Monthly Market Watch – April 2015

Values for high end collectables continue to increase as polarisation widens the gap between good and bad.

April set a new record for the highest number of collectable bottles traded on the open market. The previous record in December 2014 was 4,153. Last month’s 4,309 exceeded April 2014’s volume by an impressive 55.84% (2,765 bottles sold in April 2014). Year to date, one third of the way through 2015, the total number of bottles traded stands at 13,857, some 51.54% ahead of the 9,144 bottles sold in same period last year.

November and December 2014’s significant supply pushed values down, suggesting demand had finally succumbed to huge supply. The same expectation could be assumed with April’s record volumes; however, this couldn’t be further from the reality. Impressively, the vast majority of key indices moved up, in some cases significantly. On the flip-side of the value coin, less desirable bottles shifted further into red territory with record losses taking the negative indices to all-time lows.

The composite index April changes ranked in order of increase/decrease are –

1 – RWK Index – Karuizawa +26.26%

2 – RWB Index – Brora Index +8.05%

3 – RWM18 Index – Macallan 18 +3.80%

4 – RWM25 Index – Macallan 25 +2.55%

5 – RWVintage50 – Vintage 50 Index +2.32%

6 – RWIcon100 – Icon 100 Index +0.68%

7 – RWRMS Index – Rare Malts Selection Index +0.64%

8 – RWPE Index – Port Ellen 0.00%

Karuizawa Index buoyed by staggering increases
Karuizawa Index buoyed by vast increases for virtually all bottles

Staggering demand for Karuizawa yielded a record monthly increase of 26.26% with virtually every bottle sold on the open market hitting new record highs. In some cases the increases were vast. ‘Pourquoi fait il’, a 1980 vintage was previously selling for £1,350; one sold in April for £3,200. The sheer pace of these increases doesn’t feel sustainable, however, there would appear to be continued upside potential for those with a stake in this silent Japanese distillery.

The Brora index was buoyed by increases from the 2006 30 year old release and the 2008 25 year old. The 25 year old moved from a March value of £400 to £720 in April, an 80% jump. Virtually all other bottles remained static. The chart below shows the average price of a bottle of Brora from 2010 to the end of April 2015 (releases 1 – 7). 2014 saw the most significant movement in average prices with a 58.48% increase over 2013.

Average Brora prices 2010 - 2015 (releases 1 - 7)
Average Brora prices 2010 – 2015 (releases 1 – 7)

If we then take a look at the volume of Brora traded at auction, 2014 shows a clear dip in supply.

Volume of Brora traded at auction (releases 1 - 7)
Volume of Brora traded at auction (releases 1 – 7)

The first four months of 2015 suggests we’ll see roughly 45 bottles sold this year. This might also suggest a slower rate of pure value growth noting volume at that level would be a new record. If supply declines, we would expect to see a steeper increase in prices throughout the later months of 2015.

Putting aside the current static market for many more contemporary bottles of Macallan, both the 18 year olds and the 25 year olds made good progress with 3.80% and 2.55% increases respectively. With 2014 annual growth rates of 3.57% for the 18’s and 3.77% for the 25’s, April’s performance is rather more encouraging.

The benchmark Icon100 index just managed to post a gain for the month, closing up 0.68%. 27/100 bottles increased in value, 52/100 bottles remained static and 21/100 bottles decreased.

The best three performers in the month were the aforementioned Brora OB 25 year old (up 80%) followed by Macallan 1979 Gran Reserva (up 62.50%) and the Glenmorangie Culloden bottle (up 54.29%).

RWIcon100 Index top three performers April 2015
RWIcon100 Index top three performers April 2015

April’s worst performing three bottles in the Icon100 were the Family Silver from Glenglassaugh (down 29.41%), the 200th Anniversary Oban Managers Dram (down 35%) and the Dalmore 1985 vintage Distillery Exclusive (down 52.78%).

RWIcon100 Index worst three performers April 2015
RWIcon100 Index worst three performers April 2015

The negative indices all moved significantly further into the deep-south. The Neg1000, Neg250 and Neg100 indices tumbled by 2.05%, 3.80% and 2.57% respectively. These are among the most significant falls ever witnessed and take all three indices to new all-time lows. Polarisation and a steady decline in certain mass-volume brands are taking the brunt of the falls. Bruichladdich’s continuing broad-based slide in values marks them as the only distillery with two bottles in the bottom 10.

Record breaking falls and all-time lows for the negative indices
Record breaking falls and all-time lows for the negative indices

Rapid and continued polarisation aside, April should be viewed in particularly positive light. Record breaking supply has the very real potential to cool the market as was seen in the latter months of 2014.

It seems for now at least, for the right bottles, demand is set to out-pace whatever the market throws at it.

Bottle images courtesy of Scotch Whisky Auctions and Whiskyauctioneer.

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