Idle Speculation

Posted on Wednesday 14th of March 2012

What is the value of whisky to you? There is much talk of whisky speculation, investment, expanding markets, developing markets, collecting, consumption, branding and super-premium these days. Is it a coincidence that it all seems to have come at a time when I’ve just started a new job in a relatively youthful auction house? Or is my position a symptom of circumstance or, worse still, the ‘market’? I know for a fact that my job exists because its existence facilitates profit. We talk a lot about value these days. I see all the rants, raves and comments about it coagulating like puddles on the shores of social media. I hear it when I speak to the retailers. Margins, allocations and profits are getting tighter and tighter, the auctioneers are winning and the retailers are fighting up hill. Is this all because there is less and less of the old stuff to go around, the juicy old bottles that everyone wants. The spiraling auction prices and the increasing feeling that the old bottles and new releases are two separate worlds would seem to suggest so.

 

The star bottles in our latest auction. How many of us can now afford to obtain, let alone open, bottles such as these?

But there is a bigger picture here I think. All this increasing talk of value or perception of value seems indicative of a trending change in the way many of us think about whisky. How many of us can now afford to open old 1960s Laphroaigs or 1950s Macallans? These bottles have become tokens, they are symbolic of their perceived worth, in short, they are currency. Ten years ago there was McTears in Glasgow, they held whisky auctions no more than four times a year. Christie’s and Sotheby’s did fine wine auctions but that is something still far divorced from whisky in terms of the truly astronomical prices and quantities, it was then and it still is. Now we have the online specialist aucitoneers Whisky Auction, Scotch Whisky Auctions and more on the horizon no doubt. We have McTears (now on ten auctions a year), Bonhams and, most recently, Mulberry Bank Auctions, where I work. There will almost certainly be further additions to this list in the next year and I haven’t even mentioned all the smaller auction houses in Britain that do occasional whisky auctions or specialist sections of larger auctions dedicated to whisky. There has been an explosion of whisky at auction over the past decade, in both prices achieved and quantity sold. But what does it all mean?

 

One of the best illustrations of why whisky has value is Ardbeg Manager's Dram. Bottled in 1999 it was a single cask of astonishing quality and character. The bottles were practically given away at £69 a piece. Now enough people want one of these incredible bottles that the price is nudging £2000 a pop.

With straightforward analysis it means that the desire to drink great whisky, coupled with the cumulative effect of three decades worth of cheap to fairly priced, good to outstanding quality whiskies being steadily released around the world, has created a huge demand and an ever dwindling supply. Their inevitable consumption means there are more people who want to hoard/collect and drink than there are bottles left to satisfy these demands. It also means there are many people who kept or own these bottles, for whatever reason, and are increasingly persuaded to part with them, almost always because they seem too valuable to justify keeping. Or they were keen eyed enough to spot an opportunity and played it with an eye to raw investment. The bottom line is money has the power to exert influence over our perceptions of what something is for and what we are willing to do with it. I swore I would never part with the small selection of very special bottles I had gathered throughout the previous decade, but then in 2010 I had an overdraft and I badly wanted to go traveling . Needless to say I soon found out that I wasn’t so attached to them after all, I could no longer justify sitting on several thousand pounds worth of bottled liquid. Do I miss those bottles? No, not really, one or two that were unique and I’ll never see again, but I’ve been fortunate enough to taste most of them already in my lifetime and I’ll taste many more great drams so I don’t feel too precious about it. But the point is they evolved in my mind from potential bottled memories and stored olfactory beauty into the achievable fantasy of black ink on my bank statement instead of red and a few more stamps in my passport.

 

Unlike Whisky, it's impossible to put a price on the best experiences in your life. After the time I had in South America I'll never regret selling my bottles for a second.

People rant and rave about whisky being for drinking a lot these days, it is the understandable and ill informed reaction to the many discussions about collecting/investing/speculating (call it what you will). People seem awfully proud to blurt out their philosophy that ‘Whisky is for drinking not for collecting’ every time they hear of a bottle being stored in a dark cupboard rather than immediately cracked open with pristine abandon while the cork burns in the fire. Of course whisky is for drinking, it is after all a drink, that is the very reason these bottles are expensive. Forget the artificially expensive Dalmore (insert ludicrous latin name here) for a minute, these are different beasts altogether. I’m talking about the vast majority of older bottles and the more desirable, modern independent bottlings, these whiskies acquire great expense because people want to own and drink them (because word spread out from the many that already have). The number of people acquiring them for purely monetary purposes is nothing like the number of people who want to keep them with a view to one day drinking them.

 

There are more of these old bottles getting opened than you might imagine. That's another reason for their ever increasing value. (And yes I know it's a Cognac but give me a break.)

However, if you’ll allow me to play Devil’s advocate to myself for a moment there is a flip side. Whisky is for drinking. I come back to my original question, what is the value of whisky to you? Is it a drink that stokes the fires of great company and friendship? Is it grease to the cogs of late night imagination? Is it the ink that outlines and shades your greatest and darkest memories? Is it a liquid bound up in tears and laughter, one that toasts the fortunes and mourns the people and joys that happenstance cuts out of your life? This is where our passion for whisky often lies, it is born in the avenues of surprise and exploration and it is a glorious journey. But we are changing, these perceptions are being all too often forgotten and swept away in the face of the behemoth of money and its sticky fingers that latch onto every corner of our lives. We have made an enemy of our own passions. ‘Whisky’ is now an industry with sub-markets, markets forged by the very love we feel for the drink that started us on this journey in the first place. The prices now paid for the great bottlings are a measure of the length to which we are willing to go for our love of ‘the hard stuff’. At the end of the day these prices are paid because there are more than enough people with the money and the will to pay it who want these whiskies. The same money and keen willpower that has fired this expanding market for rare and desirable bottles.

 

When we speak of wine nowadays it suffers from an image of middle-class, Guardian-reading, bourgeois association. It is linked with wealth, food matching, Michelin stars and snobbery. The mainstream press chooses to forget in these instances (whenever it suits them) the vast quantities of people who nightly chastise their innards with litres of putrid Blossom Hill swill. The predominant and popular image is of finery and privilege. A shame that, amongst these two ends of the spectrum, is often lost the truth that wine was, and often remains, a grassroots, agricultural industry. One that requires great skill and offers simple and delicious reward beyond the obvious financial return. Wine’s rustic origins and proud role in the history of human decadence, zest for life and earned indulgence is often lost or forgotten amidst a global industry hell bent on image, price control and premium products aimed at premium clientele. Whisky it seems, in this sense, is not far behind. The only difference is whisky will never be as big as wine. The idea that a case of old whisky, even something like Malt Mill (God willing!) would match the price at auction of a case of 1870 Latour (if one should ever come up for sale), is somewhat ludicrous. Whisky is acting bigger than it is, and therefore it feels like it is bursting at the seems a little bit. It makes you wonder how much longer these markets can sustain themselves. How much higher in price can these top end Ardbegs and Port Ellens go? Whisky as an industry has always had its big ups and very big downs. It has also quite noticeably always failed to learn from its own history. Probably something to do with it being a long term product that requires great age and, as a result, the people that sell it are often replaced every ten-twenty years with a new set of people with big wide dollar signs in their eyes, all looking straight ahead into developing markets and never glancing over their shoulder to what has gone before. This specialist and rare whisky market is still a relatively new beast, I wonder how long before it, like the the rest of the industry at large has several times already, takes its first tumble? Is it just me or does it feel like we’re in those slow, steep, up-hill moments before the roller-coaster plunges…

 

A visual history of the Whisky industry.

I know that we all love whisky, with great passion. All this social media debating and all these blogs (including this one) wouldn’t exist without that love. I’ll be honest right now and say I’m not a fan of capitalism and the vast profiteering its structures can facilitate, despite the obvious fact that I am one of many who has undeniably reaped more than my fair share of its spoils over the years in the guise of privilege. With this in mind I have often struggled to reconcile my love of an increasingly expensive drink and the money I’ve paid for it on many an occasion, with the vastly unfair distribution of wealth on this planet. I suppose my musings today have been largely driven by these internal conflicts. Whatever it is, I am increasingly having to remind myself that whisky is, first and foremost, a source of joy, along with art, music, love, sex, films, expression, adventure, exercise, food of greater extravagance than is considered essential, literature and general festivities. These are the apps of life, not just to alleviate pain but to actively provide joy and decadence, to make life worth living. We have an abundance of them here in the west which is partly why so many of us are curdled by gnawing guilt. But the fact is we have them and we should not be ashamed to enjoy them so long as we appreciate our incredible good fortune to have them. I’m just sad to see that whisky is being transported ever upwards and away from these more humble spheres into realms where it is often all too easy to forget (or just to fucking expensive to remember) why we truly love it.

So, what is the value of whisky to you?

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One Response to “Idle Speculation”

  1. igor 15. Mar, 2012 at 5:17 am #

    Thank You again!!!
    Another brilliant,but sad post.
    Igor

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