I first started writing this blog in June 2010, those were heady days, you must remember them, it was the year of the ipad, oil spills, earthquakes and Justin Bieber. Was it arguably a more innocent time for whisky, possibly, bottlings were already pretty expensive, we already had the crazy bottlings but at that point they were such things as Glengoyne 40yo, we had yet to reach Constellation levels via Glenmorangie Pride. We had whiskyauction in Germany and McTears and Bonhams in Scotland. There were still bargains to be found here and there, Diageo’s special releases were offered at considerably more ‘drinkable’ prices. Retailers still rumbled on, ticking over their profits, trading as they always had. There was a recession, as there still is now, whisky was doing well, better than it ever had done. But much has changed in subtle ways since then. A lot has even changed in the past nine months since I last posted on this blog.
We now have an industry that is seemingly convulsing in different directions. There has been an increase in retail prices generally across the board, sharply in many cases, and an increase in the output of super premium releases, the bottles that court the £100,000 plus price tag and its associated buyers. We still proffer the same old sentiment ‘look how many bloody whisky blogs there are these days’ just as we did three, five even ten years ago, but blogging is no longer just hobby horse online witterings, much of it has morphed into a second tier arena of marketing (with a number of notable exceptions). New distilleries seem to spring out of the ground now like never before, almost every month a new one is announced. Words like craft, farm-scale, boutique, micro and artisan are all battered about in press releases like squash balls. But perhaps the biggest and most notable change, from my understandably skewed perspective at least, is the explosion of activity on the secondary market, or the auction scene as you might know it.
Scotch Whisky Auctions, Mulberry, Bonhams, McTears, Tennent’s, Taylor’s, Whiskyauction UK, Whisky Bid, Deluxe Whisky Auctions, World Whisky Auctions, Just Whisky Auctions, and last but by no means least, us, Whisky Online Auctions, will it never end? Probably not, there will be other players, and big ones too before long I suspect. We have become accustomed to looking over catalogues, sharing our mock incredulity at crazy prices, poking fun a silly estimates and discussing the hell out of the various merits and pitfalls of investment. This is a truly obvious change in the way whisky, in the more nerdy arenas at least, is acquired and traded. I spend a lot of time talking with people about the process and the ins and outs of this oddly alive secondary market we come to find ourself in but we rarely talk about why we have arrived here. So, here’s a few ideas on that front, in no particular order…
It’s a long standing fact that in times of economic hardship the two industries that seem to boom without fail are those that concern sex and booze. (I’m too ugly and shy to work in the former so I feel fortunate to have employment in the latter). There will always be people with plenty money but when the fiscal climate puts them on the back foot then instead of buying yachts and lolloping around the world in five star hotels they tend to stay at home and seek more domestic luxuries. This often takes the form of increased fine dining and buying more lovely booze. There is also the inclination amongst many to drink their way out of recession, just as they drink to celebrate success, they drink to blot out failure or misery, the cosy veil of alcohol provides many with a security blanket to their woes. However this is only half the equation, there is also the next point to consider…
Just going out for posh nosh and a bottle of Chateau Lafite won’t directly bolster increased activity on the whisky auction scene. However these people with money to burn can easily become captivated by ideas about alternative/new investments. There has been quite a bit of noise in the press as of late about whisky as the new wine, liquid gold, the new great investment and other such silliness. This has brought new money to the market in quite a short sharp space of time. People are beginning to buy whisky at auctions with a far more scattershot attitude and little knowledge to provide design to their spending. This has played a role in some of the dizzying price increases that have been seen, even in the last year, particularly for Macallan. This in turn plays its role in bringing out more bottles, people see daft prices and generally think they’d quite like a slice of that money too. But it is not just new money or bored money that has done all this. There is also the more knowledgeable folks, geeks, industry people and aficionados that have learned these new patterns and played them well. These people work a mix of investing and speculating with the new limited releases. Some people do it very seriously as a means to make money, others do it simply for fun. Whatever the reason the accumulative effect drives prices up and brings new levels of both supply and demand that feed off each other. As long as the distillers continue to release limited but desirable bottlings then the auction scene will play it’s roll in providing a way for people who missed out (often a lot) the first time around to get their desired bottle the second time around. The fact that they’re more than willing to pay two to three times the original price has not gone unnoticed and the speculators are out in droves now. Just look at the swift turnaround of the Macallan Coronation last month.
3: The Core Traders
People are not solely interested in whisky as an asset of finance. The age of innocence may be dead but the love people have for this spirit is accelerating unbounded. More and more people are coming to love whisky and they desire to taste and acquire as much of it as possible. More people are graduating all the time from the shop floors to the jewels of obscurity, beauty and rarity offered by the auctions. The legendary bottles become rarer and appear less frequently in this climate, every bottle opened helps boost the prices for the remaining bottles. A bottle is opened and shared, those that taste become those that seek and the more that seek the harder they all have to seek and the higher they have to bid, this is how it has always worked with the older bottlings. The internet has proliferated knowledge about the great whiskies and rendered easy the routes of access to the auctions. I’m looking at you Facebook, Twitter and Whiskyfun. In reverse people are more aware of what their bottles are worth and as such a serious auction scene has developed to serve them and provide that crucial link between an ever expanding gaggle of buyers and those with the goods to sell. This leads neatly onto the next point…
4: The stagnation of retail
Unless you have a serious set of very busy and moneyed customers then it is very difficult to keep up as a retailer of rare or older whiskies. What happened not so long ago is that retailers and traders would go to an auction and buy bottles. Then they would put the bottles in their shop/on their site with a price tag that allowed for VAT, their costs in acquiring it and some profit. When you could buy Macallan Royal Marriage for £400-600 then this was a workable system where they’d get a buyer at £1200 before long. The buyer paid for the retailer to do all the work in sourcing. Now the route between buyer and auction has become so narrow and convenient that prices are no longer competitive for most retailers at auction. Retail for whisky has been largely confined to new and modern releases. The amount of money and spending power that has migrated over the past two years to auctions, both online and traditional, away from traditional retail, is quite staggering and one of the main reasons for the huge growth in whisky auctioneering.
Buying and selling whisky at auction, when done right, should be a lot of fun, especially for the buyers, it can no doubt be frustrating to see someone else’s bid keep thwarting yours at the last minute but the thrill of the bottle you do win is always sweeter and longer than the fluttering resentment at those you miss. As has been proven very clearly over the past year, there’s always another auction around the corner and always another bottle to get. The sheer volume of supply that we’re currently witnessing also allows for a fair share of bargains. Look especially at the lower end pages of the online auctions, see how many more modern bottlings go for prices well below their current retail marks, even including a 10% commission charge these are still great buys for anyone’s money. They are also essential for any auction as they provide a way for new people with great enthusiasm and interest but perhaps less money to take part in and enjoy the process of an auction. It’s certainly more thrilling than simply clicking ‘add to basket’.
So, that’s my take on why we find ourselves in the state of affairs we’re in. Where does it lead, is it sustainable, what does the future hold for whisky and can Adam Sandler ever truly be stopped? These are all worthy and important questions but they are not for this article and not for today. Instead, to finish and to celebrate in a small way being back at Whisky Online here’s a wee worthy dram very much in the spirit of the times despite being a creature of the past…
Strathisla 10yo. OB Chivas bottling circa 1960s. Torino Import. 43%. 75cl.
Colour: White wine
Nose: This is one of those bottles that as soon as the cork is out the scent just seems to ooze around the room. It’s a style I adore, the wood is almost completely invisible, instead you have a whole meadow of wild flowers, hessian, lamp oil, very gentle fragrant waxy tones, various fruits such as lychee, elderflower, juniper and gooseberry. It’s hugely mineral as well, a pristine, highly chiselled profile with really elegant farmyard notes in the background and little touches of soot, fresh herbs and a little butter. Harmonious and really beautiful.
Palate: Punchy and very sharp with some hyper clean mineral and citrus qualities, honeysuckle, pollen, white berry fruits, green fruits, muesli, nutmeg, caraway, herb liqueurs, mint tea, just lovely really. More big waxiness, menthol notes, a little old tobacco flavour, green tea, eucalyptus oil and marzipan. There’s plenty going on and it’s all perfectly composed.
Finish: Long and drying, almost aridly fizzy in a way with notes of lemon curd, custard, pastry, a touch of wood ash, mineral smoky tones, some spice, some more white and citrus fruits and finally something a little meaty and herbaceous.
Comments: Old style whiskies can beautiful but also very difficult and often ‘unsexy’, this shares many of those attributes but it’s actually really very charming. Not to mention devastatingly quaffable, I love how much personality there is and I love how the distillate does the vast majority of the talking, perfect wood in other words. It feels like a much gentler and more refined version of some of those old high octane Clynelish for Giaccone. Anyway, it’s really brilliant and not particularly expensive either. A great summer dram too.