...where distraction is the main attraction.

Wednesday, January 13, 2016







A few words about my methodology:


Dark blue = price actually decreased, thus a negative MOI
Black = price increased more than 10 times the rate of inflation





click to embiggen

Here's a breakdown by distillery:




















  1. This comment has been removed by the author.

  2. Beautiful, thanks! One element that would add to the picture is if you would be able to also add plots where you weight each whisky by its market share (e.g., cases sold in 2015, or average number of cases sold 2007-2015). For example, Edrington is leading the price increases but that's due to their many super aged whiskies. On the other hand, Highland Park 12yo and Macallan 10/12yo did not change that much in price, and their sales are orders of magnitude above those of, say, Highland Park 25yo.

    Given the depletion in stocks of aged whiskies, perhaps a lot of the price increase in the older whiskies is due to decreased supply. There's probably a formula somewhere but I don't have the time & energy to get into it. In other words, at steady state the price of a 25yo should simply reflect the cost of time and angels' share. But since we are not at steady state the price includes an element of scarcity. This should continue to hold, I expect that the prices of old whiskies will keep creeping up for the next 10 years or so - it could stop sooner, if the demand comes in line with the reduced supply. The steady price increases for 2015 in this tier show that the prices have not reached a ceiling yet, that the demand did not reduce to the level of supply for these old whiskies. (edited for typos)

    It's been years since I bought an old distillery bottling, most of my 15 yo+ whiskies come from independents these days. We have seen some price increases among them as well, and I expect that this will continue for a few years. This would be another interesting area to explore: have the prices by age group gone up for Signatory, AD Rattray, G&M, others? Is there a shift in the distilleries on offer, or in the age of the whiskies?

    1. Thank you, sir. Indeed, there are lot of things I find wanting in this section's graphs. There are a couple of changes I'm going to attempt next year.

      Regarding Edrington, yes they're at the top of the list because of all of their older bottlings. I'd say that they're also testing the ceiling for their 12yos too; $40-$45 whiskies now selling for $55-$60. Some of us don't personally value those whiskies at that level so we've pulled out. But upper middleclass drinkers new to single malts won't see a problem with it because they only know what they're seeing now.

      As you mention, the top two(?) tiers will likely continue to rise, supply issues or not. People who freely drop $500 or $3000 on a single bottle of whisky today don't feel the squeeze of an extra hundred here or there the way the rest of us do. Retailers love those guys!

      I wish I could show the increase in indie whisky prices, because like you almost everything I buy is from the independent bottlers. Aside from maybe G&M and Signatory, the indies feel the supply squeeze so much more than the OBs. Anecdotally, holy cow have the prices gone up a lot the past two years.

  3. So another big picture conclusion comes to mind: the "premiumization" (beautiful word!) of Scotch, seems to me now, is more born out of necessity than out of sheer greed. The two tectonic trends of the last ten years are: 1) decrease in consumption/sales of blended Scotch, and 2) increase in consumption/sales of malt whisky. The industry is playing catch-up, which has a medium-term component (8-12 years) and a long-term component (15-25 years). In response, they needed to
    1. Increase production (check)
    2. Slow down moderately the depletion of medium-aged malts, without greatly disturbing the sales/market - so they come up with NAS malts, and gently increase the prices of 10-12yo.
    3. Slow down seriously the depletion of old malts - so they market this as "premiumization/luxury/life-style/what have you", and increase the prices like you showed.

    In final analysis, it seems to me, they are fully aware that they are peddling goods, and they are not evil, or out to skin us. It's just that they had a nice party prepared, but not all of us RSVP'd, and then we showed up with an extra guest, too.

    1. I wouldn't say they're evil. They're not distilling kitten limbs. I don't think. The entire business is now a corporate machine and the cogs in that machine have announced that their attention is expansion. The US and Europe are not sites of whisky growth. We're the Old World now.

      Anyway, the supply issue is curious to me because not every distillery is kicking ass on sales. After seeing the growth rates for Glenlivet and Glenmorangie far outpacing the US/World averages, that means quite a lot of distilleries/brands never had a boom and may have even had some losses. But that won't keep them from nudging up prices to seem like they're in the same league as the successful kids. I wish WISH someone would anonymously leak some distillery-specific supply and sales numbers. Lots of fun charts would follow!

  4. Great analysis, thanks for all your hard work in pulling this together. Very clearly presented, and a well thought-out analysis.

    As you say, the macro results are not surprising - nor are many of the worst offenders for specific price increases. Wine-searcher is a great resource, and I use it myself for price ranges on my whisky analysis site.

    Of course, like everyone, I am particularly sensitive to changes in my local market. It thus really sticks in my craw that the good entry-level "budget" Balvenie 12yo Doublewood (which went up ~29% over your 9 year tracking period) actually went up >23% in less than a year here at the LCBO in Ontario, Canada (from summer of 2013 to the summer 2014). At least its been pretty stable since then, but I don't have data for pre-2013. That said, it is clearly over-priced by wine-searcher price standards (both US and global ex-Canada).

    Keep up the good work - I'm looking forward to the next installment!

    1. Thanks selfbuilt! I've heard so many gripes about the LCBO, it just doesn't sound fun. I'm not entirely sure I follow their logic with pricing in general. Maybe it has to do with liquor taxes? I'm kinda horrified that Balvenie 12yo Doublewood is edging $60 now. That's an old favorite, always reliable, and my first review on this site. I wonder if they're getting low on supply and they're trying to control sales. (Note: This is NOT a rumor, just a guess, y'all.) Anyway, I'm like an old man in a rocking chair I say, "I remember when I used buy that for $40 waaaaaay back in 2012."