Obviously, everyone has their own idea as to the exact price whiskey becomes expensive, but we all agree that many are at that point, and some are even higher. I wanted to find out the reason for this. In fact, I found ten reasons why some whiskeys are so expensive.
1. They’re Made from High-Quality Ingredients
Some whiskeys are expensive because they’re made from higher-quality ingredients, which is necessary because low quality ingredients will negatively impact a whiskey’s taste.
Whiskey is made from four ingredients:
- Grain(s) whose starches are converted into sugars and then alcohol.
- Water to cook the grain and dilute the alcohol.
- Yeast that causes the sugars to be converted into alcohol.
- Barrels whose wood gives whiskey 70% – 80% of its flavor.
High quality grain means they’re uncracked, clean and sorted so that foreign materials haven’t gotten inside and contaminated them. High quality water means it’s clean and pure for the same reason, and free of iron which reacts with alcohol and turns it bitter. The yeast also has to have as few impurities as possible so that it doesn’t impart any bitterness to the whiskey.
As for barrels, high quality can mean a journey of a few years as decades old Oak trees are carefully felled and dried in a way that preserves the character of the wood needed for maturation and ensures its heavy oils don’t spoil the whiskey. Finished barrels are toasted or charred so that the whiskey can access the flavors in the wood, and sometimes barrels are first seasoned with another spirit so that its flavors can be added to the whiskey.
Whiskeys made from a lot of barley, like many Scotches, and totally of barley, like single malt Scotches and single malt Irish whiskeys, will cost even more because barley is the most expensive grain used to make whiskey, and because it’s the only grain that undergoes the additional lengthy and involved and price-increasing, malting process.
2. They’re Made from A Better Cut of Distillate
The second reason why some whiskeys are so expensive is because they’re made from a better cut of distillate.
When whiskey is distilled, alcohol from the beginning and end of the run is not used because it contains undesirable (and sometimes dangerous) elements that give the whiskey an unpleasant flavor. The closer the alcohol is to the middle or heart of the run the better it is, and a distillery will therefore cut the distillate to collect more from the heart of the run and less from the beginning or end.
A narrower cut is obviously better as it removes more of the unwanted elements that give the whiskey an unpleasant flavor, but it also means that less distillate is used which increases the cost of production. A wider cut would decrease the cost of production by using more distillate, but it would also mean that the whiskey would retain more of the unwanted elements.
This problem is worse for single malt Scotches and single malt Irish whiskeys because they’re distilled in pot stills that distill in batches and not column stills that distill continuously. That means the distillate has to be cut for every run, which means even more whiskey is left unused and even higher production costs.
3. They’re Stored for A Long Period of Time
One of the biggest reasons why some whiskeys are so expensive is because they’re matured for a long period of time.
Whiskey is matured in barrels so that it can pick up flavors from the wood. This happens because during the time the whiskey is stored, changes in temperature causes the barrels to expand and contract and the liquid to seep in and out of the wood, where it picks up flavors in the process.
The longer whiskey is matured the more flavors it will pick up, but this also makes the whiskey much more expensive. After all, it costs to have a product that you can’t use for years, and even more to maintain storage facilities that provide the proper environment in which whiskey can age well.
And while legally, many whiskeys only have to be aged for three years, many are aged for 12, 15, 18, 21 years or even longer. This is especially true of Scotch and Irish whiskeys which, because of the cooler temperatures, lower humidity and fewer seasonal fluctuations in Scotland and Ireland, have a slow aging process, and need a lot of time to reach their optimal age – which is why they can be so expensive.
4. Whiskey Is Lost During the Maturation Process
Another big reason why whiskeys are so expensive is because a lot of it is lost during the maturation process.
That’s because wood is porous so whiskey can easily evaporate from the barrel. In fact, anywhere from 2% – 10% of the whiskey in the barrel (size, method of storage and climate of location dependent) evaporates per year.
And the longer a whiskey spends maturing in the barrel the more will be lost to evaporation. Whiskeys matured for 10 years will have lost 18% – 20% of their volume to evaporation and whiskeys matured for 25 years will have lost 30% – 40% of their volume to evaporation!
This loss of whiskey is called by the cute sounding name, ‘the angels share’ but that doesn’t stop it from causing whiskeys to be much more expensive.
Of course, as mentioned, many whiskeys have to be matured for at least three years which means a significant loss of whiskey from the barrel, but a lot are aged for much longer which means a substantial loss of whiskey from the barrel.
5. They Have a High Alcohol Content Level
People prefer whiskey with a higher alcohol content level or ABV because alcohol carries flavor compounds, so the whiskey will have more intense and concentrated flavors. However, a higher ABV also means that more distillate was used, which makes the whiskey cost that much more.
Whiskey is distilled to over 80%ABV (country and type dependent), but before being placed into the barrels for maturation it’s diluted with water to closer to 62%ABV. After maturation it’s usually diluted once again and bottled at a minimum of 40%ABV, but whiskey can be anywhere up to 68%ABV.
Obviously, the higher the ABV and the less the whiskey from a given barrel is diluted the fewer the number of bottles that can be filled from it – which makes each one cost that much more. And many whiskeys are 43%, 46%, 50%ABV or more and therefore more expensive.
6. The Government Collects a Tax on Alcohol
Another reason why whiskeys are so expensive is because the government collects a tax on alcohol. The more alcohol in your bottle the more tax is collected, and the higher the price of your whiskey.
This applies to all whiskey as its minimum ABV is, as mentioned, 40%, which is significantly higher than many other alcoholic drinks like wine that’s around 16%ABV and beer that’s around 6%ABV, which therefore won’t have anywhere near as high a tax. The following table shows the ABV ranges for common alcoholic drinks:
|Alcoholic Drink||ABV Range|
|Whiskey||40% – 68%|
|Beer||4% – 6%|
|Wine||5.5% – 16%|
|Liqueurs||15.5% – 55%|
|Tequila||32% – 60%|
|Brandy||35% – 60%|
|Vodka||35% – 95%|
As you can see, whiskey is one of the strongest alcoholic drinks available, so it will be highly taxed.
And since many whiskeys are, as mentioned, likely to have a higher ABV than the minimum – often 43%, 46% or 50%, they will be taxed even more and therefore be even more expensive.
7. They’re Imported from Other Countries
The five biggest whiskey producing countries are Scotland, Ireland, the United States, Canada and Japan. Coincidentally, they’re also some of the biggest whiskey drinking countries too. But any bottle of, for example, Scotch or Irish whiskey bought in the United States was imported, which is another reason why some whiskey is so expensive.
Shipping charges alone are significant when you consider that importing (as per our example) Scotch or Irish whiskey means bringing them more than four thousand miles all the way from Scotland or Ireland to the United States. And since shipping across the Atlantic Ocean is often done by plane because it’s faster, safer and more reliable than cargo ship, it costs even more.
And once they arrive in the United States there are additional taxes, tariffs and fees which all drive up the price of a bottle of whiskey. All together the extra expense of importing whiskeys, makes the same bottle significantly more expensive in the United States than it is in Scotland or Ireland, as you can see from some examples in the following table:
|Country of Production||Price in the US||Price in the UK|
|The Glenlivet 12 Year Old||Scotland||$50||$35|
|Laphroaig 10 Year Old||Scotland||$65||$40|
|The Balvenie Doublewood 12 Year Old||Scotland||$75||$45|
|Macallan 12 Year Old Double Cask||Scotland||$80||$70|
|Bushmills 10 Year Old||Ireland||$50||$35|
|Tullamore D.E.W. 14 Year Old||Ireland||$80||$52|
8. They’re Well Branded and Marketed
The least liked reason for why some whiskeys are so expensive is because they’re well branded and marketed. This means that part of the higher price is not a result of the higher production costs necessary to produce a better product, but rather the result of a wide-spread perception of extra value due to nothing more than good branding and marketing.
Brands that make exceptional quality whiskey for years become well-established and trusted, and an excellent reputation along with a huge PR apparatus that spends a fortune in branding and marketing, can turn a brand’s whiskey into a premium product that’s associated with luxury and success, and in some parts of the world, a status symbol.
9. They’re In High Demand
One of the most ironic reasons why whiskey is expensive is because of a recent increase in demand and consequently the lowering of its supply.
Whiskey has become more popular over the last few years. In 2020 its market size was valued at $61 billion, and it’s projected to reach $92 billion by 2028. While part of this growth is due to an increase in demand in North America and Europe, it’s also being driven by the demand from emerging and fast-growing markets, especially in Asia Pacific (source).
Unfortunately, it’s not so easy for the supply of whiskey to keep up with the demand. That’s because the amount available today is dependent on how much whiskey was barreled several years in the past.
And since whiskey takes so long to produce, even if distilleries started to make more whiskey to meet the increase in demand today, they won’t be ready for several years to come. As of this writing, it’s still (sadly) impossible to make a 12-year-old whiskey in anything less than 12 years.
Where this has become a big problem, distilleries have responded in one of two ways. They have either lowered the ABVs of the in-demand expressions so they can fill more bottles than before, or they have increased the prices of the bottles they do have. Which is why some whiskeys are not only expensive, they’re also increasingly expensive.
10. They’re Rare And / Or Valuable
Some whiskeys are more than just expensive – they’re expensively expensive. Or even more expensive than that – we’re talking hundreds of thousands of dollars and sometimes millions. That’s because they’re rare or valuable.
There are a lot of rare whiskeys because distilleries are constantly experimenting with new expressions and creating limited editions to commemorate people, places or events important to them. Any that are very well received will instantly become rare because the demand will far exceed the supply, especially if the distillery is uninterested or even unable to produce further bottles.
There are a lot of valuable whiskeys too, because a 250-year-old distillery that routinely ages whiskey for decades is bound to stash away some of its stock to appreciate in value. That’s why there are many 50-year-old whiskeys, some of which have been sold for over $100,000. And why there are collections of such whiskeys that together have been sold for close to $1 million.
And of course, in an effort to add even more value to whiskeys, it was inevitable that someone would commission a famous artist to hand-paint a bottle and sell it for $1.5 million or put their whiskey in a white gold decanter inlaid with diamonds and rubies and sell it for $6 million.
For more information about these and other similar examples, see the more detailed article I wrote about the most expensive whiskeys, which you can find here.