The value of rare whiskies sold at auction has fallen this year, according to a new report which says a “bubble” in an asset class popular with wealthy investors may have “finally burst”.
Bottles of whisky sold globally for over £1,000 fell by 34% in volume and 40% in value in the year to October 1.
The figures mark an acceleration from last year’s 7% decline in value, despite a 10% increase in volume. A weakening global economy following a period of high inflation had dampened demand for premium spirits.
Interest in rare single malts surged in the years of ultra-low interest rates and quantitative easing that followed the financial crisis, which encouraged investors to seek returns in alternative asset classes.
But the post-pandemic period of high inflation and high interest rates has eroded demand for expensive collectibles like rare whisky. The bubble in which fine and rare Scotch whisky was traded for so long may finally have burst.
Producers are “mispricing” the most recent, post-2020 releases, while older bottles that were reasonably priced at launch are still “doing well,” albeit somewhat below their 2022 highs.
The industry has hit a wall of cost-of-living – volumes have plummeted and we’ve seen one profit warning after another from the majors.
In recent years, the focus of demand has shifted from Asia to the US, where a strong economy has driven demand for premium whiskies. The threat of US sanctions under Donald Trump could be offset by a market revival in Asia, where Hong Kong has cut tariffs, but economies there have also shown signs of fatigue, including in China.
