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Older whiskies overpriced?

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Older whiskies overpriced?

Postby Rudy » Thu Apr 17, 2003 11:14 am

Hello everybody,

question: are older whiskies overpriced? (Especially when compared to cognacs of similar age.)

I wonder if I'm the only one getting this feeling or if some of you feel the same. If so, how come?

Rudy
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Postby BruceCrichton » Thu Apr 17, 2003 5:22 pm

They are only overpriced if you don't think they're worth it.

Some whiskies improve with age and others don't.

But all evaporate in the cask and so the older stuff must be more expensive plus it's more time for capital to be invested without return.
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Postby hpulley » Thu Apr 17, 2003 6:02 pm

Things are worth what people are willing to pay for them.

No matter what you are talking about, worth comes down to one thing: are people buying it at that price? Would they buy it if it were more expensive? Would they buy more if it was cheaper? Supply and demand say that people will pay what they feel something is worth. If priced too high it won't sell and you'll be left with stock -- if priced to low you'll sell out before realizing maximum profit. If it costs more to make something than people are willing to pay to buy it then you are in the wrong business.

I suspect that whisky companies have B.Comms working on the ideal price for supply and demand. It is complex with whisky with the decisions on whether to blend, vatt, save for later, finish specially, redistill into London Dry Gin, Vodka or Manx Spirit, etc. but I suspect that folks who do it have a clue what they're doing.

If old whisky doesn't taste better to you, don't buy it! If the price is too high, don't buy it. Enough people do that and prices will drop.

Single malt is the largest growth area in scotch production today and the expensive prices of the exclusive bottlings are much of the reason.

Again: Things are worth what people are willing to pay for them.

Harry
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Postby The Fachan » Thu Apr 17, 2003 6:18 pm

Is it not the case that the price of older whiskies is not driven by the quality of the liquid, rather the amount of it around. Some people might find some justification if the whisky was that much better.


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Postby Rudy » Thu Apr 17, 2003 9:04 pm

Thanks for the input, I understand what you're saying, but maybe I should be more specific, in both the relative as absolute sense of whisky being overpriced.

1. Relatively overpriced: value for money?
There still are some multiplezillion liters in the warehouses, isn't it? Maybe primarely younger ages, but as whisky seems to get more attention, more OB expressions are released in order to increase sales. To my taste I got disappointed after buying the OB Sherry, Port and Madeira finishes. Payed more money, but it did not taste more enjoyable (or better) than the 10y OB.
In other cases (read the forum) people get the feeling that the taste of same expressions get less enjoyable: quality seem to decline.

Intermezzo: a quick comparison with cognac: distilled from grapes, only from the cognac area. After harvesting in September/October, the people in Cognac only have until the following 31. March to distill their wines to have the right to call it cognac. It also matures in oak and loses the Angels'share (French Angels). High regarded destillates from Grande Champagne and Petit Champagne get very enjoyable after 20y-25y and peak at 40y-50y.
Forget the biggest brands you see at the airports, take e.g. Delamain (the smallest of the big houses): their youngest bottle is an XO at around 25y for approx. €55 the next one called Vesper at around 35y €80 (I bought my bottles some time ago).
There are some other enjoyable cognacs, aged 30y-50y, in the price range of approx. €100-€130. (1€ is roughly 1 US$)

This is not meant to lead you to cognac, read on and let's get back to whisky:

2. Absolutely overpriced
I accept a range of different age statements with increasing prices for the older expressions. I also accept higher prices for rarer bottles on the market like Ardbeg 1975 OB or 30y OB. This is understandable since there's not much left.
So, what's my point?
Take Diageo as distiller of the year. They released Brora 30y for €200, Dalwhinnie 1966 for €400, Oban 32y for €310, Lagavulin 25y for €240. Note that Brora is the only closed distillery.

Your financial situation is not my business.

But how many of us in the forum have already one or more of the above? I like Lagavulin and Brora a lot, really, but these prices?

These trends are worrying me.
Single malt is a niche in the market and without economies of scale, we are already paying a little more to get a bottle. That's OK, because of the production, distribution and maybe marketing costs.
But remember, most single malts are in fact 'only' produced as an ingredient for the blends. There must be a large stock of various and mature malt whiskies.

So of all people, the small group of enthousiastic consumers that promote single malts in their environment, introduce others to the world of whisky, and stay with it for the rest of their life, not drinking it as a fashion, will have to pay super premium high prices for certain older whiskies?

This thought seems to hurt my heart more than my wallet.

Rudy.
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Postby hpulley » Fri Apr 18, 2003 10:57 am

A good financial officer or treasurer will try to keep his heart out of it. They are making whisky for money, not love. The 'distillery managers' surely have love for the product but if they don't have a good treasurer they won't be following their heart for long. Notice all the distilleries which have been mothballed and sold lately. Many which have been bought are switching to single malt from blend output as it is much higher in return to package singles, especially older ones. It used to be rare that a distillery wouldn't send any output to blenders but now most distilleries would avoid that if they could.

As I said above, whisky is worth what people are willing to pay for it. If old Lagavulin and Brora are sufficiently dear to your heart, you'll pay. If it is too much, you'll find less expensive whisky which you also enjoy -- won't be the same but it will happen.

Single malt whisky is not cheap, that's for sure. Expensive blends are as much and more than good singles but your average blend is much less.

I try to think some days, could I just drink less expensive singles or blends? Of course I could but I don't want to so the single malt producers have me right where they want me. You as well it seems...

Harry

[This message has been edited by hpulley (edited 18 April 2003).]
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Postby Rudy » Fri Apr 18, 2003 7:07 pm

Hello Harry,

I think with these old bottlings of classic malts Diageo wants to create an exclusive aura around their labels. That's marketing. The story about money indeed is financial issue.

Older single malts are a niche in a niche. What significant extra profit would you expect from 6000 overpriced bottles worldwide? I don't think they even sold a tenth of their 6000 limited bottles and thus have not realised their revenue or profit yet... What should it take, maybe 3 years to sell all, probably more?
It's more important to realise 10 ct additional profit on every bottle of Red Label sold...Then you're talking money!

Yes Harry, you're right, it seems they got me where they want me to be, but I think it's time to move: I already left some money at Douglas Laing for their Old & Rare Platinum Selection Brora. I even start to enjoy this one pure at 58.4%!
Diageo's marketing can not prevent this opportunity loss, but I start to think they don't want me as their customer in the mid-end market segment anyway.

Rudy
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Postby Spirit of Islay » Fri Apr 18, 2003 8:11 pm

Hi ,
Thought i'd throw in my two pennethworth even tho i've made it more than clear at the yahoo group i run.
Yes the older whiskies are over priced ,i had pre-ordered both the Brora and Lagavulin but cancelled when i was informed of the price . I was looking forward to both especially the Brora after the DL Platinum 59.5% (it was a monster of a dram , hence the Brorzilla tag we gave it!).
Now i'm as guilty as anyone for paying high prices (hence the Ardbeg Provenance ,Ardbeg cask 3475 and Bruichladdich 1966 in my cupboard )but you've got to draw the line somewhere !
When you start comparing prices of similar ages it starts to look worse , The Brora O.B. was £190 , DL's Platinum Broras were £100-£115 .Similar aged others were:-
Bruichladdich 1970 - £120 .
Glen Grant (Adelphi) 1971- £60 .
In the Lagavulin field going off similar ages things are much the same :-
Ardbeg LOTI - £100 .
Talisker 25yo - £95 .
Macallan 25yo - £115 .
I know it could be a bit unfair to compare like that but if you walk into a whisky shop armed with the dosh ,thats what you do compare pounds to years !
I know i'm not the only one who thinks prices are getting out of hand (more out of the drinkers hand into the collectors), i've had conversations with other drinkers and people in the trade , but the one thing thats really worrying me is that independents prices are heading the same way .
best pour myself a Dram !
Slainté
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Postby Lawrence » Sat May 24, 2003 4:31 pm

Take a look at the Scotch Malt Whisky Society, the most recent list offers a 30 year old Cragganmore for £78, remember this is single cask at 49.3% I bought a 37 year old Fettercairn from them for a mere £80 a few years back. 30 year old Glenfarclas is about the same. Top notch whiskies for very low prices.
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