Whisky flipping. It’s the ultimate physical response to that vexatious question, “How much is this whisky worth?” Nevertheless, the answer to the question is pretty simple: A whisky is worth whatever someone is prepared to pay for it.
One of the most contentious and ire-inducing phenomena to appear in whisky circles in the last 15 years has been the rise of the whisky flipper. Not familiar with the term? It’s applied to someone who obtains a whisky at retail price (typically when the product is first launched or made available) and then, within a short timeframe, re-sells it on the secondary market at a significantly higher price. More often than not, the re-selling occurs once the original retailer’s or supplier’s stock is sold out, thus cashing in on a product that is no longer available through the original channels.
A classic example of whisky flipping is those that queue up at the distilleries on Islay during Feis Ile for the festival bottlings. They buy their two bottles from the distillery and then, once the bottling is sold out at the end of the day, they sell one or both of their bottles the very next day for a much higher price.
There’s another name for this identical practice in other circles: Scalping. Scalpers are generally viewed with disdain and the name has a strong negative connotation. For reasons unclear, those that carry out such activities with whisky have avoided having the less-wholesome label applied. So why do we call these people whisky flippers? If the practice annoys you, why not start referring to such folks as whisky scalpers?
An immediate question or issue that arises from this – which some readers may already be indignantly thinking – is that, in truth, nothing sinister or untoward is taking place here. Whisky flipping isn’t illegal per se – notwithstanding that selling whisky without an appropriate licence is against the law in most (all?) states and countries. We live in a commercial and capitalist society, and there is no moral or legal barrier to someone purchasing something at Price A and then re-selling it at Price B. But the heart of the matter here – and the thrust of this piece – is the intention and motives of the original purchaser. If {B – A = C} and the value of ‘C’ surprises/annoys/disgusts you, then bear in mind the truism we stated above: A whisky is worth whatever someone is prepared to pay for it. Whisky flipping simply capitalises on that – it’s commercialising someone else’s value.
To be clear, no one is begrudging the good folks who buy a whisky; stick it in a cupboard; then forget about it or never get around to drinking it, and they sell it years later down the track after seeing it appreciate in value. Whilst they may serendipitously make good money on the transaction, their intent was never untoward or underhanded. Flipping, by definition, is buying then selling on within a short timeframe. The real crux of the matter is peoples’ motivation and intent. Most folks in the whisky community believe that whisky is for drinking. If you deliberately buy up quantities of a whisky at its first release (thus exacerbating its scarcity) with the expressed intention of never drinking it, but purely with the intention of profiteering from it via a quick, short-term turnaround, then that is scalping – and many drinkers will take a dim view of your actions.
There’s an associated angle to this discussion which also needs to be understood: There is much negativity and anger vented in whisky circles when a retailer or distillery releases a whisky at a price that “Joe Public” deems to be excessively high. Typical examples are the Feis Ile releases by the distilleries on Islay; anything by Ardbeg; retailers selling Pappy van Winkle; and in Australia, the special releases by Sullivans Cove. (Or most other Aussie distilleries for that matter). But here’s the rub: How would you feel if you were a retailer or distiller and you sold a product for $200….only to see it re-sell within a week on the secondary market for $500? How much is the whisky worth? Well, clearly, it’s worth $500 – because that’s what someone readily paid for it. Little wonder, then, that the next time there’s a similar release, the original retailer or supplier simply charges $500 from the outset. And this, ladies and gentlemen, is why the retail price of whisky has increased exponentially in the last few years. If the market will bear the higher price, then why shouldn’t the original retailer/supplier get the benefit of that increased price? Do not begrudge or criticise the retailer for simply charging what they see the market is evidently willing to pay.
The mechanics and economic forces of supply and demand will continue to play out and govern much of what occurs, with whisky flipping coming along for the ride. Whisky was comparatively cheap 20 years ago because we still had the glut of the “whisky loch” from the 1980’s downturn sitting around in warehouses. Whisky is expensive today because the category has exploded in popularity and the distilleries were caught napping at the turn of the millennium and the first few years afterwards. The distilleries went into overdrive from 2009 onwards with many ramping up to 24/7 production in anticipation of emerging markets in Brazil, Russia, India, and China. Many distilleries embarked on expansion programs from 2013 onwards to increase capacity. If those markets do not materialise or if the whole category loses popularity (as has occurred repeatedly over the last two centuries), we may again find ourselves with a whisky loch in the near future and prices will drop as the players seek sales and revenue in a shrinking and challenging market.
But the big difference between the game now and the game 20 years ago is the massive increase in avenues available for re-selling. It has effectively facilitated whisky flipping. Ebay, e-commerce, social media whisky groups, whisky websites, online auctions, Facebook trade/swap groups and the like have created (and generate) a secondary market with global reach and mechanisms lightyears ahead of what previously existed. And this is the domain in which whisky scalpers now readily exist and operate.
So what can you as a concerned consumer do? You can choose to boycott the secondary market or you can refuse to pay “inflated” prices that help fuel the ever-developing cycle of retail mark-ups. Do not feed the beast. That will give you a clean conscience and a warm, fuzzy feeling, but it won’t actually change anything. (And you’ll probably miss out on some good whisky!) It would take the collective will and action of the entire global whisky community to do likewise to affect any change. Good luck with that.
A more practical action is for the whisky community to stop referring to the practice as flipping. Flipping sounds buoyant, vibrant, and fun. There are even TV shows that take a lighthearted view of it all, such as “Flipping Houses”, “Flipping Out”, “First Time Flippers” and many more. Call it out for what it is: Whisky scalping. Flippers brag about the profit they make, and boast of their intentions. Scalpers do not. There’s a reason for this and it’s because no one likes scalpers.
In the meantime, do not vent your outrage or frustration at the retailer or distillery who raises their prices to charge what the market will evidently bear.
Cheers,
AD
P.S. On a slightly related note, and if you’d like to read a good ol’ fashioned whisky rant, you might also like this article: A rant: Is this whisky worth it?
While I have bought and sold a few bottles, most of my activity on the secondary market is buying at auction, and with few exceptions, below retail. I am not sure whether this supports flipping or not, but auctions are not solely inflating prices – there are also options to save money…