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Thursday
Oct182012

I Will Single Handedly Fight This

I've been emailing with customers all day about the current state of the whisky market. I mentioned on this morning's email newsletter that the 1988 Glenrothes took a big price increase today, so I decided not to reorder it rather than raise my price by $20 per bottle.  Laphroaig 10 also took a hit, but I did adjust it because it was less drastic (now $42).  Because Laphroaig 10 is a whisky that we sell in high volume and that I really love personally, it's not something I'm going to quit on.  That whisky was probably priced below market value to begin with. The 1988 Glenrothes, however, won't really affect our sales whether we choose to carry it or not.  I can find plenty of other whiskies to take its place.

The perceived market value of a whisky is important to the equity of each particular brand.  When a brand wants to be seen as higher-end or more luxurious, they'll raise the price to reflect that desire. What would happen, however, if I started buying up all the big boy whisky in California and just lowering their prices?  Not on the bottles that pay my salary, like Lagavulin 16 or Ardbeg, but on the other whiskies that are not particularly key players at K&L.  What are the whiskies that people love, but are a bit too expensive to purchase on a whim?  Oban's a great example!  Everyone loves Oban 18, but it's usually about $100 or more at most places. $100 is a good price for that whisky because it is quite elegant. That being said, what if I called up the distributor for Diageo, bought up every last bottle of Oban 18, and then just sold it for less?  Would other stores follow suit?  Would that then pressure a large whisky company to lower its price?  What would happen? I don't really need to sell Oban 18, but it's nice to have.  Therefore, if I just blow it out on volume it should all even out for K&L.  Now I'm curious!

Let's just get on the phone here.......yes, this is David at K&L, how much Oban 18 is in stock?  36 cases?  OK, I'll take all of them.  Delivery tomorrow.  Redwood City please.  Thank you!  There.  It's done.  A huge truck of Oban 18 is coming to Redwood City tomorrow and I am just going to sell it for less. True, it's going to ruin the market price for Oban 18, which is usually a $100 bottle of whisky, but what else can we do? For every whisky company that raises its price, I will counter them by taking one of their whiskies and lowering its price.  Tit for tat.  Let's see how this works.  I refuse to let you all get priced out of drinking great whisky.

Oban 18 Year.  Was $100.  Now $77.99.  That makes for the lowest price I can find online. Who's next?

UPDATE:  I said "tit for tat," so let's add Glenrothes to this list.  Diageo raised the price of Ron Zacapa, so I've lowered the price of Oban 18.  Glenrothes raised the price of the 1988, so I'm now lowering the price of the 1995.  1995 Glenrothes: was $65.99. Now $51.99.  This is really fun!  I hope you're all enjoying it as much as I am!

-David Driscoll