Welcome to our new whisky column where we will be discussing the secondary whisky market.
As well as insights into the market we will be giving you a roundup of key auction results, record setting bottles, trends and chatting about when something particularly mad happens.
Speaking of which, let’s get the bottles rolling with some examples of how mad this market is.
A tale of three 50 year olds
The March auctions saw a particularly lovely Springbank 1919 50 year old sell for £19,500. This classic pear shaped bottle is the original bottling of this fantastic vintage 50 year old from the iconic Springbank distillery.
Like many single malt bottles in the 1960/70s, it did not sell particularly well when it was originally released and the remaining stock was rebottled sometime in the 1980s. The rebottling comes in a classic tall bottle with a simple calligraphy style label and a neat wooden box reminiscent of other bottles released at the time (ahem, Macallan Anniversary Malt and Handwritten Label). One of the rebottled versions sold in January 2022 for £120,000… Yes you read that right, the same whisky in a different bottle sold for £100,000 more than the original bottling.
The other thing to consider is that bottle #12, which sold for £120,000, didn’t even have a particularly good level. It was also £60,000 less than when the same bottle was last seen at auction in 2020.
This is not the only time paradigms such as this have occurred in the market. There are plenty of bottles that are under and overvalued for various reasons. Often we feel that it is a simple lack of understanding of differences that lead to the disparity. But with the example above, the original pear shaped bottle has performed consistently, rising steadily in value from £16,200 over the last two years, whereas the rebottling has dropped by £60,000 over the same period.
Of course, two data points is not a solid foundation for future performance, and in this case the bottle’s extreme scarcity is probably working against it. However, we know which one we would add to our collection at the current price points.
Moving on to more recent 50 year olds, the Glendronach released their 50 year old expression earlier in 2022 for £20,000. Two have already been flipped on auction sites. One met its reserve and sold for £21,300, the other didn’t sell at £21,000. It’s a modest profit for the flipper but seems likely to be a solid long term performer for those willing to wait.
The question remains though, how is a modern Glendronach 50 year old perceived to be worth more than a 1919 vintage Springbank 50 year old? This is a good demonstration of the complexity of the market; scarcity and age do not always equate to the perfect bottle.
Sometimes they seem to work against a bottle, making buyers unsure about the proposition. Which gives savvy buyers a chance to buy clever.
The Macallan bubble
Next up we have the Macallan Classic Cut 2017, Macallan whisky seems to have a market of its own at the moment and this bottle is a good example of that.
At Scotch Whisky Auctions the price for this bottle has doubled in a month, going from a reasonable £540 in the February auctions to a mind boggling £1,200 in the March auctions. The bottle hammer price has been on the rise across all auctions since last summer, but this recent jump either proves Macallan buyers are in a world of their own, or that the market is being manipulated somehow. We will discuss both ideas a bit further down.
We will finish the roundup of March madness with one bottle we would be remiss not to discuss; the Macallan Folio 1. This bottle has seen nothing short of an explosion since 2020, it was already rising in value, but following Macallan’s announcement that the Folio series would be 24 bottles strong, the hammer price has gone from good to simply unbelievable.
Let’s start with prices, in July 2020 these bottles went for around £3,000. By January 2021 they had hit £6,000, by October 2021 they reached £8,500 then jumped in December 2021 to £10,000. The March auctions saw the hammer price for this bottle rise to £15,000 and more.
Let’s get a few things straight, this is the first Folio but like all bottles in the Archival series it is a no age statement, non-vintage whisky. Folio 1 is a limited edition (which Folio 4 and onwards are not), but even so, almost 1,000 of them have appeared at auction over the years. So why are people willing to pay almost as much for a modern, NAS whisky as they are for a 50 year old?
What’s going on with Macallan?
The answer could simply be that it is a Macallan. The distillery has a cult following, particularly for the modern releases, which are arguably more sought after than the rarer, vintage releases.
Bringing us back to something we mentioned above; in some cases scarcity actually seems to hamper a bottle’s performance, whereas modern bottles have the appeal of being readability available, at least to those with deep enough pockets.
Bottles such as the Classic Cut 2017 could also be seeing a knock on effect from the performance of the Folio series. Much like other emerging alternative markets, such as NFTs, there is a feeling with buyers of wanting to have the next big thing, which can cause knock-on growth in similar assets.
Classic Cut is another ongoing Macallan series, this one is limited edition and cask strength, plus 2017 is the first in the series. All this may be creating a market bubble as people look to fill gaps in their collections ahead of a predicted (or at least hoped for) surge in value.
Unfortunately, there could be other aspects at work here than simply Macallan’s marketing strategy working so much better than that of every other distillery in Scotland. When you look
more deeply at the March results for Macallan classic cut 2017 it is not just one bottle that has jumped by over 100% in a month.
There were nine bottles of Classic Cut 2017 at Scotch Whisky Auctions (SWA), six of them all achieved the record breaking price of £1,200, three of them a little less at £1,050. The next closest hammer price in March was £675 at The Whisky Shop Auctions, which was more in line with the results from the February auctions (which ranged from £540 at SWA to £825 at Whisky Auctioneer).
The question then becomes, why would nine buyers suddenly be willing to pay so much more than the previous month, with a surprising amount of consistency?
The answer may be simply the fact that it is Macallan, with people seeing how the Folio is doing and wanting to get in early with other ongoing Macallan series. However, the fact remains that auctions are easy enough to manipulate if you have capital to pay the buyer’s premium and buy your bottle back.
Doing the maths. If that sounds a bit far fetched, we will talk you through the maths. Bidding those nine bottles up to
their respective March 22 prices would cost £1,242 in buyers premium. If you bought nine bottles at c. £540 a bottle and sold them for £1,200 a piece you would still make around £4,000 after paying buyers and sellers premium and the extra £1,242; not too bad over a couple of months.
The fact remains that this only really becomes viable when selling bottles in bulk, which is difficult to do with the vintage bottles that are generally rarer on the market and have a much more consistent price history. That makes modern bottles much easier to manipulate. That being said, a savvy buyer should always be looking at multiple auction houses to get the best price whether it is for selling or buying. Not all auction houses achieve the same price, and even different auction houses perform better for some bottles than others. So whether you are buying or selling, make sure you do your research first.
What to look out for this month
One to watch for this month is the Springbank Local Barley 2022 which was released recently and is likely to appear in next month’s auctions. The release price was £86 plus shipping and retailers are already asking £649.99 for the bottle. Based on the 2021 Local Barley release we expect auction prices to be around £300 – £400 initially, but the 2021 release rose quickly to £540.
The Springbank Local Barley series as a whole is a nice little series that is often overlooked. The earliest edition is a 1966 vintage released in 1999 and following the mid 2010s revival of the series it has turned into an annual release.
There appears to be something of a dichotomy appearing in the whisky market between modern and vintage releases. The right vintage bottles seem to be consistent and there are opportunities in the market to buy bottles that are undervalued in comparison to other equivalent bottles, like the 50 year olds we discussed first.
The modern bottles seem to have a market of their own. They have the potential for huge peaks if you are lucky enough to buy the right bottle at the right time. They also have much more risk associated with them due to the relative lack of data and the potential for market manipulation.
Always make sure you do your research on where to buy to help mitigate some of the risk.
Within the modern market there is a very specific Macallan bubble where the prices seem to have no relevance to the whisky and simply to what people are willing to pay. For the sake of whoever paid over £15,000 for a no age statement whisky, we hope that bubble doesn’t pop anytime soon.
Mark Littler is an independent whisky broker, market analyst and consultant with over a decade of experience in the industry. Each week he publishes new videos on his YouTube channel about topics such as cask investment fraud (and how to avoid it), the history of distilleries and bottles, debunking whisky investment myths and much more.
For more information visit www.marklittler.com
UPDATE: Whisky Auctioneer takes the activity of ‘Shill Bidding’ or any attempt to manipulate values incredibly seriously and absolutely prohibits this.
This is noted in the ‘Prohibited Bidding’ section of Whisky Auctioneer’s Terms and Conditions, which all Buyers and Sellers must agree to. It is also addressed in their Code of Ethics, which the company and all employees adhere to. They monitor activity extremely closely to ensure that the value of lots is not artificially increased – for bids above £2,000 they also require an additional Identity Check is undertaken to ensure the legitimacy of users so that bids are valid and fair.
These activities are against terms and conditions of at least Whisky Auctioneer, who have procedures to go with these policies to monitor and enforce against this type of activity.