The Port Ellen distillery needs no introductions. This distillery was mothballed in the 1983 wave of distillery closing by the company now known as Diageo, in response to a serious decline in demand for whisky world over. As the whisky produced at Port Ellen was never sold as a single malt, and was only used for blends, the company figured that Lagavulin and Caol Ila would easily fill the gap, and even so both distilleries had to reduce production.
Diageo has dwindling stocks of Port Ellen whisky, releasing it in an ever more expensive yearly release. The 13th release, from October 2013, has a retail price of £1500, pretty amazing, considering that the distillery was obviously redundant 30 years ago. One must wonder why a bottle of mass produced whisky – ANY WHISKY – would warrant such a price tag. Mind you, the 12th release cost £600, the 11th cost £300 but the 10 was £275. I won’t go any further back, as those batches were much larger than the ~3000 bottles now released. All are 1978 or 1979 vintage, matured 31-34 years and bottled at 53%-55% ABV.
Rare Malts Selection Port Ellen Price Inflation 2010-2013 © maltandoak.com
Could the 13th release be 500% better than the 11th release, a mere two years before?
Obviously not.
In truth, you’re no longer paying for the whisky, especially since a good number of these bottles will never be opened (I estimated that number at two thirds, some of my whisky friends think the number is higher than 80%). Most of these bottles will sit sealed in private collections, adorning shelves, and others will go to auction at ever increasing crazy prices, again never to be opened. The bottles might as well have been filled with cheap Smirnoff vodka, it would have make no difference.
Is Port Ellen Whisky good? Yes, of course it is. Had it not been good, it would have never grabbed the imaginations of fans. Added to that is the fact that releases out there are 25-35 years old. So what would be a fair price for a 30 year old whisky from a closed distillery? The answer, of course, is whatever the market says it is, and the market is talking loud and clear. Nevertheless, there’s something about Diageo setting the price tag so far inside the crazy range, that makes it feel all wrong. It seems to me that at the £300 price tag of a mere two year ago even I would have gotten a few friends together to share a bottle without it causing my eyes to water.
But £1500 for essentially the same whisky? Come on…..
Do I really fault Diageo? Well, yes and no.
Obviously, ff I had a product with high demand and short supply, I’d make sure I get the most financial mileage out of it – especially if I saw that right after consumers buy the bottle from me at £300 they turn around and sell it for double that. Company executives figure that the company could pocket that extra margin. Indeed, the 12th release was sold out just as fast as the 11th, and the 13th just as quickly. On the other hand, the original price of the expression plays a roll in the final auction price (well, usually at least, unless you spray paint the bottle gold, in which case all bets are off). This year’s Lagavulin 37 release at £1950 is probably the precursor for the price tag of the 14th release, next year. For now, the price is on its way to doubling, on ebay:
I wish there was a way to know just how many of the bottles are actually opened. This irks me because I haven’t tasted many Port Ellens, and probably won’t get to taste the 13th release or any consequent bottling. Had the bottles been used for their real purpose – bringing whisky to the end consumer who breaks the seal and pops the cork out and has a dram with his friends to cherish the moment, they would still cost only £300. So in my book, keeping these bottles sealed, is a crime against whisky with the real beneficiary being Diageo, who holds the stock of liquid gold that has not reached its market price equilibrium…
Now, getting back to the very good and very reasonably priced Port Ellen I had at the Loch Ness in Berlin. I paid €18 for a 20 ml tasting of a 26 year PE, and enjoyed every drop.
Photo Credit: masterofmalt.com
Douglas (Hunter) Laing Old Malt Cask Port Ellen 26 years Cask DL5398, Refill Sherry Butt Distilled 1.9.1982 and Bottled 1.7.2009 (50%ABV, NCF, NC)
Color: Deep gold, medium-slow legs.
Nose: Salt, sea, burnt out fire, tar, landfill fire with oak underneath. A freshly opened watermelon on the beach, vanilla, iodine and sherry. With 3 drops of water: milder peat, fresh cut grass and malt.
Palate: Very sweet peat, gentle sherry, spice, star anise, cigar draw. Spicy and soft in mouth.
Linger: Long with spice and peat playing in mouth. Spicy going down and a long warmth that lingers and lingers…
This dram is like angels were distilled into my glass. The sherry butt does wonders to peated whisky, and good whisky that spent 26 years in one will produce one cracking dram!
To blame the 2/3 (your estimate) resp. the 80 percent that do not open the Port Ellen bottlings for price increases does not take into consideration several factors, such as the fact, that the distillery is closed, the single malt has stayed in casks for more than 30 years, comes as cask strength and clearly demand exceeds offer. Especially so with the increasing demand from emerging countries in Eastern Europe, Latin America and Asia.
Of course, the price increase (driven by the initial price tag of Diageo) from one Port Ellen release to the next is exorbitant. However, compared to the price frenzy of Ardbeg NAS bottlings (hello Galileo, Blasda, Supernova, etc.), where the consumer/ investor/ collecter does not get any transparency regarding age, vintage, sometimes even number of total bottles, the Port Ellen bottlings provide transparency while the total number of remaining casks are limited (unlike at Ardbeg, which continues to produce at full steam).
BTW: the same habits as at Port Ellen exist also at Highland Park and Macallan (and Macallan also copy/ pastes (poorly) the Ardbeg marketing gimmicks).
Ralph,
I have a whole other ax to grind with the Ardbeg (and Edrington) crazy, as you can plainly see in my “gold spray paint” comment in the post. I’ll get to that in another post.
I don’t know what PE whisky is “worth”, obviously, it’s worth 2400 EUR because people are buying it for that price. I do think that had people bought the whisky to drink, rather than sell at auction, prices would be kept reasonable and Diageo would have kept it at the ~£350 which is the £25 yearly increase seen before. Once the whisky became a commodity sold at auction, Diageo’s joining the crazy was merely a question of time….
A few years ago I was able to sample a dram of PE which was near 30YO. I knew then I could die happy.
I just want to update that I found prices for two more of the official releases, and they’ll shock you:
The 7th release sold for £125 in 2007 and the 8th release (2008) sold for £185. The 13th release, just to reiterate, was listed at £1500.
(Source: http://www.thewhiskyexchange.com/lostdistilleries.aspx)