The answer is clearly certain kinds of alcohol. You can’t make scotch, bourbon, or bordeaux in China. You may be able to make wine or whisky, but not scotch.

I own a liquor store in Kansas, and we have only two large liquor distributors for our state. One is Standard, started and owned in state. The other distributor was purchased by Glazer’s.

In the past year, we have had to deal with multiple month’s out of stock problems on the following whiskies, in order:

Old Charter. Out for a month.
W.L. Weller. Out for over two months.
*Gasp* Maker’s Mark. Out for a month.
Old 1889 out for a month and counting.

When Heaven hill burned, supply of their products was not noticeably impacted. Evan Williams went up a hair in price, but that was all. The last great price hike was the tequila scare some years ago.

How can a distributor run out of Maker’s Mark? They advertise that product! You don’t spend any money on advertising a product if it’s in high enough demand that you will run out of it!

I’m not sure if the Kansas out of stock problem’s were related to crappy management from Glazer’s (As Old Charter comes from the other distributor) and are therefore not indicative of wider supply problems in the country or not. However, combined with my observation of the price of scrap metal (China) Concrete (China) and Gasoline (China) I suspect that producers are sending every spare drop of their whiskies to the Far East, to quench that middle class. It’s a supply and demand issue, in my opinion.

If you could sell all your whisky for $300 per case in China, why would you bother selling any in Kansas for $100? Ever see Four Roses Bourbon any more? It was the top seller in the U.S. for over 20 years. They still make it. They just don’t bother selling it here.

I think my out of stock problems were indicative that Buffalo Trace is shipping every drop they think they won’t sell domestically over-seas, running a little short on a few things here, and our distributors jacking the price up as a result. I think Maker’s followed suit. We’ll see.

About those WhiskyFest prices: Yes I agree the prices have gone up a lot. More than I would want them to. Our major cost is the hotel (you would faint if I told you what they charge) and I think our hotel costs have gone up about 250% over the same period. That’s just one example, but I hope you see my point.

Still, $120 is in line with other events, like the Scotch Malt Whisky Society events here in the U.S.

Companies require to pay for the increased costs from their whisky operations now, irrespective of the costs and years when it was distilled. I have noticed significant increases this year, led primarily by the Diageo malts – prior to this, I was able to price the classic malts on the first rung of my pricing ladder (with the exception of Lagavulin 16yo). However I have found that now I have them priced on the third rung.

There will be the argument that the age of the malt in the bottle is older eg. Glenkinchie 10yo instead of 12yo, and I keep hearing rumours that other bottlings eg Balvenie 10yo are being discontinued in favour of an older version (Signature) with a consequent increase in price. I’m not sure what the position is in the USA, but in many outlets in the UK, including major supermarket chains you can only purchase the Macallan Fine Oak version.

Supply and demand are clearly a factor and I’m sure that price is being used to try and balance the equation. In this respect I have some sympathy for the producers, I have found myself having to raise the price of certain malts eg Port Ellen, because I know if I sell them at a normal mark-up, they will be targeted by malt connoisseurs as being a “bargain”.

Finally, as a seller rather than a collector of whisky, it seems to me that the producers are no doubt encouraged by the high prices paid by consumers for the specialist, one-off, anniversary, limited-edition bottlings. The vast majority of these go into dusty storage, to be sold on at a later date at a premium, therby giving further encouragement to the industry to keep raising prices.

I doubt there is any market where prices are not going up – I think this is the basic supply/demand issue – They key issue is whether the stages of cost are varying to any substantial degree – Do importers and distributors in Sweden take a different cut then those in the U.S.? – What is the rate of increase of cost at each stage from producer to retail sales – I think this was your original question. I suspect the largest impact is with producers. Figure Glenmorangie repackaging their 12 YO Finishes and then increasing the price significantly or Dalmore discontinuing their 12 for a 15 and, I suspect increasing the cost significantly (the existing Dalmore 12 probably has a lot of 15 and above in it anyway) – These are producer decisions and importers and distributors while varying to some extent are not the major drivers.

the prices go up an up because they can. It was said that other spirits are not moving up in price as whisky does. That is true. Cognac for example. In comparison to whisky cognac is dead as far as the demand goes. Even in France more whisky that cognac is being drunk nowadays. As nobody cares for cognac there is no move in prices and if it is more downward tha up.
But whisky is a bonanza. It`s boomtime mates! It is amazing what people are prepared to pay for whisky. And the producers spurr the galloping horse on and on. It will die eventually, emerging markets or not.

The cost of producing whisky has risen. But not as dramatically to justify what the producers ask for their spirit just because they can.

They claim that they have to ask higher prices because what they sell has to cover the running costs.
The matured spirit has to pay for producing the new make. And of course there has to be a price component which covers the costs of warehousing an maturing the casks.

But is that true?

It is not. Only a few years ago when you bought a 12 yo whisky you had a vatting in your bottle that was much older and the age detemining casks in that vatting were the minority. Means that a standard 12 yo bottling consisted mainly of cask much older and up to 20 and some cask even more years. So the heart of a 12 yo was in average 15 or 17 yo ore more.

Today when you buy a 12 yo whisky it is just what you get a vatting of 12 yo casks with some 15 at the most 17 yo casks thrown in. The older casks that were used in years gone by to rise the level and quality of 12 yo standard whiskies are today sold as whiskies of their peer group. e.g. 15 17 18 or 20 yo expressions.

If you watch the figures the drinks giants puplish quarterly you see where the rieses in price comes from and where the money goes.
The sell much whisky in the emerging markets but they do not sell cheap there.

The prices go up because the producers have to satisfy greedy share holders.
It is true that they have costs not doubt and they invest huge sums of money.

But they let us pay for all that.