The whiskey business isn’t what it used to be. At least one of the most coveted whiskey bottles. In a complex scenario marked by post-pandemic hangover, inflation crisis and weakening of the economy in key parts of the planet, the luxury goods sector has faced a challenging situation. A place where the specialty whiskey market is not spared. There are already those who are talking about the bursting of the “bubble” and the noticeable loss of interest of investors. And who warns: the curves will remain, at least in the short term.

After all, select single malt whiskeys may retain their value to sommeliers and aficionados, but their markets are no longer a stable haven for investors.

What do the numbers say? It looks like the whiskey “bubble” has burst. This is how he interprets it. Finance Times After consulting Scottish investment bank Noble & Co’s latest report on whisky. “good and rare”A label identifying limited edition vintage bottles of the highest quality. Despite their value and the high prices they achieve, the study shows that their markets are going through a cycle change.

Less sales, less value. The data is revealing. Last year, between October 2023 and 2024, whiskey bottles worth more than £1,000 (€1,200) sold for 34% less at auction. The drop in value was even more pronounced and was around 40%. A decline in prices had already been detected last year; This decline was significant for the first time since 2012, but it was much lower, at just 7%.

These are not the only percentages that are worrying for the industry. The overall Scotch whiskey market also appears not to have had its best months, with a 10% decline in volume and 18% decline in value in the first half of 2024, according to the Scotch Whiskey Association’s (SWA) own balance sheets. . The analysis, published by Noble & Co after analyzing more than 91,000 transactions from October to October, also found that to stitch Secondary market sales are similar on an annual basis.

From percentages to examples. Telegram This week I repeated a specific case that helps to better understand the course of the industry and the “puncture” of its bubble: In the most exclusive market, where bottles are bought and sold for more than £100.00, the same piece can be. today it is trading 33% lower than it was a year ago. The British media specifically mentions that a 60-year-old bottle of Macallan Red Collection was sold for 137,500 pounds at an auction held in London in the spring. It may seem like a lot, but the newspaper recalls that in August last year it was worth around £204,000.

Between 100 and 15,000 pounds. This doesn’t mean that the vintage whiskey market no longer generates huge profits. Macallan Lalique, 50, fetches £50,000 at auction; This is ten times its price in 2005. Whoever bought a Bowmore edition some 30 years ago, in 1993, calculated that for the £100 it cost then, it could sell for a much higher price today, closer to 15,000. Finance Times.

But the worst part wouldn’t be old bottles. Analyzing the current scenario, Jonny Fowle, director of the whiskey and spirits division of Sotheby’s auction house, emphasizes, first of all, the latest releases after 2020, which were already offered for sale at high prices and abandoned both investors. and buyers are “out of the market.” Older bottles released at reasonable rates may no longer be moving at 2022 price levels, but they are still “performing well” in the market, he says.

The most punished bottles. Nobel & Co data generally shows an 18% decline in the value of exclusive, rare and fine whiskeys, with those in the £1,000 to £10,000 range showing a more significant devaluation. Quartz notes that the average price of bottles fell 25% in the third quarter.

Knight Frank’s Wealth Report 2024 also does not leave good signs: it reflects a 9% decline in the luxury whiskey index, the largest among elite articles, but its authors clarify that some declines may be exaggerated and are confident that this is the largest decline. The coveted bottles will appreciate in value within two years.

“2023 remains a difficult year to some extent, with the Knight Frank Luxury Whiskey Index falling by almost 9%. However, the 50 worst-performing bottles lost 26% of their total value, while the remaining 50 gained 5%. The best “The results showed a significant 20 percent increase,” he says.

But… Why? To understand the current scenario, in which some analysts already see the whiskey bubble “bursting”, it is necessary to know a few keys. And above all, just look at the years following the financial crisis of the 2000s, when the most exclusive bottles became a popular asset among investors. The position of central banks and interest rates have led them to look for alternative assets that will guarantee good returns. It turns out that Scotch whiskey is a good option.

The products did not want to be left behind. As auctions became more exciting and money flowed into the secondary market, there were manufacturers who chose to increase their own rates. Now, in the wake of a pandemic, high inflation and interest rates, and a weakening economy, demand appears to have taken a step back.

Resetting expectations. Ahead of the latest data, Duncan McFadzean, head of food and drink at Noble & Co, clearly outlines the situation facing the Scotch whiskey industry, which saw its market growing strongly before the pandemic and is set to rebound in 2022.

“The industry thought it would be the ‘loud 20s’ but the reality was much, much harsher. It faced the cost of the living wall: volumes are falling and major companies are warning about its benefits and again,” he says. In McFadzean’s view, “if whiskey investors and collectors were in troubled waters last year, this year they are in the eye of the storm and trying to close the doors.”

“The bubble may have burst”. “Top investors and collectors are being very cautious about price and value. While there will always be room for record prices for the rarest bottles, the bubble in which fine Scotch whiskey has traded for so long may have finally burst,” the expert concludes. .

On the horizon, the industry faces unknowns, challenges and also occasional opportunities. For example, look forward to Trump’s tariff policy or the effects of the Chinese real estate crisis, but also the possibilities of the Asian market.

“As protectionist strategies take shape in the US, it is possible that future demand for the rarest and finest bottles will materialize in Asian markets. What is clear is that the secondary market is at a low point; the only question remaining is knowing when.” it will hit rock bottom,” McFadzean adds.

Pictures | John Cafazza (Unsplash), Maxim Hopman (Unsplash), Dylan de Jonge (Unsplash)

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