Weekly Auction Watch – 16th Nov 2015

November’s early momentum in the rare whisky market looks set to continue.

Whisky Auctioneer’s recent sale was their largest yet with c1,800 lots covering everything from the heady prices of Karuizawa through to rather less racy drinking drams.

Showing you don’t need to spend hundreds or even thousands of pounds to get bitten by the collecting bug, Aberlour A’Bunadh’s carefully controlled batch releases have been garnering a huge following. By virtue of their great bang for buck liquid, we’re now seeing prices harden for earlier releases. We must be at (or near) batch number sixty by now, so there’s a hefty back catalogue for collectors and investors.

The chart below shows the last three years performance for the first twenty batches.

Aberlour_ABunadh_Index_Oct2015

Very respectable performance. Doubling in value over the course of three years is impressive by anyone’s standards.

Away from Scotch, we’re seeing significant stress in the rare Karuizawa market. October saw values of the Karuizawa index down 2.45%. Running a November halfway point index shows values coming down by a further 2.50%… A 5% dip in one and a half months suggests descent from an overheated market with further turbulence ahead. Some bottles are coming down significantly and at a rapid pace –

A steep and rapid decline in values but where's the bottom?
A steep and rapid decline in values but where’s the bottom?

Cask 136 (1981 vintage) peaked at £2,300 in May this year; it now rests at £1,650.

Cask 8529 (1982 vintage) peaked at £1,950 in March this year; it now sits at £1,550.

Cask 8497 (1982 vintage) peaked at £2,200 in June this year; it now costs £1,400.

Cask 7802 (1984 vintage) peaked at £2,200 in May this year; get it now for £1,500.

To a degree, some of the exceptional rarities are more protected and we’re seeing polarisation at play. The more readily available (if there is such a thing!) bottles seem to be cooling but demand for ultra-rarities remains strong. This suggests the market is, at present, controlled by the collectors – when a number of ‘completionist’ collectors stop bidding, having completed their collection (as far as is possible at the time), values naturally dip. Investors typically keep going and purchase multiples of the same bottle where they see future value and the whole thing is underpinned by drinkers who gradually remove supply. These dynamics appear to have become seriously skewed at current prices, Karuizawa’s just too expensive for volumes of fans to drink, and investors have spotted the peak in the market.

We’ve declined to broker no less than five (separately owned) bottles of the 1964 Wealth Solutions bottle in literally as many days. We remain nervous enough to sit this one out and watch from the side-lines.

Let’s not get all doom-and-gloom about it though… bottles presently selling for many hundreds or thousands of pounds cost a tiny fraction of that a couple of years ago. We’re also not saying we don’t see value in Karuizawa bottles, we see plenty of value in them: The market got ahead of itself and needs natural correction.  When prices re-trace into drinking territory more familiar supply/demand forces will apply as a greater diversity of buyers re-enter the market.

Sticking with silent distilleries but moving back to Scotch, Pittyvaich’s official Flora and Fauna release took to a new £130 record. In ‘08/’09, these were a little over £30 per bottle with a record low of just £26 in early 2009.

Rosebank_CC_1988

Rosebank has been a regular tip or ours for some time (it still is), but prices look to be undergoing something of a sea-change. Bottles are becoming less prolific on the open market and values are increasing. In 2009 a bottle of Connoisseurs Choice 1988/1997 fetched £45 – At the recent Whisky-Auctioneer sale the winning number had more than quadrupled at £216.

A brace of bottles from Glenesk (aka Hillside) both hit new record highs. A Signatory 26-year-old on a 1974 vintage took £210 and a 30-year-old bottling by Douglas Laing fetched £285.

Special mention for the final bottle this week goes to the new Glenmorangie release – A Midwinter Night’s Dram – Three bottles sold for £195, £200 and £210.

A Midwinter nights bid too far?
A midwinter night’s bid too far?

As it’s still readily available for £40, one can only assume the vast price paid was a little bit of new-release-curve frenzy and regional supply differences. We’re not expecting that type of crazy price to hold fast!

Until next time.

Slainte,

Andy

All bottle images courtesy of Whisky Auctioneer

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