Longterm impact of pandemic on the whisky industry
The lockdown in the UK has been going on for almost two months. Currently, the British government is gradually easing the restrictions, but the return to normal functioning will certainly not be immediate. The effects of forced isolation are also felt by the whisky industry - most Scottish distilleries have suspended or significantly reduced their operations, and some of the alcohol they produce is intended for the production of disinfectants. Reduction of the supply of Scotch whisky in 2020 will have a considerable impact on the market in the several years perspective.
Scotch whisky market after pandemic
According to the latest Scotch Whisky Association data, as many as 87% of Scotch whisky producers currently operate to a limited extent or have completely ceased production.
- The current situation will certainly cause a significant drop in the supply of Scotch whisky this year. At the same time, there is no indication that the demand for whisky is to fall proportionally. On the contrary, the available data show that the coronavirus has not negatively affected consumers’ interest in Scotch whisky - says Krzysztof Maruszewski, the CEO of Stilnovisti. - In a few or even several years, it may turn out that producers lack whisky at a certain age. We will probably see an even larger turn towards the release of whisky without its labeling (so-called No Age Statement), but at the same time a significant increase in prices of rare whiskies at the desired age – he adds.
Due to such low production, whisky distilled in 2020 will be much rarer, and therefore more desirable by collectors, which will make them willing to pay a higher price for casks from this year.
At the same time, the investment market for rare whisky editions has once again proved its resistance to economic downturns. Bonhams Hong Kong’s auction house shared an optimistic summary of the 'Fine and Rare Wine & Whisky' online auction. Daniel Lam, the director of Bonhams Hong Kong, noted the large share of young collectors in the auction - almost half of the bidders at the auction were under 40 years old. The new generation of whisky connoisseurs is increasingly active on the market, and their interest will further increase the demand for rare whisky editions in the coming years.