Falling sales mean falling prices? Maybe not...

@OdysseusUnbound, when the whisk(e)y bubble bursts, and I think that it will, probably accompanied by global financial depression, the fall in prices is likely to be quite variable according to product category. The truly rare stuff will remain truly rare, and while some of the silly high prices for top products may come down slightly, they will remain extremely expensive for what they are. Most of those high price products will probably stay at about the same prices. The low profit margin products will decline in price only slightly to accompany lower ongoing production costs. Where I think we will see the greatest price drops will be on the middle shelf products, which have large profit margins and are benefiting currently from the boom. Those could well have price declines in the 30-40% range.

But what does any of this matter if the LCBO is still setting your prices artificially high? Some Canadian provincial governments are hostile to alcohol consumption as a social policy against which the average, say, Ontarian, has virtually no say.

What's the spirits duty based on—ABV or retail price? I see they put it in context by describing the tax breakdown "an average bottle sold at £12.77," so cheap blends.

Anyone who's really interesting in digging into the annual trends of scotch whisky production & exports measured in both volume and value should read the eye-opening and very nerdy analysis posted ~annually by the Diving for Pearls blogger. Here's the starting point of the 2017 series: divingforpearlsblog.com/2017/03/…

@OdysseusUnbound Wake up! Wake up! You were dreaming. You had a smile on your face and you were giggling. Now go back to sleep and have the usual nightmare about the future of Scotch whisky. The one where you wake up in a cold sweat crying like a baby. We've all had that one.

@MadSingleMalt Thanks for the link. That is a wake-up call about the misconception we have about "The Boom". For me, I realized that many conjectures I did for the future are already here and in fact were there before I did those conjectures. Like the USA drinking more American whiskey (not only Bourbon) and less Scotch; like "The Boom" leading to overproduction leaving stocks for aging; like Irish whisky becoming a bigger player (everybody knew that, but to that extend?!)

What really shock me after that is how greedy is the industry!

@Victor I don't think the provincial government of BC is hostile to alcohol consumption as a social policy any more than they are hostile to gambling which they advertise the hell out of. They have been ignoring the massive amount of money laundering that goes on in the big casinos for years because they are getting a huge share of the proceeds. Alcohol, gambling and tobacco (and pretty soon cannabis) provide a massive amount of taxes for governments that massively overspend and have massive debts. I believe they are addicted to the proceeds of addiction.

@OdysseusUnbound I agree with @Victor in his analysis. The point I would like to add is that we may see the come back of older whisky as part of 10 yo, 12 yo, etc., sooner than expected. Probably in less than 10 years and even 5 years (is that some wishful thinking?). Anyway, even without a decrease of price, if I have an increase of quality, I will be happy.

@BlueNote, I should have said "hostile to the consumption of high alcohol products." That is what I really meant to say. This I do believe, especially about Ontario. I strongly believe that a large component of the LCBO's pricing for whisky is the notion that "those dumb drinkers can't handle alcohol as it is, so let's make the prices for the higher alcohol-content products difficult to pay in order to discourage drinking it."

@Victor I don't think you can atrtribute any rationale, whether rational or not, to the LCBO. They have been audited and have been found to not get the best prices possible despite being the (or almost the) largest single buyer in the world. If it was just greed for revenue they would pay the least and sell for the most.

If it was about curbung alcohol use, the bottom shelf stuff would cost more.

There is no reason... just folly.

@MadSingleMalt, those are some very interesting graphs. This is, of course, a study of sales trends of Scotch only. It is extremely noteworthy that it was third quarter of 2012 when prices for Pappy Van Winkle and Buffalo Trace Antique Collection whiskeys went vertical, multiplying in price as much as several hundred percent in a year or two. This period coincides with the period of the topping out of the charts for Scotch sales, etc., and would seem to reflect a collective shift in peception of relative value by some big money. The only way I can explain multiple consecutive years of Pappy Van Winkle prices above $ 1,000 per bottle on the secondary market is that there must be big money which continues to be willing to pay that price for it. It would seem that a lot of people have decided that Scotch whisky is overpriced.

@OdysseusUnbound I think globally, If the industry continues decreasing quality and increasing prices while inctreasing overall volume they will hit a wall where people who like quality products will turn elsewhere and people who want cheap booze will go with cheaper stuff.

Then there will be a glut. Many distilleries may be closed. prices may stagnate or go down. Because of the glut they will keep stuff in casks longer. Aged whisky will be more affordable. People will develop a taste for older whisky. New distilleries will open and capacity will increase. Older stock will dwindle, a new concept of NAS will gain ground, and... wait, I've seen this somewhere...

@Nozinan And we'll find out that there really is a Tooth Fairy and a Santa Claus.

@BlueNote Of course, why wouldn't we? My daughter is making a fortune off the tooth fairy...

@Nozinan And your dentist will soon be making a fortune off your daughter.

@BlueNote Soon? Not the dentist, the othodontist. And now. And How!

One of the most intriguing—and optimistic, in its own way—spins I've seen on the NAS phenomenon is that it's the trick producers are using today to sell their whisky while it's still young, to avoid a supply glut and industry crash when demand does ultimately falter.

@MadSingleMalt But they rampled up production to feed the demand..they will have a lake of young malt...