Let’s just say it: whisky has become WAY too expensive

Image: Jason Goh, Pixabay

We’re being priced out, yet the industry is warning of hard times ahead. Did makers get too greedy and take whisky drinkers for granted? As profits slump, clearly something’s got to give.

An affordability crisis. Paycheck pain. Cossie livs. Unless you’re a billionaire, I’m pretty confident we’re all feeling the pinch right now. General inflation may have stabilised, but prices are still significantly higher than they were a few years ago. The UK’s Office for National Statistics has some useful data on this (as you’d hope). The average price of an 800g loaf of white bread was just over £1 in July 2020. Four years on and we’re at £1.39. That’s a 39% increase. The same measures saw a 1kg block of cheddar cheese (absolutely a household essential) climb from £6.95 to £8.07. That’s 16% – not the same as a loaf, but still significant. 

And the price of whisky has skyrocketed, too. The story of inflation is a well-known one. The cost of everything has gone up. Raw materials, casks, energy. Salaries for distillery workers too, hopefully. You don’t need to be an economist (I am certainly not one), to know that the financial burden of making whisky has increased hugely. Yet I don’t think all of the hikes we’ve seen are down to inflation. The ratcheting up of prices was happening long before the pandemic, the disastrous mini-Budget here in the UK. But instead of sighing and soaking it up as whisky lovers had been doing for the last decade or so, now we just can’t afford the bottles we’ve always loved.

Anecdotally I know this to be true from the whisky recommendation questions I get. “I’d like to get a really nice bottle! What can I get for under £50?” Good whisky definitely exists at this price point. Great whisky too! But when it becomes apparent that £50 (really quite a lot of money!) no longer gets you the age statement or distillery name expected, it can be disappointing.

There’s a lesson in this around ‘age not equalling better’ etc, etc. But there’s wisdom for brands, too. Stop pricing people out of something they love, especially when sales are starting to decline.

The numbers: The companies

Let’s look at the recent financial results that have got everyone all jittery. Diageo’s 2024 full-year sales were flat, with Scotch sales falling by 10%. This was largely due to a terrible performance across Latin America and the Caribbean. Here, CEO Debra Crew said the problem was down to its stocks being “more premium than what the market really was”. Or, to paraphrase, from trying to sell things at too high a price. Diageo’s big brands include Johnnie Walker, Buchanan’s and The Singleton, so this is interesting.

Over at Pernod Ricard, which owns Jameson, Chivas Regal and The Glenlivet, among others, its most recent major publication was in February when its organic sales fell by 3%. It didn’t provide a stand-alone whisky breakout, but on a brand basis, Chivas Regal plummeted 15% by volume over the six-month period, while Ballantine’s dropped 11%, and Jameson 7%. 

For Brown-Forman, overall 2024 sales fell by -1%, with its flagship Jack Daniel’s brand falling by 5%. That pulled the performance of its whole whisky portfolio down by 2%. 

As privately held companies, William Grant & Sons (Glenfiddich, Balvenie) and Edrington (The Macallan, Highland Park) don’t release detailed results, but profits at both are up in the most recent releases. Suntory Global Spirits is part of Suntory Holdings, which doesn’t publish in-depth reports for its subsidiaries.

The numbers: The prices

So it’s easy to see why, at this point, companies might not be keen to put their whisky prices up. The problem is, prices have been rising for some time. Long before the recent inflation spike, and far before the pandemic. It feels like a case of making hay while the sun shines. Distilleries have held the supply, and our thirst has fuelled demand. The question: have these increases been reasonable?

We’ve all got a ‘when I started drinking whisky, X cost Y’ story. For me, it is Highland Park 18 Year Old. I first encountered it in 2012 when I swear it cost £80 a bottle. Today it is listed on its own site for £140. That’s a whopping 75% increase.

The excellent Andre at Inside the Cask has gone further than relying on memory and anecdotes. Based on Amazon pricing, he has compiled a chart (do go check it out, it is fascinating) comparing the retail prices of both entry level and more premium single malts since 2013. 

The key findings? The price of entry-level bottlings (think: Glenfiddich 12yo, Talisker 10yo) have gone up by an average of 45% over the period. For the more premium bottlings like Glenfiddich 18yo and Aberfeldy 21yo? 74%. 

Let’s compare that to full-time salaries. In 2013, the UK average was £27,000. In 2023 it was just under £35,000. A 30% increase, if we ignore the impact of inflation. Of course, these are very top-line numbers that don’t take into account things like duty. But I think we can conclude that whisky most certainly has become way too expensive.

What next?

Firstly, it’s important to note that it’s difficult to draw global conclusions from local examples. Micro and macroeconomics are wild, complex beasts. But we all know how these price increases feel for us. Every time a press release lands in my inbox for a relatively sensible whisky with a three-figure price tag, I wince. Is it any surprise whisky sales are faltering? We’ve effectively been priced out of the market. 

Without getting on too much of an anti-capitalist soapbox, I’d wager that all the while shareholders are pushing for the maximum possible profits, nothing price-wise is going to change. Should we accept that whisky, as we knew it, has gone for good? I’d like to be more optimistic than that. 

We can hope for a market correction (I think this is likely to happen – just look at the Diageo CEO’s comments). We can also vote with our wallets. Indie bottlers tend to offer better value for money than distillery releases. We can campaign around duties, too. But I think, more than anything, we need to talk about it. Tell our bartenders, shop owners, suppliers, brand ambassadors. The message will be fed back. There’s a LOT of maturing whisky stocks right now. In time, it will need to find homes. Without more realistic pricing, we’re back to the bad old days of closed distilleries and a whisky loch from all the excess – and many actual economists and analysts already think one is forming.