The whiskey business is not what it used to be. At least that of the most coveted whiskey bottles. In a complex scenario, marked by the post-pandemic hangover, the inflationary crisis and the weakening of the economy in important regions on the planet, the luxury goods sector has encountered a challenging panorama. One that the exclusive whiskey market has not been spared. There is Who is speaking already from the bursting of its “bubble” and a loss of interest palpable by investors. and who warns: the curves will remain at least in the short term.
After all, select single malt whiskeys can retain their value for the sommeliers and fans, but its market is no longer a stable refuge for investors.
What do the figures say? That the whiskey “bubble” seems to have burst. So interprets it Financial Times after consulting the latest report from Scottish investment bank Noble & Co on whiskey “fine & rare”a label that identifies the highest quality, aged bottles that are part of limited editions. Despite their value and the high prices they have reached, the study suggests that their market is going through a change of cycle.
Less sales, less value. The data is revealing. Throughout the last year, between October 2023 and 2024, they were sold at auctions 34% less of bottles of whiskey worth more than 1,000 pounds (1,200 euros). The drop in value was even more pronounced and was around 40%. Last year, a decrease in prices had already been detected, the first significant one since 2012, although it was much smaller, just 7%.
They are not the only worrying percentages for the sector. The general Scotch whiskey market does not seem to have had its best months either, with a 10% drop in volume and 18% in value throughout the first half of 2024, according to the company’s own balance sheets Scotch Whiskey Association (SWA). After analyzing more than 91,000 transactions carried out from October to October, the analysis published by Noble & Co also detected a prick year-on-year similar in secondary market sales.
From percentages to examples. The Telegraph echoed this week of a specific case that helps to better understand the drift of the sector and the “burst” of its bubble: in the most select market, in which bottles are sold and bought for more than 100.00 pounds, the same piece can be priced today for a value 33% lower than a year ago. The British media speaks specifically a bottle of Macallan Red Collection 60-year-old that sold at a London auction in spring for £137,500. It may seem like a lot, but the newspaper recalls that in August of last year it was worth around 204,000 pounds.
From 100 to 15,000 pounds. That doesn’t mean the aged whiskey market is no longer generating huge profits. A 50-year-old Macallan Lalique fetches at auction 50,000 poundsten times the price it had in 2005. Whoever got an edition of Bowmore just over 30 years ago, back in 1993, in exchange for the 100 pounds it cost then, I could sell it today for much more, about 15,000according to the calculations of Financial Times.
However, the worst part would not be the old bottles. When analyzing the current scenario, Jonny Fowle, director of the whiskey and spirits area at the auction house Sotheby’s, puts the accent especially in the most recent launches, those after 2020, which have already gone on sale with high prices, leaving both investors and buyers “out of the market.” Older bottles that were launched at reasonable rates may no longer move at 2022 pricing levels, but in his opinion they still “perform well” in the market.
The most punished bottles. While Nobel & Co data generally shows an 18% drop in value for exclusive, rare and quality whiskies, those in the £1,000 to £10,000 range appear to have suffered a more pronounced devaluation. In your case, concrete Quartzduring the third quarter the average price of bottles fell 25%.
The report 2024 Wealth Reportby Knight Frank, does not leave good signs either: it reflects a 9% drop in the luxury whiskey index, the largest among select items, although its authors clarify that some declines may be exaggerated and are confident that the most coveted bottles will be revalue in two years.
“To some extent 2023 remained a difficult year, with the Knight Frank Luxury Whiskey Index falling almost 9%. But while the 50 worst-performing bottles lost 26% of their combined value, the remaining 50 gained 5%. “, and the 20 with the best results increased a respectable 20%,” collect.
But… Why? To understand the current scenario, in which some analysts already appreciate a “prick” of the whiskey bubble, it is necessary to know several keys. And above all, look back at the years that followed the financial crisis of the 2000s, when the most select bottles became a popular asset among investors. The position of the central banks and interest rates led them to look for alternative assets that would guarantee good returns. Scotch whiskey turned out to be a good option.
The products did not want to be left behind. And as the auctions became juicier and money flowed into the secondary market, there were manufacturers who chose to increase their own rates. Now, after a pandemic, periods of high inflation and interest rates, and a weakening economy, demand simply appears to have taken a step back.
Resetting expectations. The head of the food and beverage area at Noble & Co, Duncan McFadzean, clearly summarizes the situation facing the Scotch whiskey industry, which before the latest data had seen its market grow strongly before the pandemic and managed to recover in 2022.
“The sector thought it was going to be the ‘roaring 20s’, but the reality has been much, much harsher. It came face to face with the cost of living wall: volumes have been falling and large companies have warned of its benefits again and again,” points out. In opinion McFadzean said, “If whiskey investors and collectors were in troubled waters last year, this year they are in the eye of the storm and battening down the hatches.”
“The bubble may have burst”. “High-end investors and collectors are very cautious about price and value. While there is always room for record prices for the rarest bottles, the bubble in which quality Scotch whiskey has been traded for so long may have burst finally”, concludes the expert
On the horizon, the sector faces unknowns, challenges and also the occasional opportunity. For example, look expectantly at the tariff policy of Trump or the effects of chinese real estate crisisbut also the possibilities of the Asian market.
“As protectionist strategies take shape in the US, it is possible that future demand for the rarest and finest bottles will materialize in Asian markets. What is clear is that the secondary market is at a low point; the only question What remains is to know when it will hit rock bottom,” McFadzean adds..
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