I’ve been receiving a little bit of flack over how I do my valuations of whisky, with a lot of customers moaning about receiving  lower valuations than they were expecting. So, this little piece is on the art and science of valuing alcoholic products.  More importantly, it’s about valuing your prized whisky collection.

Why Trust The Big G?

But just to make sure that you know that I’m not just a fly-by-night valuer. I’ve had over 25 years’ experience in the retail and wholesale liquor trade.  That means buying and selling wines and spirits from and to a diverse range of customers.  Also, during that time, I’ve been a whisky importer, mainly with Scottish based distilleries and private bottlers. Fascinatingly, I’ve also had experience as a chief auctioneer and valuer at Oddbins Wine Auctions for over fourteen years! Basically, telling people what their prized alcoholic possessions are really worth. And that at times, has not been easy.  Hence, my opening comments about receiving a bit of stick over my valuations.

So How Does It All Work?

Valuers, like auctioneers, are really caught in the middle.  Buyers want the cheapest price they can get, sellers on the other hand want the highest price they can get.

Buyers scour auction markets looking for collectibles at bargain basement prices. But if that elusive bottle is their ultimate dream purchase, they will bid up, as they must have that unicorn.  For an auctioneer, bidding wars are encouraged.

So, you can see how people like me get caught in the middle.  And sometimes no-one is happy.

The common complaint from a seller then, is “why is the valuation lower than what I can find in a retail shop.”

Good question!

Retailers buy either through a wholesale supplier or at auction, they then need to put a margin on it and then GST.  They need to cover their costs plus a little in their pockets, so they too can eat.

But for the buyer, that means they can walk into a shop or purchase online and you are almost guaranteed of getting it.

For an auction house, it’s all about open competition.  What will the bidder be prepared to pay for a particular item?  It can go really cheap if no one is interested, or it can go crazily high, when there is massive demand.  Just take a look at current Springbank pricing in the current auction scene.

And here’s a little trade secret.  My time in the business has taught me that auction starting values do coincide with wholesale trade prices.  So that gives me a benchmark when it comes to valuing a product.

My Word Of Warning!

You cannot sell alcoholic beverages without a liquor license.  It is illegal.  That’s why you have to sell through somebody who has one…be it a retailer or an auction house.

And are you telling me that a retailer is going to buy back a product at full retail price?  You’re kidding me.

And that’s why I start my valuing by using auction prices, as they tell me what the buyer is actually prepared to pay for that prized bottle.

A Little Anecdote.

Back in the late 1990’s a certain very large drinks giant couldn’t sell a new range of duty-free malts.  So, they offered them to my boss, Mr Martin Baily.  We were selling them at $90 a bottle.

We had loads of them.  And our customers were scoffing them down quite happily.  They were released regularly until 2005.

By 2013 they were fetching around $400 to $600 a bottle.  Today, at auction from $800 for the lesser distilleries and up to $4000 to the superstars.

So, the lesson.  If you buy at retail.  Just be patient.