Whisky supply

Especially during times when demand is very high, such as before Christmas, our stocks have large gaps and we have to wait for supplies. Accordingly, in our shop system, the bottle is marked with 'uncertain supply', 'no supply' or 'back soon'. We try to make the information as precise as possible, i.e. to write down exactly what we know. Unfortunately, this does not always work. On this page we describe why the supply is often so difficult to estimate and what role special bottles play in the issue.

A few years ago, one of our customers complained: He wanted to order a certain bottle from Whisky.de. However, we had to inform him that it was unfortunately sold out and that we would no longer be able to get a refill. He probably went elsewhere to get the bottle, because he was furious when we later had it back in our range. Of course, this case was unfortunate and the customer was absolutely right to complain. However, this is only partly our fault, because we simply couldn't know any better. Getting hold of this knowledge is particularly difficult because Scotland is mute.

After all, it's not like we can call Lagavulin and get status information on every single bottling. This is because most Scottish distilleries are small companies operating with only one or two handfuls of people. They lack the capacity to answer hundreds of enquiries. Since most of these few employees work in production, even they do not know what the supply situation is. Only the management has such information, which is of course difficult to get on the line.

More than a billion bottles of Scotch whisky are sold every year. However, only 3.7% of them are sold in Germany. So if one in 1,000 German traders sends an enquiry to a distillery, it's only about one hundred thousandth of the world market. Accordingly, it is not worth the effort for the distillery to respond to every enquiry.

So no information can be expected from Scotland in terms of whisky supply. Another source is German suppliers. These channel the numerous enquiries and can enquire directly with the distilleries. But an 'Aberlour' or a 'Lagavulin' is certainly distributed by a dozen wholesalers. Considering the small amount of whisky that finds its way to Germany at all, German suppliers also have little chance of getting information from the Scottish distilleries. Where the facts are not really communicated, a lot of word-of-mouth and silent mail takes place. And so misinformation can occur.

Typically, wholesalers try to determine the German market for the coming year. But wholesalers' calculations often don't work out either and they get less stock than they had calculated for. In some other countries, however, whisky is less in demand and the sales market is therefore smaller. The wholesalers in these countries then realise that they have calculated too generously and want to give away some of their stock again. So the bottles are diverted and belatedly end up on the German market after all. And this is how such a situation comes about, which our customer complained about.

In the past, we did not disclose whether a bottle would come again or not. Now we put the information we have into our shop and are correct in 80% of the cases. The whisky market is a seller's market, which means sellers can afford whatever they want in terms of price changes and information. For customers, then, it's 'eat it or die! And if you don't eat it, you don't have a bottle'. Whisky.de works a little differently than other sellers because we have our own warehouses. Our customers have - rightly - high expectations of fast and correct delivery. Since you often can't rely on the work of wholesalers for the reasons mentioned, we do our own intermediate storage there.

It gets more complicated with special bottles or very limited bottlings. For example, Diageo released special annual bottlings from the Port Ellen distillery, which has been closed since 1983, from 2001 to 2017. These 'Annual Releases' are of course very limited and old, as they were all distilled before the distillery closed in 1983. The warehouses had to be emptied bit by bit before they were demolished and so they released a batch of only about 2,900 bottles each year - for the whole world! Since the German share of the whisky sales market is only 3.7%, the German market is only entitled to about 100 bottles from a few bottles. In other countries, however, the price level is much higher. This means that even fewer bottles of Port Ellen come to Germany.

We are just one of many German whisky retailers. And when we don't get any of the bottles, customers are often disappointed - to say the least - and complain. The loudest shouters are usually those who want to resell. (Shouting is not an exaggeration, by the way, and our service staff are required to hang up without consultation in such cases and block the shouters in our data). In many cases we also have to deal with arbitrage hunters. Arbitrage deals are about making profits between two prices charged at different times. For example, we had offered the rarity Ardbeg Galileo for €72.90 in our shop. In one night, almost 1,000 bottles were ordered! The next day, the bottles could be found directly on Ebay for around 150€. Since there was a decent arbitrage profit to be made here, customers sometimes ordered 50 bottles at once. In the case of the Ardbeg Galileo, we acted according to the principle 'first come, first served'. Another option would be to sell only to regular customers. But what constitutes regular customers? That they bring in a certain amount of sales every year? Or that they order four times every year? Besides, with such limited quantities, it is impossible to give a bottle to each of our many regular customers. Collectors often spend a lot of money on their collections. If you only give the bottle to the best customers who generate the most turnover in the company, other even good customers will be annoyed - and rightly so. Using such a special bottle to acquire new customers is also tricky: who can guarantee that customers will stay and continue to buy from us? Regular customers, frankly, provide for our income and that of our staff, so it is also fair that they have a special stand with us. We have also held auctions with special bottles. That does a lot of technical, legal and organisational work. In the 'reverse auction' option, a bottle is set for a certain price and made a little cheaper every day. At some point, a customer finds the price reasonable and strikes. The price drops further and when the next customer is satisfied, he too buys a bottle. And so it goes on. What is important with this option, however, is that the right of withdrawal is excluded!

Summa summarum: No matter how you do it, someone always gets the short end of the stick because of the low stocks of special bottles. We hope, however, that we have been able to explain why we do not always succeed in calculating correctly.