The 2013 Half-Yearly Single Malt Report (Part III)
High End Collectables
I remember in the mid-1990s when the Monday night war between WCW and the WWF was at its peak. Both shows were trying to sign the bottest free agents in the wrestling business and, since both shows were live each week, there was no telling what could happen. Hulk Hogan jumped ship to WCW. Then the Macho Man. All of a sudden guys like Rick Rude and Curt Hennig were showing up in WCW. Fans were thrilled, until the novelty of watching wrestlers crossover between promotions wore off and all the tricks were played out. Both promotions had become so dependent on a surprise face each week that viewers considered a show disappointing if no one new showed up.
The same sort of pop phenomenon started to happen with the Coachella music festival in Southern California each year. The concert had managed to bring many classic rock acts out of retirement and back on to the stage, to the delight of music fans everywhere. The Pixies reunited for Coachella in 2004. The following year they got Peter Murphy to reconvene with Bauhaus. There were rumors of a Smiths reunion for 2006. Or maybe even Led Zeppelin. But, alas, all we got were Depeche Mode and Tool. "Bummer," people said (but not really, right? Who doesn't love the Mode?). The expectations had become almost impossible to live up to at that point.
The problem with constantly outdoing yourself is that you're constantly under pressure to keep outdoing yourself. When the next new hit isn't bigger and better than the previous one, disappointment usually follows. In my opinion, the high-end segment of the single malt whisky industry is suffering from expectations that it can never live up to. As we mentioned yesterday, part of the reason one could buy such great whisky back in 2005 was because producers were sitting on bulk quantities of old booze. Rumor has it that Rachel Barrie was dumping twenty-five year old Ardbeg into the Uigeadail at that time. No wonder it tasted so good! Yet, with demand at an all time high, there's no way a producer could justify doing that today. So how does the whisky industry follow that act?
While single cask whisky prices have become rather exorbitant compared to what they once were, they still pale in comparison to what most luxury distillery bottles run these days. About a week ago I wrote an article about my shopping experiences in Las Vegas, where I briefly considered buying my wife a Chanel purse before thinking about all the other things we could get for the same amount of money. All of a sudden that $250 purse at Kate Spade looked like child's play. It's amazing how expensive some things seem until you put them into perspective. Today I tried doing that with some of the high-end whiskies we have in stock right now. The new Bunnahabhain 40 year old is $3000 a bottle. It's supposed to be great. But for that money I could get a bottle of our amazing Port Ellen 30 cask for $600, a bottle of the ethereal 1979 Glenfarclas for $300, a bottle of the ultra-rare and decadent 1980 Glenlochy for $450, and still have $1650 left over to blow on a wine, clothes, and food. All of a sudden those casks seem down right cheap.
Macallan 25 is now at $900 a bottle – if you can even get it. Again, that's the same as a bottle of the Port Ellen 30 along side the 1979 Glenfarclas. If you really want to understand what's happening with high-end hooch, look at the Ladyburn cask we bought three years ago. We sold those for $300 at the time. Last year when we went back to Signatory in search of a second barrel (which they had) they wanted $800 wholesale!! That would put the retail at over $1000 a bottle! Again, we have to remember that these older whiskies were the result of a glut, a state of overproduction that resulted in a surplus of whisky across Scotland, left untouched as they continued to mature for decades. I doubt that anyone is putting down casks today with the intention of aging them for three decades. "Oh, those casks over there? Those are reserved for our 2043 edition of Macallan 30." Yeah right. When they can't even keep the 12 year in stock, you know most casks will never even reach their 13th birthday.
Part of the reason we bought in big on the Sovereign Port Ellen, older Glenfarclas casks, and things like Glenlochy from Signatory last year is because we knew it might be the last shot at doing so before prices really got out of control. We were right. While $300 to $600 isn't inexpensive for most shoppers, it pales in comparison to the garbage we're being peddled today. I'm seeing price sheets that make my head spin. Old whisky is just something you're going to have to learn to live without unless you're willing to overpay. I can deal with $600 for top quality Port Ellen – the most legendary of Scotland's "lost" distilleries. We've only got about 30 bottles left, anyway, and we're in no hurry to get rid of them. Every year that goes by only makes them rarer and more valuable. But $600 for 22 year old Ardbeg? $600 for 25 year Laphroaig?
I think we'll be taking a break from the collector's market for quite some time.