Proof The Market Doesn’t Always Work

I may have to reassess my belief in the power of the free market:

LOUISVILLE, Ky. –  The producer of Maker’s Mark bourbon is cutting — likely permanently — the amount of alcohol in each bottle to stretch every drop of the famous Kentucky whiskey. The alcohol volume is being lowered from its historic level of 45 percent to 42 percent — or 90 proof to 84 proof.

The brand known for its square bottles sealed in red wax has struggled to keep up with demand that more than doubled the past seven years. Distribution has been squeezed and the popular premium brand has had to curtail shipments to some overseas markets.

“Over the last 100-plus days, there are many, many instances across lot of different cities where bars, restaurants, package stores have run low, run out,” Rob Samuels, chief operating officer for Maker’s Mark and grandson of the brand’s founder, said Monday.

“Given the surge in demand outstripping supply, what we’ve decided to do very carefully is to slightly reduce the alcohol volume.”

Of course, the other solution would have been to increase the price.

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