Research by financial analysts Noble & Co has reported a dip in the whisky auction market, particularly with regards to old and rare whisky.
The Edinburgh-based firm recently released their seventh Whisky Intelligence Report, in which they survey the auction market and analyse ongoing trends. Data from the first four months of 2024 brings to light a struggling secondary market for fine and rare Scotch.
Overall auction volumes were down 30% compared to the same period last year, continuing a trend from the previous quarter.
Evidence from bottles proved £100 to £1,000 perhaps showed the greatest evidence of this decline. While average prices remained steady, the volume of bottles in this bracket was down 29% compared to last year.
Given that this bracket made up 90.4% of total bottles traded during this period, it’s clear to see how this gives an indication of an unsteady market.
The next price bracket, bottles sold for £1,000 to £10,000, shows equally worrying signs. The volume in this area was down 41% on the previous year. April in particular was a tough month, showing a 53% drop in volume vs April 2023. Noble & Co suggest that this bracket is largely affected by reserves not being met.
Interestingly there was also no significant increase in average selling price in this category during the period.
Finally, the £10,000 to £100,000 bracket followed a similar trend of reduced volume. Even though this category’s average price increased for the period (up 27%), the report quickly adds that this fact isn’t given too much significance because of the low volume of data.
In terms of brands, The Macallan remains king of the secondary market by a considerable margin, accounting for over 40% of lots sold at auction. For context, Springbank was the second most sold brand but only made up around 10%.
However, sales for The Macallan are down in comparison to the same period in 2023. There was a drop in volume of 48.3%, which amounted to over 4,000 fewer bottles sold. Additionally there was a 10% drop in average selling price for Macallan.
Other brands that the survey monitors - including Rosebank, Daftmill, and GlenAllachie - also saw a decline in volume of sales. Daftmill’s sales saw the least sharp fall, however the average selling price fell from £253 to £203.
Even brands that performed well in this quarter have an caveat attached to their data. Both Glenfiddich and Glenfarclas showed growth in terms of value and volume respectively. Glenfiddich’s growth of 97% made them the fastest growing distillery by auction sales value. Continuing their increasing sales from the previous quarter, Glenfarclas’ sales volume rose by 59% compared to Q1 2023.
However, the report points out that the figures behind these percentage increases are still small. For example, there were 408 recorded sales of Glenfarclas, compared to 4,338 bottles of Macallan. Despite strong growth for these brands (and for a few others, such as Bladnoch), the data doesn’t necessarily suggest overall good market health.
So what are the reasons for the overall downturn in the secondary market? The report highlights two main factors.
The first is the wider economic climate. High inflation and interest rates has changed consumer behaviour. People are generally more selective about what they’re spending their money on. This has led to weaker sales in the primary market, which has the knock on effect of impacting secondary sales.
Another reason given was the large volume of new releases on the market and the quantity of bottles of each new release. Both of these factors dilute their impact in the secondary market because there is simply less demand for these whiskies.
It’s not all doom and gloom for flippers. The report hopes that 2024 will be a year of recovery for the market. Even though the evidence doesn’t yet suggest any changes, inflation is projected to return to lower levels and interest rates expected to fall which will hopefully see an increase in spending.
Both value and volume saw increases in March and April compared to January and February. While this is a typical seasonal trend (January is consistently the annual low for sales in both the primary and secondary market), it does offer reassurance for the rest of the year.
So don’t panic, those dusty old bottles you’ve got hidden away aren’t suddenly worthless after all.
