Modern Day Bootleggers

Modern Day Bootleggers

The dark arts working in cyberspace

Thoughts from... | 02 Sep 2016 | Issue 138 | By Fred Minnick

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There's a new kind of bootlegger. Unlike those during Prohibition, today's bootlegger does not drive convoys under the cover of darkness. They don't carry tommy guns or go by the term 'bootlegger', a term that's so 1920s.

They lurk in the cyber space, connecting with buyers on Craigslist, Facebook, Reddit and random forums such as TripAdvisor. The modern unlicensed liquor dealers called 'flippers', and they're getting rich off the rise of all whiskies.

You, the normal consumer, read about Yamazaki 21 Years Old, Pappy Van Winkle or the Dalmore that went for $150,000. You go to your local liquor store, whose attendant laughs at you when you ask for something so rare that a professional has never even seen the bottle. So, naturally, you want to buy this great product and you go to Google, where you post a comment somewhere on the web and somebody contacts you, or you find a private online group solely created to sell to the thirsty. This is how many buy their rare whiskeys, and it's all illegal.

In some respects, the so-called flippers are providing a service to a consumer group that cannot find desired whiskey through normal channels. But they are hated by the connoisseurs, retailers and distributors for inflating prices. Even Buffalo Trace Distillery released a statement saying it would help law enforcement crack down on people selling outside of legal channels:

"We do receive many e-mails enquiring about the online or 'secondary' market for our whiskies and especially the high prices being charged for them. We would like to take this opportunity to address the question as we enter the holiday shopping season. Our strong recommendation is not to buy our whiskeys on the 'secondary' market, aside from the fact that it is illegal in most states, there is also no guarantee about what you might be buying from a product provenance standpoint. "Sadly, we see mounting evidence in other parts of the world around counterfeit spirits. We do not want to see any customer of ours duped in the secondary market nor having to pay exorbitant prices. We are continuing our efforts to shut down the illegal 'secondary' market for our whiskeys."

But what about the the role of the flipper? According to an online manager of a secret site that allows the resell of whiskies, there are four types of flippers:

Profit seekers: it's a business opportunity. "They will pay folks to wait in long lines, they will bribe wholesalers for information and/or follow their trucks around. They are also going to be hated by everybody that reads your story," the source told me under the condition of anonymity. Profiteers often attract larger organizations with investors backing them, some have earned more than $1 million selling rare whiskies to billionaires who almost always get what they want.

Opportunists: if they're offered an allocated bottle at retail, they will buy to resell and earn a quick buck.

Traders: these people buy a bottle in their market to trade up for another bottle they can't get. Perhaps this is enthusiasm, but it's still flipping one bottle for another.

In need of the cash: these are people who have lost their jobs or just need to sell a bottle for immediate financial gain.

Of all these, it's really only the profiteers and the opportunists that drive the enthusiast mad. But one flipper says his actions are a part of the natural laws of supply and demand. He is needed. "This isn't me mounting a personal defence, it's me defending the 'need' for a secondary market in the first place.

When the whiskey is shipped, they try to mask its contents. The vast majority of shipments go through FedEx and UPS because of their superior tracking services and the ease of printing labels online.

In the end, anybody who practises the reselling of alcohol runs a dangerous risk. They're always just one package away from getting caught. And flippers know this. As one said, the deals gone bad are just a part of 'natural selection.'
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