Ooh, la la!

[Iain]

Latest news from the Gallic premiumisation front!

http://www.theherald.co.uk/news/news/di ... 76.0.0.php

Prices continue to rise at LVMH...?

[les taylor]

Apart from raising the cost of a bottle £10 a pop this is madness:-

The prosaically named Port, Sherry, Madeira and Burgundy Wood Finish whiskies will be reborn under new names such as The Quinta Ruban, Nectar d'Or and LaSanta.



Just rolls off the tongue dosen't it.

[Jan]

I agree. The premiumsation was more or less expectet - but the names seems silly - at least to me.

But one must assume they know what they are doing - and I think that we should keep in mind that this initiative is not aimed at enthusiasts such as us, but the general public.

[Leither]

From next year I suspect Ardbeg will be next to get the premiumisation treatment, which the price of the Beast gave us some indication.

[r900p]

So we're to start hoarding bottles are we. I don't agree with their first sentemce

Is there really room for them to grow abroad, surely everybody already knows about them, and there won't be many more places that can stock them.

Rob

[bernstein]

They will also feature an image of the Stone of Cadboll, a Pictish carved slab which was discovered in Easter Ross.

the Hilton Stone of Cadboll

Okay, word association:
the Hilton of Cadboll cross slab – Hilton Hotel – ooh, la la - Beverley Hills - ooh, la la - premiumisation - ooh, la la - Louis Vuitton Moet Hennesy – ooh, la la – Paris – ooh, la la - Paris Hilton - ooh, la la la la - the Hilton of Cadboll cross slab – makes sense to me, folks!

Honi soit qui mal y pense, as the British say...

[peat-chaser]

This action seen a bit gallic (=gall-bitter) to me.

Delirant isti LVMHisti !!!

[Reggaeblues]

Merde Alors! Make mine a French On the Rocks...

[les taylor]

TIME TO STOCK UP GUY'S. Or is that the plan to trigger more sales right now.

[Mr Fjeld]

I usually make a point in trying to be positive about new things but this ..........is just stupid
What's next? A special edition called "Le Glenmorangie Napoleon" or "Glenmorangie Hors d'age"
Whatever are they going to do with Glen Moray?
"Le Chateau de Glen Moray Limoges special porcelain edition XO de cuvee Louis Vuitton" . Comes in a porcelain decanter looking like a cognac bottle hidden in a purse made of crocodile skin and with a pair of white gloves. Costs a mere 200 pounds for you sir!

[Lawrence]

"It's a brave strategy"....indeed. Time to sock away some of the 10 year old. And to focus on products from other companies.

I wish Rob would make this the question for the Round Table Debate!

[les taylor]

"It's a brave strategy"....indeed. Time to sock away some of the 10 year old. And to focus on products from other companies.

I wish Rob would make this the question for the Round Table Debate!

Lawrence that would make very interesting reading. Do you think He'd dare. Or is it the attitude of the peasants are revolting, and they smell.

[Deactivated Member]

"Quinta Ruban" and "LaSanta" don't sound French to me.

I know some of you folks know better, but how often does Glenmorangie get dismissed as a garden-variety, widely available dram? Somebody on another thread said that it's the distillery's obligation to keep cost down. Rubbish. It's the company's obligation to maximize profit. It's a business, boys and girls. Yes, bad for us who are used to cheap and readily available Glenmo, but this kind of thing is going on all over, as you all have noted, and there's a reason for it--the market is changing right beneath our feet. And we are in fact part of that.

I understand the sentiment being expressed here (and to a large extent, I am only playing devil's advocate), but the only real way to judge a business move like this is in a business context. I'm sure LVMH is trying to read tea leaves with one eye, while keeping the other on their supply of maturing stock. It's a very complicated business, and as has been noted many times, they can't simply decide to produce more widgets to meet demand, or fewer to deal with oversupply, for that matter. If this move works for them, then it's a good one, whether we like it or not.

Do we have any recourse? Well, we can support small independent distillers and bottlers. But premiumisation puts us in a bit of a bind--malts are being seen increasingly as an upscale luxury item. If we try to spread the gospel in an effort to make it more of Everyman's drink, we only raise demand. We can only hope that someone, whether new boutique distillers or overlooked established ones, will see fit to serve our niche. But the increasing separation between the niches in the market does not bode well for our spectrum of choices, if we are not among the more affluent. That's life in the free market. We've seen Macallan's reputation skyrocket, with prices following close behind; it shouldn't surprise us at all to see the same with Ardbeg. Maybe we should drink more bourbon.

[peat-chaser]

So I´ll have to carry on handling Glenmo like did before and like I´m used to handle macallan fine oak - I don´t buy it!!


But how the f... shall I get my beloved Ardbegs ???

[kallaskander]

Hi there,

all that is very true my friends and it was to be expected. Now the bad news is out and rumour turns into reality.

Just let us not forget that they are at it with Glen Moray, too. Less noisy but every so slightly more pricey.

Greetings
kallaskander

PS I did not forget to mention Ardbeg. That was what it was all about in the first place. Ardbegs fame attracted those birds with long necks. Glenmorangie is only a collateral to be damaged. What is it to be the first malt in Scotland when big profit means to sell worldwide?
We said it earlier in this forum. There are no cheap bags or suit cases from Luis Vitton, no cheap champagne from Moet and no cheap cognag from Hennesy. So what follows?

[kallaskander]

Hi there,

another thought if you don`t mind. You don`t, would you?

We discussed the prices and their constant rise in connection with the anouncement that the prices have to go up because of the demand for whisky in China and so on some time ago.
The whiskymag asked about the future of whisky in the round table debate and I ventured to say that the next whisky crisis will arrive sooner or later. Apart from the booming markets in China South America and Moscow the industry needs us as customers as well. What LVMH is about to do is short sighted and profit centred. 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 likes like Macallan Highland Park Ardbeg Springbank and soon Glenmorangie are not far from that mark. I would say that if the general pricing level for standard OBs is thereabouts the customers over here will not follow. Than we will see what happens.

Greetings
kallaskander

[Deactivated Member]

What will happen is that prices will find their proper level in the marketplace. They always do. You can be sure that the good folks at Edrington, for example, are perfectly happy with the number of people in the world who are willing to shell out $125 or $150 (or whatever they're charging this week) for a bottle of 18yo. If they weren't, they lower the price. These price changes are as much a response to the market as an attempt to reposition.

I don't see how it is short-sighted to broaden your customer base. Whisky has been boom-and-bust with the current European-American market for generations. And it is probably good business as well to aim as much as possible of your sales at people with enough money not to be too sensitive to normal economic fluctuation.

[Arthur Motley]

Rather gossipy piece of journalism from The Herald.

We'd already been briefed about this range overhaul (much needed, some of the packaging was looking tired!) and this article had quite a few inaccuracies:
- Price not necessarily going up by £10. Prices are changing though.
- The changes are significant and far more than cosmetic: the liquid in the bottles are changing.
- As someone rightly pointed out, the names on the finishes are not necessarily Gallic.

We're really hoping they are opening some of these newbies at Whisky Fringe!

[irishwhiskeychaser]

Well all I can say is that if Glenmo start pricing their wares above Macallan and the like I think it will have a serious affect on their sales.

Basically you have people used of a certian price base with glenmo and if it suddenly goes higher than the Macallan then I reckon people will just stop buying. I mean why would you ?????

Bowmore have increased their prices by nearly 20% eventhough the increase is disguised by going from 17yo to 18yo. Balblair have done the same. Ardbeg were one of the first to do it. Bruichladdich pretend to be a beautique distillery and as such the prices reflect this. Now maybe the market will bare it but if everybody does it - will the market take the strain? When the big boys do this it could have a serious back lash but it is too early to say..... I think Bowmore will be the first to find out.

I have no problem with realistic prices increases as we seem to have every couple of years her in Ireland but these jumps (I feel) cause a ripple effect in the industry in general and more and more seem to be following suit. This to me is unjustified and could be a situation of killing the goose that lays the golden egg.

Further the advent of the so called BRIC effect may not be as influential as we may think. The big thing in these countries is still blends ... Russia seems to be the only market which has a serious single malt market but even that seems restricted to the very rich and is still a minor market in global terms.

Anyway that's just my 2cents worth and I maybe right or I maybe be wrong ... who knows.

[kallaskander]

Hi there,

not much to worry about Bowmore I think.

http://www.theherald.co.uk/business/new ... 69.0.0.php

On the subject of this thread just one little thing. THE INDUSTRY is stretching and reaching and testing how far they can go at the moment. Any article about whisky glows from confidence in a bright future these days. Confidence and over-confidence are the two sides of one medal. And I would like to bet that in that fledging of muscles they will draw the bow until it breaks. They always do. While rising the prices to reap the harvest they will forget that they needed us to get that far. But we are not enough whisky drinkers to reach the profit goals they have set themselves. So expansion and rising of prices are the means to get more money. They will leave their supporters and allies behind and sell them for higher goals - and gains.

Greetings
kallaskander

[Deactivated Member]

Well all I can say is that if Glenmo start pricing their wares above Macallan and the like I think it will have a serious affect on their sales.

Well, first off, that's a big if, and maybe a faulty premise. Hey, if they start charging £1,000 for a bottle of 10yo, they won't sell any, will they?

Basically you have people used of a certian price base with glenmo and if it suddenly goes higher than the Macallan then I reckon people will just stop buying. I mean why would you ?????

And a whole bunch of mystified suits at LVMH will be sitting around wondering why this happened.... I'm sure they will be keeping an eye on sales, profitability, etc. That's their job! Look, if the strategy fails, it won't be the first time such has happened. But one thing that won't happen is that Glenmorangie will suddenly fail because of a catastrophic drop in sales. The market adjusts incrementally. What looks to us like a large change is likely a delayed reaction to a changing market. In the whisky biz, it's very difficult to be responsive to change, and I think that, if anything, there is a tendency to be overcautious.

Further the advent of the so called BRIC effect may not be as influential as we may think. The big thing in these countries is still blends ...

And what goes into those blends? We often forget that single malts comprise only a tiny sector of the market. If sales of blends boom, there will be less available for single malt bottlings, especially further down the road. (And we ought not to forget that we are, to some extent, beneficiaries of the bust period of the '80's and attendant surplus stocks; we've been fortunate to be able to drink some amazing 20 to 30yo whiskies at pretty reasonable prices in recent years. I suspect that will change. Well, it already has. For an extreme example, see how the price of Port Ellen bottlings has changed in recent years.)

Anyway that's just my 2cents worth and I maybe right or I maybe be wrong ... who knows.

Me too!

[Jan]

Good points all.

In one of the comments at the Herald a guy says that the names are actually gaelic after all:

Santa: Gaelic for warmth
Ruban: Gaelic for ruby / red
Or: Gaelic for Gold

What says our resident expert?

[Paul A Jellis]

The whole thing sounds ridiculous to me, but what do I know, I'm just Joe Public, the guy in the street who buys the stuff. But not for much longer if they carry on with this madness.

I really had to check the date, at first I thought it was 1st April!

[Deactivated Member]

What's ridiculous? A few new releases aimed at a particular segment of the European market?

There is a tendency, it seems, to think "I won't buy this, so no one will," or "If the price goes up £10, I won't buy it, and the market will therefore collapse."

"And it is claimed that in its efforts to portray itself overseas as a so-called luxury brand, Glenmorangie is willing to risk losing its leading market position in Scotland." Emphasis mine. Not really much in the article to support the conclusion arrived at here.

One needs to read such articles with a grain of salt in one's eye...uh...you know. They tend to be overstated in the first place, and, as Mr Motley pointed out, not necessarily entirely accurate.

[mithril]

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.

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
$39.95: Tamdhu
$43.19: Aberlour 10 Year Old
$43.99: Glenfiddich 12 Year Old Special Reserve
$43.99: Glenlivet 12 Year Old
$46.99: Auchentoshan Select
$49.99: Arran
$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.

[peat-chaser]

Hi mithril,

I´m sure your right and we´ll have to face increasing prices, but in the last 5 or 6 years or since the implementation of the € we already hab a 'price-jump' of 20 to 100 % depending on the distillery.
But still I think the prices seem a bit more moderate here in germany, so I still got the chance to order at very acceptable prices i.e.:

Ardbeg 10: 31,99 €
Glenmorangie Wood Finishes: 35,99 € (special offer)
Highland Park 12: 29,99 € (special offer)
Laphroaig 10: 25,99 € (special offer)
Laphroaig QC: 38,90 € or 44,90 (1 Litre)
Talisker 10: 31,99 € (special offer)
Aberlour a'bunadh: 49,90 €

If an order is higher than 80 or 100 € we usually don´t pay any postage.
I still think our situation is not so bad and we have round about 50 mail-order-suppliers in germany, so I hope we´ll still have 'combat-prices'
within the next few years. Increasing prices - sure, but exploding prices - I don´t think so.
Also the distilleries like Glenmorangie have got used to sell millions of bottles a year and if they lift prices, they´ll sell less and if I think it over, I know round about 150 or 200 malt-lovers from serveral clubs and forum in germany and neighbor-countries, but I know only 1 real glenmorangie-lover. So people might change their still if single still increase their prices much more than the others.

[mithril]

Fair enough, and it should be noted that as BC is a province controlled liquor board their isn't true competition here to keep prices artificially low as there is in other places. However the price increases really have nothing to do with the EU's adoption of the Euro, rather it's the huge increase in popularity of single malts experienced worldwide which has outpaced the demand anticipated when the spirit currently being bottled was distilled 10 - 20 years ago (when single malts were very much more of a niche drink) and their re-classification as premium or super-premium spirits that have driven the pricing.

Look at Lagavulin as a prime example of low volume production 20 years ago producing a shortage and resultant price spike in today's market. Glenmorangie, in this case, is just a specific example of an industry wide phenomenon in response to the lesson that Lagavulin and others taught..... namely that you can command high prices for your product if you try. In absence of product shortage, which obviously isn't an issue for a Glenmorangie, you need to use brand marketing instead. That's why I mentioned vodka in my previous post. Vodka is being sold at premium prices despite the fact that it's comparatively very cheap to produce and the best vodka actually gives you less overall taste. Those prices are all in the marketing and packaging of the product and that's what we're starting to see with malts.

[Mr Fjeld]

I just noticed a thread at the NMWL's forum about LMVH's latest "premiumisation" .
The news is published in "Cigar Aficionado" and should please all you Ardbeg bashers out there :

Special Ardbeg Release Features the Smoke

Ready! Aim! Fire! Enthusiasts of gun smoke -- smoky Scotch, that is, not the TV Western chronicling the exploits of Marshall Dillon -- may want to start saving their pennies for the October release of the prized 1974 Ardbeg whisky in a special double-barrel rifle case. The two-bottle package goes for $20,000.

Source:
http://www.cigaraficionado.com/Cigar/CA ... 32,00.html

I was wondering if this was a joke? The price just seems more than a little excessive and there is no reference to such a product at Ardbeg's site - as mentioned in the article? However, Forbes also have an article on this:

http://www.forbes.com/wineandfood/2007/ ... hisky.html

[Lawrence]

It's not a joke, it's real and contains a lot of expensive hand made objects other than scotch whisky from Ardbeg. I saw it in the Malt Advocate and just had to have one (not).

[Deactivated Member]

Hope they have screwcaps. No way to keep your bottles upright in that package.

[Lawrence]

Hope they have screwcaps. No way to keep your bottles upright in that package.

Good point.

[les taylor]

There are only 50 sets that's not even enough for this forum's members.

[Spirit of Islay]

50 sets in the UK Les , 250 in total worldwide.
Was wondering how long it would take for it to reach here , we were discussing this back in June on my sites forum ......
It's a lovely set , the shotgun cases are made by the same guy who does the cases for Purdey Guns and 8 silver drinking cups are by Hamilton & Inches of Edinburgh . It was due for release today (the glorious 12th) but has been put back till October . Bit over the top but someone will buy it .....

[Mr Fjeld]

It's a lovely set , the shotgun cases are made by the same guy who does the cases for Purdey Guns and 8 silver drinking cups are by Hamilton & Inches of Edinburgh . It was due for release today (the glorious 12th) but has been put back till October . Bit over the top but someone will buy it .....

I'm sure it's a lovely piece of craftmanship Gordon - it's just that I don't feel it's worth it! Compare the case with a few silver cups and some bronse work with a top notch 3 piece suit tailored in Savile Row? What takes longer and is still cheaper? Must be great to bring it to a shooting though - and looking great in the back of a vintage Aston Martin Shooting-brake together with the picknic baskets and gun cases........

[hpulley]

Time will tell. Sometimes in the luxury market the price really can be too low so we'll see if their apparent strategy of pricing themselves up works or not.

As for Ardbeg, the special bottlings are just that and are now priced well above drinkers. There is no way I could afford the current prices of Lord of the Isles or their latest 1975 or 1965. That said, I have no problem with a company having 'halo' products that your average customer only dreams of tasting.

However, I think calling the Beist expensive is a bit much since it is a single run bottling (distilled 1990, bottled 2006) from a time when not a lot of Ardbeg was being distilled. It is about the same price as the 1990 'double matured' Lagavulin which is much less limited in supply.

The best deal right now on OB Ardbeg has to be CS Almost There for just over the price of the 46% 10yo. I sure hope they release a 10yo CS next year and put my votes for it in person. And I hope I bought enough AAT to last me a while if the price does shoot up soon. I really should have bought more '75 when it was a quarter of the current price...

Harry