kallaskander wrote:European and most probably US customers as well have a cut off point where they will not be prepared to pay above a certain limit for a standard OB of 10 or 12 years.
My cut off point is 40.-€ for such a bottle. I have never bought one at that price and will not do so.
The problem with statements like this is they never hold through. 2 years ago I remember media outrage and people swearing that they'd walk, bike or take public transit before they'd pay $1.00/L for petrol. The price of course hit $1.00/L and people grumbled but still filled up and drove. Then it went to $1.10/L, no decrease in consumption. Then $1.20/L, still loads of people on the roads. Then Hurricane Katrina came along and the prices jumped to $1.40/L in some places around Vancouver........ with, predictably, no decrease in the number of vehicles on the road or change in consumption. 2 years on and the average price in Vancouver about $1.15/L In a recent poll the majority of Canadian's how say that the magic price point that will force them to change their driving patterns is $1.50/L. In other words, they've gotten used to $1.00+/L petrol and don't find it shocking or out of the ordinary.
You may argue that the difference between petrol and whisky is that the former you have to have and the later you don't. However the basic principle is still the same, if you increase prices gradually over time people will pay more or less whatever you're asking. You have to remember that the public perception of SMSW is that it's a expensive product drunk by the rich and well-to-do, in other words for most people it's a status symbol to walk into a bar and order a Lagavulin 16 Yr or to have a bottle of Macallan 15 Yr Fine Oak in their home liquor cabinet. Like any status symbol purchase it's not based on the idea of sound economics, it's based on the idea of making yourself look flush and showing off a bit for the Jones'.
Pricing in a free market economy is basically whatever the market will bear and the premium spirits market will obviously bear quite a high price right now. We're in a period where people are shelling out huge amounts of money for spirits which cost very little to make simply because they've been successfully marketed as premium drinks and status symbols. I'm referring specifically to vodka which has no maturation period and therefore has none of the production costs associated with scotch and cognac which, will more expensive than vodka to produce, is still much cheaper than whisky. Frankly if I were a whisky producer looking at vodka or cognac as the primary competition in the premium spirits market I'd be looking for every possible way to maximize my profits from what is, by comparison, a very expensive product to make. It's not hard to justify higher prices when you show that your production casts are also significantly higher.
kallaskander wrote:My cut off point is 40.-€ for such a bottle. I have never bought one at that price and will not do so.
For those of us that enjoy "premium" products like single malts we have to each decide what our upper limits will be, but we also have to recognize that it's unlikely that it will make much of a difference in terms of pricing due to gradual pricing increases and status symbol marketing that causes people to buy products that they'd normally consider far too expensive. While taking a stand such as this is very principled, unfortunately you're really just cutting yourself off from the majority of the market. Several years of record sales growth in spite of widespread price increases across the industry have shown that most people who drink whisky are willing to pay much more than that and in reality many markets have already far eclipsed that limit.
For example your 40€ converts to $58CDN. In BC this is what you can buy in a single malt for under $60:
$37.99: McClellands Speyside Single Malt
$37.99: McClellands Highland Single Malt
$37.99: McClellands Islay Single Malt
$43.19: Aberlour 10 Year Old
$43.99: Glenfiddich 12 Year Old Special Reserve
$43.99: Glenlivet 12 Year Old
$46.99: Auchentoshan Select
$50.99: Glenmorangie 10 Year Old
$51.19: Strathisla 12 Year Old
$53.19: Aberlour 12 Year Old Double Casked
$54.99: The Six Isles
$54.99: Dalmore 12 Year Old
$55.95: Balvenie 10 Year Old Founders Reserve
$56.12: Glengoyne 10 Year Old:
$57.19: GlenDronach 12 Year Old Sherry Cask
To get into what most people would consider their standard every day drinkers (Ardbeg 10, the Glenmorangie Wood Finishes, Highland Park 12, Scapa 14, Laphroaig 10 or QC, Longmorn 15, Talisker 10, Old Pulteney 12, Aberlour a'bunadh, etc.) you need to move into the 50-60€ range.