Tag Archives: whisky auctions

Rare Whisky Review – September 2016

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

swa-big-guns
Three of the most collected brands. Demand remains vast

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.

balvenie-1937-dalmore-candela-and-macallan-1946-index

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.

laphroaig-12£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.

diageo-special-release-profiler

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.

Weekly Auction Watch – 12th May 2016

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.

Mortlach 75
The oldest Scotch in the world

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.

Mortlach bag
Makes traveling with you twenty grand bottle of Scotch a breeze!

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.

Macallan 18 Year Old 1970's

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.

Brora 1972's
A brace of big Brora ’72’s

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.

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 – 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.

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.

Weekly Auction Watch – 16th July 2015

Vintage Macallan Values Continue to Harden.

Building on last weeks positive outcome for Macallan, older vintage bottles appear to be shifting north; in some cases rapidly. It’s no secret secondary market values for Macallan had a relatively tough time throughout 2014. With a cross-brand all-bottle decline of 7.43%, the king of collectables took a relatively wide-reaching correction in investment terms.

Throughout 2015, certainly for discontinued older vintage bottles, things appear far more buoyant. A hardening in prices continued at the recent Whisky Auctioneer sale.

Four 25-year-old Anniversary Malt’s were sold with two achieving outright new records and the other two trading at the top end of recent prices.

Macallan Anniversary Malts continue upside
Macallan Anniversary Malts continue upside
  • The 1957/1983 vintage fetched a record £2,200; just £600 would have secured this bottle in 2010.
  • The 1968/1993 vintage fetched £1,300, not a record but way ahead of its previous most recent £950.
  • The 1971/1997 vintage fetched £1,200, again not a record but significantly above its recent £900 trading level.
  • The 1974/1999 vintage fetched £1,020, just £20 over its previous record price, but a record none the less.

On a more contemporary basis, while the ‘M’ decanter only managed £2,150, the Queens Diamond Jubilee cemented recent gains and settled around £1,120 per bottle – well up on the previous £750 – £850 prices achieved.

One for drinking
One for drinking

The Macallan ‘M’ decanter is an interesting concept. Unlike some bottles of Macallan, It wasn’t released with the collectors market in mind; it was released solely as a showcase for top of the range Macallan as a drink. I recently spoke to a business associate who asked my opinion on buying ‘M’ as an investment. My answer was to spend his money elsewhere and not to go near M as a collectable or investment… “Too late” came the unfortunate cry. It transpires he’s already bought four bottles! With a lot of patience it might claw back its losses… especially it it’s discontinued at some point in the future.

Away from Macallan…

Twice the price over just 12 months
Twice the price over just 12 months

Bottles from silent distilleries maintained their current positive price trajectory with Rosebank looking especially favourable. A bottle of 1967 vintage 26-year-old bottled by Signatory stormed in at £750; more than doubling its 2014 price of £350. The 1979 vintage 20-year-old Rosebank from The Rare Malts Selection range hit £450, not quite an absolute record (£660 was the ‘spiky’ price paid for a bottle in 2013) but way ahead of its £80 price tag in 2010.

Showing you don’t have to pay many hundreds or, in some cases, thousands of pounds to get on the silent stills ladder, a bottle of Inverleven (a distillery within a distillery) 1985/1999 by Gordon and MacPhail achieved £84; more than doubling its 2011 price of £40.

Glenlivet 1955
1955 Glenlivet

While many official bottles from Glenlivet continue to decline in value, the older vintage releases from Gordon and MacPhail are moving well. £675 took a 1955/2001 bottle, pushing it well ahead of its previous £450.

In my view, Glenlivet OB values will continue to fall. In terms of buying quality drinking stock on the secondary market, if the new Founders Reserve is anything to go by (tried it, left it, won’t return to it), we’ll see further polarisation between modern OB’s and discontinued IB’s.

Digressing slightly, the interesting conundrum for the Glenlivet Founders Reserve will be to see if it manages to recruit volumes of ‘new-to-category’ drinkers without turning away more seasoned whisky consumers. I fear the bigger challenge may be to get any new recruits to return for a second go…. who knows, I could be utterly wrong and it gets judged the best thing in the world at some award or another.

Back to the numbers and the current surge in Highland Park prices remains unchanged. Earl Haakon hit its highest price since November 2014 and a bottle of 1974 vintage (cask 11501, Viking Cinderella) sold for £750. £410 was the previous price paid for this bottle earlier in 2015.

Highland Park 1974 and Earl Haakon
Highland Park 1974 and Earl Haakon

Showing how rarities often make huge step-change leaps in value when they are rarely seen on the market, a bottle of Connoisseurs Choice 1957 Longmorn 25-year-old sold for £525. That was merely its second time at auction in the UK, on its first outing in 2008 it made £220.

Finally this week, it almost looks like Glenfiddich is giving its gilt-edged sibling Balvenie a bloody nose in the collectors stakes. The Glenfiddich 1958 sold for £4,400, way ahead of its previous £2,350 and even way ahead of the £2,750 it costs in travel retail.

Glenfiddich 1958 and 1972
Glenfiddich 1958 and 1972
Glenfiddich 1958 current retail price. Cheaper than buying at auction
Glenfiddich 1958 current retail price. Cheaper than buying at auction

At these prices it might not remain in travel retail for much longer. A bottle of 1972 vintage (from cask 16032) managed to take £900 on the nose, almost doubling its 2013 price of £460.

All in all, a good auction with some very impressive results.

Until next time.

Slainte,

Andy

Images courtesy of Whiskyauctioneer.com

Weekly Auction Watch – 7th July 2015

Are Bottles from Silent Stills Vanishing?

Scotch Whisky Auctions (SWA) first sale of quarter three 2015 highlighted a particularly revealing trend. For some time now we’ve had it in mind that the number of bottles appearing at auction from silent distilleries is in decline. Until now It’s been more of an anecdotal thought; as usual, we’ve tried to put some numbers behind the hypothesis. Individual bottle values seem to be increasing for most, if not all, silent distilleries. So before we come onto the usual winners and not-so-winners from the recent SWA we take a look at open market supply for silent stills.

The charts below illustrate some single month analysis over the last three years for the number of bottles from silent stills hitting the hammer. This is purely from Scotch Whisky Auctions and shows full-sized bottles (and 50cl) only, so excludes 20cl and miniatures.

Are bottles from silent distilleries set to become extinct?
Are bottles from silent distilleries set to become extinct?

We suspected a decline would be evident; however, we had no idea it would be so severe. Over a two-year period the % of bottles from silent stills compared to ‘all lots sold’ has fallen from almost 5.8% in July 2013 to almost 3.7% in July 2015. I find that quite staggering… more than 1% per year. In part, this goes some way to highlighting why bottles from silent stills feature record prices so frequently.

The question is – Are they being kept/collected or are they being consumed?

If they are being preserved to be re-sold in future months/years, once prices reach a certain level, we may see this trend reverse (at least stabilise). If they’re being drunk, effectively reducing the target pool of available stock, values should continue to increase… in some cases that increase could be somewhat rapid.

Demand continues at all-time highs, so with stock levels exiting the market at this rate, now might just be the time to buy those missing bottles from one’s collection. Official Port Ellen and Brora prices have remained relatively static for some time and have re-traced from previous high points… but for how long?

Silence, it appears, is indeed golden!

The recent SWA sale had many new records for bottles from both open and closed distilleries.

The recent up-trend for older discontinued bottles of Macallan accelerated as we saw a bottle of 1968 vintage 18-year-old break £1,000 for the first time. £1,150 took the bottle past its previous high of £950 and left its 2008 low-point of £240 way in the distance. The red-label US export Cask Strength bottling managed to squeeze £400 for the first time, some £60 over its previous high and a highland-mile away from its £120 low in 2010.

Older collectable Macallan maintains collectors credentials
Older collectable Macallan maintains collectors credentials

There was no let-up in demand for Macallan’s halo bottles as the 1951 (one of 632 bottles released – NOT the Fine and Rare bottle it’s frequently confused with) fetched £8,600. While this is an equal record, the bottle hasn’t seen that kind of price since February 2014. With a 2011 all-time low of £1,600, a clear £7000 increase in value is somewhat impressive.  The 1961 (again NOT the Fine and Rare bottle it’s frequently confused with) managed £7,000, its second best ever.

More modern contemporary Macallan saw some small but none the less important rises with the 2011 Royal Marriage taking £1,100 – £1,200 and the Coronation twin set managing £780 – Have we now tested the bottom for the Royal trilogy? Unfortunately, other limited editions fared less favourably with both Ghillies Dram and the Burns decanter selling well under recent trading levels.

Rarities took some of the limelight with older aged/vintage bottles remaining gilt-edged. Dalmore’s 45 year old Aurora achieved a new record £3,900. If this was bought as a ‘drinker’ it’s utterly sublime; one of the few whiskies which is scorched into my memory…. At £3,900 it’s not cheap… and nor should it be!

Older vintages, older age statements and true rarities flourish
Older vintages, older age statements and true rarities flourish

Ardbeg’s 1975 single cask (1375) sold for £1,250 and £1,150, both new record prices. £400 would have taken this bottle at its lowest price way back in 2008.

Often overlooked, this bottle of GT doubles in value
Often overlooked, this bottle of GT doubles in value

The often overlooked Glenturret saw a doubling in value for its 1980’s bottled 21-year-old crystal decanter. A little over a year ago it sold for £200 which now looks good value next to the £400 it fetched here.

Circling back to silent stills, a bottle of Banff 1976/2008 Connoisseurs Choice fetched £220 which is more than three times its 2010 price of £60. Again, from Gordon and MacPhail, a bottle of 1968/2006 Glenlochy hit £320, £100 ahead of its last UK sale price in 2013.

Declining supply pushes prices north
Declining supply pushes prices north

Not everything flew to heady new heights.

£250 ask. £75 paid!
£250 ask. £75 paid!

It’s always interesting when a completely new bottle hits the market, especially one with no obvious previous retail price history (gifts etc). A bottle of Hazelburn ‘Warehouse Dinner’ 17 yr old sat resolute with a stiff reserve of £250… There it sat for the duration…and remained unsold. I would imagine the reason for that is one sold a few days earlier for a scant £75, clearly setting pricing well below that required from the vendor.

Some of the well known past collectables seemed to languish further. Relatively recently, the Royal Lochnagar Roseisle Maltings bottle could command as much as £400 at auction. Recent years have seen the value of this bottle continually erode .

Roseisle Maltings Royal Lochnagar loses 66% of value
Roseisle Maltings Royal Lochnagar loses 66% of value

While the most recent bottle at this SWA sale had someones signature on it, it still only managed £135. That’s a 66% drop in value since 2011.

From our perspective, this clearly shows new and existing buyers are focused on different types of collectables.

Polarisation of the market continues…

All bottle images courtesy of Scotch Whisky Auctions.

Weekly Whisky Auction Watch – 19th May 2015

The early 1980’s… Average UK house prices were around £25,000, Macallan’s 1928 Anniversary Malt was retailing for £50 per bottle and the Scotch whisky industry was heading for meltdown. Over-production followed by severe global recession brought with it the rationalisation of an industry we know and love today.

One of the best known casualties was Port Ellen.

The early 1980’s… Relative unknown indie bottler James MacArthur released an innocuous, plain and inconspicuous bottle of 12 year old whisky from Port Ellen. The cost of which would have been infinitesimally small in todays world. Port Ellen was blend fodder, not the iconic collectable and (at risk of being hung, drawn, quartered, minced and fed to voracious red bellied Piranha by the anti-whisky-investment-league) valuable commodity it is today.

Port Ellen James MacArthur's 12 year old
£8,200 on the hammer

Assume a cost of £30 per bottle (it was probably far less) and push forward the clock to now. That £30 bottle has increased by a quite frankly ridiculous 27,000% to its current value of £8,200. That was the price paid for one of these rarities at the recent Whisky-Online Auctions (W-OA) sale which makes it both the most expensive bottle of Port Ellen and the most expensive bottle of 12 year old Scotch ever sold at auction.

Why? Clearly rarity plays a factor as does the distillery of origin but overarchingly it’s reputedly amazing whisky… No bullshit, just great Scotch (now there’s a marketing strapline I’d like to see!).

Laphroaig 12 Cad c1970Ardbeg 10 late 1970's

Port Ellen wasn’t the only Islay show stopper at the recent W-OA sale. A late 1970’s bottled Ardbeg 10 year old achieved £1,550 and an exceptional old Cadeneheads 12 year old Laphroaig fetched £3,600. Bowmore’s 1957 38 year old achieved £4,100 leaving its 2010 price of £1,000 as a distant memory.

Bowmore 1957

One of the other highlights of the auction was a very well kept collection of older Connoisseurs Choice bottles (cream and brown labels). While the fill levels were expectedly variable, the general condition of the bottles was excellent. Many sold for record prices including –

Ardbeg 1974 13 year old – £430, up from £380 in 2012

Dallas Dhu 1968 14 year old – £280, up from £95 in 2009

Glenkinchie 1964 19 year old – £260, up from £127 in 2012

Glenlossie 1968 14 year old – £250, up from £100 in 2013

Imperial 1969 14 year old – £160, up from £100 in 2013

Brackla 1969 14 year old – £160, up from £90 in 2009

Increasingly collectable. 1980's bottled Connoisseurs Choice
Increasingly collectable. 1980’s bottled Connoisseurs Choice

Couple the north highland seaside town of Brora with the Rare Malts Selection series and you’re almost guaranteed exceptional results. An incredibly rare 60.02% ABV variant of the legendary Brora 1972 22 year old fetched £3,200, doubling its 2012 price of £1,600. A bottle of 1975 20 year old Brora achieved £650, more than doubling its last UK auction outing of £300. Cross the road, literally, to the very much alive and kicking Clynelish and the ultra rare 1972 22 year old bottled at 58.64% sold for £825, way up from the £323 paid in 2011… 1972 was a good vintage in Brora!

Significant growth for Rare Malts Brora and Clynelish
Significant growth for Rare Malts Brora and Clynelish

Moving back down to the eastern flanks of Speyside and Ardmore’s highly sought after ‘Pure Malt Whisky’ 15 year old Ardmore 15 year oldpushed through £1,000 for the first time when the hammer fell at £1,050. In 2011 just £550 would have taken the bottle.

Having looked at some of the positives, we should always look at the not-so-positives. Someone recently asked me “Andy, just between us, what’s the worst whisky you’ve ever tried?” The answer galvanised me to mention this weeks final bottle. While in my opinion it’s not the worst ever, so far this year I’d have to say my least favourite dram is Inchmurrin 12 year old. Clearly taste is completely subjective but I couldn’t finish a glass of it recently. From the same distillery and showing not every bottle distilled in the 1960’s will increase in value, a bottle of Inchmurrin 1966 sold for £110; exactly half its previous UK auction price of £220 (2013).

50% loss
50% loss

While the weather in the Highlands has been far from spring-like with four degrees centigrade and sleet at the weekend, the rare whisky market continues with a warm glow. Let’s hope it doesn’t become too overheated come summer.

Until next time.

Slainte,

Andy

Images courtesy of Whisky-Online Auctions.