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Diageo “Whisky For Fools” Collection 2013 Released

by Oliver Klimek on September 3, 2013

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)
Brora *** 35 1977 £750 49.9 2,944*
Caol Ila Not declared Not stated £70 59.6 Limited number
Cardhu 21 1991 £160 54.2 6,000*
Convalmore *** 36 1977 £600 58.0 2,980*
Lagavulin 12 not stated £80 55.1 Limited number
Lagavulin 37 1976 £1,950 51.0 1,868*
Oban 21 not stated £225 58.5 2,860*
Port Ellen *** 34 1978 £1,500 55.0 2,958*
The Singleton of Dufftown 28 1985 £235 52.3 3,816*
Talisker 27 1985 £475 56.1 3,000**
* = 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.

{ 4 comments… read them below or add one }

bacchus September 4, 2013 at 10:03 am

maybe it’s time to drop the Classy Malts and turn to others… or make provisions.
will there be a day when all i can buy is Ballantine’s? please don’t tell me that, i’d rather dram from cough syrups.
i don’t have enough money to fill my garage with hundreds of bottles, and that’s a shame, because i’m sure i’ll regret it when i won’t be able to buy Lagavulin, Talisker, Ardbeg, Laphroaig…
if they continue to rise their prices, Single Malts will end up single. Shame.

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David September 5, 2013 at 12:06 am

If value is determined by the market, why shouldn’t distillers move to capture their fair share of the true value of their products? Who is the fool when a product sells initially for what appears to be a ridiculous price only to be bid up 2-3X within months in the secondary market?

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Jeff September 8, 2013 at 10:04 pm

Value is determined by the marketplace, but that doesn’t make it simply synonymous with the highest price that anyone is willing to pay for any given product, secondary market and Diageo’s gouging notwithstanding – otherwise Dalmore’s Paterson Collection must be worth £987,500 if one person on the entire earth can be found to pay that price.

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The Whisky Kiwi September 6, 2013 at 12:59 pm

Maybe Diageo need to look at their RRP of the Manager Choices range as well. At The Whisky Exchange the following are discounted: -

• 40% off Auchroisk 1999 / 9 Year Old / Managers’ Choice / Sherry Cask
• 40% off Blair Athol 1995 / Managers’ Choice / Sherry Cask 54.7%
• 40% off Dailuaine 1997 / Managers’ Choice / Sherry Cask 58.6%
• 40% off Glendullan 1995 / 13 Year Old / Managers’ Choice 58.7%
• 40% off Glenkinchie 1992 / Managers’ Choice 58.1%
• 35% off Inchgower 1993 / Managers’ Choice / Sherry Cask 61.9%
• 40% off Knockando 1996 / 12 Year Old / Managers Choice / Sherry Cask 58.5%
• 40% off Mannochmore 1998 / Managers’ Choice / Sherry Cask 59.1%
• 25% off Royal Lochnagar 1994 / Managers’ Choice / Sherry Cask 59.3%

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