Castle Brands Board (ROX)

[FUNMAN]

Gomey, I read the article wrong. Sorry. Your math is also slightly wrong. See my example at the bottom.

http://money.cnn.com/2017/11/16/news/beer-wine-whiskey-tax/index.html

Spirits are currently taxed at $13.50 per gallon. The proposal calls for lowering that to $2.70 per gallon for the first 100,000 gallons produced or imported by the industry. The tax rate would go up to $13.34 per gallon for anything between 100,000 gallons and 22,130,000 gallons. Anything larger than that would be taxed at $13.50 per gallon.

It's unlikely the tax savings will be passed along to the consumer in the form of a price reduction on beer, wine or spirits. Business owners are looking to reinvest the savings.

"Any money we would save we would just invest right back into the company in terms of equipment, and we would hire more people," said Tom Lix, co-owner and founder of Cleveland Whiskey, a distillery employing 15 people that was recently toured by Senator Rob Portman of Ohio, lead sponsor of the amended bill.

I focused on the first part of the article which was talking about barrels.

The quoted part of the article above is based on gallons and relevant to Jefferson's. You're right. It will be big for distillers.

However, let's not forget the example of oil producing countries selling barrels of oil. They have self serving supply and demand needs. In order to sell more product, there will definitely be price discounting. They all want higher prices, but supply won't allow it.

I think it's a fantasy that the distilleries would turn around to reinvest in replacing or expanding "property, plant & equipment". Unless demand increases, the additional profits are not going to be reinvested.

Spirits and oil are no different.

That said, you are right. This will be a big benefit to Jefferson's. It won't be 100% of the savings, but it will be important.

A case of Jefferson's equals 4,500 milliliters. That equals 1.188774 gallons.

Jefferson's is going to sell about 80,000 cases this fiscal year, or about 95,102 gallons.

95,102 gallons x the max savings of $10.80 = $1,027,101.60.

That would be significant.

Unfortunately because of our 163 million O/S, it only adds .0063 EPS.

Please tell me if I have the math right.