Tag Archives: Rare Whisky 101

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.

Bespoke Batch Distilling

Your Mission – Create flavours never tasted before in Scotch….

Andy to David – “What would happen if we drew inspiration from the craft brewers and made spirits?”

David – “No, idea, let’s find out!”

Research – we both love Glenmorangie Signet (good research!) – a weird, flavoursome single malt, an alcohol infused tiramisu with espresso coffee notes….wow. Spoke to Dr Bill and we hatched a plan.

Met Simpsons malt and chewed an amazing range of “speciality malts” and could not believe the range of flavours and textures, so we set out to further understand the impact of speciality malt flavour on new make spirit.

The Controls – 100% Golden Promise, 4 yeasts – 2 brewers and 2 cultured.

The Wood – 12 amazing sherry butts from Tevasa Cooperage – the same supplier I used at Macallan back in the 1990s.

The Questions – where should we do this?

One obvious answer – with our mates at the Glasgow Distillery Company (GDC).

Glasgow Distillery - Our Test Lab
Glasgow Distillery – The perfect playground for grownups.

It boasts a perfectly formed small lauter tun, 4 easy to keep clean stainless steel fermenters and 2 magical copper pot stills.  A way to keep each and every mash separate from the next using a range of transit tanks, allowing us to collect low wines, foreshots, spirit and feints from every single mash and fill 1 cask from 1 mash.  Perfect control, perfectly discreet, perfectly simple.

But most importantly, a team of talented, helpful and innovative people – Liam, Dr Jack, Lok and Freddy.

The plan was hatched!

The Team
David, Andy and Dr Jack

The Recipes – what mix should we use?  Can we go 100% speciality malt?  Will it mash okay?  Will it ferment?  Will it distil?  Will it yield any alcohol?

Back to first principles – we worked with Tim McCreath at Simpsons Malt and did some lab scale analysis of various speciality malts recipes.

Lab PSY (predicted spirit yields) ranged from 7.3 litres of pure alcohol per tonne to 397.5.  Wow, what a massive spread!

Distillers today typically return a yield of 410-425 litres of alcohol per tonne….but are they creating flavour?

Costs – of course this needs to be factored in. The speciality malts are much more expensive that traditional distilling malts.  Plus, we were buying in tiny batches.  More cost!

Predicted Spirit Yeild Per TonneWriting up every aspect of recipe and distillation could take forever, so we will share information in general terms.  We bought crushed (already milled) malt from Simpsons and we paid anywhere from £600 to £750 per tonne.  Imagine paying £750 per tonne to yield 7 litres of alcohol!  A pretty expensive exercise….

How about recipe planning?  Again we sought a collaborative approach and organised a planning session (in the pub) with the Glasgow distillers and we each picked a recipe we felt would or could work to deliver relatively easy processing, reasonable yields and maximum flavour.

Malt Samples
A fun night drinking beer and chewing on all kinds of wonderful malt

The plan was hatched and agreed and we asked Simpsons to confirm the PSY by conducting lab scale mashing and analysis.

So, we had a plan and an indication of likely yields – ranging from a low of around 296 l/t to 397 l/t – a huge range in yield and hopefully a huge range in flavour impact.  Would inclusion of speciality malts deliver the flavour impact we craved?  Or would the fermenting and distilling process strip out and lose all the character we sought?

Mash Recipes
Malt recipes – proportion of specialist malt

Processing – we agreed to follow the classic 3 water mash.

Strike 68C to get 64C at the spout to activate enzymes and convert starches/large sugars to fermentable sugars.

Rest briefly, balance to underback, vorlauf (or recycle weak worts) and then pump to FVs and cool worts to 20C.

Add our 4 yeasts – 2 dried culture yeasts (AB Mauri Pinnacle and SAFWhiskyM1) and two fresh brewers yeasts (A top fermenter and a bottom fermenter) with the aim of creating true complexity!

And start the fermentation ASAP.

Sparge on the second water, drain, cool and collect in FV, sparge on the third water and collect in heating tank for next mash (although we didn’t do that for every mash!).

Our Original Gravities (Ogs) ranged from 1047 to 1055 – low by many of today’s standards.

We fermented to achieve maximum conversion of sugars to alcohol and this ranged from 70 to 112 hours before sending to the wash still.

Our final gravities were hugely variable and a correlation (as expected) was found between mashes with no or low levels of speciality malts fermenting well versus high speciality malt inclusions fermenting less well.

Alcohol strengths at many large and efficient malt distilleries today can range from 8 to over 10%.  Our trials yielded a range of 5 to 8%!   Poor for yield efficiency, but hopefully great for flavour!

Flying Scotsman - David's Breakfast
A flying Scotsman for breakfast

Distilling – The alchemy bit!

We typically collected some 5,000 litres of worts per fermentation, fermented for around 4 days and then split the FV in half to give 2 wash still charges.

So, across the course of our 24 wash distillations our initial running strengths varied from the mid 40%s to the mid-60%s.

Our low wines average strengths ranged from 15.7% to 22% – again a huge range, which correlates perfectly with the mashing recipes we have used.  Most distillers today would have very consistent low wines abvs between 22 and 26%.  After all, they are looking for consistency of production and are aiming to make the same low wines and same spirit day in day out.  They are new-make factories.  We are not.  We celebrate diversity in the pursuit of a range of flavours.

By using Glasgow Distillery Company we were able to keep each run discreet and store them in 1T transit tanks.  This allowed us to control, manage and monitor each and every mash, and finally fill all the new make spirit (NMS) in a single butt from a single mash.

Each run (1/2 a mash) typically gave us around 130 Litres of Alcohol (LOA) to 180 LOA per run.  Our flow rates were deliberately very slow and ranged from 1.2 litre per min to 3.2 l/min!  This was collected and used to charge the spirit still.

As this was a discreet experiment, we did not want any recycled liquids from any previous GDC runs.  This meant we needed to ‘build up’ our foreshots and feints until we had a better ‘balanced’ system where our spirit still charges could become more consistent.

We needed to collect and build up our low wines, foreshots and feints to give enough charge liquid for our spirit still processing.  This is where it all started to get critical.  Could we recover the flavour created from our speciality malts?   Distillation is, by its very nature, a simple process to purify the feed stock material.  Collect what you want and throw away what you don’t.  After much time at Diageo and The Macallan I am a fan of small stills and slow distillation and a very narrow spirit cut to concentrate the fruity, estery notes – but would this work for rich, chocolate malty flavours?

Steam On
Steam on!

So, the detail of our spirit distillations – when we went on to spirit and then off spirit to collect the ‘heart of the run’.  This clearly shows the feints build up in our first 2 mashes and 4 spirit runs – 1a, 1b, 2a, 2b – until, we reached a ‘steady and balanced’ state.  The variation in ‘on spirit”’ from mashes 3 to 12 show the impact higher or weaker washes from fermentation can have.

Spirit Cut Points on-off

Focusing now on the average spirit strength we can again see the feints build up required until we got a more steady state and consistent spirit cut average around 72% abv +/- 1%.

Spirit Cut Average ABV

To illustrate the point more fully we have looked at the quantity of both the ‘litres of pure alcohol – or LPA’ – and the ‘bulk spirit’ created from each of the 24 spirit distillations.

LPA and Bulk from each Spirit run

And finally, the rate of distillation.  As discussed previously we wanted a very slow, even, gentle boil to ensure good reflux and a balanced recovery of the purest and most flavoursome characters from these experimental batches.  We believe this to be the slowest spirit cut in the Scotch whisky industry.

Spirit Cut Bulk Flow Rates L per Min

And so to wood.  What wood?  Well, given my experience and the richness of our expected new make spirit we opted for first fill Spanish oak ex Sherry butts from Tevasa cooperage, seasoned with wines from Gonzalez Byass in Jerez de la Frontera.

A full load of over 50 mighty 500 litres butts were sourced, delivered to Glasgow and nosed, with RW101 picking 12 for our bespoke distilling project.

We were looking for select casks that offered up aromas of rich dried fruits, spicy tannins (clove, cinnamon, nutmeg, ginger), orange zest and toffee sweetness.

Flavours and Aromas

But back to the spirit, the essence of what we were after.  What was it like?

Tasting Notes

Clearly we have recovered a range of amazing characters in our spirit.  We have the classic fruity notes as would be expected from 100% distilling malt – fruits, apples, pears, maltiness and nutty.

But even more exciting we have captured notes of chocolate, biscuity, toffee, nutty, golden syrup, roasted coffee, honey.

So, what happens next?  We wait….and wait.  And draw samples every 6 months to assess progress.  Will we lose the speciality malt characters we have worked so hard to preserve?  Will the wood dominate and hide those flavours?  Will there be a symbiotic relationship and the wood and chocolatey notes support and enhance each other?  Will things change to create new flavours?  Will we lose fruit and gain spice?  Will we create the world’s first ‘chocolate orange’ single malt?  Only time will tell!  We will report back soon…..

Cheers,

David & Andy

Chocolate Orange

Rare Whisky Review – July 2016

Secondary Market – July 2016

July saw Macallan’s 55 year old Lalique decanter set a new UK record price for the whole brand. Whisky-Online Auctions took a mighty £25,100 for this 55 year old ‘Macallan in Lalique’ second release. Back in 2010, the price of this was £5,400. As recently as 2012 one sold for £7,800. As the sixth and final Lalique decanter has now been announced and this series is complete, we should expect values to remain firm. This is also the most expensive bottle at auction in the UK since the £27,200 Springbank 1919 which sold in March 2015 (again by heavyweight price-busters Whisky-Online Auctions).

Macallan in Lalique 55
At £25,100 this is the most expensive Macallan to sell at auction in the UK

Laphroaig’s 30 year old Cairdeas managed £1,200, it’s first time through the £1,000 price point. With a 2010 record low of £345, this is further evidence that older age statements remain in exceptionally strong demand.

A few days earlier, Scotch Whisky Auctions took a bottle of 50 year old Glenury Royal to a new record of £4,300. Until as recently as 2012, this Diageo Special Release had failed to top £1,000; a seemingly distant price in light of the current market. The last twelve UK auction sales are listed under the image and, while somewhat spiky, the trend is very definitely going one way.

Glenury Royal 50 Image and Investment Profile

Millburn 1966 20 yr old ConnoisseursThat up-trend continues across most silent stills with values towards the top end or above recent trade. While short term gains are imminently possible, especially in today’s market, we still maintain whisky should be viewed as a 10 to 20 year investment. Scotch Whisky Auctions £500 hammer price for a 1966 Connoisseurs Choice 20 year old showed that 100% gains are achievable in one year! May 2015 saw this bottle fetch £250, exactly half of its sale value earlier this month. Amazing.

Lagavulin’s first 21 year old 2007 Special Release managed to achieve a new record of £920. This could make the £800 ask for the new 25 year old, soon to be released, 200th anniversary bottle look like good value providing the liquid is exemplary. Just don’t expect overnight gains, it’s taken the 21 year old almost ten years to get to this level.

McTears haven’t featured heavily in these pages recently, but their July auction had one particular star performer. The second 1994 release (not the first release as originally mentioned) of the original Black Bowmore’s managed a tremendous £6,000 on the nose. Its previous best was £4,800 earlier this year and in 2010 it was still selling for £1,600. This highlights the almost mythical allure these bottles conjure among admirers. Charting the performance of the first three Black Bowmore releases over just the last three years shows a 97.7% increase in value.

Black Bowmore Index

 

Primary/Retail Releases.

Throughout the vast, frequently eclectic, world of whisky, there have been certain constants. Reminders that no-matter what else is going on there are some things you can turn to in wide eyed expectation and get a warm fuzzy feeling. Lagavulin 16 year old is one of those things, the consistently great Aberlour A’Bunadh is another and Macallan 18 year old carrying a vintage year of distillation is another.

Since the 1983 bottling of the 1965 vintage, the Macallan 18 year old was to become one of the most spectacularly sought after vintage vertical collections. Prior to the inception of the 18 year old as part of Macallan’s core offering, the often referred to ‘gold label’ bottles can be sourced all the way back to 1940’s vintages.

These vintages are one of the most extensive historical lenses to how a brand has changed in both its flavour and it image over the last fifty or so years. Birthday’s, death-day’s, weddings anniversaries and more special occasions than one can shake an Elchies Estate stick at have been marked by these iconic bottles.

… But no more.

2015 saw the final ‘vintage’ Macallan 18. That was the 1997 (technically still not a single vintage but we’ll let that slide for posterity). From this year many will have already noticed a change. Date distilled now becomes year of release. This in effect leaves an 18 year gap where no special occasions can be referenced by date (1998 – 2015 inclusive). This subtle change sees the vintage-stated Macallan 18 year olds pass into history…

So this –

Mac 18 1997

Becomes this –

Mac 18 2016

Interestingly, the death of this longstanding vintage vertical brings with it certain opportunities for collectors. Firstly, make sure the final 1997 vintage is snapped up if a full collection is the aim. Secondly, now vintage bottles are dead, prices should start to move for the more recent purple box variants when stagnation has previously been the trend. Couple the cessation of one bottling type with the fact that 2016 is the first ‘Annual Release’ 18 year old and we all know what happens to first release prices. A real shame, and the end of an era on one hand, but an exciting annual release programme on the other.

Until next time, slainte.

Andy and David.

Diageo 2015 Special Releases – Drink, Collect or Invest?

2015 SR

The challenge on Tuesday night (and early Wednesday morning if we’re being totally honest) was to wear this year’s Diageo Special releases…

Attack of the Special Releases
Attack of the Special Releases

For next year’s challenge I apparently have to abseil down Drummuir Castle while nosing the samples!?!? Thanks must go to Eli Larson from Diageo for that gem, thanks very much pal!

Anyway, daft stuff aside (and there was plenty), we got to test-drive this years bottles at Drummuir Castle (Diageo’s impressive fortress of solitude… or maybe Greyskull others may pose?) in the heart of Speyside. There are plenty of other articles out there now about detailed liquid profiles, so we’re looking at reviewing them with collecting/investing in mind.

That said, it would be plain rude not to at least briefly mention the liquid – That is what it’s all about of course. So, in order of preference and scored out of 10, they’re listed below. The way we (granted very rarely) score is that 5 is in the middle, therefore that’s a perfectly drinkable malt. These bottles should not feel offended by being a 5, that’s a good enough score for a good enough whisky. Most of your decent common-or-garden house malts are in and around the 5 mark from our perspective. 1 is undrinkable and 10 is the best thing we’ve ever nosed/tasted. Separately, I nosed a 22-year-old single sherry cask from Speyside Distillery on the way to the Diageo event… it got 1! It’s the first whisky this year to make me physically jerk my nose away from the glass… think molasses sweetened liquified rubber bands. Anyway; the legendary lowest score of 0.0 is solely reserved for Loch Dhu… it just has to be. Fact. Full-stop. The end.

Pittyvaich 25 yr old: Scores 4 – Actually below par for this one. It’s closed and un-revealing. You want it to give more but it doesn’t. A chastity belt of a whisky!!

Dalwhinnie 25 yr old: Scores 5 – My notes just say “is okay” … and it is.

Caol Ila 17 yr old: Scores 5 – Not blown away, but fine – average. Probably just prefer this to the Dalwhinnie but it’s close.

Cally (the) 40 yr old Grain: Scores 6 – You’d certainly not kick it out of the drinks cupboard but it’s really bourbon style sweet.

Lagavulin 12 yr old: Scores 7 – Nice juice. You know what to expect. You pretty much get what you expect.

Brora 37 yr old: Scores 8 – A mighty fine dram. Not the winner. Very much lighter, almost fresher than some of the previous 30 year olds. Amazing none the less.

Port Ellen 32 yr old: Scores 8 – Another top drawer contender from the Port. Really quite coal-smoky/tarry, especially with water.

Dailuaine 34 yr old: Scores 8 – Happily sit and drink this until the cows come home. Just lovely. Best of the 8’s, just edges it on the Brora and Port Ellen.

Clynelish Select Reserve: Scores 8.5 – My personal favourite. Loved it. Complex and multidimensional.

That’s the liquid – Least best was the Pittyvaich, best best was the Clyne-hellishly-good. It’s all personal though, I know others who really liked the Caol Ila and weren’t so keen on the Clynelish.

From a collector/investor perspective, we need to factor in some other variables. Some may be familiar with the Rare Whisky 101 DCI (Drink/Collect/Invest) model published in our 2014 annual review. This will evolve over time, but we’re going to start scoring bottles based upon those three criteria.

DCI Model RW101

To explain – Take the Dalwhinnie 25-year-old – From a ‘D’ perspective, it’s already been given a 5 out of 10. The ‘C’ element is going to take into account its appeal to a broad collector base… is the distillery desirable, is the bottling limited, if so how limited, etc. We’ll award the Dalwhinnie a 3 out of 10 for that. It is limited, it’s a mid-old-ager but it has limited appeal to Dalwhinnie 25collectors. Finally, the ‘I’ investor dynamic takes into account the most important investment principles – point of entry and point of exit. Is it expensive for what it is? If it is, it scores low, if not it scores higher. And does it have the potential to increase in value over time? The Dalwhinnie will score a 2 out of 10 here. Historically, Dalwhinnie has been a poor performer at auction with values frequently falling significantly lower than RRP’s. Our Dalwhinnie 25-year-old therefore scores a total of 10 out of 30 represented by (D:5/C:3/I:2). If you want to buy it, it’s a clear drinker, not one for a hold. Not really even a long-term hold as there are far better things out there from a collector/investor perspective for £250.

It’s a little ambiguous but then so it scoring a whisky on its flavours and aromas. What we’re trying to do is answer one of our most frequently asked questions of “what should I be collecting?”

The other 8 bottles look like this –


DCI RATED IN ASCENDING ORDER – 


The Cally 4040 yr old Grain – The Cally: (D:6  C:1  I:1) = 8/30

£750 per bottle. 5,060 bottles.

I really think this will struggle to sell. The price is just too high for a single grain. The whole single grain category has failed to capture the collectors market. Drink it, fair enough if it’s your style but don’t expect this to do anything other than bomb from a secondary market perspective. If you want to spend £750 on a bottle of Scotch for investment, go buy 5 or 6 bottles of Rosebank at auction. Don’t give this a second glance unless you’re simply admiring the packaging… which is actually very cool. 


Caol Ila 17Caol Ila 17: (D:5  C:3  I:1) = 9/30

£90 per bottle. Limited release.

Highland style Caol Ila has not fared well at auction to date. It does have a fan-base as a liquid; however, all but the rarest of Caol Ila bottles do little from an investor’s perspective. Low interest for collectors but good pricing will, to some degree, appeal to generalist bottle collectors.


Clynelish Select ResClynelish Select Reserve: 8.5 – (D:8.5  C:4  I:1) = 13.5

£550 per bottle. 2,946 bottles.

VERY good liquid. VERY high price. NAS. Last years release has appeared at auction and sells for c£300 per bottle. Expect the same losses to be crystallised from this years. Take advantage of that, buy this at auction and just drink it. The limited nature of the bottle at less than 3,000 means it has some appeal to a collector but anyone wanting to tuck this away expecting future gains should be prepared to hand it to their grand-children in 50 years.


Pittyvaich 25Pittyvaich: (D:4  C:6  I:5) = 15

£250 per bottle. 5,922 bottles.

A relatively voluminous release but very keenly priced. The first rule of investing in whisky is that the whisky should be superb quality. That falls down here. That said, there is a certain appeal noting what you’re getting is a relatively old whisky from a silent distillery. At this price, that can’t be overlooked. There are utterly miserable bottles of Port Ellen out there from indie bottlers which still fetch the same market value as good-un’s.


Laga 1212 yr old Lagavulin: (D:7  C:7  I:5) = 19/30

£80 per bottle. Limited release.

Accessible pricing and high demand will see this suited to many Islay / Lagavulin collectors. Early releases of the 12-year-old cask strength are performing reasonably well at auction but a lengthy wait is required. Don’t expect instant gains but a solid bet at the price. There are many Lagavulin collectors who will ‘need’ this to maintain the completeness of a collection so expect demand to be strong.


Dailuaine 3434 yr old Dailuaine: (D:8  C:6  I:7) = 21/30

£380 per bottle. 2,952 bottles.

Above average prospects for this relatively unknown brand. Attractive pricing and the high quality of liquid make it a compelling proposition to all three buyer-types. Depending what Diageo do with the brand moving forward will have an effect on values. £380 for ANY 34-year-old in this day is great value. One I’ll personally be buying to open and enjoy… If I can find one! It’s just one point short of pipping the Port Ellen but we actually see this as a stronger pure investment than the Port Ellen becasue the price is excellent for the quality and age of the liquid.


Port Ellen 32Port Ellen: (D:8  C:9  I:5) = 22/30

£2,400 per bottle. 2,964 bottles.

The last two years have seen these iconic bottles fail to sell out in their usual record time. £2,400 is a massive amount of money for a 70cl bottle of drink which is what it is when all’s said and done. To counter that, we’ve said it before, but the annual PE releases were vastly under-priced until recently. There needed to be an element of correction from a retail / primary market perspective. The rate of acceleration of those increases has been the main shock to the system. Still one of the most collected distilleries, but pricing has massively pared back these bottles as an investment. Are they going to be worth £5,000 in two or three or even 10 years? We think not but we’ve been wrong before. The key risk at this price is that many will be used to keep a complete collection complete, few will be buying two to drink one/keep one so supply won’t necessarily be taken out of the market.


Brora 37Brora: (D:8  C:8  I:8) = 24/30

£1,300 per bottle. 2,976 bottles.

Recent price increases (which were needed, it was far too cheap a few years ago) have prevented this being an outright 10 from a collector/investor perspective. But it’s Brora, stocks are thin on the ground, time is running out for the highland heavyweight collectable. Full set collectors will need this. From an investment perspective, don’t expect instant gains, the pricing has removed any likelihood of that. But, given time, we still see this as the pick of this years bottles. We could actually argue it’s still under-priced for what it is.


From a pricing perspective, there are bottles here which represent true value, there are bottles we think are particularly good value (the Brora, the Dailuaine and the Pittyvaich) and also bottles we see as poor value (mainly the Cally). We have to also take a view on the rest of the market. The recent release of 25-year-old Littlemill for £2,000 moves the phrase ‘aggressively priced’ to ‘we actually don’t want to sell this to anyone with a modicum of common sense’. The price for the Littlemill is perceived as so immensely high that I’m hearing of retailers refusing to stock it. If customers pro-actively request a bottle then one can be sourced, but they won’t physically stock it or actively market it… when retailers show a new product the door, you know there’s a problem.

I absolutely must thank Diageo for their amazing hospitality on the evening, it would be utterly rude not to do so; it’s amazing to be able to try all the special releases in one fell swoop. However, this isn’t meant to advertise or promote these bottles, merely assist in answering a question we get asked many, many times.

Interestingly, the Dailuaine is the one to sell out in record time this year, it’s disappeared from a number of retailers already. The big guns are still on the shelves demonstrating the need for a careful balance of price, quality and age/NAS. I wonder how many bottles of Littlemill 25 have sold?

Karuizawa Values Falter

We’ve said it before and we still maintain – we don’t believe in bubbles. Not with a physical asset anyway. The reason we don’t believe in bubbles is they burst instantly and leave absolutely nothing… With a bubble, everything is gone in an instant.

Could that happen with whisky?

No, you’ll always have a bottle… More importantly (unless the broader economy implodes and we all go back to cooking on an open fire), do we see Port Ellen 1st release ever settling back to £100 a bottle or a Connoisseurs Choice Kinclaith 1966 ever being sold for its original retail price of £19.74? Again, simply no – no we do not.

BUT… do we believe in overheated markets being the subject of a significant correction, protracted slump or even a crash? Absolutely, we have to. Glenmorangie values almost halved within three months through late 2010/early 2011. Their values have now just clawed back their losses to reach pre-crash levels; it’s taken five years for a full recovery.

Over recent months, Karuizawa values have increased at a rate the broader whisky market has never seen. The Rare Whisky 101 Kauizawa Index was established on the first of July 2013, so it’s our most recent index. Exactly one year later, the index had increased from its base of 100.00 points to 146.83. That 46.83% increase outstripped Scotch, nothing could compete; but equally that would pale into insignificance compared to the gains we would see over the subsequent 12 months. 146.83 points on the first of July 2014 became a staggering 384.61 twelve months later on the first of July 2015. That’s a 161.94% increase. The index peaked at 399.32 at the end of July this year.

RW101_Karuizawa_Index_31082015

From a broader pure cost perspective, two years ago, the single cask 1980’s vintages were selling for between £600 and £800 per bottle (We’re not going to look at original retail prices because, quite frankly, it all gets a bit silly). In many cases these prices are now in the region of £2,500.

All this comes at a time when a bottle of 1960 vintage Karuizawa takes the record for the most expensive bottle of Japanese whisky ever sold (Bonhams Hong Kong £77,000). We would like to see a bottle sold at auction in the UK to see how values compare… But even in Hong Kong, hammer prices for certain bottles eased back from previous highs. The 1967 (cask 6426) sold for c£15,000 in May and made c£12,000 at the August sale.

£77,000. The most expensive bottle of Japanese whisky
£77,000. The most expensive bottle of Japanese whisky

The market looks overheated. £2,500 for a bottle of ANYTHING is a massive price to pay. Bottles of 1950 vintage Macallan can still be obtained on the open market for that amount. Karuizawa almost defies logic in terms of the prices being paid.

Scant surprise, one may argue, that we’ve now seen a drop in value through just one month by an eye-watering 7.41%. That brings the Karuizawa Index down from its peak 399.32 at the end of July to 369.73 on the 31st of August.

It doesn’t look like over-supply’s the culprit – The last six months have seen the number of bottles sold at auction in the UK remain relatively low and August even took a notable step back from July’s high (number of bottles sold – March 70, April 70, May 50, June 41, July 87, August 57).

7.41% is a steep drop in one month, so should we be worried? In our opinion we should realistically expect to see a continued short-term decline in values (at best a period of stability). We’re not expecting anything like the sort of 50% losses Glenmorangie suffered in 2010, however, we do see the current market as being in need of a natural correction before a more uniform pattern of growth is established. As a positive counterbalance to that, we need not forget that Karuizawa is almost gone from the cask and much of the (earlier releases anyway) bottled stock has been drunk.

Rarity and quality will absolutely continue to play a vital role in values – and Karuizawa has both in spades.

While it’s clearly impossible to know exactly how this will play out in the long run, we would certainly advise caution for those buying at the moment (particularly as an investment).


As Karuizawa experiences its most significant drop to date, how has the rest of the market performed?

The August Rare Whisky 101 indices ranked in order of increase/decrease are –

1 – RWRMS Index: Rare Malts Selection Index UP 2.66%

2 – RWPE Index: Port Ellen UP 2.17%

3 – Apex1000: Best performing 1000 bottles UP 1.66%

4 – RWIcon100: Icon 100 Index UP 1.47%

5 – Apex 100: Best performing 100 bottles UP 1.09%

6 – Apex 250: Best performing 250 bottles UP 1.04%

7 – RWVintage50: Vintage 50 Index UP 0.54%

8 – RWM18 Index: Macallan 18 EVEN 0.00%

9 – RWM25 Index: Macallan 25 DOWN 1.67%

10 – RWB Index: Brora Index DOWN 6.04%

11 – RWK Index: Karuizawa DOWN 7.41%

Without exception The Negative indices continued to slide, further polarising the market. The Neg1000 moved down 0.68%, the Neg250 retraced 0.83% and the Neg100 hit a new low of just 31.98 points as it fell 0.56%.

The other notable performance was the official Brora index which fell 6.04% through August. The Brora index peaked at 396.63 points in February 2014 and currently stands at 332.15, yielding a peak-to-present-day loss of 16.26%.

The Macallan 25-year-old Anniversary Malts took a slight decline through August with the 18-year-old’s remaining flat at zero growth. The remaining indices look relatively stable. Encouragingly, the benchmark Icon100 increased 1.47% and the Apex 1000 moved up by 1.66%.

As we move rapidly towards the early winter months of 2015, we head into what is traditionally the busiest time of the year. Supply usually peaks in October/November and with more bottles sure to go under the hammer than ever before, we find ourselves asking what might happen if there’s a Karuizawa late-year sell-off? Can demand keep pace if volumes do rapidly increase or will we see extended losses? We can’t forecast the answer but we will certainly report the results.