Monthly Whisky Market Watch.

October – Mixed Results with Further Polarisation in the Market.

October maintained the significant increase in the number of bottles being sold on the open market. 2013 saw 2,312 bottles sold at auction in the UK (in October). In common with general trends, that number increased by 28.46% to 2,970 in October 2014. That brings the 2014 cumulative total to 26,130. That’s already 29.28% ahead of 2013’s full year figure of 20,211.

Values for certain key collectors brands remain strong.

Other than the RWM25 (Macallan 25 year old) Index, all core indices experienced gains throughout the month. At the end of September the average price for a bottle of (vintage 1957 – 1975) Macallan 25 year old was £1,000.67; that fell to £977.70 at the end of October.

On a broader scale, the Apex indices (the top performing 1,000, 250 and 100 bottles) showed positive growth without exception. The Apex 1,000 moved up 1.24%, the Apex 250 moved up 1.01% and the Apex 100 moved up significantly by 6.07%. At the end of September the negative indices (the worst performing 1,000, 250 and 100 bottles) showed signs they had possibly reached the bottom of a steady and persistent descent. For the first time ever, in September, all negative indices turned positive. This positive reversal transpired to be a short lived dead-cat-bounce with record declines recorded at the end of October. The negative 1,000 and 250 indices hit new all-time lows showing stress and polarisation continues in certain areas of the market. The Negative 100 index is just a fraction above its August low of 36.99.

APEX INDICES

NEGATIVE INDICES 

Looking at the auction results through October, the clear expectation was for the RWK Karuizawa Index to shine through as a clear leader. While the Karuizawa Index achieved an impressive 5.97% increase throughout October (12 month performance +125.06%) it was the RWPE Port Ellen Index which found favour with collectors and investors. While the RWPE Index’s 12 month figures lag significantly behind Karuizwa at 72.53%, the October results in isolation were quite staggering at +9.45%.

The composite index October changes ranked in order of increase are –

1 – RWPE Index – Port Ellen +9.45%

2 – RWK Index – Karuizawa +5.97%

3 – RWM18 Index – Macallan 18 +2.45%

4 – RWIcon100 – Icon 100 Index +1.95%

5 – RWB Index – Brora +1.58%

6 – RWVintage50 – Vintage 50 Index +0.46%

7 – RWRMS Index – Rare Malts Selection Index +0.40%

8 – RWM25 Index – Macallan 25 -2.30%

 

The RWPE Index gain was primarily driven by the Port Ellen first release showing significant movement. A £2,100 peak took it way ahead of its £1,300 September close.  Other bottles remained relatively stable with the 4th, 5th and 8th releases showing modest increases.

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The RWIcon100 Index performed in line with the current steady upward trend. Twenty eight bottles lost value in the month, forty three bottles remained the same and twenty nine bottles increased in value.

The three worst performing bottles in the RWIcon100 Index were –

#3 – Balblair 1966 38 year old (-39.39%)

#2 – Ardbeg Provenance 1st release (-41.38%)

#1 – 1979 Lagavulin Distillers Edition (-54.48%)

The top three performers were –

=#3 – Macallan Royal Marriage 1st Release (+66.67%)

=#3 – Bowmore 1971 34 year old (+66.67%)

#1 – Ardbeg 1977 Vintage Release (+84.78%)

The RWVintage50 Index saw a marginal 0.46% increase, due entirely to the Dalmore 1926 50 year old which moved up in value by 66.67%. The worst performer was the 1957 Macallan Anniversary Malt which lost 28.21% of its value.

Following Septembers significant gain (12.65%), the RWB Brora Index had a far more stable month. The 2003 and 2004 releases showed good growth but this was largely mitigated by a decline in value for the 2006 and 2008 bottles.

The RWRMS Rare Malts Index remained broadly static at 0.40% up on Septembers close. The most significant increase was a doubling in value for the Aultmore 1974 21 year old. The worst performer was the Teaninich 1972 27 year old which lost 44.00% of its value over the course of the month.

The most noticeable element of polarisation belonged to Bruichladdich who saw values take a 2.72% broad-based decline. Until the vast amount of supply on the open market decreases, expect to see further falls.

With values for certain distilleries continuing to drop, in some cases rapidly, there still remains uncertainty throughout parts of the market. While the Apex 1000 index moved up 1.24% in October it’s on the back of a 2.00% rise in September. November brings with it an increase in supply like we’ve never experienced before. With that huge supply may come an element of cooling in the broader market. I remain cautiously optimistic for November but not quite as bullish as earlier in the year.

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