Glenlivet 70-Year-Old whisky / John Paul

Contents of barrel from 1940 amongst one of the oldest and most expensive Scotch whiskies ever to be offered for sale

When John Urquhart gave the instructions for Cask 339 to be filled with raw single malt whisky at the Glenlivet Distillery in February 1940, he had good reason to consider the spirit as precious.

A month earlier, as the phony war of 1939 began to translate into the grim realities of events such as Dunkirk, the British government had begun rationing with  malt whisky production slashed by a third.

For three years during Second World War, whisky production at Glenlivet ceased altogether and Cask 339 was largely forgotten.

But amid the chaos of war, it is unlikely that, some 70 years later, Mr Urquhart would have dreamt of just how precious the liquid he was laying down would eventually become.

The contents of the barrel yesterday became among the oldest and most expensive Scotch whiskies to be offered for sale when the final 100 bottles of the single malt were unveiled at Vancouver airport in Canada with a £23,000 price tag a bottle.

The Glenlivet 70-Year-Old, which comes complete with a handblown crystal decanter and sterling silver stopper, is the latest in a line of ultra-rare and hyper-pricey whiskies being put on the market as Scotch defies the economic stagnation.

A bottle of Dalmore 62 single malt sold for a world record £125,000 at Singapore Airport last year, making the decision to target Vancouver – a major hub for flights between North America and South East Asia – not quite so outlandish as it might seem.

David Urquhart, the grandson of the John Urquhart who laid down Cask 339 and is now masterminding the marketing of the Glenlivet as head of the Gordon & MacPhail family company, said: “Our family has passed its knowledge and expertise of Scotch whisky from generation to generation. The Glenlivet 70 Year Old is an exceptional single malt. We’re proud to be able to share this with the rest of the world.”

At a price.

But the pitching of the Glenlivet 70-Year-Old as a tipple of choice for billionaires and plutocrats is just the high profile manifestation of a shift in global whisky tastes which is seeing demand for single malts – regarded as the connoisseur’s Scotch – rocket worldwide.

Exports of single malts grew from £576.7m in 2010 to £744.6m last year - a 29 per cent increase which outstripped the rate of growth of all Scotch exports, including blended whisky. In total Scotch worth £4.2bn was sent abroad last year – a 23 per cent rise, with Brazil becoming the fastest growing market, followed by Singapore and Taiwan.

Single malt still only accounts for 18 per cent of all exports. But the kudos surrounding names such as Laphroaig, Macallan, Glenfiddich and Auchentoshan means that as markets mature and young professionals in emerging economies who once drank blended whiskies develop a taste for more refined Scotch, demand for niche brands is going to rise steeply.

That, at least, is what growing numbers of distillers in an industry which has grown exports for seven consecutive years are hoping as they invest heavily in their single malt products.
Rosemary Gallagher, of the Scotch Whisky Association, said: “Demand for both blended Scotch and single malts is increasing from mature markets and young, affluent consumers in emerging economies. While blended Scotch still forms the vast majority of exports, as consumers become more knowledgeable about Scotch, single malts are also growing in popularity.”

Morrisons Bowmore, the Japanese-owned distiller whose brands include Bowmore and Auchentoshan, this summer announced an 86 per cent leap in pre-tax profits driven by sales of its single malts and increased its stocks of the whiskies by nearly £6m.

Arran Distillery, a relative newcomer to the premium whisky market after it opened for business 16 years ago, is increasing its production of its single malt by 15 per cent this year to 400,000 litres in the expectation of burgeoning demand in Asia and Latin America by the time the spirit matures in a decade.

Managing director Euan Mitchell said: “We’re thinking long-term and are laying down extra stock now to ensure we can capitalise on the increased demand for single malts ten years down the line.”

Such bold expansion has led to some industry observers raising the spectre of the last time Scotch producers dramatically increased production in the 1970s by around 200 million litres and economic factors such as the oil crisis and the collapse of the Japanese economy led to a slump and the closure of distilleries.

But, with around £2bn of investment being pumped into the Scotch industry, producers are confident there will be no repeat of this scenario because of the economic awakening of future whisky connoisseurs in places from Nairobi to Bogota.

Diageo, the market leader whose sales have increased by 50 per cent in the last five years to £3bn, announced this summer that it is investing £1bn in the next five years to increased whisky production by up to 40 per cent.

Paul Walsh, the company’s chief executive, said: “Over the next 15 to 20 years there will be two billion new consumers coming into legal drinking age who have the economic wherewithal to access brands such as Johnnie Walker. If the extrapolations are correct, what we are putting in place will not be enough to supply the new consumers in 20 years’ time anyway.”

Quite whether this new wave of malt lovers will have the wherewithal to spend £23,000 on the wartime water of life that went on sale in Vancouver Airport’s duty free aisles this week remains to be seen.

But it seems a truth spotted by Winston Churchill during the Second World War remains current.

In April 1945, as production of whisky restarted, Churchill wrote: “On no account reduce the barley for whisky. This takes years to mature and is an invaluable export and dollar producer.”