The whisky bubble burst after years of auction house fever

The value of the best single malt whisky at auction has dropped 40% in one year.

The whisky industry has changed. No, not the rare whisky bottles. The luxury goods sector faces a complex situation due to the post-pandemic hangover, inflationary crisis, and economic weakness in key regions. The exclusive whisky market is affected. Some are predicting its “bubble” will burst and investors will lose interest. And some warn that the curves will continue, at least temporarily.

Fine single malts may remain valuable to sommeliers and aficionados, but investors no longer trust them.

Figures say what? A whisky “bubble” appears to have burst. The Financial Times interpreted the latest Noble & Co report on “fine & rare” whisky, which identifies the highest-quality, aged bottles in limited editions. Despite their value and high prices, the study suggests a market cycle change.

Fewer sales, less value. Data reveals. Auctions sold 34% fewer bottles of whisky worth over £1,000 (€1,200) between October 2023 and 2024. Value fell even more, around 40%. Last year, prices dropped 7%, the first significant drop since 2012.

These aren’t the only sector concerns. Scotch whisky sales dropped 10% in volume and 18% in value in the first half of 2024, according to the Scotch Whisky Association (SWA) balance sheets. Noble & Co. found a similar year-over-year decline in secondary market sales after analyzing over 91,000 transactions from October to October.

Percentages to examples. This week, the Telegraph reported on a case that helps us understand the sector’s direction and the “bursting” of its bubble: in the most exclusive market, where bottles cost over 100,000 pounds, the same piece can be quoted for 33% less than a year ago. The British newspaper mentions a 60-year-old Macallan Red Collection bottle that sold for 137,500 pounds at a spring London auction. The newspaper recalls that in August last year, it was worth nearly 204,000 pounds.

£100-£15,000 The aged whisky market is already booming. At auction, a 50-year-old Macallan Lalique can fetch £50,000, ten times its 2005 price. According to the Financial Times, a Bowmore edition bought in 1993 for £100 could sell for £15,000 today.

Not the aged bottles will suffer the most. Jonny Fowle, director of Sotheby’s whiskey and spirits department, emphasizes the latest releases, those after 2020, which have sold at high prices, leaving investors and buyers “out of the market”. He believes that older bottles launched at reasonable prices are still “doing well” in the market, even though they may no longer trade at 2022 prices.

The most damaged bottles. Nobel & Co.’s data shows an 18% drop in value for exclusive, rare, and quality whiskies, but those worth £1,000–£10,000 have dropped more. Quartz reports a 25% drop in bottle prices in the third quarter.

Knight Frank’s 2024 Wealth Report shows a 9% drop in the luxury whisky index, the largest among select items, but its authors say some declines may be exaggerated and that the most sought-after bottles will appreciate in two years.

The Knight Frank Luxury Whisky Index fell almost 9% in 2023. It said the 50 worst-performing bottles lost 26% of their value, while the other 50 gained 5% and the 20 best-performing bottles rose 20%.

But why? Several key points are needed to understand the current situation, where some analysts are seeing a “burst” in the whisky bubble. The years after the 2000s financial crisis, when investors sought out the most exclusive bottles, are most relevant. Central banks and interest rates drove them to seek high-return assets. Scotch whisky worked well.

Products feared falling behind. As auctions became more profitable and money entered the secondary market, some manufacturers raised their rates. After a pandemic, high inflation and interest rates, and a weakening economy, demand appears to have slowed.

Resetting expectations. According to Noble & Co.’s head of food and drink, Duncan McFadzean, the Scotch whisky industry had strong growth before the pandemic and recovered in 2022.

“The industry expected the ‘Roaring Twenties’, but reality has been much harsher. He says cost of living has hit a wall, volumes have fallen, and big companies have issued profit warnings repeatedly. He says “if whisky investors and collectors were in troubled waters last year, they are in the eye of the storm this year and battening down the hatches.”

“The bubble may have burst .” “High-end investors and collectors are price-sensitive. The bubble in quality Scotch whisky may have burst, but rare bottles can still fetch record prices “Expert concludes.

Unknowns, challenges, and opportunities await the sector. It anticipates Trump’s tariff policy, the Chinese real estate crisis, and Asian market opportunities.

“As US protectionist strategies develop, Asian markets may demand rare and fine bottles. The secondary market is low; the only question is when it will bottom out “McFadzean adds.

https://herbalmeds-forum.biolife.com.my/d/220233-alic-trk-tbyaay-laalaj-artfaaa-dght-aldm-oman

https://forum.instube.com/d/198918-alic-oman

https://bio.link/alicoman

https://www.esol.link/wall/forum/topic/57111

https://neverbrokestoday.com/page/business-services/alic-oman

https://besteksites.com/page/business-services/alic-oman

https://slashpage.com/alic-oman

https://form.jotform.com/243511267282050

https://soundcloud.com/judiyetaireshw/alic-oman

https://www.provenexpert.com/alic

https://devfolio.co/projects/alic-bdf6

https://solo.to/alic