Still whisky bargains to be had?

[whisky_rob]

In this time of what seems to be ever increasing prices way above inflation particularly for any new more limited releases, Whisky 'bargains' seem to be few and far between in the last few years. I personally have 2 distinct sides to my whisky collection, 1 for drinking and 1 for collecting.

I have always had a £50ish limit for a bottle I will happily drink everyday and maybe a tiny bit more than that for a couple of special occasion bottles at the back of the cupboard. What I have noticed recently is rather than just buying bottles as I used to I now stock up when things are on offer as my standard likes are just getting more and more expensive. I also find myself going for a 12 now instead of a 15/18 purely based on price. Have other peoples buying habits changed too?

Collectable bottles seem to have just exploded in price with releases from top distillers I always used to get now seemingly doubled or more in price and out of reach. I understand that demand is and will continue to exceed supply, but does this legendary 'bubble' that gets mentioned in the press even exist because it just seems to be non-stop price increases and instant sell outs. Surely we are going to get to a point where companies will run out of customers who can afford these prices? Maybe I'm just frustrated that I feel I'm being priced out of a market that I used to be!

Shopping around for a bargain now seems to be a necessity rather than just the enjoyment of saving some money, I think I feel better now having had a complain about the state of things but I'm just frustrated I now drink lesser whisky for more money and collect less bottles and spending more money too!! Rant over!!!

[Quaich1]

Rob, I think you have sincerely and eloquently highlighted some very important elements which put the spotlight on a "disconnect" between the psyche of the whisky industry and the comfort zone and tolerance dynamics of the whisky aficionado, both drinker and collector. Here in Canada, most of the new limited release offerings in the UK are not usually available and if they are, there is usually an additonal significant mark-up from the UK original price. Sales of single malts here do reasonably well for basic single malts. Here in Ontario, the average working man or woman who enjoys whisky typically drinks Canadian whisky brands which fortunately are quite excellent and plentiful and affordable. The clientele who purchase single malts here in Ontario on a regualr basis or who focus on more scarce single malt expressions are definitely not the average working man or woman. One way to get around spending loads of money here for those wanting to try better single malts is joining a certified single malt club which allows sampling of drams which are not for sale at the LCBO and are part of the evening special suppers.

The other interesting phenomena that I am starting to see is that some friends who can afford to spend a fair bit of money on their single malt buys have started to pull back a bit and have become much more selective. They still go after rarer offerings but buy less expressions and less frequently. The tango between the single malt whisky
industry and its buyer dance partner is starting to affect the dance steps and the momentum of the dance which I think is inevitable.


_________________
"Always carry a large flagon of whisky in case of snakebite and furthermore always carry a small snake."
W.C. Fields (1880-1946)

[Alexppp]

[Alastair]

What has changed for me due to the price increases over the past few years is i am less likely to experiment and buy a bottle blind without tasting it or reading a review of it. I also find myself drinking younger whisky as the 18/21 year olds are getting beyond my everyday drinking budget and the increase in price over the 10/12 year olds isnt always worth it

I do stock up when whisky is on offer these days, you have to due to what i consider a marketing technique of falsely inflated prices so that they can have dramatic sales of sometimes £8 to £10 off a 10 to 12 year old bottling. I bought just over 20 bottles of various malts from supermarkets in the run up to christmas and if i was to buy the same malts from the same shops today it would probably cost me around £200 more

[whisky_rob]

[bifter]

A wide-ranging topic and I've had a few rants about prices on here and elsewhere.

Firstly is there a bubble? Well, it has all the hallmarks of a bubble - prices running away, people queuing from stupid o'clock to get hold of limited releases or taking Web sites offline scrapping over NAS whiskies at £80 a pop. We've seem this before in other markets: gold hit almost £1200 in 2011, it's now c. £760; the rush for gold was spawned by the biggest meltdown in markets since 1929, itself a symptom of the housing bubble; house prices in Northern Ireland are still half of their 2007 values in some cases. So perhaps this will play out in the whisky market, I'm hoping so if I'm honest, sorry if that is a view that upsets collectors but I think they're part of the problem tbh.

However the dynamic of emerging markets can't be underestimated. If you consider how many millions of affluent, 'middle class' Chinese, Indians and South Americans are being created every year, they have the potential to dwarf that of the West. If you look at the market for Chinese antiques they are being repatriated at astonishing prices and that's unlikely ever to be reversed now. I'm not an economist but the argument that the West is in decline seems a strong one to me. And as long as this 'new brass' has a penchant for whisky we're going to be increasingly unable to compete.

So, it's a seller's market and NAS seems to be the emerging industry reaction. We're now all paying more for bottles that have no discernible relation to production costs and IMHO that's a bad thing. However production is being ramped up very quickly and, within a decade the production capacity will have been enormously increased. Will that demand still be there in a decade? Who knows! Again I'm hoping that the lustre of malt whisky is just a nouveau riche fad and interest turns to something else, leaving the industry with warehouses full of ageing whisky they can't sell, except to me and you at knock-down prices of course! (Dream on?)

I know many people on this site collect and that there is not a straightforward divide between drinkers and collectors but, personally, I take a dim view of what I'd call 'investors'. It's one thing to collect memorabilia or stamps or cars even (as long as they're given a run out now and then and generally speaking they are). However I really despise the thought that the cream of the crop of Scotch malt whisky sits in dusty bottles without ever being drunk, nothing more than an investment vehicle for spivs. That's anathema to me. Of course that's just my opinion and I'm sure some financial whizz might be able to cobble together some justification for investors driving the market but I don't care. In my view the stuff was made for drinking and the true whisky drinker is fast becoming a victim of its very success. A sad state of affairs.
_________________
"Whisky is liquid sunshine."
[George Bernard Shaw]

[bifter]

Sorry, got a bit sidetracked there. In terms of the original post, I am doing the same things as others in reaction, i.e. waiting for discounts in the shops, looking out for tasting events and promotions to sample higher end stuff before I buy. The SMWS has been raising prices but is sometimes a good source of value and, of course, you can try before you buy.

I've also being giving thought lately to getting into other markets that aren't as overheated such as rum, brandy and Armagnac (Cognac is as overpriced as whisky). I've never really taken to Bourbon. Tequila is a drink I'd like to try more of but it's not very available. Part of the advantage of living in Scotland is the breadth of choice in single malts of course.

And I have to mention duty and VAT, the levels of which are egregious when compared with wine and beer. A rationalisation of duty across the board would be welcome but what chance of that?
_________________
"Whisky is liquid sunshine."
[George Bernard Shaw]

[opelfruit]

The problem with emerging markets is that they are;

1. Fragile
2. Prone to rapid direction change

The markets that are being sold to (and future planned for with produciton rises/new distilleries) may well fallen away as quickly as they came about. The money may stop, the market may crumble or there may be a step-change in the buying habits away from whisky to something, say brandy or vodka (as has been mentioned above).

These emerging markets are great because the are in such flux and are dynamic.....the scotch whisky trade however, is the total opposite. It cannot change quickly and has to plan very long term for demand. The introction of NAS bottlings does help them somewhat and allows them to be more dynamic....

The regions that really will benefit are the new emerging whisky producing nations themselves, as most of their stuff ages so fast and can be slapped out at 3-5 years old at quality levels they can move with their target audiences demands.



I for one partly hope it collapses as the prices rises are getting silly. I'm lucky that I can afford most of the stuff I want to drink regularily. I never go for the big hitting super-mega-uber-premiums (Port Ellen OBs etc...) but I'd still rather have more money in my pocket thanks very much

at the same time we dont want to see a mass closure of distilleries again because of lack of demand. That would suck.



Look though, we all live in a world of change. The house I live in is smaller than the house that my parents live in, and my parents could not afford to buy the house they live in if they had to buy it now. I live in a world where I can't afford a house near enough as good as I should be able to, but I can replace my washing machine/TV/computer without worrying about the cost.

So certainly at the moment, whisky is the same. Long gone are those tripple decade plus bottles and we're on the throwaway NAS. Shit happens. As annoying as this is it's outside of the control of any of us.
_________________
"Too much of anything is bad, but too much good whisky is barely enough."

[Quaich1]

[TheWM]

I have given this a lot of thought and whilst there is no right or wrong answer, just individual opinions, I'll throw my two penneth in.
 
I'm new to the whisky scene, but I'd call myself a (novice) whisky enthusiast, but I've seen what is happening with the whisky world happen with other hobbies I have, such as watches and classic cars.
 
The only difference and I concede it is a big one is that whisky is consumable. Yes, cars will be written off and watches can be lost or broken, but generally these are the exception. Whisky is made to be drunk and I'm assuming the vast majority of all whisky that is bought, is drunk. Therefore, on a basic level those that aren't drunk will command a higher price due to pure supply/demand factors. This is inescapable.
 
The other fact that the burgeoning middle classes of developing nations is also hard to escape. My parents are immigrants to the UK and are of Indian descent. Growing up, all the men would drink whisky. Mainly J&B, Johnnie Walker Red or (Black on special occasions), Grants and Bells - well you get the idea.
 
These days, as incomes have increased, peoples' outlooks have changed.  My dad, as an example would drum into me the power of saving, not being frivolous with money, buying things that were cheap. I read not too long ago, that despite being on miserly wages that the average Chinese person saves 40% or their take home income. I'd assume Indians are not too far off.
 
Quality (or perceived quality) was an secondary issue. This has all changed now, this together with increased incomes has also lead to consumers from emerging markets come to the table, this has been a long time coming.
 
I can't help but think that in relation to these consumers - good luck to them. We in the western world have had years of being in a privileged position to afford to buy luxuries. Now the Indians and Chinese are able to afford them, their time has come as it were and, I feel we should embrace them. I always try to look at the positives.
 
With potentially 100's of millions new consumers starting to drink whisky, yes in the short term there will be an impact, especially on price - what about the future. Whiskies that are being made now that have all kinds of different finishes to them, that we may have never have thought of (I personally cannot wait for a Mexican grain whisky with a Tequila finish:) Think of the new distilleries that may open across the world and the expressions that might start filtering through.
 
And with more choice comes competition and generally, prices may start bottoming out when there are new entrants to the market as currently there are still only a few major players in town (examples, look at PC's, MP3 players, tablets etc:). I also hope that the established cartel will have to move with the times to adapt and demonstrate that their brands are worth the premium based on quality and age, rather than marketing.
 
Anyway, I digress.
 
The arguments against collectors are similar arguments I have heard previously. I used to similarly subscribe to the view that those who simply jump on a bandwagon to simply profiteer from a hobby enjoyed by others is a bad thing. But then, like a lot of things - this isn't as simple as it appears.
 
For example, when someone devotes years to their hobby and by proxy becomes a collector, but not for profit, finds that due to their luck/knowledge, they are sitting on a small fortune as the stuff they were buying 10 years ago has suddenly exploded in price. And by selling a portion of their collection it affords them to buy other things that they previously thought was out of their price range?
 
TWE, for example is a good example of how collecting/profiteering lines cross over and get blurred, although if the TWE didn't do what they did, then I'd imagine lots of us may have to go without, or even more bottles would go abroad.
 
I myself, have bought 4 bottles of Mortlach 16 and looking back at it, I should have bought more. Why? Well it's one of the nicest whiskies I've ever had in the short time I have drunk whisky and the thought of it never being available for me to drink again frankly sends shivers down my spine. I want to be able to have a dram with my unborn son when he turns 18 for example and share this experience with others.  It was also affordable.
 
That said, I'd be lying if in an undetermined amount of time I get offered several times what I paid for it, that I would keep it. I would sell, if it meant I could try something else that previously may have been considered out of my price range. Is this a bad thing? Again, to me it would be an opportunity cost that I would have to weigh up.
 
And to try and sum it all up and going back to the OP's question and point. In the nicest possible way, you appear to be contributing to your own problems whiskyrob insomuch that you have already said you are collecting whiskies and finding it harder to find cheaper bottles out there. I agree, prices are going up, but if you (and I) will store those we like for profit or future consumption, then the upshot is higher prices.
 
To give an analogy from cars, for years prices of early 911's have been rapidly increasing to the point where they are out of the realms of most people.  What has happened is that prices of less desirable models have started to increase as those buyers pushed out of the 911 market but want a Porsche are moving to 912's and late air cooled models like the 964. Hell even 914's have almost doubled in price in 5 years.
 
So, yes - I am buying whisky like it goes out of fashion when the retailers have a sale on and have saved myself a considerable amount of money over the last few months stocking up on bargains, but there are other ways to adapt to the changing times. I for one am buying cheaper whisky at Lidl and Aldi when new expressions are available, and generally, they are proving to be OK weekday drams.
 
I'm also taking a look this year at bourbon. Given Jim Murray's comments (and I find it a bit weird that those who previously were happy to quote ratings/notes from his bible are now treating him like the devil for his views on bourbon) and the higher quality level that distillers work from, is worth further investigation. Who knows this may be the next big thing over the next few years as other markets come to either appreciate bourbon, or are driven there by price.
 
I would also finish with the fact that seems to have escaped this discussion are the companies themselves mothballing distilleries. This, in my view has also contributed to higher prices, but they don't seem to come under as much attack as those trying to make a few quid. And as mentioned above, if we could get some movement on the unfair taxation, this would assist in unburdening our wallets.

[bifter]

[whisky_rob]

[albo]

[albo]

Generally on this topic though, yes there are still bargains to be had, you just need to be lucky and quick these days to take advantage of them.

Last year I managed to get hold of a bottle of 18yo Glenlivet from Waitrose for £24 as they were selling it off, this to me represents a bargain. Tesco recently had Aberlour 10 on offer for £16. You just need to be in the right place at the right time.

Overall though, I do this this is a whisky bubble at the moment, emerging markets, new mega distilleries it has all the hallmarks of being so. I happen to disagree with some on here who say we should embrace this as it will lead to new exciting things happening in the whisky market (new distilleries all over the world, Mexican barley tequila finished whisky etc), they all sound very gimmicky to me and will all I have no doubt come with their own unjustified price tags.

Distilleries as punting out NAS whiskies left right and centre now to try and cash in on what's happening world wide as they didn't see this coming, their stock levels are not at the stage they need to be to manage the demand. I get that and I also get that if they stuck to their core age statement whiskies that prices would go even further through the roof as the stock would be limited. This doesn't make the price they are asking for right for the whisky they are producing, I'm not suggesting these NAS whiskies are inferior in quality (some are mind), but there is a value in the length of time the spirit has been matured, if nothing else, that value is in the distillery not seeing a return on it's investment for 10/12/15/18 years, versus, 5/6/7/8 years, then storing the whisky take room and comes with a cost, not being able to reuse barrels as quickly or as often etc, these all come at a cost which the NAS whiskies inherently don't have, so to pull a 12yo whisky and replace with a NAS for the same sometimes more money, is just plain wrong and there is nothing any of the marketing people out there can say to me to convince me otherwise. The only way I will believe them is if they start listing the quantity by %age of each of the aged whisky in the bottle, so a NAS whisky as 30% 3yo, 50% 7yo 10% 10yo and 10% 15yo, at least that would give me some indication of what I'm actually drinking and I could fairly base my comparison against the old 12yo offering. Now that would be a move that the industry should be pushing for, that would be open and honest and give clarity to the consumer.

I've listed above my thoughts on collectors (odd people), investors (bad people) and consumers (good people) so I'll not cover that ground again.

Overall though there is nothing we can do about this, it's still a consumer driven market, we make the choice to buy or not to buy, whisky is after all a luxury item and not a must have commodity, given the amount we all post here and the drams that seem to get sunk by this very small community each day, I don't think were anywhere near a state of unsustanability just yet.

[whisky_rob]