Whisky is made for drinking, yet the amber spirit is increasingly purchased for profit as much as pleasure. For the canny collector, it can be a lucrative investment.
Growing returns on investments in whisky
Last year, the Rare Whisky Apex 1000, an index of 1000 rare Scotch whiskies, rose by 21 percent. Since 2010 it has risen by more than 500%.
Single malt Scotch whiskies aged between 25 and 60-plus years have consistently outperformed wine, gold, equities and property.
This performance is being fuelled by booming demand from drinkers, connoisseurs, collectors and investors, notably from Asia.
Certain high-net-worth individuals – tech billionaire Jack Ma and Jeff Bezos are collectors – pay whatever it takes to acquire very rare, very special bottles of Scotch.
Most expensive whisky at auction: some notable historic examples
In 1986, 40 bottles of whisky were produced from a 60-year-old cask at the famed The Macallan distillery. Artists Valerio Adami and Peter Blake were commissioned to design labels for 24 bottles.
In October 2018, a bottle of The Macallan Valerio Adami 1926 – described by Bonhams as “the Holy Grail of whisky” – fetched £848,750 (nearly R16 million) at auction in Edinburgh, setting a world record.
The record didn’t last long. A month later, another bottle from the cask sold for £1,2 million at Christie’s in London.
The Macallan 1926 60 Year Old was even rarer – the only bottle with a hand-painted label by Irish artist Michael Dillon.
How to get a slice of the action
Fortunately, you don’t have to pay millions to start investing. However, building a valuable whisky collection isn’t as simple as filling your trolley at the local liquor store.
Follow these top tips for investing in whisky.
1. Know your tipple
Find out everything you can about whisky. Tour distilleries (there are more than 120 in Scotland alone), find bars with good collections, attend tastings, festivals, and auctions, read books, magazines, websites, and join online communities.
Learn all you can about the process from grain to glass: distillation techniques, ageing strategies, recipes at distilleries. The more you know, the better informed you’ll be about your investment.
2. Seek out quality, rare whiskies
Whisky doesn’t pay dividends or rental income, so the goal is capital appreciation.
Whisky investing is simple supply-versus-demand economics. Quality whisky gets drunk, supply diminishes and bottles become more sought after.
The golden rule: invest in the best quality, most desired whiskies that are rare. For the safest buys, consider iconic distilleries like The Macallan, Glenfiddich, Dalmore, Ardbeg, Glenmorangie.
Keep an eye open for limited releases and special editions. Scarce bottles from closed, or silent, distilleries such as Port Ellen and Rosebank are especially prized.
3. Beware the bad and bogus
There are fraudsters and fakes galore in the whisky world. Only buy from trusted sources.
Check out the credentials of a seller, distributor or shop and follow the old saying – if a deal looks too good to be true, it probably is.
Before buying, always read the labels for as much information as possible, including distillation and bottling dates, content, cask, batch and bottle numbers.
The front and back labels must be undamaged and readable, the bottle sealed and unopened, and the filling level not abnormally low (a little evaporation is usual).
4. Have fun and shop
Investing in whisky comes with the same risks as any investment. Firstly, work out your budget. Distilleries and reputable retailers offer some of the safest deals.
Online auction retailers have made it easier to find quality low-production bottles, but remember you are buying sight unseen. At auction, always stick to your price point and don’t forget the 20% buyer’s premium on the hammer price.
5. Protect your investment
As with any investment, you need to protect your whisky. Proper storage preserves both the bottle and the prized amber content.
A temperature-controlled cellar is first prize, but a darkened cupboard, store or shelf will work.
Never allow direct sunlight on your bottles and store whisky upright at temperatures between 15 to 20°C. Then lock the door.
Best whiskies to invest in right now
Scotch whisky is the leader in the field, but sales of Irish whiskey (note the ‘e’) have soared more than 300% in the past 10 years. They’re worth considering, alongside some American and Japanese brands.
According to the Whisky Foundation, these are some of the best whisky collections to invest in this year:
- Diageo Game of Thrones Collection
- Daftmill 2019 Release
- The Macallan Concept Series
- Glendronach Batch #17
Securing a loan from Lamna
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Total Cost of Loan
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