Last week I walked into a fancy steakhouse – one that’s run by one of Australia’s leading and most well-known restauranteurs and celebrity chefs. I was shown to my table and handed the menu. Wow! It showcased an amazing selection of gourmet choices, although with price tags to make most of us squirm. There was one particular steak that stood out – it was a particular cut of wagyu that sounded out of this world. As was its price tag! I’d love to have treated myself to it, but it was more than what my budget could justify. Besides, there were much cheaper steaks that also looked pretty tempting, and I couldn’t order two meals now, could I? I resigned myself to the fact that I’d probably have to order one of the cheaper, more regular cuts.

As I pondered this situation, a waiter brought the main course out to the couple who were sitting at the table next to me. I couldn’t help but notice that the man had ordered the very wagyu steak I was lusting for. As they settled into their meal, I leaned across and said, “Excuse me – I was just wondering if you’d mind cutting off a piece of your steak and giving it to me so that I can try it?”

– – – – –

It’s nonsense, isn’t it? You’d never have the temerity to do such a thing or to make such an undignified request. So why does this very situation play out in the whisky world? We wouldn’t do it with food at a restaurant (yes, for the record, the above story was a fictional allegory), yet plenty of people are quite happy to make similar requests when it comes to whisky. It’s the dark side of whisky samples.

In the life and history of single malt whisky appreciation, it’s a relatively new phenomenon. It comes in many forms, from the concept of bottle splits, to people just brazenly asking others to send them a free little bottle in the mail. And if you’re reading this and thinking, “What the hell is he talking about?”, I’ll give you two concrete examples:

Last year, Whisky & Wisdom procured, bottled, and imported its own bottling of Glenfarclas. It was a great single-cask whisky which received outstanding reviews and a got a lot of very positive feedback. It was made available to purchase via an online retailer; some independent shops took consignments of stock; and it was also available by the dram at a number of whisky bars around Australia. Nonetheless, I was overwhelmed by requests from people for me to send them a sample. More interestingly, these requests were not presented with words to the effect of “Hey, if I sent you a small sample bottle and some money for the postage and the inconvenience, plus also to cover the value of the sample, would you mind drawing some off for me?” No, instead, I got inundated with emails and messages that simply went along the lines of “Dude, can I please have a sample?” More interestingly, when word started to spread that the bottling was running out and that there weren’t many available left for sale, the requests for samples amplified even more.

Similarly, we get a lot of requests to The Scotch Malt Whisky Society for whisky samples. As much as the Society is a fantastic whisky club and offers both amazing literature, events, and value for its members, it needs the input of members and for its bottles to sell if it is to remain a viable operation. And yet, each time we run a campaign or offer a promo code for folks to sign up, we – instead – get hit with requests for samples. “Hey, I know you’ve got that amazing bottle of Bowmore that you’ve already selected exclusively for new members and I know you’ve given me a discount code, and I know there’s only 12 bottles of it in the entire country…but could you please send me a free sample of it first?”

Personally, I don’t understand the thinking. We don’t ask the restaurant for a free sample of their signature dish before we order it. We don’t ask to live in a house for a few days for free before we choose whether or not to rent/purchase it. And, yet, the whisky scene appears to have grown itself a “try before you buy” mentality. Not to mention a mentality of entitlement: When such requests for samples are politely declined, responses are often indignant and further protests made. Such a mentality did not exist 15 years ago, so what has changed?

The answer is threefold…

First and foremost, whisky – at least, old and rare whisky – is significantly more expensive than it used to be. 15 years ago, a good whisky was $80 and a rare whisky was three times that much. Today, a good whisky is $100, but a rare whisky is at least ten times that and usually much, much more. (And that’s before we get to the stupid releases that are in the many thousands of dollars). So, the simple reality is that a lot of rare or limited whisky is priced beyond what most of us can afford. (For a very enlightening and education read on this development, see this article: Are you paying too much for your whisky? ).

The second catalyst is the rise of the bottle-split – which is, in itself, a response to the affordability problem outlined just above. People can’t necessarily afford a $500 whisky, but they can afford a 30ml or 50ml sample of it. And so entities now exist (either individuals amongst friends, or more organised commercial ventures) that buy a whole bottle and then divide its contents amongst a syndicate of subscribers.

The third driver is a more cerebral development, which falls into the category of “box ticking”. Others might call it FOMO (Fear Of Missing Out). Everyone wants to have tried everything. No one wants to be the person in the conversation who listens on helplessly whilst everyone else raves about a whisky that only they haven’t tried. Despite the fact that the number of whisky bottlings and releases is ever increasing at an exponential rate, an entitlement culture now exists where everyone feels they should get to try everything, regardless of its availability or their budget. Tried that whisky? Yep, I’ve ticked that box. Add it to your CV and move along.

For this third category of behaviour, it is a symptom and development of the internet and social media. Prior to the existence of social media and online retailing, we simply accepted there were whiskies or certain expressions marketed in other counties that weren’t available in our own, and we got on with our lives. Most of the time, we didn’t even know they existed, so perhaps ignorance was bliss? Today, we see those bottles pasted all over social media or whisky websites/blogs and we can readily order them from offshore and have the bottle despatched to us. (Whilst simultaneously complaining about the taxes and the shipping costs that allow us the privilege of tasting whisky that isn’t available in our country). Or we can rant and rave on Twitter and Facebook until someone up the chain feels pressured enough to force change and bring the bottle in officially.

The concept of the bottle split, however, is a bit more sinister. Of course, under the rules of the Scotch Whisky Association, it’s actually not permissible to re-bottle already-bottled whisky outside of Scotland and still call it Scotch whisky, but we’ll put that inconvenient truth to one side for a moment. Stop for a moment and put yourself in the mind and shoes of a small distillery, or a small importer/distributor who gets a small allocation from a single cask, and might only have a handful of bottles available to sell. You have an amazing product. For the viability and successful operation of your business or venture, you do your maths and financial plan based on a model and assumptions as to how many bottles you’ll sell. (This is particularly relevant to the many new Australian distilleries who only market and sell single cask releases with a finite number of bottles available for sale). And you set your RRP accordingly to meet your costs. For ease of understanding this analogy, let’s assume you’re a small Australian distillery with a new single cask release that has 200 bottles available. You assume that there are 200 people out there who want to try your whisky and they’re keen and willing to buy it. To meet all your costs, and maybe even put some money in the bank, you need to sell each bottle for $200.

15 years ago, you’d simply sell all 200 bottles and make back the $40,000 you needed to survive. Today, however, it’s a different ball game. Instead, of those 200 people who were your market, it turns out only about 155 of them have the mindset to buy the bottle straight off the bat. The other 45 are less bullish. Either $200 is more than they’re prepared to pay, or they want to try it first before committing to shelling out $200. Or they have no intention at all of buying a bottle, but they’re really keen “just to taste it”. Someone unknown to the distillery then offers a bottle-split. This person buys two bottles and splits them into 45 x 30ml samples and makes these available as a cheaper, alternative way of trying the whisky. And they get snapped up accordingly by 45 happy punters. For the distillery operator, yes, 200 people have now tried the whisky (155 + 45). But only 157 bottles have been sold. 43 bottles, or 21.5% of the required revenue, remain unsold. Maybe some who tried the sample will now go on to buy a bottle for themselves; most will not.

(EDIT: Since originally posting this article, several people questioned the logic of the above example, but I posit the doubters are not involved in the sales of finite products. Such dilemmas exist in the whisky world: You might be selling tickets to a special tasting event where you have 50 seats to sell (and need to sell all of them to meet costs), or you might be selling a single cask or limited release whisky where you have 150 bottles to sell and need to sell them all at full price to meet your costs. Either way, you learn pretty quickly in this game that – depending on the product and what you price your product at – you have a limited market; there are only so many buyers out there; and it can be an uphill task to sell your full availability.)

Yes, it’s a simplistic explanation and analogy above, and the maths obviously differs from case to case, but the principle remains valid.

And I’ve personally seen and experienced the principle play out in three separate whisky businesses I’m involved with, so trust me when I say we’re not making this up for the sake of a good story. So is bottle-splitting the Napster of the whisky world? Many would argue that bottle-splitting and samples are a good thing, because they allow more people to try the whisky than would otherwise be the case. That’s a good outcome, right? Surely it’s a positive development if more people are out there trying more whisky, yes? Yes, it might be for a major brand or a whisky that is always available, e.g. Glenlivet 12yo. But it’s less positive when you’re a smaller producer selling a product with finite number of bottles, e.g. a single cask. What about the producer? In the example above, he or she is still down on required revenue by 21.5%. So what does s/he have to do for their next release? He either goes broke, or she’s got to put the price up to account for the number of people who will seek out this whisky and try it, but not by purchasing a full bottle. And thus begins a vicious cycle of producers needing to increase RRP’s to meet costs, because consumers are circumventing the usual paths to retail and revenue.

(And before you accuse this article of being wide of the mark, no, we’re not discussing people doing bottle-splits of Glenfiddich 12yo and upsetting William Grant & Sons, nor are we discussing Diageo getting robbed of a bit of revenue. We’re discussing the real situation that affects small operators; the smaller craft distilleries; private ventures trying to sell bottles from a single cask, and many of the Australian distilleries).

There is, sadly, a twisted irony in how many people lament the increasingly high price of rare whisky or special single cask bottlings, yet – by seeking out samples or bottle splits – those same people inadvertently engage in purchasing activities or behaviours that contribute to those increasing prices.

The situation turned a little ugly in Australia recently, when a well-known independent brand and bottler discovered that – without their knowledge or permission – their whiskies were being split into smaller sample bottles and being sold off separately by a licenced retail liquor outlet. This situation muddied the waters further, as the shop had printed and applied colour labels to their sample bottles that matched the original, giving some the impression that these were “official” bottlings. This led to much unease and questions. How do I know that what’s in the sample bottle is actually the real whisky it purports to be? What if the whisky has been affected in some way by being transferred into the sample bottle? How do I know it hasn’t been watered down? Has it been changed or affected by oxidation in this process? We’re not suggesting or implying the store did any of those underhanded acts, but the situation did raise these questions. More critically, the bottler lost control of their brand and their product – how it is packaged, how it is labelled, what size bottle it is sold in, the retail price of that bottle, and how it is presented to and perceived by the consumer. When you consider the great lengths that some brands go to to make sure their whisky hits the market in exactly the state and form that they believe is best, bottle splits can unravel some good work.

Now, if you’ve made it this far, please don’t assume that the above commentary is an attempt to wage war against all sample bottles and all bottle splits. There’s nothing wrong with someone electing to share their whisky with others. In fact, such a gesture is to be encouraged. There’s nothing wrong with a few mates chipping in together to buy a bottle whose price tag might be beyond their individual means. However, the entitlement mentality of “dude, can you send me a sample” is an ugly trait that – whilst I’m sure is not intended this way – ultimately disrespects the hardwork and financial realities of the small operators and bottlers who are doing the hard yards and need to sell full bottles to stay afloat. And as for corporately or commercially arranged bottle-splits? By all means, share the love and spread the whisky gospel. But don’t be disappointed when you see the price of whisky continuing to rise.

Cheers,

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