September 1, 2016Alongside our post detailing (click here) 50 of the most expensive whiskies in the world, one thing stood out from this list: there were only a few bourbons listed. Regardless of how high a bottle value you think a Pappy Van Winkle might hold, it is but a drop in the bucket compared to most Scotches. This got us wondering though about what some of the most expensive bourbons might be on sale right now, and for this we turned once again to our friends at wine-searcher.com for details.
Below you’ll find from them a list of 20 of the most expensive bourbons currently sitting at retail. This list, it should be noted, is based upon the average price of a standard bottle excluding taxes, with information for it being drawn from a database of prices from tens of thousands of wine and spirits stores all around the world....
Exports have become vital to the USA industry. What happens when the culture of bourbons is no longer sexy because of it's cost. There is a reason why bourbon is cited by allies for tariffs; it is an exclusively USA product. Tariffs on bourbon will not effect the luxury and recreation culture of countries imposing the added expense, as bourbon competes with scotch in foreign markets. Scotch is widely available in Europe. (click here) The tariffs may be permanent when the scotch market increases.
...Bourbon is an $8.5 billion signature industry in Kentucky, generating 17,500 jobs with an annual payroll of $800 million. Spirits production and consumption pours more than $825 million in federal, state and local tax coffers every year.
More than $1.1 billion in capital projects has been completed or is planned and underway in the past five years and the next five years, including new distilleries and aging warehouses to bottling facilities and tourism centers....
There is a danger with tariff wars, in that when a culture that induces sales is interrupted and new sources for providing the same or simliar products are found, contracts are signed. Also, there are current contracts that will delay the initial impact on the USA's economy, but, the long term timeline is very discouraging. Also, during the 2008 economic collapse, contracts for imports to the USA became too expensive or unable to fulfill and those contracts were canceled or sorely reduced.
Right now USA companies are looking to the investment to create aluminum and steel domestically. The impact on higher costs to American products, especially the car industry, can be extremely difficult to remain viable. Recently, Ford stated it would be reducing it's product footprint, I am confident that tariffs are a part of that. Ford may be looking into domestic steel and aluminum production for their products and the industry in general. That is simply speculation on my part, however, if that is a remote reality, Ford will need capital to move into such change in its supply chain.
I always believed Ford Motor Company is a moral and very smart company. It is lead by a family member connected to it's namesake, Henry Ford. That is not only smart, it guarantees the moral content of the company. It is dependable.
It is amazing to realize Ford was the last man standing in the 2008 economic collapse when borrowing money was extremely cheap with zero interest if memory serves. But, in recent years, Ford has encountered a difficulty in producing trouble-free cutting edge cars such as the Ford Focus.
Ford has stated it is revamping it's older product line (click here), but, it will provide an opportunity for cash flow that can result in not only a gas free product line but, also the entertainment of producing it's own raw materials domestically. If Ford ever makes such a leap of faith it will not only supply it's own raw materials but, be a source for most of the domestic industry. The point is, such dynamics are being entertained across the USA and such moves will demand long term commitments and will eventually eliminate tariffs as a cost to production.
All the tariffs now entertained by Trump and his administration are causing import-export dynamics to change. Countries effected will seek other ways of economic gains and losses. In the case of bourbon, the exports will eventually disappear and the USA's current foreign customers will begin their own domestic product line to rival the USA's nearly exclusive production.
None of this is pretty to outcomes for Trump's tax structure. These paradigms will change quickly in response to the tariff wars. The monies obtained by governments through tariffs will leverage the future and new investments to their domestic economy will be made.
There are two ways to look at tariffs, as an added burden to increase domestic products market or an opportunity for US treasury income if USA products are selling cheap in foreign markets for whatever reason they are. Either scenario can be benign or deadly and in the case of Kentucky bourbon it is the later. If product demands fall and the culture of bourbon changes abroad, the Kentucky economy will feel the pain in the entire product chain from raw materials to final product. Bourbon may not recover and those $1.1 billion in capital expenditures to benefit the future could become an anchor of debt and sink the industry. Kentucky bourbon may very well go back to the bootlegger stills before it ever recovers.
Trump's plans to pay for his tax cuts is a folly. No country. No industry is so mired in it's market it can sustain this level of tariffs. Europe is right to leverage against such tariffs on it's product, their future is more real to them with Trump's hostile attitude and their national sovereignty will not fail them. Being an ally to the USA is supposed to have an advantage of those we tolerate in trade while an enemy; Europe is losing it's advantage and NATO countries will not put up with it.
There is a great deal that hangs in the balance with these tariffs and it isn't all out of pocket expenses for American consumers. There is a good chance those tariffs will dry up far sooner than Trump or his Wall Street advisers expect, too. It doesn't take long to build a steel mill. Are there any left in mothballs in Pittsburgh?
June 8, 2018
By Mike Pomranz
Last week, (click here) when the Trump administration enacted a 25 percent tariff on imported steel and a 10 percent tariff on imported aluminum, the message seemed pretty clear: The U.S. was looking to bolster these industries domestically at any cost. Now, that cost is becoming clearer, and it could come, in part, at the expense of America’s bourbon and whiskey industry.
The E.U. Commission has announced that it will be imposing a 25 percent tariff on imports of bourbon and other American whiskey starting in July. This retaliatory move should come as no surprise as the European Union made this exact threat last July and the possibility has continued to fester ever since. Once the Trump administration proved its tariff talk was more than bluster, the E.U. Commission’s hand was essentially forced, and major American exports like bourbon, among plenty of others, found themselves caught in the middle....
