The launch of the new “Manager’s Choice” line by Diageo was only the latest in a series of whisky releases that left many whisky lovers dazzled by the attached price tags. Two notable examples are:
Black and White Bowmore (€ 3000)
The first two releases of this legendary 1964 whisky in 1993 and 1994 were priced at less than a tenth of the price for the new releases. Even when taking into account the higher age, the price rise is immense.
Ardbeg Double Barrel (€ 12000)
In 2008, Ardbeg released two 1974 single cask bottlings in a handmade guncase with 8 silver drinking cups. The regular price for a bottle of Ardbeg 1974 single cask is around €1000.
Are Distilleries Becoming too Greedy?
The Ardbeg Double Barrel clearly is the brainchild of the LVMH involvement in Ardbeg and Glenmorangie. The French luxury goods company wanted something very special for their uber-rich clients, something to show off to their friends who thought they had seen it all. For this purpose, it is very important that the price be extremely high, otherwise it would not be regarded as valuable. Where money does not matter, the price tag makes all the difference. Almost anybody could buy a bottle for a thousand bucks, so it must be significantly more expensive. If the whisky is really “worth” that much, is entirely unimportant.
Things are different with the Black Bowmore. This a perfect example how the collector’s market for whisky can influence the pricing of distillery bottlings. After the original release, prices continued to rise into four-digit territory. So Bowmore decided that with the next release the money spent by the collectors would be better off on their bank account than in the purse of some speculators.
The Diageo release seems to be in the same line. The occasional Diageao Manager’s Drams that found their way onto the free market fetched similar prices as are now demanded for the new series. For those who are not familiar with the Manager’s Drams: Every year Diageo chose the best cask from one of their distilleries to be bottled as presents for their top staff.
The Danger is Real
As long as distilleries are offering their basic drams at an affordable price, I can happily live with the LVMH approach. Give the rich what they want, but don’t forget the poor. The danger I see here is that the concept of “overpriced added value” might also be applied to the standard bottlings. A new bottle design, a new label, slightly higher ABV or an additional finish might be reason enough to crank up the price by more than the added value would justify.
Even more dangerous is the “cash in on the collectors” approach. By setting the prices for special bottlings too high, chances are that they will only collect dust on collector’s shelves instead of being opened and enjoyed. But as long as collectors are willing to pay these prices, this seems to be unavoidable. But distiileries should be aware that happy consumers are always a better source of income. When they like the whisky they might buy some more. A collector is happy with only one or two bottles.
I want to reiterate that it is of vital interest to the whisky industry as well as to the consumers that entry level bottlings stay affordable. This is not as self-evident as one might think, if for example you look at the development of the price for Lagavulin 16 over the past years. This is the base of the pyramid, and fiddling around with it just might prove fatal.