The Year of Macallan 18 Scotch Shortage

Tequila, Champagne, all the way up to the marquis producers of fine Scotch, like Macallan, left store shelves sparse. Even the most common of household names have become stringently allocated. Why? That’s a great question!

Searching for Macallan 18 Sherry Oak, or even the Macallan 12 Year has become a real pain in the neck, especially for those who love to sit with friends and enjoy an after-dinner aperitif. If you haven’t noticed by now, huge retail stores are all sold out. Those who have it have increased pricing by 50% simply due to scarcity and inflation. There is a reason why this shortage exists, and we will get to it a bit later in this article. Before we do, it will help for you to understand what Scotch is and how it is made, which will help you understand why distilleries can’t just quickly make more.

Scotch is an interesting beverage. It isn’t for the faint of heart. Aged Scotch has a fruit component to the taste profile, including tart cherry, dark berry, and citrus fruits. What makes the liquor a bit more masculine in style is the smoky flavor which is created when it is produced over a peat fire. Let’s step back for one more minute. The three main ingredients of scotch are yeast, malted barley and water. In the early phase of scotch production, distillers use a kiln and burn peat, to dry the wet barley. The barley absorbs the scent of burnt peat, which causes a smoky taste.

What is the difference between a 12 Year and an 18 Year Scotch other than time? Generally, the time in barrel and the barrels used will make the scotch creamier, richer, and more complex in terms of fruit notes and aromatics. The price difference is simply due to the cost of managing the process and storing barrels. A distillery doesn’t just make scotch and let it sit. A distillery often takes a small sampling of each barrel every year to test chemistry and adjust. Adjustments can mean taking scotch from another barrel and filling the other barrels when there is a loss of alcohol due to evaporation (a phenomenon called angel’s share).

Now let’s talk about why you can’t find Macallan Sherry Cask Scotch or other fine and rare scotch brands on the retail shelves.

First, you can’t take Scotch or rare Whiskey and just make more. The process of aging takes a lot of time. The source materials used to make them cost a lot of money, and now they cost even more. While supply and demand were usually tracked with relative accuracy, the pandemic threw it all out of whack.

Secondly, the statistics show that people consumed more alcohol during the COVID 19 pandemic, then the previous 10 years COMBINED! That means that inventory depletions from the source all the way to the store shelves were on steroids. People stayed home instead of going to restaurants, not because they had to save money, but because they were told to stay home by law. Consumers saved so much money by cutting down on fine restaurant dining and business dinners and avoiding travel that usually comes with treating oneself well… with staying home and upping the caliber of booze they drink at home.

Thirdly, as if you haven’t noticed, there is a shortage of something every single day. Different parts of the world were affected by the pandemic in different ways. The recent lockdowns in China affected factory production of raw materials worldwide, including glass, aluminum cans, labels, and even packaging boxes. In the past 20 to 30 years, producers of just about every good on the planet have relied on cheap Chinese labor for source materials, especially glass bottles.

In 2019, a report released showed that China produced 51% of the world’s float glass. Only 6.8% of the world’s glass is produced in the United States. So, when China shuts down, the whole world slows down from a glass bottle perspective.

The fourth reason why is shipping supply lines. During the pandemic the economy didn’t slow down, it grew substantially. All sectors experienced high growth including housing, food production, automobile, semi-conductor, literally almost everything went into high demand overdrive. The phenomenon was unpredictable to the logistics companies who ran at a steady pace for at least several decades. As supply lines shut down due to the lack of production, and as demand increased for just about everything, glass especially, logistics companies didn’t have enough bandwidth to account for the demand. Shipping isn’t a modernized industry and ports are designed to take in and process new shipments based on history. For many months, ships docked in port harbors waiting in a long line to process containers coming inbound from all over the world. Liquor fell victim to this issue.

The fifth reason is the trucking issue, coupled with the high cost of gasoline/diesel. The major reason for the disparity in price is the taxes levied on diesel, largely due to the carbon emissions produced. The federal tax on diesel is currently 24.4 cents per gallon, as opposed to 18.4 cents for a gallon of gasoline. Diesel one year ago cost $3.17 per gallon and today is $5.49 per gallon. The ocean liners run on diesel and the trucks that take booze from the ports to the distributors run on diesel, as does the delivery vehicles that take it from the distributor to the retailer.

The sixth reason is political. In 2019, President Donald Trump slapped a 25% tariff on single-malt Scotch whisky as part of the trade dispute. While the U.K. no longer is an EU member, it belonged to the EU when the tariffs were imposed. In June of 2021, the tariffs were lifted on a variety of products including scotch, cheeses and olive oil. The Scotch Whisky Association estimated the tariffs caused more than $850 million worth of lost exports to the U.S. In the whole ordeal, did Scotland stop making and shipping scotch? No. They did what most smart people would do, they shipped more product to the emerging Asian markets, which resulted in displacing allocations to the United States.

As you can see from the explanation above, the pandemic created an anomaly which continues to trickle down to retail shelves. Will the supply lines for scotch increase? Certainly so, however as I pointed out above, vintage declared scotch can’t simply be increased overnight. It will take at least a decade or more for the recovery to fully set in.