mozilla wrote:How does a distillery go about priceing a new barrel of bourbon? On the open market or just one barrel, is there a formula that quantifies the price? Is there a difference if the barrle has some age? who sets the price....Master Distiller, warehouse manager, distillery manager, accountants? Do they add bottling costs even if you bottle it yourself? Any of the experts have some prices or info in this area?
Thanks in advance.
You can't bottle it yourself -- it must be bottled as a pre-approved label. If you desire a personalized label, you have to go through the (expensive) label-approval process.
Regarding the barrel purchases I've been involved in -- and, mind you, I didn't do the negotiating -- the price is negotiated between the buyer(s) and distributor, not with the distillery. You can't buy directly from the distiller -- it must go through the 3-tier system.
That said, you can expect a discount from the general retail for the brand to which it was bottled -- after all, the distributor/retailer essentially have it pre-sold, so they undertake no risk in the transaction. For example, you buy it at retail at, say, cost + 5% instead of cost + 30%, which is the approximate retail markup here in Tennessee.