Most inventory appraisers who are sent to a liquor store after a fire or flood have never worked in one. They are competent at what they usually do: counting, categorizing, and applying a cost or replacement figure from the records in front of them. The problem is that beverage alcohol is not like most retail inventory, and the records in front of them are not enough.
1. Invoices do not tell you what a bottle is worth
A distributor invoice shows what the retailer paid. For a case of a mainstream vodka, that is a reasonable starting point for replacement cost. For an allocated whiskey, it is not. We have seen a limited release invoiced at a few hundred dollars that the store sold, legitimately and regularly, for more than ten times that. An appraiser working from invoices books it at invoice and moves on. Multiply that across a few dozen allocated releases and the schedule is off by six figures.
2. They do not recognize the product
Annual limited releases, allocated bottled-in-bond series, long-aged single malts, sought-after Japanese whisky and prestige cognac are not household names outside the trade. If the appraiser does not know that a line on a POS export is an allocated release, they cannot know that its value has nothing to do with its cost. In one loss we lived through, the evaluator had never heard of the most valuable bottles in the building.
3. They apply one basis of value to everything
Policies value stock in different ways: actual cash value, replacement cost, or selling price less discounts and unincurred expenses. Each produces a different number, and for a well-run liquor store with allocated product the gap between them is large. A schedule that does not state which basis it is using cannot be checked against the policy.
4. They miss what was not on an invoice
Liquor retailers acquire stock in more ways than distributor delivery. Allocated releases arrive in small quantities on separate paperwork. Some stock is transferred between locations. Some is held back from the floor. A reconstruction that relies only on the most recent invoices will systematically under-count the highest-value items.
5. They do not have distributor data
Replacement cost is what it costs to put the bottle back today. That number lives in current distributor price books and allocation availability, which a generalist appraiser does not have. Several states also impose minimum markups or posted pricing, so a national average is the wrong input. We work from live distributor cost, which is the difference between an estimate and a sourced figure.
How to catch it
- Ask what basis of value the schedule uses, and whether it matches the policy.
- Sort the schedule by unit value. If nothing on it exceeds a few hundred dollars, the allocated product has been missed or mispriced.
- Look for the signs of allocation: annual release names, age statements above 15 years, bottled-in-bond series, single-barrel and store-pick designations, and any cognac or wine with a vintage or a prestige tier.
- Ask how the appraiser sourced each price. "From invoices" is an answer that should prompt a second look.
An independent review by someone who has bought, priced and sold this inventory is not expensive relative to the error it is likely to find. Book a consultation if you have a schedule you want checked.