Bloodbath at Bonhams as Bears Take Control.

Weekly Auction Watch

9th October 2014

Bloodbath at Bonhams

Bonhams recent whisky auction on the 1st of October marked the start of a months lead up to Halloween. Some of the sales results were indeed the preserve of nightmares as the festival of Samhain got well underway in Edinburgh.

The leading bottles of the sale in the publicity material focussed on two veritable heavyweights – The Macallan 62 year old Lalique and the 70 year old Mortlach. If your publicity is directed at two big bottles like this, it’s always a good thing to see them hit the reserve and fly out of the door…. Neither of these did.

The horrors persisted as even the hardiest of bears moved aside to let the ghouls and demons take control of murdering the market –

A bottle of Ardbeg 1976 (cask 2390) sold for £920. Its previous sale was £1,750 yielding a 47% drop in value.

A 1954 Glenfarclas Family Casks bottle (cask 1260) achieved just £700 at Bonhams while later in the day one sold for £1,850 at Whisky-Online Auctions. I guess that’s good from a Bonhams buyers perspective, not so good if you’re the seller.

The gavel, or rusted blood stained axe in this case, hit just £950 for a bottle of 40 year old Glenlivet Atlantic. Its previous sale was £1,750 in August of this year – A 46% step-down in value with one slash of the axe…

On the flip side of this bed of nails, it wasn’t all gore and misery. There were some good results for certain bottles. Some of the bundled lots went for sky-high prices, in many cases far exceeding the value of the constituent bottles. A brace of Bruichladdich Valinches were good examples – A bottle each of the 2009 and 2010 Feis Ile releases sold for an exceptional £420. The most recent single sale values of these are £71 and £65 respectively.

A stunning example of an old 75 proof, lever cap Lagavulin made a heady £2,500, exceeding its previous best of £1,900 in 2011. As I was told just the other night ‘There ain’t no foolin’ with the Lagavoolin’.

Cask number 26.1 by the Scotch Malt Whisky Society sold for £1,800. Distillery number 26 is Clynelish, so why so much for a Clynelish? Because it’s ‘old’ Clynelish distilled in 1965 before the current distillery had been established…. That makes it Brora as we now know and love. The previous record for this bottle was £1,550.

The vast majority of Macallan values were either around current market values or slightly lower (lower mainly for the 18 year olds). That said, a bottle of 1974 Speymalt by Gordon & MacPhail showed impressive growth when it sold for £390. The low point for this bottle was £123 in 2011.

Older Laphroaig continued to see huge demand as a bottle of the 1980 27 year old Oloroso matured (972 bottles) sold for £850, more than doubling its 2009 hammer price of £400.

So like the gore soaked blade of Jason’s Machete there were many up’s and down’s…. some blood was spilled but there were some hero’s too. Interesting times for whisky values….

Until next week.

Slainte,

Andy

Macallan Gran Reserva – Its Creation and Collectability

The 1979 18 year old Macallan Gran Reserva – The Birth and Growth of an Iconic Whisky.

David talks through the creation of the Macallan Gran Reserva then Andy looks at its collectors credentials.

DAVID – It was summer of 1996 and Macallan was under new management. As a result of the take-over by Highland Distillers the challenge we were presented with was to develop a heart-n-mind capturing new release for the global markets. Having had experience and a good understanding of the stocks since joining Macallan in 1994, I knew that 1978, 1979, 1980, 1981, 1982 and 1983 were halcyon years.  After conducting an extensive cask sampling and assessment programme we landed on creating a vintage first fill Spanish oak release – like the usual Macallan … but on steroids!  Gran Reserva was 100% first fill whereas our usual 18 year old was a mix of first and second fill.

Macallan Gran Reserva

To get the balance we wanted, we used casks which had previously contained a broad range of different sherries (dry oloroso, sweet oloroso, amontillados).  We also did some wood analysis at the time and discovered that Eugenol, a clove like tannin, was a key marker for ‘high tannin potential’ oak and was correlated with the deep rich red colour, aromatic spices and syrupy textures/mouth feel we wanted.

From memory, for the first release – a 1979 18 year old –  We selected around 50 first fill sherry butts and released somewhere in the region of 3,000 (12 bottle equivalent) cases – mixed between 75 cl and 70 cl.

Personally I loved the whisky, it was my first real ‘white space’ creation so I bought 8 cases – In staff sales it was selling for around £45 per bottle and was launched with a suggested retail price point of £65. Of these, I only have a few bottles left and they will now be saved for very special occasions.

My friends and family were gifted many bottles in the late 1990s and I recall consuming a couple with my father at the ghillies cottage at Macallan when we watched Hearts thrash Rangers two – one in the Scottish cup. We got off to a flying start as Cameron scored a penalty after the first two minutes. That marked the opening of the first bottle and I very quickly had one less in my collection. Poor Rothes was the town we chose to celebrate in after the win!

Not only was the Gran Reserva one of my favourite all time whiskies, I was also forcibly made to travel the world launching the Gran Reserva 1979 to a global audience. Imagine the utter hardship as I had to endure drinking this stuff morning, noon, afternoon and night as we travelled throughout USA, Canada, Europe and Asia showcasing it to my fellow whisky fans. A complete nightmare of a time in my life, as I’m sure you’ll agree!!!

Over the years I think I’ve drunk maybe 60 or so bottles but my favourite memory was developing a perfect end to a perfect meal in perfect company. Our dark chocolate mousse dessert was accompanied by a ‘dessert’ dram as well as a drinking dram. The dessert dram was poured over the mousse before we ate it… just delicious. It’s one of those small things but it became a real standout moment for me.

As would be expected, and for so many reasons, the 1979 Gran Reserva still sits in my top 10 whiskies. Others include the Caol Ila Managers Dram, Macallan 30 yo Blue Box, Brora 30, Dalmore 1973 Cab Sauvignon.

Sadly but inevitably, all good things have to come to an end. The Gran Reserva was discontinued once we ran out of stock from that first and only 1979 vintage.  Given it was such a success we were asked to repeat the feat and subsequently released the 1980, 1981 and 1982 vintages. I obviously enjoyed these other vintages but the 1979 just edges it for me. Being the first release it’s also hugely sought after – a bit like Balvenie Tun 1401 batch one.

In terms of what it’s like? While I haven’t had a tot of this for a wee while, I know the liquid intimately. My lasting memory is one of rich dried fruits, raisins, dates and prunes to the fore. The fruits are set against an intense background of tannic spice majoring on cloves, cinnamon, ginger and some cracked black pepper. This is then balanced with dark chocolate, citrus orange peel and sweet hints of red fruits and vanillin.

Now where are my last few bottles!?…..

Macallan Gran Reserva Box

ANDY – 1970’s distillate, first release, heavily sherried and from The Macallan… Let’s be fair, this was never destined to be left languishing on shelves gathering eons of dust like a Mannochmore Managers Choice. With a relatively small number of bottles released, of those 36,000ish bottles there will now be a tiny fraction left (Snow Phoenix had just over 60,000 bottles released)….. My esteemed colleague gave it a good go to remove as much as he could from the market, so many more will have done so too.

It’s scant surprise this bottle’s seen massive demand and steep price increases over the past few years. Its appearance at auction in comparison to the market in general is declining. Broad-based supply (the number of ALL collectable bottles hitting the UK auction market) is increasing at around 50% per year and has done for the last 5 years. The number of Gran Reserva 1979’s seeing the market is in decline, relatively speaking. In 2011 there were 19 sold at auction, 2012 saw 25, 2013 saw 33 and so far this year we’ve seen 25 (so we’re on track for 33 again this year). If general market increase dynamics are applied to this release then we should have seen – 40 in 2012, 60 in 2013 and around 90 bottles already in 2014…. Similar to, but not as severe as Black Bowmore – Bottled stocks are declining.

Values have increased rapidly in positive correlation to diminishing open market supply. The index below shows the growth in value of the 1979 vintage compared to all Gran Reserva vintages from the end of 2008 to September this year (the ‘All Gran Reserva’ index still includes the 1979 too).

Gran Reserva Index

While the 1979 is somewhat spikey, it’s still outpaced the general growth of all Gran Reserva’s by over 100%.

Current values place the 1979 at around £800 to £1,000 at auction with a 12 month low of £500 in February this year and a 12 month high of £1,300 in June this year. The 12 month average is £817. Good growth when you look at the 2008 12 month average which was £220. Taken in comparison to the standard 1979 18 year old Macallan it seems like ‘Macallan on Steroids’ has a significant lead. The current 12 month average of the standard 1979 18 year old is £401, leaving the Gran Reserva at more than double the standard bottles performance.

While it’s impossible to forecast forward what will happen to the value of anything, let alone just one bottle variant of Scotch; when you look at the diminishing supply relative to the rest of the market coupled with the exceptional quality of the liquid, The Macallan Gran Reserva looks like it still has legs.

This is undoubtedly one of the iconic collectibles; the only question is how far can it go?

Weekly Auction Watch 1st Oct 2014

This week marks the end of another whisky auctioneer, this time it’s the relative newcomer Whiskyauction.co.uk. The UK franchise of longstanding Whiskyauction.com has closed its doors for good.

Why?

Simply put, it has to be price. Price and, I suspect, an element of overcrowding in the online auctioneer market.

Take a look at the pricing for Whisky Auctioneer and it’s great news from a buyers perspective; like a British entrant in Eurovision it’s nil points… or nil pounds in this case. But it’s not so great if you’re a seller and right now it’s a sellers’ market.

If you look at an average priced bottle of say £200; Whiskyauction.co.uk charges 20.89% commission – Net £158.22 to the seller. Then take a look at Whiskyauctioneer.com, just 30 miles up the road and it looks far more attractive. 5% sellers fee, £3 listing fee and £1.80 reserve fee (assuming a reserve of 10% under the hammer price at 1% of the reserve price). In this instance the seller would receive £185.20…. some £30, or 15%, more than Whiskyauction.

Are the hammer prices for these two neighbouring auctioneers vastly different (ie does Whisky auction justify the additional fees because it gets 15% more on the hammer price)? No, not really. Whisky auction have indeed had some strong results but Whiskyauctioneer hold the UK record for Port Ellen 1st release among others. So buyers are not paying significantly more at Whiskyauction.com just because there are no fees.

It may be significantly different with parent company Whiskyauction.com, however, in the UK there’s just too much competition… in this case virtually next door.

So while this may be the end of Whiskyauction.co.uk for the foreseeable future they certainly went out on a high with their best auction to date closing on the 20th of September.

The main highlight was a superb and extensive collection of the old Silent Stills bottles from Signatory. Just by the virtue of the name – Silent Stills – it looked like there would be some fierce bidding from the start.

I remember bidding a bottle of the 18 year old Silent Stills Brora up to £320 at a smaller independent auction in 2011. I then quit and lost the bottle for £330 (my rival bidder had a look of pure madness in his eyes so I politely ‘allowed’ him the bottle…. But kept my life!). It looks like my lost bottle would have been a good investment as one sold at Whiskyauction for £615.

Until relatively recently Banff has been something of a silent under-dog with the main interest going to Port Ellen and Brora. Current demand for anything from a closed distillery saw the 1966 34 year old sell for £515 significantly outpacing its last UK auction sale of £320 in 2013.

The Coleburn 16 year old took £380, a clear £200 ahead of its all-time low of £180 in 2012.

Lochside’s 31 year old on a 1966 vintage achieved £460, more than doubling its 2008 low of £200.

As expected The Silent Stills Port Ellen bottles also achieved new record prices. Three separate bottlings; an 18 year old, a 22 year old and a 23 year old sold for £555, £610 and £610 respectively.

Other than the silent stills bottles achieving great prices across the board everything else sold for what would be expected.

Another thing this auction highlighted is the importance of keeping all original packaging complete with a bottle. The unboxed variants of the Silent Stills bottles (lacking the box, the miniature and the cask piece) sold, in most cases, for 40% – 50% less than the boxed variants.

So we bid farewell to another whisky auctioneer…. Will there be others?

Until next week.

Slainte,

Andy

Cutting to the heart of the Scotch Whisky industry.