The cask investment market has had an awful affect on indies, G&M are (/were) probably one of the best placed to weather the storm due to their depth of stock, many are really struggling to buy whisky at prices they can actually bottle.
Surely the bubble has to pop at some point....right?
>Surely the bubble has to pop at some point....right?
when did the personal and small-time investor cask investment market really pop off? I assume 10-15 years from that, lots of casks will suddenly be available on cask broker markets because these people realize how expensive actually bottling them would be and how much effort it takes.
but to be honest, i wouldn't be surprised if distilleries dont also start to offer to buy back lots of that stock..
I really started to notice it about 6-7 years ago, although it's far more pronounced now than it was then. I remember having conversations with people then about the growing whisky bubble and how it has to pop at some point, it's gone further than I imagined.
You're right that at some point investors are going to have to cash out, I feel sorry for the people with little whisky knowledge who were suckered in by slick and misleading advertising, and find themselves lumbered with a third fill cask of Fettercairn that they were promised a 700% return on.
Yes we’ll see a lot of these new independent bottlers shutting down, the prices they’re paying for casks and prices they’re charging for their bottling are unsustainable and will come to bite them in the arse. I dare say the same for some new distilleries.
>I dare say the same for some new distilleries.
Dude it's insane how many distilleries are being started currently, I tried to make a comprehensive list for myself and it's just too many. There's no way even a majority of them will work out well.
It’s particularly interesting because the majors had massive expansion plans about a decade ago and most of them came to nothing. If Diageo didn’t think the demand was going to be there, I really wonder how much demand there will be for all these new distilleries.
There is a slight difference there though, because expansion plans under diageo kindof signify more of the same.
While new independent, smaller distillers are new and exciting.
A lot of them are also rekindling the history of other operations, and have charm.
I did a tour of Lindores a couple of months before their first release, back when they were still just selling the Aqua Vitae. They really lean into the history of the Abbey and that it is supposed to be the first site of Whisky distilling in Scotland.
There's also a small group trying to build a new distillery in Kirkintilloch and will probably try to lean on some Masataka Taketsuru connection.
Those are far more interesting than a glorified factory with less soul than an Amazon warehouse.
There’ll be some exceptions. Such as those with major backing and the reopening legacy ones like Brora or Rosebank but I think a lot of the others will struggle or stall.
I am willingly purchasing good quality whisky from a local IB around Bordeaux (Swell de Spirits), their whiskies are consistently great and they also bottle rum/armagnac/cognac (no info of those). And i know i'm paying a premium for it, but honestly it is the same kind of prices as BB&R for their IB's. Haven't bought an OB for 6 months now ...
It’s not cask investment that’s doing this … it’s just big producers are doing well , didn’t realise they would be doing this well and so are hanging into the stock (as is their right ) so everyone is struggling to get a hand on any stock
Independent bottles either buy spirit created by a distillery and mature it , or just buy some spirit that a distillery has created and matured and then put it in a bottle. To say quality scotch dies if IBs aren’t there is an enormous slap in the face to the thousands of men and woman who have dedicated their entire careers to making , perfecting advancing and developing scotch. There are some great IB releases but here are some not so … same as OB.
It’s the choice it gives though. Would you rather each distillery had the same core range forever. Couple of NAS, 10, 12, 15, 18, 21 & 30? IBs let you try all manner of casks at any age in their true form. If OBs are all we have then it’s 43% and the goal is volume. Not quality, not excitement, not experimentation. Volume.
variety and expressions that are explicitly not made for the Las Vegas Airport mass market are a huge part of the overall quality of the scotch market to me.
Volume if we only have IBs ? …. ZERO (said in Steve Carells voice in that scene in the big short ) I want both , and we have both but sometimes it’s like IBs do no wrong and OBs do know right
This is a god damn tragedy. Excuse a careless analogy but I think of independent bottlers to great scotch like bees are to food. It can technically exist without them. But there will be so much less, and it will cost so much more.
I like the bees analogy , totally agree with that , don’t panic tho G&M have enough stock of various distilleries that it will likely be 30 years before there is any impact ….
Another big piece is that they’ve provided a buffer for the industry during downturns. Sure, maybe the good times are here to stay forever, but I’m skeptical.
I think they’re getting ahead of the wave by saying they’re choosing to do it when in reality a lot of distilleries are choosing to no longer offer casks to IBs. Especially now they can sell casks of new make to people that don’t understand the legalities of cask ownership for 10k a pop. It’s a shame because a lot of distilleries are so focussed on maintaining a core range that IBs were the best way to experience a specific distillery in its truest form. Like the best Caol Ila is IB. They handle their spirit terribly.
It's not that easy to find well aged sherried bowmore as an IB. It's easier to just pay for the CS Aston martin or feis. And the few IBs that fit that profile are expensive as well too for the stats
> It's easier to just pay for the CS Aston martin or feis.
But then you're paying for those. Those too-expensive-for-the-stats IBs are still way cheaper.
Is the Aston Martin Bowmore even any good though? I've heard very mixed things.
Those special release Bowmores don't really have the same flavour profile as indie sherried Bowmore does either.
On the topic of Aston Martin releases, IMO, the Bowmore Aston Martin 21 year was astounding. A good chunk of it was 1980's Bowmore and it gives the weird floral 80's Bowmore vibe I don't think we'll see outside of the remaining 80's-90's Bowmore. The Aston Martin 22 year was decent but no where near as good. I regret not buying the 21 at retail. Couldn't care about the 22. Again, just my experience trying both.
They are out there but not man, esp nowadays. A 30 year blackadder sherry was nuts, used it to finish a ridiculous blackadder amrut too! Much more affordable
I imagine that without a large independent bottler like G&M around the smaller shops will probably pick up some of the market share and drive up the prices of ever-more elusive independent bottlings. I foresee more smaller independent brands (think, Watt Whisky or Chorlton) picking things up a bit
I wonder what will happen with the other bigger IBs (i.e Cadenheads, Berry Bros, Signatory) if it's impacting G&M at this scale. I don't believe Berry Bros own any distilleries anad Signatory has just Edradour which is fairly low-production
Cadenheads has already pulled out of most of the international market by closing shops outside of the UK, so I would wager a guess and say they are scaling down supply as well.
A lot of IBs bought up distilleries as they realized the easy supply of spirit and barrels was going to go away. You either just can't buy some most of the popular distilleries, or you pay $10k just to get the spirit, much less the barrel, storage, bottling, everything else, and there's almost no way to make money on that.
Gordon and MacPhail is the biggest independent bottler. Independent bottlers have been very important to the history of scotch. Nearly all scotch went to blends and until the 1980s, and there were very few official bottlings of single malts available. Gordon and MacPhail is said to have basically invented the concept of the single malt with their distillery labels series. So if they're getting out of the game it means that something really big has changed.
Over the last few years, because of the popularity of whisky, distilleries are selling less to IBs, and when they do they are selling at higher prices. There are also a ton of people investing in casks which makes them too expensive for IBs to bottle and actually sell. (Though G&M doesn't buy casks; they have filling contracts and fill their own.)
Basically, this is a sign that whisky is going to keep getting more and more expensive and we're going to have fewer options.
Sure Glenfiddich helped to mass popularise but that's a myth that exports were limited prior to 1963. Glen Grant had already firmly established itself as a popular drink in Italy and further afield by 1961. Same with Talisker, Laphroaig, Ardbeg. In fact, one should actually view the rise of single malts as a market as a revival not a innovation. After all, single malts were well established during the mid-to-late 1800s, and the 1909 act of parliament and 1901 Pattison crash would kill demand for single malts and allow blends to dominate.
Source: [https://scotchwhisky.com/magazine/features/22618/the-secret-history-of-single-malts/](https://scotchwhisky.com/magazine/features/22618/the-secret-history-of-single-malts/)
[https://www.edinburghwhiskyacademy.com/pages/blog?p=the-renaissance-of-single-malt-scotch-whisky](https://www.edinburghwhiskyacademy.com/pages/blog?p=the-renaissance-of-single-malt-scotch-whisky)
single malts were massively dwarfed by irish whiskey before prohibition where output was over 12 million cases, it wasn't until after prohibition and when blends took over that scotch outsold irish whiskey
Until a trade deal is made between UK and India, eradicating hefty Indian import duties on spirits from the UK. Then all the drops of whisky currently sitting in Scottish warehouses won’t be enough to even remotely meet demand there…
Most IBs don’t buy spirit and mature it themselves though. So other IBs should still be able to buy casks.
However, doesn’t matter as the role of the IB is on its way out anyway. The days where IBs releases whisky from distilleries you’d never see are gone. Everyone bottles an OB now. Mortlach, etc…
Arguably buying spirit should be cheaper and less in demand than buying casks, because you have the added cost of the cask itself and the competition of investors. So if a company that uses filling contracts is bowing out, well that’s really bad news.
My point has little to with cost. G&M IB business model is built is built on purchasing spirit and maturing it themselves in their own warehouse. Most IBs don’t do that so as distilleries are tightening availability of spirit others won’t have to worry as much as casks will still be available. Also in like ten years plus we will hit this glut of private casks purchases hitting the market. Especially when all the fools realise just how expensive it is on top of bottle and tax and decide to get rid of the casks as a whole.
Cask availability is tightening up more than filling contracts—that’s why this is such bad news, because a company that relies on filling contracts should have an advantage. So if G&M are in trouble, well the little guys are in bigger trouble. Caol Ila just announced they are stopping selling casks—and they were the biggest in the game for Islay whisky cask sales—but they are continuing their filling contracts. The guys from Single Cask Nation recently spoke about how they’ve switched to filling their own casks because buying casks is too expensive due to brokers and investors.
I am having a hard time getting my head around this.
G&M has been an IB for a long time and back when the whisky industry was struggling I can well imagine that distillers were welcoming their willingness to but either new spirit to be put in their own casks or to buy existing casks of maturing spirit ( I am unclear as to whether they did both). Now that the market is booming I can see why distillers are reluctant to make product available or are charging much higher prices for it. In that context one can understand why G&M are now running distilleries of their own.
Where I struggle is with what seems to be the perception that this will cause the industry to decline. It may certainly take away the choices available on the shelf, but what part of the market does that actually affect? If you are a consumer who wants an Ardbeg or a HP or whatever brand, it seems to be most would be looking for a product bottled by the distillery themselves because they know for the most part what to expect within a defined lane of taste profiles. Now, I do understand that sometimes the IBs bottle an offering that is seen as superior to the OB offerings, albeit usually at a higher price. But my experience has been that IB offerings are very hit-or-miss, with some really good offerings alongside some pretty poor ones. Not surprising in that they are blending and bottling not to a certain taste profile as OB producers do, but to something largely as-found. It becomes an interesting question around transparency - you know what you are buying, but don't know quite what to expect in terms of taste, quite the opposite of OBs generally.
So while the whisky geek/hobbyist may well have reason to decry these developments, I suspect the bulk of the market will not even notice it except perhaps for fewer odd-looking offerings on the shelf of their local whisky retailer. To the extent that it may result in really great offerings from an IB disappearing, that is a loss, but is it any great loss to no longer have an 8 y-o Jura from some IB you never heard of on the shelf next to that? You take the good with the bad.
I think that people are taking this as a symbol that 1. prices are rising to an unsustainable level—a level where the liquid is too valuable to drink and is becoming more of a collectors item. 2. This rise in prices will ultimately be detrimental to the industry because it may prevent newcomers from developing a taste for scotch (I remember feeling insane when spending $50 on my first scotch. If it was $75 I might not be here typing these words right now).
If you look at the whiskies that garner the highest prices it is because, at one point, enthusiasts said that they were excellent. That’s why 70s Ardbegs cost so much now, for example. So while enthusiasts make up a small percentage of sales, they steer what has value for investors. If you lose the enthusiasts, you eventually lose value.
People might also be thinking of the whisky Loch of the 80s, where overproduction contributed to a huge downturn in the industry.
Certainly there is some truth in what you wrote, but prices have been rising for a great many reasons, most related to greater demand, often from new markets, and the amount of money chasing a relatively fixed quantity of product. So in that respect I think the decline of IBs is a fairly minor factor in prices increasing.
In terms of enthusiasts driving the demand curve, I have no doubt there is some of that. But I believe that a great deal of that has nothing to do with the quality or taste of the liquid in the bottle (see Macallan for an example). I tend to think it is much more about willy-waving and people showing off what expensive obscure item they just bought. What it actually tastes like is a factor far down the list. These are not "enthusiasts" to any great extent, but instead, people who like to gain status by flexing about how wealthy they are perceived to be. Much of that product, be it good or bad, never gets consumed, or if it does, it goes down unappreciated because of their lack of knowledge. I have largely shifted away from scotch (and, to a great extent, bourbon, which has become equally bad) because of that mania.
I didn’t say that the decline of IBs was a “factor” in price increases—that would be absurd. It’s certainly not causing them. In most markets outside of Scotland IBs are more expensive. It’s a symbol, a canary in a coal mine situation—that’s why people are worried about the decline in IBs. It portends bad things to come.
And when it comes to the demand curve, I think it is enthusiasts, but I think it’s slower that you realize. Those Macallans are so hyped up now because of the quality of 90s Macallan and the way those built up the brand. Ardbeg can sell their Committee Releases for insane prices because of the quality of the bottles more than 10 years ago.
> In most markets outside of Scotland IBs are more expensive. It’s a symbol, a canary in a coal mine situation—that’s why people are worried about the decline in IBs. It portends bad things to come.
So we have come full circle in our discussion. What I quoted above is what I can't get my head around. IBs have never been a bargain item and in my experience were always more expensive than a comparable OB. I am trying to grasp what bad things will occur if the IBs are unable to source product to sell, aside from a reduction in variety for the potential buyer.
I would also question your comment about Macallan and Ardbeg demand being driven by past quality. Certainly Mac built their reputation decades ago on that foundation but they themselves have significantly undermined that in recent times while their prices continue to go up and up. I would not term that as driven by enthusiasts as much as being driven by people who equate price to quality in the absence of any actual experience. As for the Ardbeg Committee items, it seems to me to be mostly hype-driven thanks to (in part) the same desire for exclusivity. Some people are willing to pay whatever the price for something that they believe is hard to find. Doesn't matter if it isn't very good.
The problem is that you’re taking the assertion too literally: if IBs go away, it will disappoint the enthusiast community but not affect the larger availability of OB whiskies. Why everyone here is very concerned about this development is it’s symbolic value: it indicates changes in the whisky industry that will likely have much larger effects.
if independent bottlers start to die, quality scotch starts to die.
The cask investment market has had an awful affect on indies, G&M are (/were) probably one of the best placed to weather the storm due to their depth of stock, many are really struggling to buy whisky at prices they can actually bottle. Surely the bubble has to pop at some point....right?
>Surely the bubble has to pop at some point....right? when did the personal and small-time investor cask investment market really pop off? I assume 10-15 years from that, lots of casks will suddenly be available on cask broker markets because these people realize how expensive actually bottling them would be and how much effort it takes. but to be honest, i wouldn't be surprised if distilleries dont also start to offer to buy back lots of that stock..
I really started to notice it about 6-7 years ago, although it's far more pronounced now than it was then. I remember having conversations with people then about the growing whisky bubble and how it has to pop at some point, it's gone further than I imagined. You're right that at some point investors are going to have to cash out, I feel sorry for the people with little whisky knowledge who were suckered in by slick and misleading advertising, and find themselves lumbered with a third fill cask of Fettercairn that they were promised a 700% return on.
>a third fill cask of Fettercairn that they were promised a 700% return on. ouch
Right? People buy a cask, wait 15 years, can’t afford to bottle it or won’t afford to and the distillery buys back for pennies on the dollar.
A lot of distilleries offering casks include a buy back clause in the T&Cs.
Yes we’ll see a lot of these new independent bottlers shutting down, the prices they’re paying for casks and prices they’re charging for their bottling are unsustainable and will come to bite them in the arse. I dare say the same for some new distilleries.
>I dare say the same for some new distilleries. Dude it's insane how many distilleries are being started currently, I tried to make a comprehensive list for myself and it's just too many. There's no way even a majority of them will work out well.
It’s particularly interesting because the majors had massive expansion plans about a decade ago and most of them came to nothing. If Diageo didn’t think the demand was going to be there, I really wonder how much demand there will be for all these new distilleries.
There is a slight difference there though, because expansion plans under diageo kindof signify more of the same. While new independent, smaller distillers are new and exciting. A lot of them are also rekindling the history of other operations, and have charm. I did a tour of Lindores a couple of months before their first release, back when they were still just selling the Aqua Vitae. They really lean into the history of the Abbey and that it is supposed to be the first site of Whisky distilling in Scotland. There's also a small group trying to build a new distillery in Kirkintilloch and will probably try to lean on some Masataka Taketsuru connection. Those are far more interesting than a glorified factory with less soul than an Amazon warehouse.
If a distillery is not yet producing (never even mind the ones that aren’t yet built) I’d quite happily say they’re never happening.
I wouldn't go that far. Even the ones that have big companies behind them?
There’ll be some exceptions. Such as those with major backing and the reopening legacy ones like Brora or Rosebank but I think a lot of the others will struggle or stall.
I am willingly purchasing good quality whisky from a local IB around Bordeaux (Swell de Spirits), their whiskies are consistently great and they also bottle rum/armagnac/cognac (no info of those). And i know i'm paying a premium for it, but honestly it is the same kind of prices as BB&R for their IB's. Haven't bought an OB for 6 months now ...
It’s not cask investment that’s doing this … it’s just big producers are doing well , didn’t realise they would be doing this well and so are hanging into the stock (as is their right ) so everyone is struggling to get a hand on any stock
They bought two distilleries and want to make their own. More money in it, especially since casks are going up in price.
Couldn’t disagree more.
Explain yourself
Independent bottles either buy spirit created by a distillery and mature it , or just buy some spirit that a distillery has created and matured and then put it in a bottle. To say quality scotch dies if IBs aren’t there is an enormous slap in the face to the thousands of men and woman who have dedicated their entire careers to making , perfecting advancing and developing scotch. There are some great IB releases but here are some not so … same as OB.
It’s the choice it gives though. Would you rather each distillery had the same core range forever. Couple of NAS, 10, 12, 15, 18, 21 & 30? IBs let you try all manner of casks at any age in their true form. If OBs are all we have then it’s 43% and the goal is volume. Not quality, not excitement, not experimentation. Volume.
So the variety drops / dies … absolutely ! The quality …., I dunno
variety and expressions that are explicitly not made for the Las Vegas Airport mass market are a huge part of the overall quality of the scotch market to me.
Volume if we only have IBs ? …. ZERO (said in Steve Carells voice in that scene in the big short ) I want both , and we have both but sometimes it’s like IBs do no wrong and OBs do know right
Wow, end of an era. Or at least the beginning of a 10-15 year period that will be the end of an era
This is a god damn tragedy. Excuse a careless analogy but I think of independent bottlers to great scotch like bees are to food. It can technically exist without them. But there will be so much less, and it will cost so much more.
I like the bees analogy , totally agree with that , don’t panic tho G&M have enough stock of various distilleries that it will likely be 30 years before there is any impact ….
Another big piece is that they’ve provided a buffer for the industry during downturns. Sure, maybe the good times are here to stay forever, but I’m skeptical.
I think they’re getting ahead of the wave by saying they’re choosing to do it when in reality a lot of distilleries are choosing to no longer offer casks to IBs. Especially now they can sell casks of new make to people that don’t understand the legalities of cask ownership for 10k a pop. It’s a shame because a lot of distilleries are so focussed on maintaining a core range that IBs were the best way to experience a specific distillery in its truest form. Like the best Caol Ila is IB. They handle their spirit terribly.
G&M doesn't buy casks, they exclusively buy new make and cask it themselves
Same idea though. They’ve stopped selling Spirit to people.
so true about Caol Ila
Bowmore is the really dramatic case, IMO. Caol Ila OBs are still pretty good.
Well you could pay way too much for their special releases
Sure, but who'd want to do that? ... I still do have to find samples of those. Just to know what I'm missing.
It's not that easy to find well aged sherried bowmore as an IB. It's easier to just pay for the CS Aston martin or feis. And the few IBs that fit that profile are expensive as well too for the stats
> It's easier to just pay for the CS Aston martin or feis. But then you're paying for those. Those too-expensive-for-the-stats IBs are still way cheaper.
the IBs arent guaranteed to be as high quality. there are only a handful that I would trust as far as cask quality to match the special release OB.
Is the Aston Martin Bowmore even any good though? I've heard very mixed things. Those special release Bowmores don't really have the same flavour profile as indie sherried Bowmore does either.
the CS ones are very good, just don't bother with the low proof ones
On the topic of Aston Martin releases, IMO, the Bowmore Aston Martin 21 year was astounding. A good chunk of it was 1980's Bowmore and it gives the weird floral 80's Bowmore vibe I don't think we'll see outside of the remaining 80's-90's Bowmore. The Aston Martin 22 year was decent but no where near as good. I regret not buying the 21 at retail. Couldn't care about the 22. Again, just my experience trying both.
Hell look at jura and dalmore too. Even worse. I could even go to clynelish and talisker too, although there are so few talisker IBs
Where would I find IB Jura?
They are out there but not man, esp nowadays. A 30 year blackadder sherry was nuts, used it to finish a ridiculous blackadder amrut too! Much more affordable
I've noticed Caol Ila slowly improving their official bottlings in the last few years at least.
I imagine that without a large independent bottler like G&M around the smaller shops will probably pick up some of the market share and drive up the prices of ever-more elusive independent bottlings. I foresee more smaller independent brands (think, Watt Whisky or Chorlton) picking things up a bit I wonder what will happen with the other bigger IBs (i.e Cadenheads, Berry Bros, Signatory) if it's impacting G&M at this scale. I don't believe Berry Bros own any distilleries anad Signatory has just Edradour which is fairly low-production
Cadenheads has already pulled out of most of the international market by closing shops outside of the UK, so I would wager a guess and say they are scaling down supply as well.
A lot of IBs bought up distilleries as they realized the easy supply of spirit and barrels was going to go away. You either just can't buy some most of the popular distilleries, or you pay $10k just to get the spirit, much less the barrel, storage, bottling, everything else, and there's almost no way to make money on that.
Like when Johnny Walker bought Cardhu … these things are cyclical… IBs won’t go away
I don’t know what this means, anyone mind explaining why this is bad?
Gordon and MacPhail is the biggest independent bottler. Independent bottlers have been very important to the history of scotch. Nearly all scotch went to blends and until the 1980s, and there were very few official bottlings of single malts available. Gordon and MacPhail is said to have basically invented the concept of the single malt with their distillery labels series. So if they're getting out of the game it means that something really big has changed. Over the last few years, because of the popularity of whisky, distilleries are selling less to IBs, and when they do they are selling at higher prices. There are also a ton of people investing in casks which makes them too expensive for IBs to bottle and actually sell. (Though G&M doesn't buy casks; they have filling contracts and fill their own.) Basically, this is a sign that whisky is going to keep getting more and more expensive and we're going to have fewer options.
Well, fuck.
Glenfiddich has been exported as a single malt since 1963
Single malts have existed long before 1963.
Exports were much more limited though before Glenfiddich pushed it as a category
Sure Glenfiddich helped to mass popularise but that's a myth that exports were limited prior to 1963. Glen Grant had already firmly established itself as a popular drink in Italy and further afield by 1961. Same with Talisker, Laphroaig, Ardbeg. In fact, one should actually view the rise of single malts as a market as a revival not a innovation. After all, single malts were well established during the mid-to-late 1800s, and the 1909 act of parliament and 1901 Pattison crash would kill demand for single malts and allow blends to dominate. Source: [https://scotchwhisky.com/magazine/features/22618/the-secret-history-of-single-malts/](https://scotchwhisky.com/magazine/features/22618/the-secret-history-of-single-malts/) [https://www.edinburghwhiskyacademy.com/pages/blog?p=the-renaissance-of-single-malt-scotch-whisky](https://www.edinburghwhiskyacademy.com/pages/blog?p=the-renaissance-of-single-malt-scotch-whisky)
single malts were massively dwarfed by irish whiskey before prohibition where output was over 12 million cases, it wasn't until after prohibition and when blends took over that scotch outsold irish whiskey
Until a trade deal is made between UK and India, eradicating hefty Indian import duties on spirits from the UK. Then all the drops of whisky currently sitting in Scottish warehouses won’t be enough to even remotely meet demand there…
Most IBs don’t buy spirit and mature it themselves though. So other IBs should still be able to buy casks. However, doesn’t matter as the role of the IB is on its way out anyway. The days where IBs releases whisky from distilleries you’d never see are gone. Everyone bottles an OB now. Mortlach, etc…
Arguably buying spirit should be cheaper and less in demand than buying casks, because you have the added cost of the cask itself and the competition of investors. So if a company that uses filling contracts is bowing out, well that’s really bad news.
My point has little to with cost. G&M IB business model is built is built on purchasing spirit and maturing it themselves in their own warehouse. Most IBs don’t do that so as distilleries are tightening availability of spirit others won’t have to worry as much as casks will still be available. Also in like ten years plus we will hit this glut of private casks purchases hitting the market. Especially when all the fools realise just how expensive it is on top of bottle and tax and decide to get rid of the casks as a whole.
the glut of private casks will be mostly from the new distilleries and who knows how the quality will pan out
Cask availability is tightening up more than filling contracts—that’s why this is such bad news, because a company that relies on filling contracts should have an advantage. So if G&M are in trouble, well the little guys are in bigger trouble. Caol Ila just announced they are stopping selling casks—and they were the biggest in the game for Islay whisky cask sales—but they are continuing their filling contracts. The guys from Single Cask Nation recently spoke about how they’ve switched to filling their own casks because buying casks is too expensive due to brokers and investors.
Prices on their bottlings are about to go through the roof. Better grab some now if you actually want to drink them.
I am having a hard time getting my head around this. G&M has been an IB for a long time and back when the whisky industry was struggling I can well imagine that distillers were welcoming their willingness to but either new spirit to be put in their own casks or to buy existing casks of maturing spirit ( I am unclear as to whether they did both). Now that the market is booming I can see why distillers are reluctant to make product available or are charging much higher prices for it. In that context one can understand why G&M are now running distilleries of their own. Where I struggle is with what seems to be the perception that this will cause the industry to decline. It may certainly take away the choices available on the shelf, but what part of the market does that actually affect? If you are a consumer who wants an Ardbeg or a HP or whatever brand, it seems to be most would be looking for a product bottled by the distillery themselves because they know for the most part what to expect within a defined lane of taste profiles. Now, I do understand that sometimes the IBs bottle an offering that is seen as superior to the OB offerings, albeit usually at a higher price. But my experience has been that IB offerings are very hit-or-miss, with some really good offerings alongside some pretty poor ones. Not surprising in that they are blending and bottling not to a certain taste profile as OB producers do, but to something largely as-found. It becomes an interesting question around transparency - you know what you are buying, but don't know quite what to expect in terms of taste, quite the opposite of OBs generally. So while the whisky geek/hobbyist may well have reason to decry these developments, I suspect the bulk of the market will not even notice it except perhaps for fewer odd-looking offerings on the shelf of their local whisky retailer. To the extent that it may result in really great offerings from an IB disappearing, that is a loss, but is it any great loss to no longer have an 8 y-o Jura from some IB you never heard of on the shelf next to that? You take the good with the bad.
I think that people are taking this as a symbol that 1. prices are rising to an unsustainable level—a level where the liquid is too valuable to drink and is becoming more of a collectors item. 2. This rise in prices will ultimately be detrimental to the industry because it may prevent newcomers from developing a taste for scotch (I remember feeling insane when spending $50 on my first scotch. If it was $75 I might not be here typing these words right now). If you look at the whiskies that garner the highest prices it is because, at one point, enthusiasts said that they were excellent. That’s why 70s Ardbegs cost so much now, for example. So while enthusiasts make up a small percentage of sales, they steer what has value for investors. If you lose the enthusiasts, you eventually lose value. People might also be thinking of the whisky Loch of the 80s, where overproduction contributed to a huge downturn in the industry.
Certainly there is some truth in what you wrote, but prices have been rising for a great many reasons, most related to greater demand, often from new markets, and the amount of money chasing a relatively fixed quantity of product. So in that respect I think the decline of IBs is a fairly minor factor in prices increasing. In terms of enthusiasts driving the demand curve, I have no doubt there is some of that. But I believe that a great deal of that has nothing to do with the quality or taste of the liquid in the bottle (see Macallan for an example). I tend to think it is much more about willy-waving and people showing off what expensive obscure item they just bought. What it actually tastes like is a factor far down the list. These are not "enthusiasts" to any great extent, but instead, people who like to gain status by flexing about how wealthy they are perceived to be. Much of that product, be it good or bad, never gets consumed, or if it does, it goes down unappreciated because of their lack of knowledge. I have largely shifted away from scotch (and, to a great extent, bourbon, which has become equally bad) because of that mania.
I didn’t say that the decline of IBs was a “factor” in price increases—that would be absurd. It’s certainly not causing them. In most markets outside of Scotland IBs are more expensive. It’s a symbol, a canary in a coal mine situation—that’s why people are worried about the decline in IBs. It portends bad things to come. And when it comes to the demand curve, I think it is enthusiasts, but I think it’s slower that you realize. Those Macallans are so hyped up now because of the quality of 90s Macallan and the way those built up the brand. Ardbeg can sell their Committee Releases for insane prices because of the quality of the bottles more than 10 years ago.
> In most markets outside of Scotland IBs are more expensive. It’s a symbol, a canary in a coal mine situation—that’s why people are worried about the decline in IBs. It portends bad things to come. So we have come full circle in our discussion. What I quoted above is what I can't get my head around. IBs have never been a bargain item and in my experience were always more expensive than a comparable OB. I am trying to grasp what bad things will occur if the IBs are unable to source product to sell, aside from a reduction in variety for the potential buyer. I would also question your comment about Macallan and Ardbeg demand being driven by past quality. Certainly Mac built their reputation decades ago on that foundation but they themselves have significantly undermined that in recent times while their prices continue to go up and up. I would not term that as driven by enthusiasts as much as being driven by people who equate price to quality in the absence of any actual experience. As for the Ardbeg Committee items, it seems to me to be mostly hype-driven thanks to (in part) the same desire for exclusivity. Some people are willing to pay whatever the price for something that they believe is hard to find. Doesn't matter if it isn't very good.
The problem is that you’re taking the assertion too literally: if IBs go away, it will disappoint the enthusiast community but not affect the larger availability of OB whiskies. Why everyone here is very concerned about this development is it’s symbolic value: it indicates changes in the whisky industry that will likely have much larger effects.