June 21, 2024

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Premium whisky prices slump as weak global economy hurts taste for luxury

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The value of rare whiskies sold at auction has recorded the steepest fall in a decade other than during the pandemic, indicating that softening demand for luxury items is spreading to an asset class previously seen as a haven from volatile markets.

Investment bank Noble & Co said analysis based on about 8,500 transactions of “fine and rare” single malts, defined as whiskies selling for more than £1,000 per 700ml or 750ml bottle, showed a 7 per cent drop to £27mn in the 12 months to September compared with the previous year.

The decline follows a 19 per cent increase the previous year, suggesting that premium whisky’s “almost unblemished” status among the best-performing alternative investments was declining.

Edinburgh-based Noble & Co said the fall in the transaction value was the first “major drop” since 2012 — excluding a 51 per cent fall during the Covid-19 lockdown in 2020. Prices at auction fell despite the number of bottles being sold increasing by a tenth to more than 8,500 in the first 10 months of 2023.

The sales decline adds to evidence that whisky sales are not immune to the effects of a slump in demand for luxury goods as China struggles to shake off the economic impact of its faltering property market.

Diageo, owner of the Johnnie Walker brands, this month warned of weaker profits in the six months to December because of slower sales in Latin America and the Caribbean, while the Scotch Whisky Association this year said export values fell 3.6 per cent in the first half of 2023.

There were variations within different segments of the market with prices in the upper-end being supported by potential buyers preferring to hold on to their bottles rather than sell at lower prices. While there were “standout moments”, such as the £2.1mn sale of a Macallan 1926 bottle this month, the overall trend was for…

2023-11-27 06:46:08

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