Malt Advocate Blog Readers Weigh In On Rising Scotch Prices

John Hansell has asked readers to delve into why Scotch whisky prices are moving higher so much faster than inflation. There are some very interesting replies. The influence of supply and demand trends, and also rising fuel and warehousing costs, are discussed. Also the cost tolerances of the elite buyers. Some highlights snipped below, but visit the original as it is a very interesting and informative read.

Scott: What has changed drastically is not only the prices distributors charge but the deals are almost non existent anymore. Just last year buying such things as Highland Park and Macallan in bulk would lead to a drop of about 10 dollars (after mark up) per bottle. Now the best deals they offer only take off 2-5 dollars off the bottle cost. It’s not only The Edrington Group that has changed, Morrison Bowmore products (Bowmore, Glen Garioch and Auchentoshan) have also removed such deals. These products used to be easy to keep under 19.99 a bottle, now it’s rare to see them under 24.99. Now if the deals are no longer offered because of distributors or because of the distilleries I can not say.

Brian: My hunches are that demand for the upmarket brands is stable or increasing while supply trends down (supply and demand), and that the drinks companies are using the added revenue from the upmarket sales to subsidize the downmarket brands (Robin Hood effect).

David: In the case of Jameson, I know where some of the money is going. Pernod Ricard reported sales growth of 21% for Jameson but only 15% volume growth (2007/2008). The previous year it was 18% and 11% respectively. Inflation accounts for some of that but the rest is Pernod Ricard edging the price up to the benefit of its bottom line.

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~ by whisky1 on September 28, 2008.

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