impossible to Get, and There's Even Less in 2015

Buffalo Trace announced this year’s release of the Van Winkle lines of bourbon. Unfortunately, the yields are less then in previous years. Marketing director Kris Comstock noted “… several of the older Van Winkle barrels did not meet those standards.” The result is less 15 year-old Pappy, and “far less” of the 20 and 23 year-old releases. Kris suggested the allotment is half as much as last year.

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Old Rip Van Winkle 10 (2014) - Brash Youthful "Almost" Pappy

Old Rip Van Winkle 10 represents the raw youthful bloodline of the Van Winkle line. This would be a whisky that’s easy to write-off in one sip, but with that branding, few would. It takes time to build a relationship with Old Rip Van Winkle 10 and experience the uniquely charismatic and sharp flavours.

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Van Winkle 12 Year Old (2014 Release) - Frustratingly Almost There, But Not

The Van Winkle 12 Year Old is an utterly frustrating drink. Firstly, let’s get one thing out of the way—unless you really want a “Pappy” related product, this isn’t the one to get. At the retail price ($55 US), this is a pretty good purchase (★★☆☆). At the $200 to $300 retail range you’re likely to find this (and far more), it’s not worth considering. This is an example where the prestige of the whisky hurts its Whisky Cabinet Rating despite a high taste score. The rating is, after-all, the “Is this worth buying!?” rating.

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Buying Pappy (and other rare bourbons) From The Government

In Ontario, the government sells event tickets for the chance to purchase Pappy Van Winkle. This might seem like a ridiculous concept in a free market society, but since 1916, Ontario has been under prohibition. The only way to buy spirits is through the government owned LCBO. 

In the case of Pappy, the LCBO sold $125 tickets to a four course dinner that included whisky pairings. The star of the dinner was the order form that allowed event attendees to place an order for Pappy. The hundred or so tickets sold out online within 5 minutes, and there were reports of system issues. 

The LCBO is one of the largest purchasers of alcohol in the world, and it’s the only way to legally purchase spirits in Ontario (with the exception of buying spirits at a distillery, but even those need to go through the LCBO for approval). With a population of over 13 million people, they sell a lot of liquor.  Being government owned, though, means finding fairer ways to sell rare releases that are in high demand. 

About 240 whiskies were available for purchase at the event. Of those, 100 bottles of Van Winkle 12 Year Old Lot B and the Old Rip Van Winkle 10 Year Old were available. Only 20 bottles of the 15 Year Old Pappy and the Family Special Reserve were available. Chances are, you were going to walk away with one bottle of Van Winkle, but it was less likely you’d get Pappy. 

We all submitted our forms by the end of the event. Four days later, we learned of the results. No back-alleyway meetings. No grey market. No courting liquor store managers. The prices were at a reasonable range from $85 to $190 a bottle.

Events are not the norm, however. When Buffalo Trace Antique Collection became available in Ontario, orders were taken online. A lottery system was used assign available bottles. People attempted to game the system by asking family members to create accounts and place orders. Some created as many as 20 or 30 accounts. By a limited sample size, I would guess the odds of getting BTAC was one in 30. I wasn’t lucky enough to get any with my one account.

This lottery system is met with mixed reception. True whisky connoisseurs and restauranteurs had better luck obtaining those whiskies by lining up outside of flagship stores the day the bottles went on shelves. Ontario is an oddly populated province, however. Almost 40% of Canadians live in Ontario, and many of those live in Toronto and (to a much lesser degree) Ottawa. The rest of the population is spread across a province that’s eight times the size of England. The LCBO serves the entire province. The lottery system, especially when done through online orders, is seen as a fairer way to serve all of Ontario. 

No system is going to please everyone. Collectors will proudly and happily hunt down BTAC and Pappy in the US, and they’ll have  an excellent story to share. In Ontario, things are perhaps almost too fair. Regardless, there’s already a lot of tension at the very existence of the LCBO. The pressure to privatize continues. I do wonder, though, if we in Ontario would even get Pappy and BTAC if our purchasers were split between several liquor distributors instead of one big LCBO.

As for my luck, I scored a bottle of the Lot B and the 10 Year Old. Not the ones I wanted, but for $190 (not including the dinner ticket), they’ll make excellent (though perhaps overrated) additions to my whisky cabinet.

Pappy Van Winkle - Elusive, but with alternatives

The elusive nature of Pappy Van Winkle is part of its charm. Pappy Van Winkle is released in such limited quantities that a bottle listed at $300 will sell for three or four times that price. More importantly, it's almost impossible to find unless you know someone, or happen to be at the right place at the right time. The one time I enjoyed a full sampling of Pappy Van Winkle was entirely by chance, when the bar I happened to be at did a one-night-only flight tasting. 

For those that have had Pappy Van Winkle, they often mention that it is a rare smooth quality to the whisky not common in many bourbons. To be considered a bourbon, American whisky needs to have corn as its first ingredient (51% minimum). Corn gives the bourbon the thick, sweet notes. Most bourbons have rye as their second ingredient. Rye adds spicier tones to a bourbon that are predominant toward the middle and finish of a taste. Bourbons are often made up of around 10% rye, but rye-heavy bourbons (such as Bulleit) have up to 28% rye. Malted barley is the third ingredient, and it's used to aid fermentation. 

In place of the rye, Pappy Van Winkle's second ingredient is wheat. Wheat tends to mellow out the drink, bringing balance to the sugars of the bourbon, and cuts out much of the spice.  In terms of tasting, wheat smoothens out the middle of the palate just after the initial sip and before the finish. For those that find rye too harsh, wheat is an excellent alternative. 

Pappy Van Winkle is not the first wheated bourbon, but it shares a lineage with the first. W.L. Weller makes the claim of being the original wheated bourbon. The company started as a whisky reseller, and later W.L. Weller distilled their own alcohol. A salesman by the name of Julian "Pappy" Van Winkle worked for W.L. Weller, and eventually he purchased the company along with a co-worker in the early 1900s.

Julian Van Winkle released Old Rip Van Winkle wheated bourbon for the first time in the late 1910s. The whisky was distilled by W.L. Weller, and was considered a premium product from W.L. Weller's standard wheated bourbon. Unfortunately, prohibition put a quick stop to Old Rip Van Winkle bourbon when all whisky production halted in the United States. 

While W.L. Weller changed ownerships and rebuilt after prohibition, the Old Rip Van Winkle brand was largely dormant (with a few exceptions) until later in the century. W.L. Weller whisky continued to be distilled in the Stitzer-Weller distillery up until 2002. Buffalo Trace (its newest owner) moved all production to the Buffalo Trace Distillery, and closed down the Stitzer-Weller distillery at that time. All new releases of W.L. Weller whisky have since been made at Buffalo Trace Distillery. 

Before closing the old distillery, the last of the distilled alcohol from Stitzer-Weller distillery was purchased by the Van Winkle family (among others). This remaining supply of whisky goes into Pappy Van Winkle 23 (though likely not true for much longer), and it is the only original Pappy available from the the now-closed distillery. Otherwise, the rest of today's Pappy Van Winkle product is said to be distilled at Buffalo Trace distillery in agreement with the Van Winkle family. 

To put simply, Pappy Van Winkle was born of W.L. Weller's wheated bourbon. The mash bill (the ratio of corn, wheat, and malted barley) for Pappy Van Winkle is likely identical to that of W.L. Weller's 12 Years Old bourbon. The marketers will tell you that W.L. Weller gets rejected Pappy Van Winkle barrels. In all likelihood, Pappy Van Winkle barrels are aged at premium parts of the warehouse where conditions are warm enough to keep the whisky aging even through Kentucky's winters. This added maturation gives the whisky a smoother texture.  

These factors affect the quality of the drink. So does the alcohol content of the drink. Pappy Van Winkle 15, for example, is cask-strength whisky--it's not watered down. W.L. Weller's 12 Years Old is watered down to a respectable 45% ABV. W.L. Weller is sometimes referred to as "Poor Man's Pappy" because of its similarities. There are some that claim that mixing W.L. Weller 12 Years Old and W.L. Weller Special Reserve will give you a similar profile to Pappy Van Winkle 15. You can google for various recipes, though only W.L. Weller 12 is currently available at the LCBO. 

While Pappy Van Winkle is impossible to get, W.L. Weller 12 Years Old is available at the LCBO for $44.95. Aged for a minimum of 12 years, W.L. Weller is an excellent buy for the price (sidenote: this is even truer in the US, when you can find it for under $30 a bottle). It's made from the same distillery, using the same recipe (likely), and it is aged only 3 years less as compared to the Pappy Van Winkle 15. 

How does W.L. Weller 12 Years Old taste? On the nose there are familiar bourbon, vanilla and caramel notes, but there's a nice dusty hay sort of scent that comes through. If you dig a little too deep, you'll get leather-polish notes. On the palate, the drink is surprisingly complex. The wheat tempers the heavy sugars, providing for a nicely soft but interesting drink. It begins with light caramel, with the sugar mingling lightly on the tongue. The spicy notes are there, and they draw up through into the finish with a nice balance from the oaky sugars. For those that find bourbons too forward-facing on flavour, W.L. Weller will hit the spot. 

W. L. Weller isn't your only option for wheated bourbon. The original Maker's Mark and Maker's Mark 46 are both wheated bourbons. I'm especially a fan of the 46, which uses staves within the barrel to provide more oak surface area as the whisky ages. The results are excellent, especially if you like a deep oaky bourbon. The Heaven Hill distillery releases wheated bourbons under the Old Fitzgerald label (which actually has a history going back to W.L. Weller as well), but few of these make it into Ontario. 

It's hard to call Pappy Van Winkle over-rated. Rare luxury items are impossible to compare to their more available counterparts. From my brief tasting of Pappy Van Winkle, the 15 Years Old one wins out for me. Pappy Van Winkle 15 perks the palate by tempering the caramel and vanilla-forward flavours found commonly in most other bourbons. The longer-aged Pappy Van Winkle bottles take on too many oaky-vanilla notes, erasing any hint of wheat. They taste more like an old bourbon than a wheated bourbon, and while that's not a bad thing, it's a miss for me because the wheat is no longer being expressed.

I have no plans buy Pappy Van Winkle for my whisky cabinet. W.L. Weller 12 Years Old is a far more affordable and available. Maker's Mark 46 has the thicker mouth-feel that you'd find in Pappy. Both of these are relatively affordable at the LCBO. Comparing the two, Maker's Mark 46 wins out for me for its younger more chaotic nature, but W.L. Weller 12 Years Old is a welcomed addition to my cabinet as a smoother more mature wheated bourbon.