An Expert Guide To Investing In Rare Whisky
In late 2018, a bottle of ‘ultra-rare’ Scotch broke all sorts of records to become the most expensive whisky ever sold.
The drop? A 60-year-old Macallan from 1926, in a one-of-a-kind hand painted bottle. The price tag? A whopping £1,200,000 (roughly AUD$2.2m), sold at a Christie’s auction in London.
“The sale represents a landmark moment in the whisky market,” said Christie’s International Director of Wine, Tim Triptree, at the time. And indeed it does.
Never has whisky been in such high demand. Whether it’s regular priced bottles for immediate consumption, or rare and limited releases that savvy investors are buying and hoping to make the most of, thanks to the current market upswing, whisky is certainly in fine fettle.
In fact, the latest Knight Frank wealth report has revealed that rare whisky is now the most lucrative investment in the luxury asset space. Their data, taken over a ten-year period, has revealed rare whisky reached a return on investment of almost 600 per cent.
That puts rare drams and bottles ahead of more familiar investments like cars, watches and jewellery. And if that wasn’t enough – in 2018 alone, rare whisky saw a 40 per cent jump in value. Slàinte.
Why the rise in whisky investment?
But what is making whisky, especially rare whisky, so attractive to investors?
“The stunning price growth of rare single malt whiskies shows that the appetite for new alternative asset classes remain strong among high net worth investors,” says Andrew Shirley, editor of The Wealth Report.
“We see prices continuing to harden for the right bottles from the right distilleries, as well as increased interest in more affordable bottles from the second tier.”
Diageo’s National Whisky Ambassador for Australia Simon McGoram agrees.
“I believe that whisky investment is booming thanks to years of growing interest in the category itself,” says McGoram.
“But it’s also a case of there being a kind of perfect storm. The 1980s and ’90s were relatively low in production, with many once successful distilleries forced to shut their doors – like Carsebridge and Port Ellen in 1983 and Pittyvaich in 1993.
“As popularity in Scotch – and indeed, world whisky – has grown, especially with the opening up of markets like China and Taiwan, mature whiskies from these decades and earlier are in high demand. [And] increasingly short supply numbers, in turn, have driven value.”
Look out for special release whisky
McGoram also gives credit to annual limited collections – like the Diageo Special Releases – to having helped increase awareness of the collectability and investment potential of whisky.
“People collect and invest in whisky for a number of reasons – and for the most part it’s not just to turn a profit. Successful investors have a real passion and understanding of whisky that’s been borne out of an exploration of the category and its myriad of delicious flavours.
“That is what makes investing in whisky so difficult, as your willpower will be tested more than it ever has before. Whisky, after all, was made for drinking.”
So, you’ve caught the bug and are interested in trying your hand at whisky investment. What now? Where do you start in such a complicated and age-old category?
“I’d recommend buying your whisky from a specialist retailer to begin with,” suggests McGoram, “and once you have a bit of experience under your belt you can start exploring online retailers and auction sites.
“One of the benefits of collecting and investing in whisky as opposed to wine is that it is much easier to store and doesn’t age in the bottle like wine. That being said, whisky should be stored upright, in the original packaging, in a cool dry place and out of direct sunlight. And certainly, out of reach of pesky housemates, friends and in-laws.”
What to look for in investment whisky
Obviously not everyone can afford a 60-year-old Macallan (nor even some 18-year-old Macallans for that matter), but there are a few other names to be cognisant of if you’re looking for a bottle that will hopefully show serious returns on investment.
“Bowmore has taken top spot as the most ‘collected for investment’ distillery in 2018,” says Andy Simpson in his latest Rare Whisky 101 Report. “Closely followed by Brora and Springbank. [And] increases in values across the board for Macallan have been phenomenal.
“The next round of collectables? GlenDronach, BenRiach, Benromach, GlenAllachie, Tamdhu, Tomatin and Ben Nevis – could some of these distilleries emerge as tomorrow’s collectable brands?”
McGoram’s tips come with a little bit more detail for the uninitiated investor.
“Consider buying bottlings released by the original bottler. Whilst indie releases might be no less delicious, they can be harder to resell. [Also] it might be wise to look up professional reviews of a product or even find a bar that stocks it so you can try for yourself and form your own opinions.
“Overall, it’s important to do your research before a big purchase – and it just so happens that in the case of whisky, this research will be equal parts delicious as it is informative.”
As for any distilleries in particular, he’s hard-pressed to go past his Diageo favourites.
“Rarity will always be the driver of price, but there are also some distilleries that are more prized than others. Every bottle in the Special Releases deserves a spot in your collection but Port Ellen, Brora, Lagavulin and Talisker – from bottlings past and present – are ones to keep an eye on.”
(Lead image: Diageo Special Release Collection, image: Diageo / supplied)
Published 02 April, 2019