Supply Shortages Hit Key Spirits Brands, As Pennsylvania Begins Rationing Certain LabelsSeptember 20, 2021
A combination of strong consumer demand and supply chain disruptions since the onset of the pandemic has left Pennsylvania and other large U.S. spirits markets short of supply on some key brands recently. Late last week, the Pennsylvania Liquor Control Board (PLCB)—with annual sales of more than $2.5 billion—enacted a purchasing limit of two bottles each of 42 specific labels, including certain expressions of Hennessy, Jack Daniel’s, Don Julio, Patrón, Buffalo Trace, Russell’s Reserve, and Elijah Craig, as well as Champagnes Dom Perignon, Veuve Clicquot and Moët & Chandon.
“These bottle limits are preventative measures to fairly distribute product and minimize out-of-stock situations, which will vary by location,” the PLCB said in a statement, noting that the rationing measures will be in effect for an indefinite period. According to Impact Databank, Pennsylvania was the second-largest control state nationwide in 2020, with spirits volume of 7.2 million cases on an 8.5% decline. The Keystone State temporarily shut down all of its retail outlets last year during the initial Covid outbreak, impacting those numbers. Tim Holden, chairman of the PLCB, told SND earlier this year, “Excluding those months (when beverage alcohol retail stores were closed), from a year-to-year comparison of 2020 to 2019, spirits dollar sales increased 5.9% and 9-liter cases increased 1.9%.”
While Hennessy has battled supply issues in recent years due to the popularity of its VS offering, out-of-stocks are now hitting Bourbon and especially Tequila brands more frequently, not only in Pennsylvania but other key markets as well. “We’re still experiencing out-of-stock across the board in silver, reposado, and añejo Tequilas, and there are multiple brands on monthly allocations,” says John Hermann, president and CEO of the 58-unit WB Liquors & Wine chain in Texas.
Earlier this month, Jack Daniel’s distiller Brown-Forman flagged “global supply chain disruptions, including glass supply,” as likely to continue impacting its business over the next several months. “While we are optimistic the operating environment will continue to improve, we are closely monitoring the potential volatility associated with the evolving pandemic and continued supply chain disruptions,” said Brown-Forman president and CEO Lawson Whiting.—Daniel MarstellerSubscribe to Shanken News Daily’s Email Newsletter, delivered to your inbox each morning.