Los Angeles Times

A bourbon so rare it sparks criminal probes

Whiskey can sell for $200 a shot. Its allure has ensnared officials in an Oregon scandal.

- By Andrew Selsky and Damian Dovarganes Selsky and Dovarganes write for the Associated Press.

SALEM, Ore. — Buttery, smooth, oaky. These are characteri­stics of the best bourbons, and a growing cult of aficionado­s is willing to pay an astonishin­g amount of money for these increasing­ly scarce premium American spirits — and even bend or break laws.

Premium spirits have always been expensive and sought after. But a surge in interest in high-end bourbon has made finding that elusive bottle even more difficult. Distillers have upped production to try to meet increased demand, but before the whiskey reaches stores and bars, it must age for years and even decades. Scarcity has changed what some fans are willing to do to obtain the most sought-after bourbon.

In Oregon, a criminal investigat­ion is underway after an internal probe concluded several state liquor officials used their clout to obtain scarce bourbons, including the holy grail for bourbon fanatics: Pappy Van Winkle 23-year-old, which can sell for tens of thousands of dollars on resale markets. Top-end bourbons have found themselves at the center of criminal investigat­ions in at least three other states — Virginia, Pennsylvan­ia to Kentucky.

The cases underscore how demand has reached a fever pitch. A limited supply of Pappy Van Winkle 23-year, produced by Old Rip Van Winkle Distillery of Frankfort, Ky., goes to each state. In 2022, Oregon received just 33 bottles.

“The average person cannot get good bottles,” said Cody Walding, a bourbon aficionado from Houston who has been on the hunt for Buffalo Trace Distillery’s five-bottle Antique Collection. He hasn’t been able to find any despite making connection­s with liquor store managers. He believes he’s years away from success.

“Like, to be able to get Pappy Van Winkle or Buffalo Trace Antique Collection, unless you’re basically best friends with a store manager, I don’t even think it’s possible to get those,” he said.

In a Los Angeles bar that Walding visited last week, one shot of Pappy 23-year cost $200.

Supplier sales for American whiskey — which includes bourbon, Tennessee whiskey and rye — rose 10.5% last year, reaching $5.1 billion, according to the Distilled Spirits Council of the United States. Revenues for makers of super-premium American whiskey grew 141% over the last five years.

In Oregon, the price of a bottle of Pappy 23-year-old bourbon is set by the Oregon Liquor and Cannabis Commission at $329.95. But finding Pappy 23-year-old on a store shelf is nearly impossible.

The commission says that of last year’s allocation of Pappy 23-year-old, 25 bottles went to bars, restaurant­s and/or liquor stores, three were reserved as safety stock to replace any damaged product, and five went to “chance to purchase,” a lottery started in 2018. The odds of winning Pappy 23year-old were 1 in 4,150.

Utah and Pennsylvan­ia are among other states that also use lotteries for coveted liquor. Two men in Pennsylvan­ia each bought a bottle of Pappy Van Winkle after winning the liquor lottery in different years. They tried to sell their bottles on Craigslist, but undercover officers posing as buyers nailed them for selling liquor without a license.

In Virginia, an employee of the state’s Alcoholic Beverage Control Authority downloaded confidenti­al informatio­n about which state-run liquor shops would be receiving rare bourbons. An accomplice then sold the informatio­n to Facebook groups of bourbon fans. In September, the now-former employee pleaded guilty to felony computer trespass, received a suspended prison sentence and a fine, and was banned from all Virginia liquor stores.

In Kentucky, an employee of Buffalo Trace Distillery was arrested in 2015 for stealing bourbon, including Pappy, over several years and selling it. The caper became part of “Heist,” a Netflix miniseries, in 2021.

Bourbon, in particular, has a rich American heritage. It’s been around since before Kentucky became a state in 1792 and is where the vast majority of bourbon comes from.

In 1964, Congress declared bourbon “a distinctiv­e product of the United States,” barring whiskey produced in other countries from being labeled as bourbon. Today, some of the best-known Kentucky bourbon distilleri­es are foreignown­ed.

In the 1960s and ’70s, bourbon had a reputation as a cheap drink. Then came a change: Targeting Japan, Kentucky distillers developed single-barrel and small-batch versions in the 1980s and 1990s, which later blossomed in the United States, said Fred Minnick, who has written books on bourbon and judges world whiskey competitio­ns.

“The distillers were starting to wake up — there was an interest in the whiskey, because the culture itself was beginning to change,” Minnick said. “We were going from a steak-and-potatoes nation to foie gras and wagyu.”

Minnick lovingly describes what it’s like to sip a great bourbon, which obtains sweetness by absorbing natural wood sugars from charred oak barrels.

“It begins at the front of your tongue, walks itself back, will drip a little bit down your jawline, a little bit like butter, very velvety,” Minnick said. “Caramel is one of the quintessen­tial notes, followed by a little touch of vanilla.”

They boosted bourbon production with multimilli­on-dollar expansions and renovation­s, but there’s still not enough of the best stuff to go around.

In Oregon, that scarcity led to the headline-grabbing scandal that drew attention to the state’s system for distributi­ng rare spirits.

Six Oregon Liquor and Cannabis Commission officials, including Executive Director Steve Marks, acknowledg­ed they had Pappy or another hard-to-get bourbon, Elmer T. Lee Single Barrel, routed to liquor stores for their own purchase. All six denied they resold the bourbons.

The internal investigat­ion determined they had violated an Oregon statute prohibitin­g public officials from using confidenti­al informatio­n for personal gain. Gov. Tina Kotek sought Marks’ resignatio­n in February, and he quit. The other five are on paid temporary leave.

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