Heads in Commercial Product

[Mendel]

One of the biggest gains (or losses) from home distilling has been the ability to taste heads in commercial products. In some ways this is a loss, as I can be very excited to try something new/rare/exciting and immediately get punched in the head by heads worse than my stripping run.

Has anyone else experience kept track of which products are less heads than others care to post? And I want to point out that less heads != better quality in all situations.

I am somewhat surprised by this, as a $50 bottle of whisky doesn't cost nearly $50 to make. Huge amounts of cost are in marketing, and a lesser extent, aging. So instead of putting $5 worth of alcohol in the bottle, spending $10 to age it, and $15 to sell it and make $20 profit - why not put $6 of alcohol in the bottle?

I am also convinced many commercial brands start with tight cuts, and after they are established brands, start adding more heads to the product. I hate to single out specific producers, but can think of at least one of my favorite scotches that seemed far smoother years ago.

I've never been a Grey Goose fan, and am hesitant to single out commercial products, but they are a popular brand to hate, so I will start by picking on them. I swear 10 years ago, they had okay vodka although not worth the premium price they charged, but the stuff they sell now is nail polisher remover - or maybe I just have a better pallet today.

[HDNB]

5 bucks worth of likker in a bottle?? more like pennies. you can buy a litre of pure ethanol for 1.60 CDN...maybe a 1.10 USD. dilute that 2 and a half times for 40% it's more like 50 cents worth of booze in there.

barrels, warehouse, ROI all add to that...but it's still pennies. most average commercial likker is like 80 or 90 cents gross profit on a fifth. the rest is taxes and expenses.
if more people knew this, there would be a lot less craft distillers.

grey goose prolly does 100000 bottles a day, clearing 90 cents...90 grand a day...not bad. increase your cost by a penny a fifth and you lose 1000 a day...365 grand a year...and that there is folding money.

and that's the "why" behind it.

[contrahead]

I am somewhat surprised by this, as a $50 bottle of whisky doesn't cost nearly $50 to make. Huge amounts of cost are in marketing, and a lesser extent, aging.

Don't forget taxes. In the U.S. at least half of liquor's price comes from tax. In some other countries the “sin tax” might be much higher.

Any particular U.S state collects property, equipment and inventory taxes on barrels of spirit for every year it resides in a warehouse. Eventually the Federal government is there with its hand out to collect an excise tax on all legal booze made domestically, every time a distiller sells a barrel to a distributor. The Federal excise tax amounts to something like $13.50 per proof gallon. When the distributor sells to a retailer, each state collects a second excise tax (mabey another $2 to $6 per bottle). Imported liquor though is subjected to separate tariffs or custom duties, instead of excise tax. Then when you purchase any liquor at a store, bar or restaurant you pay a standard local sales tax, plus perhaps (depending on state) a bumped up hidden retail "alcohol tax" as well.

Pretty soon those taxes add up.

[The Baker]

Excise (the government tax) on spirits in Australia is levied on the amount of pure alcohol in the drink:

One example; " Of the $95 retail price, $24 of each bottle was paid in excise tax...."
The price of a less upmarket spirit selling for around $50 or a bit more would still include the same $24 excise if it contained the same percentage of alcohol.

And then there is also a 10% 'value added tax' (levied on most items sold including spirits).

Geoff

[Mendel]

Aren't taxes only on liquor that gets sold? Tighten cuts and taxes stay the same. 10% less off the heads in a product completely changes the product, especially a column still product. I can't imagine there is any successful commercial product that cutting the equivalent cost from marketing to pay for it doesn't increase sales.