We’re moving all future blog posts to the RW101 website blog.
Early trade shows Port Ellen and Black Bowmore surging.
You can read RW101 Rare Whisky Analyst – Jamie Timoney’s – first post of 2018 here.
Macallan 18 Values Soften and Diageo Silent-Still Heavyweights Dip Amid a Mixed Start to the Year.
The first two months of 2017 have been something of a mixed bag for whisky values. There was always a certain air of inevitability around a re-trace of Macallan 18 year olds following 2016’s rapid gains. The vintage 18’s older Anniversary Malt siblings, however, continue to climb.
Following 2016’s emerging trend, the market seemingly continues to de-value the scarcity of silent stills – Values for both the Port Ellen Index and the Brora Index have fallen in February with significant volatility continuing, if not increasing across both indices. On a year to date basis, the Brora index is the worst performing of the key indices.
February was also the first month to see a year-on-year decline in the number of bottles hitting auction in the UK. February 2016 saw 5,360 bottles of Scotch sold at auction in the UK where February 2017 saw 4,980. Worthy of note is Scotch Whisky Auctions held their first 0% sellers commission auction back in Feb 2016, so there was a correspondingly huge increase in volumes from the Glasgow auctioneers.
Whereas year on year volumes declined by -7.09% it was a very different story for overall values. Again, comparing February 2016 to February 2017, the £ value hitting the open market increased by 31.06% from £1,131,512 to £1,482,991. This is to be fully expected noting the quantum shift in prices through 2016.
The key Rare Whisky 101 indices ranked in order of performance for February and also year to date are –
The broadest measure of the market, the Apex1000 Index, highlights continued positivity with the holistic picture showing good upside… >2% gains have been experienced in both January and February. The Rare Malts Selection Index looks to be experiencing accelerating growth. The Rare Malts had a great 2016 with early 2017 results suggesting this cult collectible series has further to climb.
The Vintage 50 Index also highlights the growth in interest for significantly aged, vastly rare Scotch with it’s second highest monthly increase in over three years. This months result was only bettered by a 5.82% increase in September 2016.
Despite a softening of Macallan 18 values, the ‘M’ distillery still leads the pack with the vintage Anniversary Malts advancing. Looking at the indices side by side shows they’re almost on par again with the Macallan 18 index standing at 553.82 and the Macallan 25 index at 538.55.
Port Ellen and Brora show exceptional peaks and troughs across both indices. This suggests both are being governed by the collectors market. We typically see a spike as a collector is missing one or two releases from a full ‘set’, thereafter the market returns to normality. Despite the inherent spiky nature of these indices, the general trend does still remain positive.
To some degree it will also be important to see what Diageo do with pricing for the 2017 release of Port Ellen and Brora (if, indeed there is one). On the secondary market, the trend seems to be the more retail prices are inflated, the more volatility creeps into the market. 2016’s Port Ellen Special Release saw relative retail price stability; so we find ourselves asking if the retail ask price is increased this year, how far will/can it go before the normal dynamics of the market simply snap and consumers walk away?
Elsewhere in the market, it’s fantastic to see London-based Whisky.Auction manage to bust a substantial haul of fake whisky. For those interested and/or invested in the secondary market for rare whisky this issue will become ever more prolific with prices at all-time highs. If there’s one person producing fakes in the UK, there’s a terrible certainty more will be doing the same.
In summary, for the early part of the year, from a collecting perspective, It’s fascinating to see silent stills moving out of the limelight in favour of producing distilleries. Will this trend continue or has the market simply paused for breath, thus providing a good time to acquire any remaining bottles from silent stills? Rarity certainly suggests buying up remaining bottles from silent stills, but, in some cases is liquid quality letting the team down? … A polarising start to the year.
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.
Bottle(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.
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.
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.
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.
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
October’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.
Whisky-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.
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.
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.
Secondary Market – September 2016
We finished the last rare whisky review with the following statement – “…Although in the current market, a bargain seems increasingly unlikely”. A statement which currently resonates through the very fabric of the rare whisky auction market.
Never before have we witnessed such fevered buying at almost any price for rarities from high demand brands. We’re going to be taking an in-depth look at Macallan in our 2016 full year report in around four months’ time but the vintage 18 year olds look like they will have virtually doubled in value throughout 2016. We just haven’t seen anything like this type of growth before.
That said, there’s plenty of time for 2016 to unleash a nasty sting, we saw that in 2014 and (we’re assuming) with the vast majority of the forex related gains under our belts, things could ease in the final quarter of 2016. As, when, and indeed, if we see that happen we’ll report it, however, until then, we’re looking at an exceptionally positive landscape for the world of rare whisky…
Big Brand Demand
With a scant 77 bottles released a few years ago, Dalmore’s Candela has taken its time to increase in value until it breached £10,000 in 2014. Prior to that, it was hovering around the £6,000 – £8,000 price point for years. Dalmore gets a bit of a bashing occasionally – we hear things like “the price has been Dalmorized” when something might be a little racy in the bang for your buck department… or “it’s just got a load of the black sludge in it” (meaning e150a colouring) and there might, who knows (certainly not us), be an element of truth in there somewhere. But one thing’s for certain, old Dalmore’s just a thing of wonder. Be it an older bottling such as the late 1950’s distilled twenty-year-old bottled in 1978 or an old aged liquid like Candela, these things are fabulous to drink… and clearly collect. Two bottles of Candela hit the market earlier this month at Scotch Whisky Auctions and Whisky-Online Auctions. The respective hammer prices were £15,000 and £14,600; both comfortably exceeding Bonhams previous £13,000 record set earlier this year.
Scotch Whisky Auctions continued to roll out the big guns and the records fell. A 1937 50 year old Balvenie managed £15,000. In August 2010, I remember bidding on two of these at Bonhams in Edinburgh. I was bidding against my arch-auction-nemesis from Italy who has particularly deep pockets, so I bailed out and lost the bottles for £3,600 and £3,800. Maybe I should have pushed further.
£8,400 took a bottle of Macallan 1946 Select Reserve to a new record, edging past its previous best of £7,600.
If we index these three bottles to take a look at their combined growth, as is common with high value rarities, we see periods of stability (where there are no sales due to simple scarcity) followed by significant positive step changes. A 300% increase in value since December 2008 is very impressive.
Scotch performed admirably, but Japan needs to feature too. The two big Japanese bottles at SWA were the 35-year-old Yamazaki which, at £16,000, was not just the most expensive bottle of the auction, it was the most expensive bottle of the month. Not quite in the ‘Yama-35’ league but the 2013 Yamazaki Sherry Cask fetched a whopping £3,600. Look back at early 2014 and these were selling for around £100 per bottle… then a man in a hat with scary eyes wrote nice things about it and BOOM! Madness.
Port Ellen Prowess
Taking a quick look at the first eight official Port Ellen releases and we see every bottle closing out September with a value in excess of £1,000. It’s the first time that’s happened so we’re expecting to see significant gains in the Port Ellen index when it’s published tomorrow.
The First release seems to have reached a (temporary?) glass ceiling of £2,200 with the other releases playing catch up. Whisky Auctioneer took the 3rd, 6th and 7th releases to £1,300 per bottle; all new record prices for these bottles and the first time the 7th release has pushed through the £1k barrier.
£4,300 for 12-Year-old Scotch
Desirable bottle of the month from a personal perspective has to go to the Whisky-Online Auctions bottle of 12-year-old Laphroaig at 80 proof by Cadenheads. At £4,300 it was no-where near the most expensive bottle of the auction, but it was a new record price for the bottle and marks this as the fourth most expensive 12-year-old on record. The most expensive 12-year-old is the £12,100 (which has also sold for £7,600, £5,000 and £4,800) Port Ellen Queens Visit, followed by £8,200 for both the James MacArthur’s cask strength Port Ellen and the Bowmore Lagiemeanoch 1967 12-year-old.
Caution Still Required in Bullish Market
While the current market looks exceptional, it is still possible to buy the wrong bottles. In 2013 a bottle of SMWS bottled Tomintoul, cask 89.1, sold for £500. Earlier this year, a bottle managed just £155. That’s a 69% hammer price to hammer price, buy/sell loss… add in auctioneers’ commissions and the loss is a punishing 78%.
Get it wrong, and like any investment, you can lose your shirt.
Retail Releases – Diageo Special Release Analysis
The big one this month is the Diageo Special Releases. All bottles and prices for the 2016 release can be seen here. As we had to politely decline attending the tasting this year, we’re not in a position of knowledge with this years releases. If we do get to try them, we’ll post up our thoughts on quality vs price.
It’s interesting to look at what these bottles represent now they’re in their 16th year. Put pricing aside and they are probably the most eagerly anticipated new releases on the Scotch calendar. The 2001 first annual releases numbered just three products – Two Talisker’s and the aforementioned Port Ellen 1st release. Bringing it right up to date, including 2016’s releases, there have been 143 different products. That’d be some collection in its own right.
The profile below shows what distilleries have been bottled in what years.
Interesting to see there are still five operational distilleries with no special release – Blair Athol, Glenlossie, Inchgower, Roseisle and Teaninich are devoid of an annual release. Surely we have to see something from Roseisle? If we don’t see any releases from the other four, I don’t think many people would lose that much sleep over it to be fair.
We can see grain featuring more frequently now as Cambus, Port Dundas and Caledonian have all been released. Might we see a Cameron Bridge? North British would be unlikely as it’s a joint venture with fellow distillers Edrington.
Noting the amount of time since their closure, if I were a betting man, it looks unlikely that we’ll see anything much from Diageo’s many silent distilleries other than Port Ellen, Brora and Rosebank possibly (but for how long?). Could we now start to assume that the brand owner is out? Quality probably wasn’t there with any remaining stocks so the last few casks have been blended away? It looks probable. At the end of the day, Diageo are a blending company, so it makes sense anything from a sub-optimal-single-malt perspective has been used in a blend.
The 1995 to 2005 Rare Malts Selection releases featured many of the more obscure silent stills – Glenlochy, Banff, Glen Albyn, Millburn, Glen Mhor and Hillside (Glenesk) featured. Can we now assume they were to be the final OB’s from these lost distilleries?
That circles me nicely back to the importance of the secondary market. If you must have an official bottle(s) from many of these silent stills, it’s looking more and more like auction will be the only way to get them. As knowledge/awareness of whisky auctions builds among the ever growing number of connoisseurs, collectors and investors, the secondary market looks set to grow… as do prices.
Until next time, slainte.
Andy and David.
Sometimes packaging delights us; sometimes it turns us off; sometimes it sadly becomes more of a focus than the liquid it’s intended to position, enhance and display… Rarely does it confuse. But that’s where Gordon and MacPhail’s Mortlach 75 year old packaging has left me – utterly confused.
I’m not saying it’s bad per se, just a little left of field, a bit odd and probably not that sensible if the truth be told.
The recent Whisky Auctioneer whisky sale saw a bottle of the oldest Scotch in the world sell for the not insignificant sum of £17,800. Included in the sale was the leather travel/presentation bag. I have nothing against leather travel bags, I’ve owned one for many years and it’s been a welcome companion on many a trip… But would I stuff nearly twenty grands worth of Scotch and crystal decanter inside it and haul it over my shoulder? The concept seems about as sensible as popping into Lady Gaga’s meat dress and wandering round the Maasai Mara shouting “here Lion, Lion… here boy”. Maybe the inside of the bag has significant steel and Kevlar reinforcement? At least it’s different! Odd… granted, but different.
Anyway, moving from packaging to prices as is more the focus here; there were some huge new records achieved at last week’s Whisky Auctioneer sale.
Macallan – A market divided.
As auction values for more modern releases and many Macallan ‘drinkers’ splutter and falter like an asthmatic steam train ascending Everest, many are becoming available at auction for significantly less that you’d pay at retail (Rare Cask for £135 at auction). On the flip side of this crumbling coin is the golden face of the ‘old’ bottles. The older vintage 18 and 25 year old’s are absolutely flying. Values are increasing at an unprecedented rate. The 18’s have already increased by 24.69% this year and the 25 year old’s have increased by 19.35%. April’s Rare Whisky 101 month-end charts were off the scale and that growth looks to be accelerating. As with the vast Karuizawa gains seen through early 2015, we’re wondering if the market is becoming overheated. Certainly, the pace of these increases cannot be maintained. Three of the 18 year olds sold at this auction achieved fresh new records – the 1970 hit £1,050, a bottle of 1974 sold for £975 and the 1978 made £825. All were selling for around a third of those prices as recently as 2013.
Islay continues to ride high.
Yet again, older rarer bottles from Islay made big money. I remember being sat in the auction room at Bonhams (Edinburgh) in 2010 and chatting in hushed tones to a friend as the auction moved along. Almost exactly when I’d finished talking, the hammer fell on a bottle I couldn’t believe I missed. £120 took a bottle of 1972 27 year old Bowmore… A snip… and I missed it because I was chewing the fat over Lyne arm angles, secondary fermentation or some other utterly geeky stuff. Like my old school reports – pay more attention! Especially noting that bottle sold for £858 at last week’s Whisky Auctioneer sale.
White Horse bottled Lagavulin seems to be in ever increasing demand. £230 took a bottle to nearly double its recent trading range… Maybe there’s panic in them there hills? Might 16 turn to eight then turns to NAS?! I suspect not to be fair, but who knows. A bottle of Murray McDavid bottled 1979 Lagavulin also shone through as a clear winner managing £1,000 for the first time. Until the end of 2013 this bottle had never sold for more than £200 at auction.
Bruichladdich saw a bottle of its 40 year old make the most expensive bottle of ‘Laddie at auction in the UK. A respect-worthy £1750 took it past a previous best of £1550.
From a silent stills perspective. The big movement was seen from independent bottlers. A brace of 1972 vintage Brora’s from Douglas Laing went expectedly berserk. The Old and Rare 29 year old managed £2,350, massively ahead of its previous UK sale price of £500 (that was expensive in 2010!) and the 30 year old bottled for The Whisky Shop hit £1,426, not a record but a superb price noting it was lacking its card tube.
Port Ellen had a noticeable lack of bottles at auction but a Connoisseurs Choice 1982/2007 stood out when it fetched £410.
All told, last week’s Whisky Auctioneer sale was as buoyant as they come. We’re just keeping a close eye on the rapidly heating vintage Macallan market. For those with a few stashed away, values are clearly increasing; however, I’m not so sure I’d be entering the market in a hurry right now. As always, time will tell.
Images courtesy of Whisky Auctioneer.
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.
£12,100 is no drop in the ocean for one single solitary bottle of Scotch, however, it was a bottle 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.
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.
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
2016 has already seen significant increases in price for certain bottles of Scotch. As we move towards the end of Q1, that up-trend shows no immediate signs of let-up.
Further buoyancy at Scotch Whisky Auctions recent sale served to cement the positive market sentiment.
Age, vintage and rarity continue to be driving forces behind the best performers.
Ardbeg’s ever increasingly scarce single casks remained under extreme pressure. One of 453 bottles released from cask 1378, a 1975 vintage released in 2006, fetched £1,150. Just £360 took this bottle in 2009. Younger single casks also shone with a bottle of the 2000 vintage from cask 368 taking a massive £700. With a previous record of £410 in 2015, this looks like a one off spike but is impressive none the less.
Adding at least some balance to proceedings, heading down in value was a bottle of Auriverdes ‘bloggers-bullion’ gold bottle. At £1,000 it’s now worth just less than 50% of its first recorded sale of £2,100. Losses aside, £1,000’s still not a drop in the ocean for a free press release bottle.
At 40 years old, the 1966 distilled Jura was limited to just 98 bottles and is rarely seen at auction. At this kind of age and with exceptional rarity it’s no surprise to see the bottle hit a new record. In 2008 a bottle sold for £700. In today’s market the value of this scarce bottle has increased by 257% to £2,500.
While many of the more familiar releases languished or slipped in value, top end Glenmorangie’s performed well. Throughout 2010 and 2011 Glenmorangie values crashed. We’ve spoken about this frequently as values literally halved over a period of just three short months. While prices have remained depressed for certain limited editions, the older aged/vintage releases have recovered and in some cases excelled.
A bottle of 1981 Sauternes finish fetched a frighteningly low £120 in the depths of the ‘Morangie-massacre – Putting those fallow times well and truly behind it now, one sold for a record £720, a bottle of the duty free exclusive 1975/2002 ascended to £430 (Mid-crash this was sat at £122) and topping this heady trio was a bottle of Malaga finish 30 year old which managed £820 (again, just £120 took this bottle mid-crash). Hindsight is 20:20, we all know that; BUT… but, if you’d bought these three bottles in 2011, right at the peak of ‘Morangie-misery, they would have cost £362. In today’s market they would be worth £1,970, a 444% increase.
Old vintages also continue to shine. With an all-time low of £150, a G&M bottled 1957 vintage Tamdhu sold for a record £640. The previous record for this bottle was a mere £260 in 2014.
With a notable absence of any sort of volume for older vintages, it was scant surprise to see a new record for a 1970/1988 Macallan 18 year old: £920 sealed the bidding, well ahead of its previous best £750. Showing a recovery and renewed demand for rarities, the first release Easter Elchies Cask Selection closed out at £1,100, not an outright record but good progress, especially considering its 2008 release price of £105.
Silent stills were, again, visible by their absence. Dipping numbers on the open market are pushing prices ever higher.
I remember being beaten at auction in 2011 for a bottle of Brora Silent Stills 1983 18 year old. The enemy (the other bidder) took the price up to £310… there were only two of us bidding by that point… I thought he’d leave at just over £300 so I pushed on to £320. The enemy’s hand went straight back in the air and I remember thinking this is going to go silly. So I let the enemy have it for £330. Maybe I should have taken it a little further as one sold for a mighty £920.
Of the few silent stills present, other record performances were seen for –
In general, I don’t remember seeing such a buoyant start to the year as we’ve seen in 2016. There will be some spikes in-and-among the numbers and some bottles will naturally cool back down… That said, we do still see a continued hardening of prices for the oldest, rarest examples of the best whiskies. Get ‘em while you can?!
Photo’s courtesy of Scotch Whisky Auctions
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.
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.
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.
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 –
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.
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!
A 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.
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.
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.
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?
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?