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The once-stable fine and rare whisky market, long regarded as a haven for investors, is facing significant turbulence in 2024. According to Noble & Co’s latest Whisky Intelligence Report, the market is experiencing an extremely sharp downturn, with auction values and transaction volumes plummeting to new lows.
Dramatic drop in auction performance
The report highlights a staggering 50 per cent year-on-year decline in auction values for the second quarter of 2024, accompanied by a 52 per cent drop in the number of bottles sold. This marks a significant acceleration from the already challenging conditions in the first quarter.
Historically a peak period for high-value sales, May accounted for only 24 per cent of the annual value traded, falling far short of expectations.
This decline continues the challenging narrative of recent years. Noble & Co’s 2023 report noted that the whisky market had “taken a turn for the worst.”
Duncan McFadzean, head of food and drink at Noble & Co, commented: “If whisky investors and collectors were in choppy waters last year (2023), this year they’re in the eye of the storm and are battening down the hatches,” as reported by The Times.
Economic pressures shift market dynamics
Economic factors are playing a pivotal role in the downturn. Rising inflation and tightening household budgets have pushed consumers toward more affordable options. Bottles priced under £1,000 now make up over half of the total value transacted, reflecting a 43 per cent increase since last year. Meanwhile, the average price of bottles sold at auction fell by 19 per cent in the second quarter, with April and May experiencing the steepest declines.
“Top-end investors and collectors are very cautious about price and value,” the report noted. “While there is always room for record-breaking prices for the rarest bottles, the bubble in which fine and rare Scotch whisky has been traded for so long may have finally burst.”
High-end whisky takes a hit
Even the premium segment of the market, traditionally more resilient, is feeling the impact of the current economic climate. Bottles aged over 50 years saw unsold rates soar to 37 per cent in Q2, compared to just 16 per cent during the same period last year.
Collectors are increasingly reluctant to sell prized assets at heavily reduced prices, further exacerbating market stagnation.
Bottles priced above £10,000, typically sought after by international collectors, also faced significant declines. May recorded a dramatic 91 per cent drop in transaction volumes for this category. However, average prices in this segment saw a slight increase, suggesting that the decline is more volume-driven than value-driven.
The Macallan remains dominant but not immune
Speyside continues to dominate the market, largely driven by The Macallan, the iconic single malt owned by Edrington Group. However, even this market leader has faced challenges, with auction values dropping by 34 per cent from April to July compared to the previous year. Notably, The Macallan accounts for nearly half of the total volume decline across all distilleries.
Glimmers of hope
However, despite the bleak overall outlook, some brands have managed to show resilience. Glenfarclas and Port Ellen posted modest gains, offering rare bright spots in an otherwise struggling market.