A Course Forum for Students in: Dynamics of the Global Wine Industry (GSBGEN 356)
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Friday, March 4, 2016
Scotch Supply-Demand Inbalance
See the below article:
http://money.cnn.com/2016/03/04/luxury/global-single-malt-scotch-whisky-drought/index.html
Per the conversation of our last class, global scotch supply is tight and dropping fast. Demand from established markets, as well as emerging markets, is simply outpacing supply of quality aged scotches. In the U.S., annual sales nearly tripled between 2002 and 2015. Asia now accounts for one-fifth of all Scotch exports, buying up a quarter of a billion bottles a year. The biggest supply constraint is aging. Macallan can greatly increase production this year, but there is a time lag associated with it because all Scotch whisky must be aged for a minimum of three years.
It's to the point where someone has launched a commodity speculation fund to purchase and hold whisky investments: "The shortage of old and rare single malt ... has already started, and it's going to get worse," said Rickesh Kishnani, who launched the world's first whisky investment fund." So if you get sick of derivatives and greek bonds, start speculating in whisky.
Hey Peter, interesting article. Although this trend may be great for speculators, it has not been so fun for those of us who like to drink nice old Scotches. I have been collecting since about 1999-2000. Back then, Beltramo's usually had at least a few bottles of Macallan 30 in their whisky case, and the price was something like $300-$400/bottle. Now, those same bottles are priced at around $5000 at specialty shops, and new Sherry Oak Macallan 30 is selling for over $3000/bottle, IF you can find it. This is probably the exception, not the rule, but prices generally have been rising without any noticeable increase in quality.
ReplyDeleteOf course there are quite a few old whiskies from other distilleries that are arguably as good (if not better) than those put out by Macallan but priced considerably lower. One that comes to mind is Glenfarclas--an old family-owned distillery just down the road from Macallan in Speyside. Glenfarclas 25 is going for about $160 at Beltramo's/Bevmo; some of their older offerings, though more expensive and harder to find, are also truly excellent and a great value.