Has Drinking Whisky become too expensive?

Executive Summary

For many years, spirits companies and consumer trends analysers have been telling us that “we are drinking less but drinking better”. This often went hand in hand with “premiumisation”, as the theory and the data seemed to imply that the consumer was trading up to a more expensive drink on average. Of course, retail prices for drink consumed can rise from mix consumed (drink better) but also other factors such as distributor margins increasing, currency movements, tariffs and duties rising, Minimum Alcohol Pricing, underlying higher prices from the distiller (inflation anyone?), or a changing SKU mix launched into the market. How we can ever be certain that prices were rising because we were all drinking ‘better’ was never clear to me. Whisky has become more expensive and some products are increasingly out of reach for many consumers. Economic pressures are impacting volumes of all spirit drinks globally and it will be interesting to see how the cost inflation from raw materials and inputs (in the last few years) for brown spirits roll through costs on shelf in the coming years as the liquid becomes mature.