It’s no longer true that buying liquor is a waste of money. In fact, the purchase of a rare whiskey could be the investment of a lifetime. If you own a bottle of the Macallan 1926, it could fetch as much as US$ 1.5 million.
Rare whiskey: greatest growth in value among luxury assets
According to the 2019 Knight Frank Luxury Investment Index, rare whiskey showed the greatest growth class among luxury assets over the last ten years.
Over the last 12 months alone, the price of rare whiskey increased by 40%. Luxury cars appreciated by a paltry 2% in comparison.
Over a 10-year period, the price of fine whiskeys has increased by 582%. Luxury cars – the second largest investment class – grew at a far slower (but still steady) pace of 258%.
Highest prices fetched for Scotch whiskey last year
Single malt Scotch whiskeys brought in some of the highest prices in 2018.
In October, a bottle of Scotch sold for a record US$900,000. It was to be surpassed only a month later by the Macallan 1926, which fetched a whopping US$1.5 million.
Only 40 bottles of this limited edition Scotch malt exist. Three famous artists designed the individually numbered bottles. The whiskey itself was finally bottled in 1986, after spending 60 years maturing in ex-sherry casks.
These unique bottles offer precisely the rarity that connoisseurs and investors are looking for.
Why the sudden interest in luxury whiskey?
Times of political and economic uncertainty are often accompanied by increased risk to traditional investments such as stocks, bonds and other financial portfolios.
Market pressures and investor nervousness increase the volatility of these asset classes, regularly resulting in significant decreases.
The current South African economic downturn and slow gains in the international financial has prompted investors to find more lucrative assets that do not lose value over time.
Traditionally, these have included fine art, classic cars, gold, and wines. These assets may become more valuable with age. They also function as status symbols for those who own them.
Whiskey has now joined other assets as a top player in this luxury market.
Coveted malts often come from highly-esteemed distilleries with long traditions of producing fine whiskeys. The older, rarer and more unique they are, the higher the price they may command.
An insatiable Asian market
Asian collectors seem to be particularly attuned to the growing value of fine whiskey.
The Scottish Whiskey Association reports that the sale of Scotch whiskey to India increased by 44% in the first half of 2018 alone.
Sales to Chinese and Singaporean customers also grew by 35% and 24%, respectively, during the same period.
Direct flights between Beijing and Edinburgh enable Asia’s high-net-worth investors to visit Scotland to learn about whiskey and make their purchases.
Some investors purchase entire casks that are still in the process of maturation, hoping to make huge returns on their investments when these malts are finally bottled.
It’s price that matters
It’s not only the quality of a whiskey that determines its price. In other words, a very expensive bottle of whiskey won’t always taste better than one with a lower price tag!
But that’s not the point. Whiskey is big money. Rather than looking for the best tasting whiskey, investors are looking for the best potential returns.
The expanding luxury whiskey market means that distilleries the world over are trying to get in on the game.
Who’s making the most expensive whiskeys
The Scots aren’t the only ones producing malts that draw exceptionally high prices. In fact, the whiskey trade in Japan, Taiwan and the United States has grown massively in recent years.
In 2018, a 50-year old bottle of Japanese Yamakazi whiskey sold for US$350,000.
Who knows, perhaps South Africa will one day join this exclusive club, producing some of the world’s top luxury whiskeys.
The distilling industry in South Africa is still nascent, but our own Bain’s Cape Mountain Whiskey won a top award at the 2018 World Whisky Awards. It’s not a Yamakazi or a Macallan. Yet.
What we offer at Lamna
At Lamna, we don’t specialise in or have a commercial interest in fine whiskeys.
Client borrows R10,000 for 90 days.
Total Cost of Loan
Fixed rates range from 36% to 60% APR and payment options range from minimum 3 to maximum 24 months. Apart from the initiation and monthly fees shown below, the only additional fee is credit life insurance if the borrower does not have this already.