Friday, October 12, 2012

After the Whisky Bust


Dateline: 2018

As everyone knows, the early years of the decade were heady times for whisky collectors. Despite some curmudgeons who were never on board, distillers regularly auctioned whiskies for four, five and even six figures. People crowded into auction houses for the latest 50 or 70 year old whisky in a jewel encrusted bottle. Aged whiskies from Dalmore, Bowmore, Macallan and Glenlivet became the liquid equivalent of Rolls Royce and Bentley.

The high water mark was in 2013 when an anonymous collector paid $1.8 million for a 180 year old Macallan. As everyone now knows, it was later discovered that, through a clerical error, an extra zero had been added to the age and it was actually an 18 year old. When the anonymous purchaser asked for his money back, the auction house responded with a three word tweet: "Caveat emptor sucker!"

Many people credit the Macallan 18 incident with causing the Great Whisky Crash of 2014 when the bottom dropped out of the market. People simply weren't willing to pay that level of money anymore, and an entire industry of collectors and speculators was left high and dry. Many remember the low point of that bust cycle, when bottles of Port Ellen and Brora littered liquor store discount racks and clearance bins, and the Old Rip Van Winkle Distillery began their three-for-the-price-of-one Pappy Van Winkle giveaway. Bonham's Auction House, which was one of the major centers of whisky auctions during the boom, disbanded its spirits division in early 2016 and transferred its spirits staff to the rare Beanie Babies division.

I recently visited one of the major collectors from that time, Jose Bolsa de Dinero, who lived through the boom and bust.

"None of us saw it coming," Dinero says of the crash, "I mean, here I had invested most of my life savings into these whiskies, assuming I would be the first whisky billionaire once I flipped them all, but then it just all went to hell. Now I can't give the stuff away. I mean, I try to tell people, hey, this is a 50 year old Bowmore, and they're like 'dude, it's just booze.' The bottles are quite lovely though, I managed to sell a bunch of the empty ones on ebay. Apparently, they make a perfect vase for Dutch tulips."

As many whisky lovers said at the time, the bright side about having a whisky collection, however worthless, is you can always drink it, but on that point, Dinero demurs, "Sure I drank some of it, but all those Dalmores? Who would want to drink all that stuff?"


9 comments:

Tim Read said...

I remember hearing one tale from 2015 - David Driscoll handed his business card wrapped in a $20 to a whiskey blogger in a desperate attempt to get him to buy some Pappy instead of going to get it at Costco.

The Malt Desk said...

I wonder if the failed sale of the 1957 Bowmore at Bonham's in Edinburgh the other day, is the first sign of this happening as the promotion of certain whiskies a ultra luxury brand has gone over the top.

http://www.businessweek.com/news/2012-10-10/bowmore-whisky-from-1957-fails-to-sell-at-edinburgh-auction

...and its only the us consumers that can put a stop to it by not paying inflated prices.

But has the limit been reached? Maybe for the ultra premium whiskies, but I dont thing that the segment below that has seen end end of the rise in prices, sadly...

and hand to heart here... the whisky industry is a business - and not philanthropic enterprises prices will go up.
New markets grow around the world and after industry closures in both th 1990's and especially the 1980's you can't really blaim the distillers for making money when an opportunity show itself.

But back to your post, Sku... I like your funny take on it - and if/when the bubble bursts its probably what its gonna sound like.

/Claus, The Malt Desk

Michael said...

Uhh - what a dreadful thought regarding the Dalmores... :-)

Anonymous said...

Diageo, its investors and pensioners, would kindly like you to postdate that dateline for 2026:

http://www.guardian.co.uk/business/2010/jul/01/diageo-tops-up-pension-fund-with-whisky

David D said...

That was in 2016, Tim!

Anonymous said...

Did all this occur before or after the great era of no age statement and white dog whiskeys? Who can forget that time when it was thought to be a great idea to release product with little to no aging in the barrel. When potatoes were considered a grain. When vodka and grain neutral spirits could be called whiskey. I think it was a Monday.

@alligatorchar said...

A bust is inevitable and I look forward to the ridiculous marketing gimmicks going by the wayside. Highland Park Thor? WTF?

dave w. said...

I love the "Dutch Tulip" comment.....

Dg said...

Caveat venditor ...