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An Update On Whisky Inflation

by Oliver Klimek on June 30, 2014

In November 2012, nearly 18 months ago, I took a closer look at whisky inflation since 2002. The result in a nutshell was that especially the older expressions increased in price while prices for standard bottlings often remained flat if adjusted for inflation and increase in excise duty.

I will try to make it a tradition to look at the price development from time to time. So I have taken the bottlings from the 2012 list that have not been discontinued and noted their current prices as charged by The Whisky Exchange. TWE was chosen because the inital 2002 prices taken from the Wayback Machine were also from that shop. The current bottling of Macallan 18 Sherry is not available there at the moment, so for this bottling I entered the price of Master of Malt. Laphroaig 10 yo Cask Strength was not available at either retailer.

  ABV Nov 2012 Jun 2014 - Exc Diff
           
Aberlour 10 40 23,95 25,75 25,36 5,9%
Aberlour A’bunadh 60 35,49 39,45 38,86 9,5%
Ardbeg 10 46 35,95 39,95 39,50 9,9%
Balvenie Doublewood 43 28,95 32,95 32,53 12,4%
Balvenie 21 Port Wood 40 86,95 126,00 125,61 44,5%
Benrinnes 15 F&F 43 40,49 49,95 49,53 22,3%
Blair Athol 12 F&F 43 40,25 41,95 41,53 3,2%
Bunnahabhain 12 46,3 33,95 36,95 36,49 7,5%
Cardhu 12 40 30,75 32,95 32,56 5,9%
Dalmore 12 40 35,95 37,95 37,56 4,5%
Edradour 10 40 30,49 35,45 35,06 15,0%
Glendronach 15 46 39,49 44,95 44,50 12,7%
Glenfarclas 15 46 39,95 45,45 45,00 12,6%
Glenfarclas 21 43 59,95 61,75 61,33 2,3%
Glenfarclas 25 43 90,95 117,00 116,58 28,2%
Glenfarclas 30 43 123,00 145,00 144,58 17,5%
Glenfiddich 15 40 31,95 33,45 33,06 3,5%
Glenfiddich 30 40 254,00 499,00 498,61 96,3%
Glenlivet 12 40 25,45 28,45 28,06 10,2%
Glenlivet 18 43 37,95 58,35 57,93 52,6%
Glenmorangie 10 40 27,25 28,95 28,56 4,8%
Glenmorangie 18 43 79,95 85,35 84,93 6,2%
Highland Park 12 40 24,49 30,95 30,56 24,8%
Highland Park 18 43 56,95 99,95 99,53 74,8%
Lagavulin 16 43 44,95 48,95 48,53 8,0%
Lagavulin DE 43 63,49 67,45 67,03 5,6%
Laphroaig 10 40 29,95 36,95 36,56 22,1%
Macallan 18 Sherry 43 97,94 146,00 145,58 48,6%
Springbank 10 46 34,49 35,25 34,80 0,9%
Strathisla 12 40 29,49 29,95 29,56 0,2%
Talisker 10 45,8 32,49 34,25 33,80 4,0%
Talisker DE 45,8 51,49 52,45 52,00 1,0%
Chivas Regal 18 40 48,49 50,95 50,56 4,3%
Johnnie Walker Blue Label 40 139,00 135,00 134,61 -3,2%

 

UK excise duty has increased by £1.41 per litre of pure alcohol since 2012. The “- Exc” column shows the current price minus the increase of excise duty based on the actual ABV and the volume of 70 cl. Because of varying batches the ABV of Aberlour Abunad’h is assumed to be 60% on average. The “Diff” column shows the percentual difference of the current price adjusted by excise duty increase compared to the 2012 price. Up to date excise duty data can be found at the HMRC website.

Accumulated consumer price inflation in the UK was about 3 to 3.5 percent in the past 18 months. While a number of bottles have been fairly unchanged, we can see that there are some significant price increases. Again the older expressions have suffered the most from price increases. Glenfiddich 30 is a special case because this is a bottling that is still available but apparently has not been re-issued since. So the drastic price increase reflects the dwindling stock of this bottle.

But also some younger whiskies like Highland Park 12 or Laphroaig 10 have become over 20% more expensive. But surprisingly some highly demanded whiskies like Talisker or Lagavulin have seen only moderate increases. The only bottle that actually became cheaper is Johnnie Walker Blue Label. Which is a bit surprising with all the talk by the industry about higher demand for luxury blends.

{ 13 comments… read them below or add one }

Jordan June 30, 2014 at 6:44 pm

Diageo has done a surprisingly good job of holding down prices on their basic expressions. Their strategy seems to be introducing new NAS expressions at comparable prices rather than jacking up their old standbys.

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Florin June 30, 2014 at 9:33 pm

Very interesting Oliver. Why is Caol Ila 12yo not on the list, just curious?

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Oliver Klimek June 30, 2014 at 9:47 pm

Because the 2002 data was not available for the initial check. I will try to track more bottles for future comparisons.

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Gal Granov July 1, 2014 at 9:28 am

just as I thought, prices of aged whiskies from distilleries now releasing a lot of NAS are up (macallam , HP) and the prices of those with no NAS expression (lagavulin for example) are not changed…
NAS is driving age statement prices up as foretold…

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Joel Harrison July 1, 2014 at 10:50 am

A very interesting and detailed piece, thanks. Does this take into account the different vintages of Mac 18 as some seem to be more sought after than others.

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Oliver Klimek July 1, 2014 at 11:01 am

For Macallan 18 I only use the price for the current vintage because of this. This is also why I took the price from Master of Malt in that case. They have the 2006 vintage whereas TWE currently only has older vintages that are obviously more expensive.

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smsmmns July 1, 2014 at 10:59 am

Love this post, Oliver. Super interesting the varied rates of price increases, esp in light of tax increase two years ago. But in the context of commodities does whisky stand out? Old article offers some context http://www.theguardian.com/news/datablog/2012/oct/04/global-food-price-index-rise-data

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Oliver Klimek July 1, 2014 at 11:11 am

I am not a statistician, and I guess you need a good methodology to calculate something like a solid “official whisky inflation rate” that can be used for comparative purposes. But I would dare a wager that overall whisky prices have risen more quickly than those of most other food items.

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Joel Harrison July 1, 2014 at 11:02 am

It would be interesting to see the production capacity of the distillery next to each one (‘infinity’ in the case of JW Blue Label!) and then their uplift in case sales globally, to show a true reflection of *why* there has been a price increase. Normally price increases are linked to ‘demand vs supply’ and the value of the brand for the consumer. Can we assume from this list that the value of the JW Blue brand has dipped in the eyes of the consumer, as they’re not willing to purchase at a higher price. Whereas, say, Macallan or Balvenie have both risen in the eyes of the consumer? Are these brands selling less at a higher price (but driving greater profit), or more at a higher price (driving both profit and market share)? Maybe JW Blue’s price is due to increased competition from Grants 25, Royal Salute, Louis XII and other premium spirits?

A lot of food for thought and it shows that the retail price of a whisky has a lot more behind it than simply just ‘the prices are going up because companies want to make more money’. It’s a fascinating and complex world, for a product so limited in volume yet so highly prized around the world.

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Oliver Klimek July 1, 2014 at 11:14 am

I agree, it is not easy to look behind the numbers and find out what actually drives the prices. It would be interesting to also compare the number of bottles sold for each expression. But to get this data is next to impossible.

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Joel Harrison July 1, 2014 at 11:20 am

Yes, I understand that. Taking something like Macallan 18 and it’s variable vintage, some years it might be 100,000 bottles, other years 40,000 bottles (I’m making these numbers up for illustration purposes, obviously) but if they keep selling 100% of the bottles they make, they can basically choose their price. If, however, a brand sees a dip in sales by 2 or 3% but can sell at a 5 or 10% price increase, then it is happy days for the spreadsheet munchers in short sleeves back at HQ. It is all so complicated, I’m glad I don’t have to crunch the numbers!!

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Roque July 1, 2014 at 1:43 pm

Very interesting — thanks for this. I’d be curious to know how American whisky is faring in this regard, since there’s a major debate roiling right now over whether we’re really experiencing a bourbon shortage. But it seems to me, without having compiled the data, that we’re experiencing a similar phenomenon, with prices for the premium and aged stock rising, while standard bottlings remain more or less stagnant. (Except maybe for Buffalo Trace, which really does have a shortage problem. Their standard bourbon has risen more than $5 at my local store just in the last year, when they have it.)

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Oliver Klimek July 1, 2014 at 3:11 pm

I did not include American whisky because pricing in Europe is a bit erratic. Actually it is also erratic in the US, so I really did not want to take on that task ;)

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