The Deadly Sins of Whisky – Diageo’s 2014 Special Releases

The long anticipated 2014 Diageo releases has arrived, and I sadly stand vindicated.

Just a few months ago I wrote a piece on the absurdity of Diageo’s Port Ellen pricing policy, claiming that whisky suppliers are as guilty as collectors for creating the bubble in whisky prices by setting prices that make the whisky so prohibitively expensive that the only plausible thing to do with a bottle that cost so much is to treat it as an heirloom. I’ve made my views known on the pricing policy of Port Ellen (and Brora, by implication), and yet gasped in horror seeing yesterday’s announcement of Diageo’s 2014 Special Releases.

Photo Credit: blog.thewhiskyexchange.com/

But my gasp of horror was not at the prices of the Port Ellen 14th release (£2200) or of the Brora 35 (£1200) as [luckily??] neither have even doubled. Rather, at some of the other crazy pricing announced, including a (technically 16 year old) NAS Clynelish for £500, a Singleton of Glendullan 38 for £750 and a 21 year old Benrinnes from 1992 for £240. I do have to mention that both the Lagavulin 12 and the Caol Ila Unpeated 1998 have remained at or under £80.

I realize that the £240 Benrinnes may seem utterly reasonable compared to the £2200 ask price for the Port Ellen, but do remember that a mere three years ago, in October 2011, you would have paid £300 for the 11th release of Port Ellen. I’ve updated the release price infographic to reflect the 14th release.

© Michael Bendavid, MaltAndOak.com 2014

It’s like we fell through a rabbit hole into a whisky wonderland someone just forgot what normal pricing for whisky is. As the Mock Turtle says in Alice in Wonderland “Well, I never heard it before, but it sounds uncommon nonsense.”

Now, I’m not this silly romantic who looks back at prices of yesteryear (or last year, for that matter) thinking they won’t change. The global market for whisky has changed, as well as the use made of whisky as an investment to beat the market and the demand is bound to be reflected in pricing. Also, every market has its quirky outliers who command absolutely silly money (our Port Ellen and Karuizawa), and it’s just the way it is.

I mean, Clynelish 14 is £33, and the 1993 Distiller’s Edition is £61. A rare Duncan Taylor 25 year old single cask that produced only 92 bottles sells for £271. Where does Diageo come off pricing an outrun of five vintages (essentially a Clynelish 16) producing almost 3000 bottles at £500? This is done in the hopes of making you look at bottle of the 14 for anything under £50 as the find of a lifetime after this.

Why do I feel vindicated? One of the comments I got on the original Port Ellen piece (it was on Facebook, and I didn’t take a note of who wrote it and I do apologize for it) said that in the pricing of Port Ellen, Diageo was simply rectifying a market failure where they sold the whisky for £300 and speculators bought bottles and sold them at auction the following day for double that. He’d rather see the money go to the people who actually produced the whisky, rather than to the speculators who added no value of their own. Honestly, I can’t argue with that, which is why I checked current Ebay prices for the 13th release, and found them to be just shy of £2000. Thus, I view the Port Ellen pricing as an outlier in the industry and am not contesting Diageo’s pricing strategy for it (or for the Brora), although I assume prices would have never climbed this high in auction had Diageo not decided to push the speculators out of the market. Thus, the only ones who still stand to make money on the Port Ellens (other than Diageo, of course), are those who bought a bottle pre-2013 and eventually sell it at auction (probably for £700-1000, unless you have an unopened 1st release).

But the Strathmill, Rosebank, Cragganmore, Glendullan, Benrinnes and Clynelish pricing – I’m sorry, I just don’t get it.

No, I shouldn’t say that, I do get it actually and here’s where the deadly sins come in. Greed and pride on Diageo’s side – trying to force the “regular” brands more and more into the “Super Premium” category, stoking lust and envy in the collectors/speculators for profit. Now a healthy measure of the deadly sins induce innovation and creativity. Overdoses of it are deadly. I fear that line may have been crossed and Diageo has partnered with the collector/speculator faction to artificially stoke the fires of absolute crazy.

The beauty of all this is, of course, is that the whisky market is just like any other investment market, where two truths abide: Bubbles burst, and pigs get slaughtered.