All Things Whisky

Alright, Drammers and Dreamers.  something to talk about.

Let’s beat this dead horse like Negan on a noggin'(*).  It’s a subject that seems to be getting a lot of play in almost every whisky conversation I’m a part of lately.  Let’s talk about the price of whisky.  yes.  That again.  I kinda think everyone needs a public forum to air it out.  The comments section below, I imagine, is about to become just that.

There seem to be two schools of thought (of course there are more nuanced approaches, but for the sake of simplicity, bear with me).  The first suggests that whisky is a luxury item and that any price is fair on a luxury item.  Especially in light of the fact that many of the same individuals who are now complaining about the stratospheric (and still soaring) price of the precious fluid are the ones that have helped push it there via the laws of supply and demand (and disposable income).  The second suggests that no matter what your personal druthers are, there is no fucking way that the current climb is justifiable in light of the very small change in conditions that supported prices which probably came in about 40% lower (more in some cases) just a year or two back.

Are these two arguments balanced?  Do they offset?  Well…I think you know where I’m about to weigh in, aye?

Here’s the thing.  Shit gets more expensive over time.  We know this.  Just ask your parents who trudged uphill both ways in the snow to see a ‘picture’ at the cinema with no more n’ a few bits in their pocket.  Of course, that covered popcorn and a wee dip into the sweet shoppe on the way home too.  The reality is…the times they are a changin’.  BUT…typically this happens incrementally.  Small hops and skips that mostly go unnoticed by a population that progressively earns more and more and a dollar that continues to morph into an entirely different beast than back in the day when a home could be bought for tens of thousands.

As regards whisky though (before we start to ramble too much)…in the last couple of years where we’ve seen spikes that look like towering t-rex teeth or stalagmites in some Journey To The Center Of The Earth spinoff can we reasonably explain away such drastic increases?  Uh…nope.

Barley is about on par with 2010 prices (source); barrel shortages we heard so much about have been claimed to have been BS by many industry sources (forgive my refusal to name names of the good people who share insider secrets, but even so, let’s face it…much of the industry’s move to ‘sherry-seasoned’ barrels must be a cheaper option than the old ‘ex-sherry’ butts); fuel costs are on the decline (source) so transport should be cheaper; it would seem median salaries in the UK (home of all this glorious malted gold) have held pretty steady in recent years, right around £26k (source); and…let’s name the pet elephant in the room: “hello, Brexit!”

So…why the hell has the price of whisky shot through the roof?  It’s simple really.  Because it can.

Let’s return to the other argument for a moment.  The one that says whisky will cost what whisky costs because it is whisky, not bread.  The point: it’s non-essential.  It’s a luxury item that we don’t need, so if we’re gonna be that indignant about it, we can always just walk away.  At the end of the day, this argument really is sound as a pound when you think about it (a pre-Brexit pound, that is ).  Vote with your wallet.  Simple message.  We don’t need this stuff, so shouldn’t we be saving our breath to fight the good fight elsewhere?  Yeah, probably.  But life is rife with shit in so many ways.  That’s a simple reality.  In our few short rotations ’round the sun we hunt out the things we love (and that make our lives better) then we cling to them like life preservers.  The more we learn to love them, the more we become covetous and protective.  It’s only right that we should fight to hold onto what we hold dear, don’tcha think?

Anytime there is an illogical leap in expense, should we not as consumers question it?  Caveat emptor, aye?  If not are not implicitly responsible for the act of gouging?  Look what happens when fuel costs spike.  Or automobiles.  Or when Cauliflower doubled in price last year.  Or bacon.  The internet went batshit.  People wanted answers.  And for the most part, they got ’em (excepting fuel, that is…we’ll never get answers there).  Why, therefore, can we as consumers not question the rising tide of malt prices without being villainized?  It’s a bullshit old world mentality that is telling us to suck it up and not question the status quo.  And I, for one, will never buy into that (pun intended).

And here’s the real rub for someone like your faithful author:  I love this stuff.  I mean…I fucking love it.  I have dedicated vast tracts of my life over the last decade or so to pushing it to the fore.  To publicizing the greatness in it.  To sharing the word and helping elevate brands (even in my own small way).  I have started massive whisky clubs, written hundreds of reviews, shared countless experiences and bottles, led more tastings than I like to admit and supported businesses near and far.  And yet, I’m one of the ones struggling to stay in the game.  That is…well…lemme be honest here…it sucks.  A lot.  It’s caused me a bit of an existential crisis of late.  (I know, I know…sounds melodramatic, but do realize how much of my life I’ve dedicated to this.)

So where do we go from here?  Hard to say.  If you’re like me – and you maybe squirrelled away a bit of a store for rainy days – you hunker down and wait.  And you plug your ears when the bubble bursts.  You also scour for deals, share the word when you find them, and sew enough good karma that others share their hoards throughout these lean times.  Oh yeah…and you learn to fall in love again with the younger, cheaper malts you started with.  If you’re not like me…well…you pay grossly inflated prices and live large now, but recognize your dollar is working harder for you than it ever has before, and that you…are…being…fleeced.  If you’re okay with that (and to a degree, we all must be right now, or else we wouldn’t be drinking some of the drinks we do), let’s simply smile and move on.

In short…consider me on record as saying that the current state of whisky valuation is bullshit and it simply comes down to what the market will bear.  Supply and demand, and all that.  The question now becomes, are you ready to walk away or are you going to continue playing, knowing that the metrics have changed in favor of the other team and you’re playing on their turf?  Who knows…maybe it’s gonna be a true David versus Goliath story.

Either way…the next few years are gonna be hella interesting, I’d say.

(*shameless Walking Dead reference)

– C

I’d like to clarify something that sort of defies clarifying.  In other words…this will likely be a useless post that accomplishes none of what it sets out to do.  We refer to ‘the industry’ a lot.  Here on ATW, in discussion in and in other forums and venues.  It’s an easy catch-all term that speaks to the us and them mentality that so many of us feel, if not actually outwardly project.  It’s easy to think of the industry as one big evil empire, a machine deriving its fuel from the soul of whisky-man (much like the Matrix), but the reality is different, of course.  We like the ease of language the term affords, but it’s painting with a broad brush, and something I’d like to draw a bit of attention to.

Let’s talk first of local shopkeepers and sales folks.  Those individuals who are the purveyors of the malts we love.  They drive the local flavors by boosting or stalling certain sales, choosing the products that hit our shelves, arranging events and festivals, educating us when we visit and sharing their knowledge, secrets and tips.  Of course in some monopoly-driven markets these roles may be somewhat curtailed, but much remains the same.  These folks are the last stop.  Do they fall under the blanket appellation of ‘industry’.  Well, yes, but it’s a gray area.  I don’t want to get too deep into the nuance, lest I cast shade, but typically there is a set margin to be applied to what rolls in from the local agents and voila! Robert’s your father’s brother.  They hit the sales floor…you hit the sales floor.  Ultimately hard to fault these good people (more often than not friends of ours after a few visits), unless of course, they are the ones responsible for setting margins and are playing loose with the numbers and being dodgy.  Rarely the case, I would suggest.

Next up we have the local ambassadors and agents.  Ultimately responsible for bringing in the goods from the big distributors behind the brands or distilleries.  Here’s where things get a little harder to get a feel for.  But let’s look at this in two pieces.

First off, we have the ambassadors.  Charming (and usually good-looking) people on the frontlines, learning their stuff inside and out (we would hope), smiling and pouring you drinks at fests and shows (no matter how tedious…and trust me, it is, I’ve done it) and making the products known and approachable to as wide an audience as possible.  Do they have an agenda?  Of course.  They work for a company that has a portfolio.  It’s their job to sell that portfolio.  But here’s the rub, guys and gals…these people are human shields.  Really.  Whisky geeks, by and large, are good people.  But we’re all fiercely protective of the drink we love.  When things go wrong we question the closest representative we can target.  Do they set prices, determine allocations and such?  Of course not.  But guess who takes both barrels.  Our only real gripe here is how much stock you can put in the words of the guy or gal selling you something.  Caveat emptor.  But, hey…I’ve done it.  I’ve worked for brands that weren’t my heart and soul.  There are a lot of creative words to verbally sex something up even when you don’t believe it the new Ardbeg ’77.  Ultimately though…they are good and great people working in sales.  The enemy?  Hardly.

The other half of the this piece is the agencies.  Hmmm…very little visibility or accountability here.  I’m as in the dark as anybody.  What sort of slice of the pie they are taking is anyone’s guess.  And good luck finding out.  Lemme give you an example.  I recently found out that Aberlour a’bunadh is still retailing for just over £40 in many places.  That’s $66.80 Canadian at the time of writing.  So riddle me this:  Why is it $136.99 on shelves locally?  No matter how you spin it, it doesn’t make sense.  The dollar is low.  But so is the pound.  Production costs haven’t changed drastically.  Barrel prices are not much different than they were a few years ago.  Shipping…not a big change.  Anyway…time to start getting a little concerned we may be edging into that ‘enemy’ industry territory?  Maybe.  Tough to say.  A lot of people I know are in these positions and making a living from it.  They are good people.  Truly good people.  But I can’t speak to the finances.

Next up…the big companies.  The brands behind the local importers and agencies.  Entities like Diageo, Pernod, Edrington, etc.  Now THIS, THIS, I believe is where most of the vitriol is pointed.  Answerable to no one but owners, shareholders and the SWA and SWR (where applicable).  Is this where our prices are set?  Largely, I would imagine?  And where decisions are made to launch more and more products that shrug the ‘shackles’ of age statements in favor of names and stories.  Probably.  This level also has a lot of hired guns doing face time.  Love ’em or hate ’em, I won’t mention names here.  I would argue that this is where your animosity should largely be directed.  Not that I’m suggesting animosity is the recourse.  Just saying, let’s send our barb to the people that can ultimately answer back to them.

And finally, we have the makers themselves.  I don’t generally mean the Patersons and Dalgarnos and such.  (I think those folks sit in the tier above).  I mean the folks working at the homes of production.  The ones running stills and mashes, visitor centers and tours.  The ones working the maltings and warehouses and bottling floors and cafes.  The ones pouring samples on site, building and repairing casks, doing grounds maintenance and polishing stills.  The ones fixing boilers and spelling out washbacks and all the other heavy lifting that comes with it all.  These folks are darlings of us all.  Rightfully so, I’d say.  They’re not setting prices or creating marketing blurbs.  They’re making whisky and creating experiences.

Ultimately, no matter the level we look at, we’re talking about people.  I’d bet anything that I’d get along with any one of them if we met along the wood at some small tavern and shared pints.  Our agendas diverge, for obvious reasons, but none of us would be here if not for love of the game.  Logic tells us to separate business and pleasure, but this is one case where that is entirely impossible.  Having said that, we can still respect the man, if not the method, aye?

Yes, yes, this is a gross simplification, but the point wasn’t to draft pages of essay-like rigidity and dryness.  It was an attempt at humanizing something that gets distorted to the point of dystopianism sometimes.  I struggle with it myself from time to time.  As you’ve seen.

Cheers, friends.

(Note:  This little musing was triggered by a recent conversation with a friend of mine who works in the ‘industry’ and by a recent post the Sponge put up).

– C