[This blog post represents the views of @LondonLiquor and not necessarily those of the British Bourbon Society]
As CyberMonday draws to an end, it's worth reflecting on Whisky Exchange's unique Black Friday deal, which offered customers the chance to buy Glendronach 15 Year Old Revival, a delicious but currently discontinued whisky, for £79.95. While this was £30 above the previous price on The Whisky Exchange's website, it was apparently below the "current market price [of] £100-120".
Apart from winning first prize for sheer Black Friday chutzpah, what else can we say about The Whisky Exchange's deal? Marketing genius? Or a worrying sign for consumers that a huge online retailer has priced a product by reference to the 'market' price? Here are a few, somewhat unstructured, thoughts.
First, the Black Friday deal was a huge success. All 420 bottles had sold out by the end of the day. One Twitter user commented that it was a "very inventive Black Friday deal [...] Love the marketing the perfect antidote to all the Black Friday madness".
Second, whisky has undeniably become an investment with a 'market price'. Numerous online whisky auction sites have shot up to cater for this demand, including The Whisky Exchange's sister company Whisky.Auction. Grey market Facebook secondary trading groups were shut down earlier this year only to come back to life days later. Whether whisky's emergence as a commodity is a good or bad thing is a discussion for another day but the reality of the situation is that whisky has a 'market price', which might be entirely disconnected from the official RRP.
Third, it's absolutely terrible news for consumers if retailers start bunkering bottles to list at a higher price at a later date. Did The Whisky Exchange do this for their Black Friday deal? It's unclear. The website post states that "we have been fortunate enough to find a small parcel of stock". Whether this small parcel was sitting in their warehouse or elsewhere, who knows.
Fortunately, several online retailers have joined the anti-bunker brigade. Master of Malt's stockholding policy dating from 2013, but still very much in effect, is admirably clear in this regard: "Every single bottle of every single allocation that we’re given by every single supplier is sold directly to our customers. We don’t siphon any stock off for ‘directors’ personal collections’, we don’t hold onto any stock in order to list it at a later date at a higher price, we don’t submit anything to auction sites, and we don’t give preference to trade customers over retail customers". The policy concludes "not that there’s anything wrong with auctions – markets will be what they are – fill your boots. There is however something wrong if retail allocations find their way there without ever hitting the shelves and going through a customer first". Equally, there is something wrong with a retail allocation being bunkered and then priced according to the secondary market (even if at a discount to that price). If The Whisky Exchange has a publicly available stockholding policy, please tweet a link to @london_liquor.
Fourth, establishing a fair market price for whisky isn't easy as it can be thinly traded. Whisky Exchange declared the current market price of Glendronach 15 Year Old Revival to be £100-120. None of this particular whisky appears to have been sold on Whisky.Auction. Turning to Scotch Whisky Auctions, there have been multiple sales, with prices veering between £65 and £100 (plus 10% buyer's commission) in 2016. One seller currently has six bottles for sale with a reserve of £500. It will be interesting to see how many of The Whisky Exchange's 420 bottles find their way onto the secondary sites in the next few weeks and what impact this has on the 'market price'.
Fifth, the Black Friday deal highlights how rarity (perceived or otherwise) can lead pricing to go hayweather, irrespective of quality. Glendronach 15 Year Old Revival is a fantastic whisky but is it streaks ahead of the Glenfarclas 15 Year Old being sold on Amazon for almost £40 less last Friday? Certainly not.
So, where do we stand? The Whisky Exchange played a blinder, subverting Black Friday in style. But if RRPs go out the window, with bunkering and dynamic secondary market pricing becoming the norm for online retailers, it will be a sad day indeed for whisky drinkers.