One Day....

One day, no one will drink Macallan. Not because they've lost their touch, not because they've stopped using Golden Promise, not because Michael Jackson is no longer with us to espouse the distillery on the hill, people will always pay attention to it. Simply put, no one will be able to justify spending the money on this stuff. Today I received the price increases for the brand effective May 1st. You may remember that we were forced to raise our price on Macallan 18 year for the first time in quite a while after eating incremental price increase over the last couple of years. Macallan feels perfectly justified to raise their prices simply because of laws of supply and demand. Who can blame them? They've raised their prices once a quarter for as long as I can remember and we still can't keep it in stock. Let's not beat around the bush. Despite seeing no slowdown in sales due to price increases, Macallan is also feeling extreme supply pressure from the Asian market. The number of wealthy individuals in China, Singapore, Japan, Korea, who are willing to pay whatever it takes to own this prestigious product is unfathomable. Regardless of what they charge in Asia, the savvy world traveler will find that the prices in the US are significantly better than back home. That means that unless the prices normalize worldwide, we will not see any sort of reduced demand domestically. In fact, I'm convinced that the vast majority of Macallan 25 and 30 year sold in the US is finding its way in suitcases or through various exporters into Hong Kong, Macau, or any number of other destinations where wealthy individuals are willing to pay tenfold the retail price just to secure a bottle of the famous distillery's rare offerings. But, what does that mean for us? People who might like to actually drink Macallan? It means we're screwed. Today, the price of Macallan 18 year went up $206 a case. That means my cost is above my retail price (again)! Expect Macallan 18 year to be $200 in no time. That's not even the worst of it. The Macallan 30 Year Old Fine Oak, given it has been VERY unavailable over the past year, has just increased $1700 a case or nearly $300 a bottle. This is not even the highly prized Sherry Wood 30 Year. I'd buy in, but of course they're out of stock until after the increase. Big surprise. Take comfort in the fact that the Macallan 25 year is only going up $401 a case. So what was a few years ago an $800 bottle (and an expensive one at that), will easily go for $2000 today if not significantly more. But, can it still be undervalued? How about $2600 in Hong Kong? You can buy it today! So yeah, it's over man. One one will drink Macallan.

-David Othenin-Girard

David Othenin-Girard