Inside the booming black market for bourbon (and why it should be legalized)


Selling secondhand liquor--even if unopened--is illegal, but that hasn't stopped a thriving black market from taking off. Adam Allington reports for Marketplace:

"Bourbon, America’s only “native spirit,” has been riding a wave of popularity like it hasn’t seen in 50 years, driven by a combination of savvy marketing and a resurgence of cocktail culture.

Bourbon has become so popular that many of its most precious labels have become nearly impossible to buy at the retail level. That is, most liquor stores don’t carry them, and the few that do are only given an allocation of a few bottles per month. This has lead buyers to seek out their whiskey on secondary markets... And while it’s illegal to sell alcohol without a license, thousands of people do it..."

Read more here:

This gets at an issue R Street's Kevin Kosar has written about--namely, there should be a legal secondary booze market, rather than forcing these types of sales to go underground. As Kosar put it:

It is a confounding situation, which means, of course, it was created by government. People long have been free to sell their stuff. One need only visit an antique shop or a Goodwill store. There is a market for nearly everything, whether old baseball cards, DVDs and music cassette tapes, or jewelry, antique knives or eye glasses. The garage sale is an American tradition.

Yet various laws forbid consumers from reselling a previously purchased alcoholic beverage, even if it has not been opened...

[I]ndividuals should be free to resell alcoholic beverages without any sorts of restrictions. The market, over time, will sort out the good sellers from the bad (rather like the used goods markets on, and the like.) However, to satisfy concerns about fraud, safety and counterfeiting, one might establish a system like that which exists for gun sales. Only licensed purchasers could buy secondhand drinks, and they then could sell them to the public. Purchasers would be required to record their inventories and make them available to the Alcohol and Tobacco Tax and Trade Bureau. Sales could even be taxed, as auction house sales of old drinks are.

Either way, the sensible path forward is to make the resale of beers, spirits and wines legal. Continuing to ban the resale of drinks will only ensure that the black market continues...

Kosar's whole piece is worth reading: