Is Whisky collecting now a 'bubble' market?

[JCSkinner]

John Hansell seems to be hinting at that when he wrote this:
http://blog.maltadvocate.com/2008/09/10/and-you-complained-about-white-bowmore-being-expensive/
We've had South Sea shares, Tulipmania, the dot bomb and more recently the housing bubble and bust.
Given some of the prices now being quoted for what, at the end of the day, are still only single bottles of whisky, many of them newly released and from still active distilleries, are we now approaching or at the peak of a bubble market in whisky?
And if so, what will a crash bring?

[JCSkinner]

That sounds more like the sound of distillers cashing in on a peak rather than the actual bursting of the bubble, though.

[objetti]

John Hansell seems to be hinting at that when he wrote this:
http://blog.maltadvocate.com/2008/09/10/and-you-complained-about-white-bowmore-being-expensive/
We've had South Sea shares, Tulipmania, the dot bomb and more recently the housing bubble and bust.
Given some of the prices now being quoted for what, at the end of the day, are still only single bottles of whisky, many of them newly released and from still active distilleries, are we now approaching or at the peak of a bubble market in whisky?
And if so, what will a crash bring?

Well whisky is not really comparable to stocks, housing and real-estate.
Whisky is rather a luxury commodity (with a marginal air of collectability).
What´s happening is perhaps (hopefully) an end of the price hikes at the topend of the destilleries product lines (which even if ridicously out of reach for almost all consumers in silly limited editions could be seen as a way to hike the accepted price range of more "normal" editions)
The end of this bubble is likely to be since long included in brand strategies but if there was a "real" whisky-crash coming it is more likely it would mean (again) closed destilleries rather than slashing of consumer price levels of whisky.

The collecting (secondary) "market" is working on collector mentality much more than on general bubble economy theories.
The collapse of that kind of "market" would be based on cultural and psychological factors.
Whisky as collectibles are probably still growing strong but should not be over-estimated. Even if many join the collectors ranks they are probably still outnumbered by the growth of "accidental" collectors (that buy more than they can drink). The latter group will sometimes sell to collector but more seldom buy from them which is cooling that "market" down.

Both these areas will of course be impacted by the general economy going down. But the producers (and speculators) will be much more affected than the "true" or "accidental" collectors.

sorry for bad english - don´t let me be misunderstood

[Leorin]

I think John mainly refers to those very expensive bottles, that are more than 1000 USD already when they are released.
If you'd buy a White Bowmore or an Ardbeg Double Barrel today it is indeed a good question what you can expect to get for it, if you'd like to sell it in ten years.
I think the number of people who are willing and able to spent more than 200 USD on a bottle of booze (no matter if in America, Europe or Asia) will stay very small over the years.

[adogranonthepitch]

prices will come down ... then go up ... then go down .. then ... yep you guessed it.

... that economics for ya!

[jb9492]

prices will come down ... then go up ... then go down .. then ... yep you guessed it.

... that economics for ya!

What? Were you drunk when you posted that? Price is a reflection of supply and demand...macro-economics 101.

In terms of a bubble market, the global whiskey market is relatively young, and growing especially in the U.S., due to increased marketing efforts and consumer re-branding efforts. Side comment: I heard JW is booming in China. Over the next 5 years we can expect whiskey prices to fluctuate slightly upwards, but not too much. I am confident the brands are aware that you do not increase your purchasing base by making whiskey cost prohibitive.

From an American perspective, I think the value of special bottles of really expensive whiskey, >$1000, partially depends on how many people in their 20's become serious whiskey drinkers over the next 10 years; being one of the richest nations in the world, with a high disposable income. Personally, I can easily see myself having a $5,000 collection (opened and unopened) by the time I am 35.

Happy Drams,

JB

[Deactivated Member]

Bubble, in general, No.

[JCSkinner]

I suppose this is only applicable to the very top end (pricewise) of the market.
But it still seems to me as if some of the prices have now long since left planet Earth.

[Deactivated Member]

There's probably a bit of a downturn in the market at the moment given that the economy has taken a bit of a nosedive and potential buyers have less disposable or investable income. When the economy takes a turn for the better there will probably be an increase in buying and collecting and prices once again but I think things are definitely cooling off just now.

Or maybe people just don't want to buy any of FeisIslay's hoovered bottles...

[objetti]

I suppose this is only applicable to the very top end (pricewise) of the market.
But it still seems to me as if some of the prices have now long since left planet Earth.

I feel the new record breaker is the coming Laphroaig 30 Cairdeas
It´s of course not the most expensive current bottling at 500£ - but for being a "friends of laphroaig" bottling targeted at the "fan-club" it´s unheard of before (compare to Ardbeg committee offerings).
Sure it is likely to be a VERY limited bottling and there is a rebate for FOLs (bringing it down to 450£) but it is after all "only" a finished version of the 30yr old that cost before it went away below 200£. It does not seem overtly "friendly" to boost it by more than 200£ for above reasons.

(The oloroso 27 yr was NOT designed specifically "for friends" and could be had at WOW for 350£ or 399£)

[Reggaeblues]

My last SMWS malt has a lot of bubbles when I shake it.

I still say whisky is best drunk.

Like me...

[Jimmy321]

IMO if you are trying to sell at the moment don't expect the price you would have got in the past year or so. The economy downswing is likely to last 2 years then bottom out. The next boom will be in no less in 4 years time if there is one.

[Whiskytaster]

What do people think of the current state of the whisky collectors market?

Have we seen any price falls?

[wolpertinger]

Have we seen any price falls?

Yes we have. The old standard OBs from the 70s and 80s had quite a hit in the last Kruger auction. If it was the record number of over 1500 bottles in one single auction or the financial crisis or anything else - who knows. Fact is those old bottlings were sold at prices that we haven't seen for a long time.

In the very same auction a bottle reached a new all time high - it was an Ardbeg of course. Never before was a price of over 8000 Euro paid for a bottle on that platform.

During the tulip bubble it was only the super rare specimens that kept their prices when everything else went south.

If history is repeating, we will see that rare-only bottles go down, but super rare bottles keep their value.

If I were a collector - errm... mean investor, I would rather like to have 20 high class bottles worth +500 than having 200 bottles worth +50

just my 2 cents

[Bloody Marvellous]

I think we should all pray for another prohibition.

Then we'd really be able to make big bucks off of our collections

[borgom]

I think we should all pray for another prohibition.

Then we'd really be able to make big bucks off of our collections

Yeah we'd have cash and no whisky to buy, what a great idea!

[wolpertinger]

Somehow that reminds me of a saying by Fat Freddy of the Fabulous Furry Freak Brothers (Comic by Gilbert Sheldon)

Dope* will get you through times of no money better than money will get you through times of no dope.

(*replace with your favourite malt - after all we're not twens in the Sixties)