In a significant market shift, the auction value of rare whiskies has plummeted, marking the steepest decline in a decade, excluding the downturn during the pandemic. This downturn reflects a 7% decrease in the past 12 months, as per a comprehensive analysis by Noble & Co, which examined approximately 8,500 transactions of fine and rare single malts. These whiskies, typically auctioned for over £1,000 per bottle, have suffered a notable drop to £27 million in value compared to the preceding year. This decline starkly contrasts the 19% increase observed the previous year, challenging the sector’s once sterling reputation as a high-performing alternative investment.
This first major drop in transaction value since 2012—barring the 51% fall during the 2020 lockdown—comes despite a surge in the number of bottles sold, which rose by 10% to more than 8,500 in the first ten months of 2023. The trend is a clear indicator that the whisky market is not insulated from the global luxury goods slump, a downturn driven in part by China’s economic struggles, particularly in its property sector.
The ripple effects of this economic softening have reached major players in the industry. Diageo, the conglomerate behind Johnnie Walker, has flagged an anticipated profit dip for the latter half of the year due to sluggish sales in regions like Latin America and the Caribbean. This aligns with reports from the Scotch Whisky Association noting a 3.6% drop in export values in the first half of 2023.
Despite the overarching downward trend, the upper echelons of the whisky market have seen resilience, with prices for the most sought-after bottles being upheld. Collectors appear to be clinging to their prized spirits rather than selling at depreciated prices. Even amidst a softening market, notable sales, such as a Macallan 1926 bottle fetching £2.1 million, have occurred. However, these instances are exceptions rather than indicators of the general market trajectory.
Additionally, the broader premium whisky market has experienced stagnation in bottle prices, despite a 17% increase in the number of bottles sold, further underscoring buyer sensitivity to price fluctuations. This sensitivity has been particularly pronounced in the market for bottles priced over £10,000, where the decision to purchase is driven more by confidence in the market’s future rather than immediate affordability.
In light of the challenging macroeconomic climate, industry specialists foresee little change in auction market trends. Nevertheless, optimism persists among some distillers who made substantial investments during the industry’s boom years. They maintain confidence that the allure of premium brands and the potential of new markets, especially in Asia, will continue to fuel growth. These distilleries, like the Holyrood Distillery in Edinburgh, which opened in 2019, believe that quality whiskies with compelling narratives can weather an economic downturn. The distillery reports continued growth in the premium spirits sector, even as concerns about Europe’s economic slowdown are mounting.
This mixed picture paints a complex landscape for the whisky industry: while premium whiskies have historically been a bulwark against market volatility, they are now showing signs of vulnerability in the face of broader economic pressures.
