Just as it is reguarly the case with the latest Apple iProducts, there have been leaks about Diageo’s 2013 Special Releases quite a bit before the official announcement. Probably not by accident, rather to prepare the whisky community for the monstrous pricing of some of the bottles:
|DISTILLERY||AGE AT BOTTLING||YEAR DISTILLED||UK RRSP||% ABV ON BOTTLING||VOLUME RELEASED (BOTTLES)|
|Caol Ila||Not declared||Not stated||£70||59.6||Limited number|
|Lagavulin||12||not stated||£80||55.1||Limited number|
|Port Ellen ***||34||1978||£1,500||55.0||2,958*|
|The Singleton of Dufftown||28||1985||£235||52.3||3,816*|
|* = individually numbered bottles||** = individually numbered cartons||*** = closed distillery|
The annual Port Ellen has gone up from £600 for a 32 yo to £1500 for a 34 yo. Brora increased from £400 for to £750, both released as 35 yo. The Convalmore 36 yo is priced along this line, with a small discount for being less popular, but actually it appears to be much rarer than Brora or Port Ellen in absolute terms.
In the press release, Diageo (or ‘head of whisky outreach’ Dr. Nick Morgan to be more exact) indirectly explains the hyper-inflationary prices for Brora and Port Ellen by their ever-increasing rarity:
“Stocks of Brora and Port Ellen are inexorably diminishing. Each year’s limited-edition bottling releases one more fragment of whisky history that is unique, and can’t ever be replaced. This puts Port Ellen and Brora in a different category from most other very old single malts - mainly from operating distilleries - that are on the market, often at very high prices. On top of that, Port Ellen and Brora are not merely rare, old and in great demand – they are judged by most qualified commentators to be of outstanding quality, and this year’s edition will be no exception.”
Rather surprisingly the 37 yo Lagavulin is priced like one of these as well. Granted, Diageo may not have very many casks of 37 yo Lagavulin collecting dust in their warehouses, so this release is something very special indeed. But the distillery is still active and definitely will not be closed in the forseeable future. So the justification for such a price tag is projected demand only.
Talking about the laws of supply and demand, stock market investment legend André Kostolany once said “It’s all about the question if there are more fools than shares or more shares than fools.” And a fool and his money are easily parted. After the announcement of the 2012 Special Releases someone commented on Facebook. “It hurts, but I am going to get the Port Ellen anyway.”
Is it really such a surprise that Diageo is now pushing the bar even higher, when people react that way? Maybe this particular fool is now priced out of the market, but the Diageo crew know what they are doing. They will have studied the demand for their high end bottlings very thoroughly and are trusting that a few thousand fools, probably mainly from Russia, China and Southeast Asia, will still not be hurt enough and will buy the bottles anyway.
This pricing poliy is also an obvious attempt to dry out the secondary market. Even with last year’s already quite hurtful prices, short-term speculators were able to make a quick buck. The prohibitive price tags on this year’s releases make this much less likely to happen.
It is rather obvious as well that this pace cannot be kept up for several years in a row. Unless…. thinking the unthinkable now…
After Diageo acquired United Spirits and with it Whyte & Mackay in quite a bit of a struggle, one interesting question was if Dalmore – if not being resold straight away – would be able to continue their ultra-high price shenanigans. What if it happened the other way around? Dalmore becoming a role model for Diageo’s Classic Malts? Then indeed we might see this trend go on, crystal decanters included. Heaven forbid.