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Sunday
Dec092012

Why Whisky Could Be Bordeaux

Sometimes whisky bloggers will team up to tackle a topic simultaneously on their respective webpages. I've never really had the chance to go back and forth with another whisky blogger, but this seems like the right time to do it. Oliver Klimek writes an awesome whisky blog called Dramming that continues to follow market trends much like I do here. The man is German, lives in Germany, but writes in English, adding further embarrassment to us American bloggers who can barely write in English ourselves. Oliver wrote an interesting response to a series of pieces I did a few days back, comparing the rise in whisky prices to Bordeaux. While no one knows for sure what's going to happen with the market, I thought it would be fun to think of the top single malt brands in comparison to the top Bordeaux brands. Oliver, however, does not think the comparison is as strong.

Let's look at some of his points:

I beg to disagree. On first glance, the argument makes sense. First Growth Bordeaux prices have climbed to ridiculous levels, but still the top châteaux sell their wine easily. And whisky prices have been going up and up bolstered by strong demand even for very expensive bottles. But there are two fundamental differences between the whisky and the wine market. Firstly the wine market is huge, much bigger than the whisky market.

I think the first thing that we need to point out is that I'm not comparing the whisky market to the wine market. I'm comparing the premium whisky market to the premium Bordeaux market. Just like there are inexpensive Bordeaux wines, there will continue to be inexpensive whiskies. My point is that the pricier whiskies many of us are interested in, but can still afford right now, may be going up to a level that we can no longer afford and never coming back down. It wasn't so long ago that Macallan 18 could be had for $80. I'd be surprised if it's under $200 anywhere by this time next year. That prices me out.

There are many thousands of producers across the world, and the top class Bordeaux wines only make up a teeny tiny little fraction of that, much less than the ‘premium’ single malt whisky segment that is giving us a headache right now compared to the entire whisky market.

I think this sentence summarizes exactly my point. Bordeaux is a niche market, as is the premium whisky market. This would seem to strengthen my argument, rather than weaken it.

For this reason I don’t think the First Growth prices have too much of an effect on the market of ‘affordable’ wine. There are shitloads of wines below $/€/£ 20 per bottle, and not all of them are plonk, while in single malt whisky we can see a definite rise in anything but the most basic expressions, fueled by the laws of supply-and-demand.

If I had been talking about wine in general, this would have been a strong point. However, I think Oliver misunderstood me. At no point do I think that rising Bordeaux prices have had an impact on wine prices as a whole, but rather only on other classifed-growths. If Lafite and Latour raise their prices, it allows Pichon-Lalande and Cos de Estournal to do the same. I think this analogy is the same for whisky. I've been privvy to some insider info that really nailed this point home. I know for a fact that a certain company raised the price on one of their top expressions just so they could be 5% higher than another competitor. They wanted to be seen as "more luxurious" than this particular whisky. This is happening in Bordeaux and in single malt. Believe me.

The second difference is even more striking, and probably also more important for answering the ‘bubble’ question: The correlation between price and quality is much greater in wine than it is in whisky. I am not sure if you can find many €20 bottles that can match Premier Crus – if at all. But it is not unusual to find a €50 single malt receiving the same score from reviewers as a bottle ten times as expensive.

When studying the results of the Malt Maniacs Awards 2012, you see that indeed most of the top scorers are old and expensive single cask bottlings. But this is by far not a one-way street. The quite affordable Elements of Islay Pl1 and Yamazaki Shery Cask bottles managed to get the same 90 point score as the much more expensive old Longmorn and Glen Grant, for example. And it also works the other way round. Some rather expensive bottles only managed to get a silver or bronze medal. For example the latest Talisker 25 yo (price: €250) received 85 points, the same score as the Lagavulin 16 yo retailing for €50.

If we were going to talk about our own opinions, which wines we liked personally or even the public perception as a whole, I think Oliver could have made a case here. However, if we're going to use points to determine quality (the absolute worst way we could possibly do it, in my opinion) then we're only going to prove that Bordeaux and whisky are even more alike. Shall we?

Let's use Robert Parker's reviews of the 2011 Bordeaux vintage as an example:

2011 Lafite - $700 - 90-93 points

2011 Lynch Bages - $109 - 90-93 points

Identical scores. $600 price difference. Should we keep going?

2011 Cos de Estournal $154 - 92-94 points

2011 Fonplegade $36 - 92-94 points

Cos is a Bordeaux legend. Fonplegage not so much. Identical scores. Big price difference.

I could list another twenty examples like this, but I don't think it proves anything other than the fact that points are the stupidest way possible of assessing quality. I don't think Robert Parker really believes that the Fonplegade and the Cos are on the same level. However, if you just look at the points you might think otherwise.

I would argue that Oliver's point is even stronger about Bordeaux than it is for whisky. You can more easily find great Bordeaux for less money than you can great whisky. I think it's entirely the opposite!

I'm really glad that people are feeling the need to chime in on this topic. It's an important one. I really appreciate that Oilver read the piece and used his own blog to offer more dialogue on the issue. This is one of the best parts about the online whisky community. That being said, I've yet to hear a convincing argument as to why the Bordeaux market and the whisky market are different. After reading Oliver's response, I'm even more convinced that they are alike.

-David Driscoll