Tag Archives: value

The High Pricing of Whisky

Eric Asimov had a post on Friday that caught my attention. In it, he refers to a book by Robin Goldstein called “The Wine Trials”. In discussing the book, and a related article on Newsweek, he started speaking of the amount of money spent on wine, and how some use the excessive amount of money as evidence of the snobbery (and perhaps even classism) found in the wine world.

…in characterizing the behavior of wine drinkers, Robin is grounding his conclusions in economic and psychological studies that demonstrate a correlation between the pleasure taken in a product and the amount of money spent on it. He and his team wrote an academic paper, “Do More Expensive Wines Taste Better” (Warning: PDF – Kate), based on their findings, which is now available for viewing on the web site of a group called the American Association of Wine Economists.

As you may imagine, this piqued my interest, as the status and purpose of expensive wines likely runs parallel with that of whiskies. In discussing the whisky book, several people have spoken to me about the $70,000 bottles of Scotch, and the $200 glasses of Rare bourbons and Irish Whiskeys being sold and bought.

Goldstein’s conclusion of his paper – essentially that those who are unaware of the high price of the wine draw no greater joy from it – runs similar to my own beliefs in regard to the whiskey world. I cannot speak for the wine world, but in the whiskey the high prices found in the industry can be attributed to two distinct forces – the collectors and the marketers.

The collectors are a weird breed, from the little I’ve dealt with them. They collect everything from mini bottles similar to those found on airplanes, to the bottles of distilleries long extinct. As with most every collectible community, the rarer the bottles, and the higher quality of the state of the bottle, the higher price that they will bring. Additionally, you’ll find that sometimes the first, 100th, or even 1000th bottle bottled of a run will bring a high price. In Glenturret in a display, there’s a first bottle of a limited run being sold for twenty five thousand pounds.

The marketing of the high prices is not a new thing either. In the mid 19th century, it was cognac that was afforded the high prices, as it was a drink that was supposed to connoted status, both in palate and in class. When the wine crops in France were decimated by the Phylloxera vastatrix bug in the late nineteenth century, cognac became scarce, and the upper class moved to whiskies, both Scotch and Irish, to fill the void. Since that time, status has always been inferred upon the rarer drinks, the older single malts. The rarity of, say, a twenty year old scotch, would not have been the first purchase of the middle to lower classes when cheaper alternatives were available. The status of some whiskies has been fully taken advantage of by marketers ever since. To buy that twenty year old single malt now, according to some marketers, denotes taste and class, regardless of whether that whisky is any good.

The pricing of whisky continues to intrigue me on many levels, as it plays in with the psychology of purchasing and even the psychology of drinking (If you want to give a conniption to someone, added cola to an aged single malt – it screws with them on so many different levels).