The age-old debate about what should be done with whisky has recently be been regurgitated once again by an exchange of arguments between Ian Buxton and Dominic Roskrow. I feel compelled to throw in my tuppence here because I feel both views make up the two sides of a coin that cannot easily be split apart.
To summarize, Ian Buxton takes the ‘romantic’ position that whisky is meant to be drunk and that all attempts to make money from it in a secondary market are to be condemned as they are supposed to create a speculative bubble. Dominic Roskrow on the other hand defends investment in whisky as a reasonable thing to do.
The wicked thing is that both are right in a way. Yes, whisky is a product made with passion and meant to be enjoyed. And yes, those opportunists queueing at Feis Ile or other occasions only to put up their catches for double price on eBay two hours later don’t do the whisky community a favour.
But one has to realize that the laws of supply and demand can not simply be turned off. For everything that does not rapidly degrade there is a secondary market, be it among collectors or investors. And as long as there are people willing to pay higher prices for older bottles of whisky there will also be people who see this as an opportunity to make money. To generally call these people greedy Scrooges does not do them justice but is just patronizing. After I have bought a bottle of whisky, I am free to do with it whatever I want. I can drink it alone or with friends, I can let it collect dust on a shelf or sell it on for a profit. Or I can pour it down the sink.
I earn my money as a stamp dealer. I act in a collector’s and investor’s market that is not unlike whisky, even more so as old postage stamps have no intrinsic value whatsoever. They are just little snippets of paper, but sometimes people pay ludicrous prices for them. I buy cheap and sell for more, you may call it short term profit. I don’t consider myself a Scrooge anyway, and neither will do my customers, who are happy to pay me more because I pick the nice stuff for them from a pile of trash and offer it to them on a silver tray, so to speak.
There have been speculative bubbles in the stamp business just like in whisky. It used to be CEPT ‘Europa’ issues until that bubble burst, currently China is ‘hot’, but this bubble will burst soon too. Did it harm the entire market? Not at all, because most considered it too dangerous to burn their hands and maybe eventually their money with it.
Ian Buxton is right, if he warns of a speculative bubble. But as long as this happens only in the secondary market – like people paying enormous sums at an auction – I don’t have a problem at all with this. I just refuse to go into the nitty-gritty of sound investment vs. greedy speculation because it’s hard to draw a line between them, and in the end both are about making money.
The real danger for the whisky market is when the whisky industry starts to look enviously at the profits made in the secondary market, their lips drooling at the thought how much money can be made there. Offering their whisky at collector’s prices form the start, like Kilchoman’s latest 100% Islay shenanigan or Glenmorangie with their Pride are examples where the real greed manifests itself. This greed effects actual retail prices that have to be paid by all and not just by the buyer of a single bottle at an auction who effectively decides on his own how much he is willing to spend.
And when producers specifically offer their whisky as an investment opportunity to people with no intention to ever drink it, like in the Dalmore example cited by Ian Buxton, this game is taken to yet another – somehow perverted – level.