Client Update - June 2025
As we reach the halfway point in the year, it feels like a turning point for the Scotch whisky industry as well. The chaos and uncertainty of Trump’s tariff extravaganza has been tempered into something more manageable, and nascent trade deals with the US, the EU, and particularly with India seem to have secured some stability for Scotch whisky.
We have seen several Bulk Trade Bids returning to the platform, and sufficient demand to begin purchasing new make spirit again. We have recently welcomed Tomatin distillery to the platform for the first time, a distillery with an excellent reputation amongst blenders whose single malts have also been experiencing a surge in recent years.
A frequent conversation I have had with clients over the recent months has been around our stock valuations. We post valuations of the stock you own based on a blend of data from our own trading platform along with prevalent sale prices in the wider whisky industry. However, in the current market with an excess of sellers, many prices being offered fall well below our valuations, and some clients are concerned that the values shown on their account do not match what they can immediately sell for with one click.
The first reason we do not use such “mark-to-market” valuations is a matter of volume. Traditional stock exchanges which have high volumes of trading on every security they offer can mark the valuation of a security as being whatever price it was last sold at. However, in a market like ours, with over 300 whiskies, each of which will experience less than one trade per day, such a system will lead to erratic jumps in reported value.
The other reason is that our valuations also serve as a guide to pricing for industry buyers as well as clients. When a buyer decides to submit a bid for client-owned whisky, they will typically use our valuations as a marker to determine their bid pricing. If we lowered our valuations to reflect only the trading going on in the platform, then the value of Bulk Trade Bids being placed would also drop commensurately, and clients who do not wish to sell at the low prices currently available in the market would be robbed of opportunities to realise the full value of their whisky. In essence, our decision reflects a long-term view of the whisky industry, rather than the day-to-day view adopted in the stock markets.
Recent activity in Bulk Trade Bids has been encouraging, and reflects the fact that the industry is willing to pay well above our valuations when they bid. 3 out of 5 bids this year have received counter offers, despite the fact that the original bid was above our valuation price, and the only bid to be submitted below our valuations was unsuccessful. This gives us confidence that our valuations are a fair reflection of the wider market, but it is clear that we have work to do to better explain what they represent.
As always, we appreciate your support and feedback, and if you have any thoughts or questions, please do not hesitate to contact us at the details listed below,
Warm regards,
Ben Challen
Commercial Director, WhiskyInvestDirect