Hijacking?

[bourbonv]

Here is an interesting story that just came up on a local tv station's website. http://www.wave3.com/global/story.asp?s=7302946

Gary,
They had a 1914 bottle of Jack.

Mike

[J.W.]

This strikes me as one of the last places something like this would happen.
MTC

[bunghole]

WTF

[EllenJ]

...Most of the bottles were found in warehouses and in a home in Lynchburg, about 65 miles southeast of Nashville, but some were seized at a Nashville hotel room where drinks were being served and bottles were being sold, [Danielle Elks, executive director of the Tennessee Alcohol Beverage Commission] said.

A spokesman for the distillery said he believes collectors were involved.

"It seems to be an issue of collectors who collect various bottles who trade and sell and buy among themselves after purchasing the product legally," said Phil Lynch of Brown-Forman in Louisville, Ky., which owns the distillery.

Uh... perhaps it might be prudent to forgo the traditional gazebo gathering next April?

[cowdery]

I suspect OJ.

[bunghole]

I suspect OJ.

ima do too

[Dump Bucket]

mmm.... I wonder what they will do with the goods

[bourbonv]

The ATF was just doing its job of busting "bootleggers" selling alcohol without a license. I suspect the biggest mistake these people made was doing so on such a huge scale. I also suspect that the one thing that could cause them serious problems is if some of that product was stolen from the distillery and thus untaxed product. The fact the taxes were not paid will get them more time than the fact that they stole it! Even so, to have that much product is asking for trouble if you are selling it to collectors.

[EllenJ]

I also suspect that the one thing that could cause them serious problems is if some of that product was stolen from the distillery and thus untaxed product. The fact the taxes were not paid will get them more time than the fact that they stole it! Even so, to have that much product is asking for trouble if you are selling it to collectors.

Other than the one 1914 bottle they mentioned, the reports were a little vague about what the rest actually are. The articles imply that these were not current product but collectors' items, and the value estimate (which would average about $400 a bottle for the rest of them) supports that idea rather than simply stolen current product.

Which brings up another issue... Is the suspicion that these were not taxed based only upon these being pre-1980s product and there are no tax stamps on the bottles? Because normally the stamp (pre-paid, or at least billable, of course) was affixed at the same time the bottles were filled and the labels applied. Certainly there are other possibilities, but one thing that comes to my mind is that these bottles may be counterfeits, intended to be sold to "select" collectors. Jack Daniel is the world's best-known "bourbon", with devout, and naive, fanatics making pilgrimages to Lynchburg every year. Some are quite wealthy. I'm pretty certain that a couple of the better-known examples of American whiskey in our collection are counterfeit, although probably the last few owners of them weren't aware of that. Also, with pre-prohibition Maryland Rye whiskey, much of what was originally sold might have qualified as "counterfeit" by today's standards. Mostly we avoid being taken in by the simple fact that we concentrate on obscure brands that few others would pay much attention to, and we buy cheap. That is but one of several differences between us and most Jack Daniel collectors we know. And many of us here are familiar with at least one collector in Europe who has probably already purchased a few examples of these

[cowdery]

As Tim pointed out elsewhere, TN relies heavily on its sales tax and any sale, as in resale, on which the sales tax was not charged, hence not paid, would be considered untaxed even if all the taxes were paid on the original sales the first time through the distribution channel.

[EllenJ]

Good point.
We always tend to curse the Federal government, but they're sure not the only ones who depend on taxes.

[TNbourbon]

This was a state raid, and taxes ARE the primary issue, especially in light of the size of the stash.
Tangentially, but not at all totally unrelated, there is a story in today's Tennessean (the Nashville daily) relating to light-handed treatment of the state's liquor distributors against open violations of state liquor-distribution law related to favoring retailers:
http://tennessean.com/apps/pbcs.dll/art ... /711040428
You'll recall that New York State recently collected something like $1.6 million in fines against its distributors in a similar circumstance.
It won't surprise me a bit to learn eventually that one or more distributors was at least a cheerleader prodding the ABC to raid these JD bottles.

[bourbonv]

I forgot that Tennessee does not have income tax and such revenue gathered from the sales tax runs the state. In this case, the state is going to be very interested because of the value of the whiskey concerned. Tim, What is the sales tax in Tennessee? I seem to remember 6% but that was 10 or 12 years ago and that may be way off. Even at 6% of one million dollars value in bottles, the state is going to want its share of the money.

I suspect that the distillery will end up with many of the older bottles to add to their collection. The other bottles may be destroyed after serving the purpose of evidence. It does bring home the dangers of selling over the internet. The ATF looks the other way with small time dealers that sell the occasional bottle, but when it gets into real money, they may not be so kind. I wonder how this will effect the ebay market.

[TNbourbon]

...What is the sales tax in Tennessee? I seem to remember 6% but that was 10 or 12 years ago and that may be way off...

The state portion of the tax is 7-1/2% (only 6-1/2% on food -- diapers still are assessed at the 'luxury' rate), but local government units -- counties and cities -- can assess up to 2-1/4% more, and most do. So, the top rate can be 9.75%, though I'm lucky enough to reside in a county where the rate is 'just' 9.25%.

...I suspect that the distillery will end up with many of the older bottles to add to their collection. The other bottles may be destroyed after serving the purpose of evidence. It does bring home the dangers of selling over the internet. The ATF looks the other way with small time dealers that sell the occasional bottle, but when it gets into real money, they may not be so kind. I wonder how this will effect the ebay market.

I suspect you're right, Mike. But, I think Jack Daniel's and Brown-Forman could do itself a world of marketing good by getting the most valuable of these bottles back to their 'rightful' owners instead of putting them in their own museum, assuming some were from international collectors, and not simply local hoarders. And, while that might seem a slight to state regulators after their efforts, believe me, Jack Daniel's is a tail which wags the dog around Tennessee.

[bourbonv]

Tim,
You are right of course about the collectors getting their items back, but I think the collectors would rather see them in Jack Daniels collection than destroyed. Since the collectors were breaking the law, destruction is a very real possibility. Maybe the best compromise would be to have them in the distillery collection with a donor plaque acknowleging the owner.