Tag Archives: Karuizawa

Monthly Market Watch – November 2016

Whisky Values Maintain Buoyancy as Port Ellen Leads the Pack in November.

Demand for rare whisky increases as November’s results show prices hardening amid an almost insatiable market.

Volumes were relatively stable at 5,352 compared to October’s 5,528 and average prices for Scotch look to be edging further north towards the end of the year. More on averages in the 2016 Investment Review released early 2017.

Other than the specific negative indices which track the worst performing bottles, every single key index finished the month in positive territory. As more confirmation certain brands/bottles continue to fall, the Negative100 index slid further into the red, losing 1.43%; its greatest single month dip since Mays -7.46% loss.

The basic principles of the current dynamic market remain broadly the same as they did five years ago with the most desirable bottles increasing and polarisation suppressing values for undesirables.

springbank-1963-cadenheadsBottle(s) of the Month

When gems from Springbank infrequently appear on the open market there’s usually a decent amount of activity. Over the past year or so, demand for some of these magnificent older examples has dialed up to eleven.

Born in 1963, this Cadenheads 31-year-old has only appeared on the market three times. Scant surprise then, when Whisky-Online Auctions unearthed one, it rapidly disappeared into the stratosphere from a pricing perspective.

springbank-1963-31-yr-old-valuation

From £320 in 2010 to its current price of £2,150 represents a 572% increase in value.

Rather more frequently seen on the open market, the blue label Macallan 30-year-old managed a new record of £3,500.

macallan-blue-label-30-yo-sherry-valuation

With a 2008 record low of £260, this bottle is one of the all-time best performers at auction yielding a 1,246% increase in value.

The Month in Summary

The key Rare Whisky 101 indices ranked in order of performance for November are –

Port Ellen (OB) Index:                    +16.46%

Macallan 18 y/o Index:                  +11.49%

Karuizawa Index:                              +9.93%

Brora (OB) Index:                            +7.14%

Macallan 25 y/o Index:                  +5.01%

Icon100 Index:                                 +5.00%

Apex1000 Index:                             +4.34%

Rare Malts Index:                            +3.40%

Vintage50 Index:                             +0.38%

Port Ellen (OB) prices continue along their unpredictable peak/trough sawblade-esque trajectory. Down 15.85% in October then bouncing back in November to increase 16.46%. A 2016 year to date result of +38.19% shows the general trend is still very much up.

As the third greatest gainer in November, Karuizawa appears back on the radar. Novembers increase takes Karuizawa out of the red for 2016 and gives a marginal year to date positive performance of 6.01%.

And then there was Macallan!

The current surge in values is so out of line with anything we’ve ever seen before. We still maintain this market is unsustainable. That said, every month we seem to keep witnessing further increases, especially to the vintage 18-year-old bottlings.

To illustrate how unique the current market is, if we forecast forward the average per-bottle price increases for both 18 and 25-year-old Macallan’s, we see the 18-year old’s becoming worth the same as the 25 year olds in just over one year, with an average per-bottle price of just under £4,000.

average-per-bottle-macallan-18-vs-25

 

Now, while the current increases look almost incredible, an average of £4,000 per bottle would be madness… but with the current trajectories, that’s how out of line the current market really is.

With one more month before the curtain is closed on 2016, it looks like this year will be a record breaker. While there’s still time to see a year-end dip similar to that of 2014, we would see it as unlikely any dip could/would be significantly material… more a pause for breath. The current market just looks too bullish at the moment with demand for rare whisky remaining nothing short of exceptional.

October 2016 Market Watch

Calm After the Storm?

October saw the second highest month on record from a supply perspective with 5,528 bottles of Single Malt Scotch hitting the secondary market in the UK, slightly behind August’s all-time high of 5,707. It’s incredible to think the number of bottles sold in one single month is now regularly exceeding 2010’s full year supply of 5,431.

From a pure investment perspective, October looks to have finally flushed through any Brexit forex related gains. The broadest measuring index, the Apex1000, increased by 2.20% in October, cooling from September’s 5.30% and August’s heady 6.18%.

While there’s clearly been the expected positive correlation between Sterling’s drop and certain bottles increasing, the broad market has remained underpinned by the same tried and tested principles. The ‘right’ bottles are increasing and the ‘wrong’ bottles are still languishing in the doldrums. The impact of the crash in GBP has by no means positively affected all prices; the value of some bottles has continued to fall.

Bottle(s) of the Month

brora-1972-22-yr-oldOctober’s highlights have to include Scotch Whisky Auctions Rare Malts Selection Brora 1972 22 year old which, in-spite of massive increases already, pushed up from its previous £5,400 record to a massive £6,400. The profile of that little gem is below.

1972-22-yr-old-brora-values

1967-largiemeanochWhisky-Online Auctions took a bottle of the Largiemeanoch Bowmore 1967 from its previous best of £8,200 to £10,300. Demand for these amazing old rarities seemingly knows no bounds as the valuation history below shows.

1967-largiemeanoch-values

The Month in Summary

October proved to be a particularly sharp, double edged sword as Macallan continued to surge but both Brora and Port Ellen dipped dramatically. Both indices saw large peaks over earlier months which have now been erased.

brora-and-port-ellen-spikes

The monthly % changes of the indices are ranked below together with the respective 2016 year to date results-

Oct 2016             2016 YTD

Macallan 25 Index           9.51%                   53.53%

Macallan 18 Index           7.50%                   100.09%

Apex 1000 Index              2.20%                   28.87%

Icon 100 Index                  2.03%                   38.65%

Vintage 50 Index              0.40%                   21.40%

Rare Malts Index              -0.04%                 33.88%

Karuizawa Index               -2.94%                 -3.57%

Brora Index                        -9.08%                 14.41%

Port Ellen Index                -15.86%               18.66%

It’s the first time we’ve ever seen an index/collection double in value over the course of less than one year. The vintage Macallan 18 year olds have outstripped everything before them. Even the rapid ascent of Karuizawa prices in early / mid 2015 can’t hold a light to Macallan. As a word of caution, and as can be seen from the charts, these bottles have been through a protracted re-trace before. Whether we see any sort of cooling in rare Macallan prices is anyone’s guess; but we’re absolutely not expecting these gains to continue. They simply cannot.

While not included in the ranking above, the Negative1000 index crept slightly further into the red, cementing the risks involved in selecting the wrong bottles.

Port Ellen and Brora are also showing why Scotch should be viewed as a medium to long term investment. With peaks and troughs galore, as ever, timing is everything.

Weekly Auction Watch – 4th April 2016

Balvenie’s old golden-balls lost their lustre recently. We reported a steep decline in values across the board in our 2015 annual review. Two short years ago, it seemed the collector’s darling could do no wrong – Recently, the question I was asked “could Balvenie challenge the mighty Macallan for the collector’s crown?” rapidly became “When will Balvenie values stop falling?”

Balvenie Record Breakers
A whole Tun of Rosie

Before we move onto a broader review of Scotch Whisky Auctions recent offering, March’s Whisky Auctioneer sale saw a stunning collection of Balvenie single cask bottles. Proving there’s still a significant market for the right bottles from one of Dufftown’s leading distilleries, every single bottle took a new record… in some cases massively. So the oldest vintage single casks are still in heavy demand but are the ‘limited releases’ recovering? Scotch Whisky Auctions first sale of quarter two looked positive for Balvenie… Are those golden balls being polished again for another challenge to Macallan’s collector prowess?

The first release of Balvenie Rose managed to hammer home £1400. In 2009 a mere £126 took this bottle and as recently as 2012 one sold for £240. Following a fallow period, Tun 1401 batch 1 values moved up another gear when, for the first time ever, one managed to exceed £3,000, taking an impressive £3,200. It’s just staggering to think that these were selling at the distillery in 2010 for £150 per bottle.

To add balance, there always has to be a yin for one’s yang and that’s no different for Balvenie. Tun 1401’s replacement – Tun 1509 – still hasn’t captured the hearts and minds of the collectors. Batch #1 continues to sell at auction for less than it original retail price.

Why? Glendronach 1968 ANA Cask 13Too many bottles and too much money came the cry. Simple.

Extreme break-outs of current trading levels weren’t the exclusive preserve of Balvenie at Scotch Whisky Auctions. Fellow Macallan-worrier, Glendronach, saw their most expensive sale at auction to date with a bottle from cask number 13 of the famed ANA 1968’s. The last time this sold at auction in the UK was for £1,550. In June 2012 one sold for a low-point of £320. £2,600 is the current price. Absolutely amazing gains.

Demonstrating the halo-effect perfectly, a bottle of Dalmore’s 1978 vintage, Sherry Finesse, sold for £1,550, a significant margin ahead of its last sale of £490 last year. The reason? The 1978 vintage Constellation sold for £3,800 earlier this year. Compare the two and, whether you see value in the Constellation collection or not, the earlier release looks like good value.

Dalmore 1978
A rising tide floats all 1978 vintage Dalmore’s

Lord of the IslesArdbeg’s Lord of the Isles was another standout performer with two bottles selling for £1,050 and two bottles selling for £1,100. Recent bottles have been selling for around the £550 – £600 mark so this is a significant Glenmo Cote de Nuitsremoval from the current pattern.

Following recent price advances, the tall-necks of Tain, Glenmorangie moved further up the value chain. The fabulous ice-cream accompanying Sonnalta PX saw £230 and £240 achieved. Not outright new records, but significantly above values for the past 12 months. Sonny PX might currently be a tad expensive to buy purely for your Mr Whippy, but (when it was cheap) this stuff really does go well poured on ice cream… as does PX itself. Another one of Glenmorangie’s finest bottles, the 1975 vintage Cote De Nuits took to new highs when two bottles sold for £740 and £820.

Amid an advancing market for Scotch, Karuizawa remains a significant risk to those who plan on buying for investment. Earlier this year, a bottle of the second release Ghost/Rouge cask series sold for £17,500. It’s about as rare as it gets with just 22 bottles, but £17,500 is a chunk of change to take from even the wealthiest of spare-change-spirit-slush-funds. Clearly too much for the market to repeat, a bottle sold for almost half that amount… £9,000 sealed the deal. Let’s be fair here, £9,000 is still a whopping price to pay/receive for this bottle, but vast elements of unpredictability and volatility continue to hound Karuizawa… Never catch a falling knife!

Karuizawa 1995 Ghost
To be known, from this day forth, as the falling knife of Karuizawa

In summary, SWA’s early April auction confirmed values are increasing. In some cases rapidly. In some cases too rapidly. If momentum continues over the next few months, maybe we’re moving through a period of market correction where values will progress to another level? But if demand slips, or market conditions change, some of these increases could simply be unwanted spikes. It’ll certainly be interesting to see if some of these prices can be maintained.

 

 

Images courtesy of Scotch Whisky Auctions

Monthly Market Watch – March 2016

Bull’s March through March in Whisky Fuelled Stampede

Following February’s gargantuan supply, the number of bottles sold on the open market in March cooled to a slightly less heady 4,798.

While volumes dipped, values did the opposite. March saw frankly incredible increases in some of the Rare Whisky indices. Increases which cannot be sustained in the medium to long term; none the less, if you’re a whisky collector with an eye on the value of your collection then this is one of the rosiest months/quarters on record.

But before we head to the indices –

Bottle(s) of the Month

March’s big bottle of Scotch was brought to market by Blackpool based auctioneer, Whisky-Online Auctions. Their record setting Port Ellen Queens Visit 12 year old set a new record for the most expensive bottle from the deceased Islay distillery when it fetched £12,100.

Port Ellen Queens Visit

£12,100 is no drop in the ocean for one single solitary bottle of Scotch, however, it was a Karui 4 decades ghostbottle of Japanese whisky which made the months most expensive bottle. Dunfermline based auction house Just-Whisky managed to bring one of only 24 bottles of the Karuizawa 5th Ghost to auction which made an exceptional £15,025. The 1964 Wealth Solutions bottle came a close second place at £14,000, albeit significantly down from its £19,000 high in September last year.

The Month/Quarter in Focus

Following the arrival of spring (someone please tell that to whoever’s in charge of the weather in Scotland), the closing out of March also signalled the end of quarter one. A quarter which has seen the continuation of recent increases in value for old/rare/collectable bottles of Scotch.

Ranked in order of year to date performance and with Q1 2015’s results as a comparison, the indices are as follows –

Respective Quarter-    Q1 2016              Q1 2015

Macallan 25 Index          18.30%                -0.50%

Macallan 18 Index          18.28%               -0.16%

Rare Malts Index            12.76%               4.99%

Icon 100 Index                11.60%               7.24%

Apex 1000 Index             5.13%                 4.36%

Brora Index                     3.65%                 -2.76%

Vintage 50 Index             1.33%                 -2.04%

Karuizawa Index             -1.28%                21.00%

Port Ellen Index               -6.66%                5.58%

The two benchmark indices, the Apex1000 (tracks the best performing 1000 bottles of Scotch) and the Icon100 (tracks a fixed basket of regularly traded collectables) have made good progress. Both indices are ahead of 2015’s performance over the same period.

RWIcon100_Index_Mar2016
Icon100 Index hits new all-time high

Macallan and Karuizawa almost completely traded places with the immensely collectable vintage Macallan 18 and 25 year olds almost neck and neck leading the performance tables.

RWPortEllen_Index_Mar2016
More spiky than a grumpy hedgehog

Karuizawa has further stabilised as would be expected following recent meteoric rises.

Amid continued descent, the Port Ellen index remains the sick parrot in intensive care. Bottles of 1st release were, at one time, regularly managing £1,800 – £1,900, a figure which is now more like £1,500 – £1,600. Have the official releases become an icon for overly rapid retail price hikes resulting in brand aversion? We will inevitably see a bottom for what was 2015’s key performer, that’s a certainty. But when it hits, the question becomes will it recover or will it see the ‘flat-line of Karuizawa’? There will always be value in Port Ellen and we’ve seen many Rapid recoveries over the years but the fact remains, Islay’s best loved pile of rubble wants to stay in the red.

As to Macallans recent surge for older, rarer collectable bottles; to some degree increasing scarcity of supply is at work. Throughout quarter one 2015, there were a total of 9,378 bottles of Scotch sold on the open market. In 2016 that figure has soared to 14,033, an increase of 49.64% year on year. Over the same time-frame, there were 47 bottles of 1960’s and 1970’s vintage Macallan 18 year olds sold in 2015. In 2016, that’s reduced to 41, a 12.77% decline.

In common with a whole host of bottles showing the most significant increases, general supply’s up but rarities and ultra-desirables are disappearing. A trend we expect to continue.

 

Bottle images courtesy of Whisky-Online Auctions and Just-Whisky

 

Monthly Market Watch – Feb 2016

What a month February turned out to be!

5,467 bottles (full sized bottles, single lots of single malt) were sold at auction in the UK, that’s the highest volume of bottles seen on the open market in one month. Monthly volumes have never quite managed to break through the 5,000 bottle barrier… as an indication of how vast last month was, February 2015 saw 2,690 bottles sold. To a large degree, this supply-glut was down to Scotch Whisky Auctions zero seller’s commission offer which gave a boost to the figures. Include memorabilia, blends, bundled lots, grains, mini’s and everything else sold through whisky auctioneers in the UK and, in total, there were 9,587 separate lots to bid on!

Bottle of the Month…

…Goes to McTears Auctioneers in Glasgow for bringing to market the only bottle ever produced of a 60 year old Dalmore for Drew Sinclair’s 60th birthday. A 1939 60 year old and just one bottle in existence… it doesn’t get much more desirable than that. Interesting to see a top end Dalmore in a little more sedate packaging too. At £7,500 it’s not the most expensive Dalmore ever, and while it’s a rather odd thing to say at this price point, it actually looks like good value for whoever bought it.

Dalmore Drew Sinclair 60
Image Copyright McTears Auctioneers Glasgow

The Month in Focus

Scotch is an interesting investment proposition. It’s beautifully simple in its supply/demand driven environment.

Supply goes up – Demand stays the same or falls = Values soften.

Supply goes down – Demand stays the same or increases = Values harden.

Following January’s rather buoyant start to the year, in light of February’s massive increase in supply, we were bracing for an almost unilateral dip in values.

With the exception of one major index (Port Ellen) we witnessed some of the single largest ‘in-month’ increases we’ve ever seen.

RW_Apex_index_feb16
An exceptional month for Scotch

The broadest measure of how Scotch is performing on the open market is the Apex1000 index.

December 2015 saw the index step back ‘in-month’ at the year-end by -0.02%; we know a massive supply month can directly impact value growth, and it’s not the first time we’ve seen this. While -0.02% is no crash, it’s still not the right direction for values.

Contrary to expectations, the Apex1000 increased by a significant 1.73% in February. It would seem that while supply is increasing it’s being continually outpaced by demand. Looking at a year on year comparison, February 2015 saw the Apex1000 increase by 1.53%… but with fewer than half the number of bottles on the market.RW_neg_index_feb16

 

Conversely, the Negative1000 index, which tracks the 1,000 worst performing bottles, continued to fall, losing 0.68% in the month to rest at a record low 53.81 (the index started at 100 in 2008).

Ranked in order of performance, February’s indices look like this –

(1) Rare Malts Selection Index: +6.27%

(2) Brora Official Bottle Index: +5.81%

(3) Macallan 25 yr old Index: +4.97%

(4) Macallan 18 yr old Index: +3.70%

(5) Icon 100 Index: +2.59%

(6) Apex 1000: +1.73%

(7) Karuizawa Index: +0.40%

(8) Vintage 50 Index: -0.44%

(9) Port Ellen OB Index: -5.27%

Historically, rather more sedate than other indices, the Rare Malts Selection Index took the reins with a 6.27% increase. Impressive, but we’re not convinced these gains will be cemented. Late 2015’s December-dip saw 2.34% wiped off a full collection of Rare Malts, so we could be seeing a natural correction.

Below is an extract from our 2014 full year investment report talking about Macallan’s 25 year old Anniversary Malts and the earlier release 18 year olds. Respectively, these indices moved up by 3.77% and 3.57% throughout the whole of 2014.

Mac 18 and 25 extract

Current sentiment would appear far more positive for these stunning older bottles as they took to incredible gains last month. Increases throughout February alone out-stripped performances for the whole of 2014.

Karuizawa values stabilised during February as the index increased by a fractional 0.40%. Have we reached an equilibrium for Karuizawa values? We’re not so sure…

Then there was poor old Port Ellen!

RW_portellen_index_feb16A far cry away from the Port Ellen Index’s Feb 2015 all-time high closing position of 456.77 points; twelve months later and we see almost 12% wiped off the value of a collection of Port Ellen OB’s (releases 1 – 8 incl). Values moved north throughout the whole of 2015 by over 23% but, even removing some of the price spikes, like the one in Feb 2015 (full collections being completed maybe?) and the chart suggests we might have reached the top of the current cycle. Could values plateau or even cool a little for the most iconic of silent distilleries?

Aside from Port Ellen’s erratic behaviour and a lacklustre performance by the Vintage 50 index, general values advanced impressively amid the challenges of our largest volume month on record and continued turmoil in other markets.

 

 

Weekly Auction Watch 26th Jan 2016

Bonhams – Hong Kong – had a massive 38.5% unsold lot rate at their recent whisky auction. Just 61.5% of lots sold on the day.

Conversely, Whisky-Online Auctions has an unsold lot rate of 0%. Zero percent! They have a no-reserve policy; and in the current buoyant market, that seems good practice. If the market softens, that good old reserve-price comfort blanket may well get dusted off, but for now it’s almost surplus to requirement.

I’d view Bonhams 61.5% lot-sold-rate (LSR) as a pretty disappointing performance from arguably one of the world’s most significant whisky auctioneers. So what happened?

Before we get into some cold hard facts about the winners and the not-so-winners from a brand perspective; in our opinion we suspect part of that poor performance is that we’re seeing a gradual homogenisation of global market pricing. Estimates, in some instances, were massively over UK values. Many of these bottles failed to sell. The rough rule of thumb used to be that auction sales values in HK were roughly double what they were in the UK. That really no longer applies. In-fact some sales prices, even for the mighty Karuizawa, were actually lower than prices in the UK. As the burgeoning UK internet-auction scene has become a truly world wide web, are we now seeing the creation of a level playing field… from a pricing perspective at least?

From a regional secondary-market brand perspective, (putting aside pricing differences and over-estimation), there are some clear trends emerging for popular bottles/distilleries.

Port_Ellen
Any Port in a storm? Not this Port, not in Hong Kong anyway.

Taking 61.5% as the average LSR let’s take a look at which brands are like a summer in Hong Kong… That’ll be hot then!

The highest LSR was Glenmorangie with 100%. Good old Tain titans, the 16 men pull out a perfect score (when is a lady ever going to permeate that most elusive of men’s clubs!?!?!). A whole two out of two bottles sold… so from that basis the data set is hardly revealing. Conversely, Bruichladdich saw three bottles at auction and took a big fat ‘oh’. Zero percent sold… Great bottles too, shame. Overpriced. No demand?

The two big guns were clearly Karuizawa and Macallan. East versus west in a sherry bomb barrage of superb open-market liquid.

Karuizawa reigned supreme with a market leading 89.7% LSR as 52 out of 58 bottles hammered-out successfully. Craigellachies finest, Macallan, managed a LSR of just 51.2% as 21 out of 41 bottles hit reserve. While the LSR was impressive, many Karuizawa prices fell in HK as they have in the UK… apart from that bottle (the 1960 50 year old), which again highlighted the krazy world of the professional Karuizawa collector. I am minded to think of the Pepsi-Max in sunny Blackpool whenever I delve into Karuizawa prices!

Staying with the sherried theme, the increasingly in-demand Glendronach took an 80% LSR as 4 out of 5 bottles sold. Not a conclusive victory at these miniscule levels, but none-the-less an interesting fact.

Springbank_32_Shoulder
A spring in its step at Bonhams

Closest to Karuizawa and just above Glendronach, from a Scotch perspective, came Highland Park with an impressive 87.5% LSR: 7 out of 8 bottles found new homes. It has to be pointed out that the bottles were exceptional rarities so it was scant surprise competition was particularly stiff. Springbank then came in with a convincing 66.7% LSR as 8 out of 12 bottles sold.

From this we know that Karuizawa is as popular in HK as it is in the UK but irrespective of the number of bottles sold, prices still softened. In some cases we saw bottles sell for less than they do in the UK. Have Karuizawa prices paved the way for harmonisation of values world-wide?

Brora_32_and_35
Brora’s awful… Seriously bad stuff. Send all bottles back from Hong Kong to Scotland. We all hate it here and will dispose of it in a fitting manner… honest.

Particularly different to the UK, some of our silent stills appear like they have yet to appeal to the eastern hearts, minds and palates (or maybe they were simply too expensive?). Port Ellen had a good selection of 40 bottles at the auction but could manage a LSR of just 35% when 14 sold. Brora fared even worse with just 3 of 14 bottles taking flight, giving a 21.4% LSR. Rosebank, saw a little more action as 4 of 10 bottles moved. Whether estimates were simply too high (they were certainly eye watering from a UK viewpoint) or the frenzy for silent stills is yet to infect HK who knows?

A fascinating auction and one which suggests values are aligning globally. Worthy of note; just under a year ago, in the February 2015 HK Bonhams auction, Macallan had an 85.3% LSR when 29 out of 34 lots sold.

Changing trends ahead?

Or simply aligning prices?

Weekly Auction Watch – 7th December 2015

We often talk about price and value as being very separate animals.

Price is whatever anyone wants to ask for a ‘thing’. An asking price can be as wholly realistic or as flamboyantly outlandish as the seller of that particular thing decides. If the price is right, the thing sells – if the price is low, the thing sells fast – but if the price is too high, the poor thing sits on a shelf gathering dust. Value, on the other hand, is what the thing is actually worth.

That’s part of the beauty of the secondary (auction) market; it highlights true value and provides an open market test of worth.

Mortlach 25 yo

Take, for instance, the relatively recent release of the revised Mortlach range. A controversial 50cl bottle size and ambitious pricing raised eyebrows. The 25 year old range topper costs £600 per bottle, or £840 per 70cl equivalent. For a new-start luxury malt brand to position itself above the combined prowess of the mighty Macallan (£680 per 70cl 25 yr old) and Dalmore (£600 per 70cl 25 yr old) takes some confidence.

It was interesting to see where the open market priced the Mortlach in the recent Whisky Auctioneer sale. Its retail price might be viewed as a little ‘toppy’, so how does its true open market value compare to the 25 year old Macallan and Dalmore?

The Macallan 25 sells for £600 per bottle at auction.

The Dalmore 25 sells for £410 per bottle at auction.

The Mortlach achieved £275 (£385 per 70cl equivalent).

From a sellers perspective, that places the Mortlach 25 into a very rare group of bottles indeed. Those who lose >50% in value when switched from the primary to the secondary market. We highlighted a recent Glenturret which saw a massive loss too, the Mortlach is almost on the same level. Taking into account sellers fees and VAT yields a 59.7% primary-to-secondary market loss. Not one for the collector/investors. That said, we do still see older OB and IB Mortlach performing exceptionally well. A trend we expect to continue if not accelerate.

Loss making primary market bottles aside; the recent Whisky Auctioneer sale would be best described as a continuation of a (mainly) very positive theme. In many cases demand for the usual suspects took to new highs while other bottles continued to fall.

Port_Ellen_OBs
Rapid increases in value for Port Ellen OB’s

The Port Ellen official releases performed amazingly well with new records for the 5th, 6th and 8th releases. £950, £1,150 and £945 (respectively) took these bottles soaring past respective low values of £150, £140 and £170 in 2009. While average Indie per-bottle prices are still some way under the OB’s, massive demand took many IB’s to new heights. Both the Signatory port wood finishes hit new records with the first edition hitting £480 (£90 low point in 2008) and the second edition taking £575 (£80 low point in 2008).

Millburn

Bottles from silent siblings Millburn and Glen Glenflagler Sig 1970Flagler also fetched impressive numbers. A Douglas Laing bottled 1969 36 year old Millburn achieved £425 and a 1974 31 year old from Cadenheads took £345. Signatory’s 1970 23 year old Glen Flagler made £600, up from a previous £420 best.

Continuing a different theme; Karuizawa values softened further. Good examples of this swift descent from previous peaks as high as Mount Asama itself were –

1977 (from cask 7026) sold for £2,100 down from a June peak of £2,900.

1981 (from cask 8461) ‘en soi’ sold for £2,000 down from a £2,600 peak in April.

1981 (from cask 152) sold for £1,800 down from its £2,400 peak in September.

Again, taken from their original retail prices, these sale values are far from catastrophic; however, bottles purchased at auction earlier this year look like losses will be further extended.

Our final distillery this week is Glenfarclas. Producers of some of the best spirit on earth; ‘probably Speysides finest’ as they have been known (who the hell am I to disagree to be fair) look like a long due upshift in values is on the cards. More recent contemporary releases are remaining relatively stable, however, values for older vintages are hardening. A bottle of Signatory bottled 40 year old from 1958 achieved £1,260 up significantly on its 2014 high of £800. A bottle of the OB 1959 vintage fetched £850, again, a significant uplift on its previous £600 record.

Glenfarclas_Old_Vintages
Are Glenfarclas values set to increase?

Compare values for similar old vintages from other well-known distilleries and it’s not difficult to see why interest is now shifting to Glenfarclas. Prices in the current market look very favourable from a quality and age perspective.


December promises the highest ever number of bottles to hit the open market. As widely discussed, the end of 2014 had a supply led slowdown in values. Right now, this year looks to be bucking the trend.

In what is set to be the biggest whisky auctioneering month on record, can demand continue to outpace supply?

Until next time.

Slainte,

Andy

All images courtesy of Whisky Auctioneer

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

Weekly Auction Watch – 2nd Nov 2015

October departed quicker than a bottle of Loch Dhu down a drain. An immensely busy month for RW101 saw our weekly updates turn monthly. There are huge levels of activity in many areas of the market right now, which in itself is exceptionally exciting… Volatility and extended losses for some and immense upwards pressure on values for others.

November’s first dedicated whisky sale saw a bumper 2,800 lots go under the e-hammer at Scotch Whisky Auctions. In last months SWA sale, fifteen out of the top twenty most expensive bottles were from Karuizawa; Scotch took just five. This month, Scotland gained a little ground holding onto seven out of the top twenty. That said, the price difference between the most expensive bottle of Karuizawa and the most expensive bottle of Scotch was vast: £9,000 took the first bottle (of just 50 released) on the open market from Karuizawa’s cask number 3557. Laphroaig’s 1960 vintage 40 year old was capable of just £4,000 – Incidentally, that’s the first time this bottle’s hit £4,000, having a previous record of £3,800.

Over £16,000 right here... Just these three!
Over £16,000 right here… Just these three!

The second most expensive bottle of Scotch was also a record breaker. One of the ultra-rare 1973 28 year old Talisker’s shot to a record £3,200, comfortably exceeding its previous best of £2,500.

Ardbeg demonstrated the ongoing trend of market polarisation as a bottle of the highly desirable Lord of the Isles took an all-time second best price of £820. Languishing at the other end of the spectrum, the Kildalton Project bottle struggled to fetch its original retail price of £120… After fees and taxes the result is clearly a steep net loss.

Clynelish 12
Just £120 in 2009

Featured in our previous auction update, “buyer beware at these heady prices” was our closing remark about Bowmore’s Mizunara cask finish when the first bottle to hit the market achieved £1,200. One short month later and we’re looking at a 25% auction-to-auction loss following a £900 sale. Still more than its original retail price but classic new-release-curve at play.

Further highlighting bottles released years/decades ago containing legacy-liquid are still hugely sought after, a bottle of early 1980’s bottled Clynelish 12 year old sold for a record £560. Way back in 2009, a paltry £120 would have secured one of these.

From a collector/investor perspective, Dalmore values continue to harden. As much as Dalmore has become famous (infamous) for their recent seemingly excessive pricing, their long extinct bottles and older vintages keep stepping up in value. A bottle of exceptionally rare 12-year-old from the 1970’s at 75 degrees proof achieved £640, way ahead of its £260 Low in 2010. Along with that, a wonderful old bottle of 20-year-old hit £740 – not an outright record (£785) but way ahead of the £450 paid in 2010.

Long extinct releases and older vintages underpin Dalmore as a collectable
Long extinct releases and older vintages underpin Dalmore as a collectable

While we didn’t run the numbers, anecdotally, there appeared to be a continuation in the trend for declining stock from silent distilleries. There just isn’t much floating around the auction-ether anymore.

Be it the above mentioned stress on supply or a renewed level of demand, following an extended period of volatility, Brora OB values seem to be settling towards the higher end of their trading range. No outright records were set but there was evident pressure on the prices paid.

Mirroring the above apparent stress in supply, one of just two bottles from silent lowlander, St Magdalene, (a 1965/1993 Connoisseurs Choice) fetched an almost inevitable new record £320. The other, a bottle of the 19-year-old Rare Malts Selection, fetched £520. Not a record but towards the top end of its trading range, especially noting the borderline fill level. In 2008 you’d have picked this bottle up for £100.

St Mag - Just two bottles out of over 2,800 at this auction
St Mag represented by Just two bottles at this auction

All-told, a buoyant start to what it traditionally the highest volume month of the year. Whether that trend continues is anybody’s guess…

Until next time.

Slainte,

Andy

All images courtesy of Scotch Whisky Auctions

Weekly Auction Watch – 12th Oct 2015

The increased (and massively premature when you have an excitable four year old) visibility of chocolate Santas, holly adorned tubes of sweets and various other absurdly early Christmas related merchandise means one certainty… We’re in the final quarter of the year. Q4’s typically the busiest time of the year from a volume-of-bottles perspective – It can also be a volatile period from a value-of-bottles perspective. Q4’s first Scotch Whisky Auctions sale showed little of that volatility; values look to be holding steady with continued upwards bias for many bottles.

Worthy of mention, fifteen of the top twenty most expensive bottles of the auction were from Karuizawa. Scotch did, however, punch a little above its weight from a value perspective with 26.6% of the value of the top 20 – slightly ahead of its 25% volume.

Scotch Whisky Auctions top 5 results by price
Scotch Whisky Auctions top 5 results by price

With rarity in part driving the price of the most expensive bottle; one of just 68 bottles from Karuizawa’s cask 8333 managed a staggering £9,000.

The most expensive bottle of Scotch at the auction is quite possibly one of the most hideously packaged ever. Awful/cronky packaging aside (irrespective of looks, try opening one of the bloody things!), the Glenfiddich 38 year old ‘Ultimate’ hit an impressive £5,200.

The next release comes with a luxury shaving kit
The next release also comes with a luxury shaving kit

The fourth overall most expensive bottle and the second most expensive Scotch is the first record-breaker this week. The 1953 58 year old Glenfarclas fetched £5,200 comfortably moving past its previous £4,450 record.

Sold for £5,200, almost double its 2013 first UK auction price of £2,800
Sold for £5,200, almost double its 2013 first UK auction price of £2,800

Much comment and the expected cries of outlandish pricing accompanied the recent launch of Bowmore’s NAS Mizunara Cask Finish. As the first bottle hit the open market and managed £1,200 (almost double its £650 retail price), it looks like demand comfortably exceeded the price tag. That said, we could see classic new release curve at play (first sales go high then settle as supply increases over time) so buyer-beware at these heady prices. With 2,000 bottles released, many will be drawn into the secondary market over time. Patience, again, could well be rewarded as open market supply naturally increases.

Sold for £1,200. Almost double its original retail price
Sold for £1,200. Almost double its original retail price

This weeks final bottle from a currently producing distillery is the Rebus bottling from Highland Park. Values in general for Highland park remained static or slightly lower than recent highs. It was pleasing to see the Rebus bottle manage a record £2,600; more than three times its all-time low of £800.

Silent stills maintain buoyancy.

Dallas ‘Dhon’t’ put a lacklustre past performance well behind it and very much became ‘Dallas-don’t-mind-if-I-Dhu’ as new record prices were achieved for virtually every bottle sold. A brace of Signatory Cask Strength bottles on 1975 and 1979 vintages achieved £300 and £270 respectively (up from £210 and £160 respectively). A 1971 vintage Connoisseurs Choice edged up from its previous £150 to settle at £190.

Dallas please-Dhu
Dallas please-Dhu
Indie bottles from Silent stills perform well
Indie bottles from Silent stills perform well

Again, from Signatory, a bottle of Glenlochy 1980 30 year old hit £250 up from a previous sale of £190. Glenury Royal also had a good auction with the OB’s at the top of their current trading range and a Blackadder bottled 1973 34 year old taking £340; up from just £165 last year.

Port Ellen’s official bottles maintained their current up-trend with the first release making a record £2,200. The 2008 Feis Ile bottle hit a joint £3,400 high; an acceptable seven year increase from its original £100 selling price. That was one queue worth getting up at four o’clock in the morning for!

A £3,300 gain for one queue
A £3,300 gain for one queue

With a little over two months left until Christmas, it would be hard to second guess the market at the year end. Last year showed us November and December can be tough months if supply goes through the roof… Right now though, things continue to look very positive.

Until next time.

Slainte,

Andy

All images courtesy of Scotch Whisky Auctions.