Newsletter
6
February 2007
The forum
Forum special bottling:
Glen Garioch 1975-1990
One of the goals the forum tried to reach last year was a special bottling for its members. Quite a risky operation,
if the organizers are not professionals.
Fortunately, the company Jean Boyer, French pastis producer but also whisky
independent bottler gave us the opportunity to acquire a very special and excellent bottle.
A Glen Garioch, distilled in 1975 and bottled in 1990. This bottle has been unanimously acclaimed by all those who had a chance to taste it. It is a pity, but all bottles are sold and this whisky is no longer available. For those who did not have the opportunity to taste it, it will be presented during a master class during the Belgian whisky live in Verviers next month.
Bladnoch bottling: Port Ellen
As good luck never come singly, the members of the forum were invited by the Bladnoch distillery to join its forum members and acquire a fantastic bottle of Port Ellen, selected and bottled by Raymond Armstrong.
From time to time, Raymond bottles a cask for the members of his forum (and now also for those of whisky-distilleries.info), and it the result is very often a remarkable whisky at a very competitive price.
Whisky prices to increase: some worrying facts
A combination of worrying factors seem to indicate an unavoidable price increase in the following months.
Raw material
Besides this growth of the worldwide whisky demand, the industry has to face some supplying problems this year.
Bad harvest in 2006
The weather conditions were not good for an optimal maturation of barley in 2006. After a particularly dry and warm July, we had to face one of the coldest and rainy August in many years.
In the world :
The winter malting barley harvest was good in France and in UK, on both quality and quantity aspects. This harvest
was happily done before July. The spring malting barley harvest took place in July in Spain, France, South England
and South West of Germany, so it was finished at the end of the month. Quality of Spanish barley was rather poor
and quantity was disappointing as well, while France was happy with a better than expected harvest. The only problem
was a barley with high proteins. Same results in Slovakia and Hungary. 
Then August came...
The coldest and rainiest
August in many years. Normally barley resists quite good to humid conditions, but when the extreme conditions in
Europe in August destroyed a great deal of the harvest. Further, sprouting took place nearly spontaneously.
Countries
like Germany, Poland or the Czech republic reported harvest lost from 50 to 75%, and the barley which was not destroyed
was not suitable for malting, and could hardly be considered as feed barley.
Problem of the poor harvest in Europe is very important, as it will deprive the whisky industry of its raw material... Even importing from traditional exporter like Ukraine or Russia is not a suitable option. Ukraine reported many quality problems and the domestic demand in Russia has increased dramatically, and is thus not in state to export to Scotland.
To avoid too much maltings has to close down, or to work under the production capacities, the choice of producing malt from poor quality barley will probably be taken, which will have negative consequences on the quality of whisky produced this year....
Credits: Euromalt report (european association of malt producers).
In Scotland
Scotch whisky industry will certainly suffer from this situation. However, the area is classified amongst those
with limited damages according to the map below:
Despite all this, the price for malted barley has considerably increased during the last few months: about 70%...
This raises the question again: where does the barley used in Scotch whisky grow?
According to the SWA, a huge part
of the malt used to make Scotch whisky is produced in Scotland. If SWA says this, there is no reason not to believe
them. They know perfectly what is going on in the whisky industry in Scotland. They know about each aspect of the
whisky economy.
Could there be some confusion about the definitions? It is probably true 90% of the malt is produced
in Scotland, but where is the barley used to produce the malt coming from?
In other words, Scottish maltings produce
nearly all the malt used by distilleries, but who produces the barley? Considering the unbelievable increasing in
the prices and the fact Scotland did not really suffer from bad harvest, the most logical conclusion would be that
a great deal of the barley is coming from outside Scotland...
Maltings
The barley shortage in 2006 will obviously have an influence on the maltings. To understand this effects, it is important to understand the process of making whisky. For those who are not very sure of how whisky is made, I recommand to read or to reread the page dedicated to the making of whisky on the site.
Malting and distilleries
Producing their own malt from barley used to be one of the traditional tasks of the distilleries until the 1960's
or 1970's.
Things changed for some economical reasons, and nowadays none of the distilleries in Scotland produce
all the malt they use in the distillation process. There are a few exceptions (like Laphroaig, Springbank, Highland
Park or Bowmore) where about 30% of the malt is produced on the distillery's malting floors. May be an interesting
tourist attraction, but apart of those exception, nobody produces its own malt by now.
Each distillery buys its malt at a malting, often following the precise specifications of each distillery.
Maltings concentration
In the course of the years, the great groups have built their own maltings for their own needs, and decided to sell their malt to distilleries not belonging to the group as well. Very often malt is exchanged for new-make spirit, needed for blending. And no doubt that smaller maltings had to close.
Diageo is the greatest spirit group in the world and owns 4 big maltings in Scotland: Port Ellen, Glen Ord, Burghead and Roseisle.
Of course, Diageo is not the only great concern to own maltings. The group is mentioned here as an example, and the policy of other groups is probably comparable to Diageo's. In the current hard times, where barley is rare, the policy of those groups is first to serve their own distilleries in priority, and then think if other distilleries can buy from them, obviously at much higher prices... And if one consider the meaningful increase of the demand of whisky beside the barley shortage...
Consequences on supplying
Could anybody imagine that a significant increase of the prices of raw matters could happen without consequences on supplying at the distilleries, and on rather short term on whisky supplying for the whisky lovers we all are? If other price increases (petrol for instance) are taken into consideration as well, together with some local problems like those recently reported on Islay, regarding supplying the Island with fuel (needed to heat the stills), there is no room left for optimism regarding the price of whisky in the (near) future.
Consequences on the prices
The increase of raw material prices will have an influence on the price the consumer will pay at his retailer
or in the supermarket.
Fortunately, the price of raw material represents just a part of the price of the whisky we
buy, and this gives us good hope that whisky prices will not increase in the same proportion as those of malt (up
to 70%).
Anyway, such an increase would have as immediate consequence that most of whisky drinkers would look at
other spirits. May be nice perspectives for Cognac and vodka would accelerate its amazing progression.
Prices of
raw material very often depends on economic or natural circumstances which can change quickly. Considering the price
of petrol which was announced to reach 100 dollars a barrel, the only fact this winter was warmer than expected was
enough to lower the prices.
Who knows, may be a good harvest this year could make the situation better. But it is
a general rule, passing an increase in costs on to the customer seems to be much easier and is always quicker than
passing a decrease... Wait and see, and the next years will tell us if this pessimism is justified, or if we are
just facing a temporary problem. Economic life is made from cycles , with ups and downs. Let's hope we have reached
the bottom...