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'Whiskey Shortage' Fears Overblown

Whiskey shortage claims deserve to be watered down.

Bring out the crushed ice and bourbon and whip up a julep -- despite headlines to the contrary, America is not likely to face a whiskey shortage any time soon.

Spurred by industry press releases, rumors of a run on the whiskey distilleries have prompted publications to pen heady coverage on the crisis. USA Today warned of a "looming" whiskey shortage. Esquire called it a "shortage worth worrying about." FOX News asked whether the "whiskey apocalypse" is real and TIME is sure that it has the industry "over a barrel."

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Yeah, that one doesn't pass the smell test.

It's true that in 2013 for the first time, whiskey exports, encouraged by reduced tariffs, exceeded $1 billion, making less whiskey available stateside. That and an increased interest in flavored whiskeys have caused some big distilleries to ramp up production, thereby drawing on more resources needed for production, and smaller shops have sold out or raised prices, but that's far from an actual shortage.

“Do I think there's an overall huge whiskey shortage? No," said Kentucky Distiller's Association spokesman Adam Johnson. "Yes, consumption is up, demand is high, but there's still plenty of great brands on the shelf."

For instance, distiller Buffalo Trace has warned its customers of rolling blackouts affecting the supplies of its bourbons, including the already notoriously hard-to-get "Pappy Van Winkle," aged 10-23 years. Even Weller 12 Year, a smooth, wheated bourbon from the same company can be difficult to come by.

“People are hearing Weller is the poor man's Pappy and … it sells quickly. You might not find it at two stores or three... or you might have to come back,” said Charles K. Cowdery, author of Bourbon Straight. Maker's Mark has for 30 years been "on allocation," a system that rations out whiskey supplies state-by-state based on past sales to ensure overall market availability. "But have you ever walked into a store and they have no Maker's Mark?” said Cowdery.

In classic economics, a shortage occurs when the price of an item is set below its fair market value and supplies across an entire category run out

That's not what's happening here, though there are real bottlenecks that are being exacerbated by the spike in demand.

Vendome Copper, which builds nearly all the whiskey stills in America, has a year-long backlog. Experienced copper welders are in short supply. In Kentucky, just one construction company is certified to build whiskey warehouses. Thanks to a bad winter and a lack of skilled loggers, distillers are also scrambling to get enough barrels.

And in part, changing tastes are to blame.

Can't find whiskey? There's always gin.

Bartenders “stopped making frou-frou cocktails and started going back to the basics and using whiskey.” said Fred Minnick, bourbon authority for the Kentucky Derby museum. They also started using brands like Bulleit and Four Roses. Meanwhile ultra-premium brands drew new fans. And smaller craft distillers have increasingly been interested in spirits, only to be unable to keep up with demand.

But even though distillers are spending millions to ramp up production, their warehouses are full. Jim Beam has one under construction that will hold 100,000 barrels, compared to the normal 20,000.

The whiskey problem could ultimately be altogether different than the feared shortage.

“There may actually be too much whiskey,” says Cowdery. “It's hard to predict what you’re going to sell in five years. The big growth markets are predicted to be China and India. If those markets develop the way they're predicted to, enough whiskey can't be made.”

If predictions don't bear out -– and there have been hiccups -- “everyone will have made too much," Cowdery says. "We'll be swimming in the stuff.”