LIQUID GOLD
by Emma Cowing As prices soar, whisky is a rock-solid investment (even if experts lament that it SHOULD be drunk)
THE atmosphere in the auction room was electric. Lot 86 was, after all, one of the most highly anticipated pieces to come under the hammer in Scotland for quite some time.
With no small degree of reverence, two men in white gloves carefully carried a glass box into the packed room and placed it in front of the podium. As the bidding began, the audience craned to get a glimpse of a really rather special bottle of Scotch.
The Macallan Valerio Adami 1926 60-year-old is one of the rarest whiskies in the world. Featuring a specially designed label by Italian pop artist Adami, only 12 were produced and two have been lost; one in the 2011 Japanese earthquake and one, horror of horrors, because it was drunk. Experts call it the ‘holy grail’ of whiskies.
At a phone bank a welldressed young man – flown in from the auction house’s Hong Kong branch – was furiously speaking Cantonese into his receiver and, at each price hike, nodding his head. And so it was, when the hammer went down at his final nod, that this 60-year-old bottle of whisky was sold to an anonymous Chinese bidder for a whopping £848,750, making it the most expensive dram in the world.
Bonhams, the Edinburgh auction house behind the sale, declared itself delighted.
‘It is a great honour to have established a new world record,’ said its whisky specialist Martin Green, ‘and particularly exciting to have done so here in Scotland, the home of whisky.’
But not everyone is celebrating. Because for some, such eyewatering prices are destroying the very thing that Scotch was made for in the first place: drinking.
‘Whisky is losing its soul. It just shouldn’t be about that,’ says Jim Murray, whisky expert and author of the annual Whisky Bible.
‘There is no romance any more. People have lost that sense of fun when it comes to whisky. Now it’s just money, money, money.’
It would certainly seem that way. Within hours of the sale, Christies in London announced it was putting up an even rarer whisky for auction next month, another 1926 Macallan with a unique hand-painted label by Irish artist Michael Dillon. It is expected to break the £1million barrier for the first time.
Meanwhile, in the first half of this year, UK sales broke all records, with the Rare Whisky 101 index recording that £16.336million worth of hard-to-find whiskies had been sold, a 46 per cent increase on last year.
GIVEN that in the whole of 2013 sales amounted to only £4.52million, it would seem the market is not so much growing as exploding. So why is whisky making so much money? The answer, it seems, is because in today’s volatile financial world, a dram is a safe bet.
‘In 2008 when the stock markets were bad people sought other forms of investment, something that was going to be safer than stocks and shares,’ says whisky writer Charles MacLean. ‘Whisky was one of those things.’
While items such as stamps, coins and gold have traditionally been seen as safe financial havens, today whisky is outperforming them all.
‘The most successful alternative investment is vintage cars, the second is fine art and the third is now Scotch whisky,’ says MacLean. ‘It’s extraordinary. We’ve got to a place where Scotch is outperforming most other forms of alternative investment, including gold.’
The fact that old whiskies can only become rarer – because bottles are drunk or lost – also means they steadily accrue value.
‘Rare whisky is a finite resource that’s always getting more finite,’ says Sean McGlone, who runs auction site Whisky Auctioneer.
‘There are always people who will open a very special whisky for a very special occasion, which makes the existing bottles even rarer. It’s an investment opportunity but it’s also something people are really excited about. Once they saved money in stocks and shares, now they save in whisky.’
In August, one Asian whisky collector travelled from China to a McTear’s auction in Glasgow so he could personally bid on a rare crystal decanter of 70-year-old Private Collection Glenlivet 1943, eventually putting in a winning bid of £43,800. An identical decanter of the same whisky was priced in a December 2017 catalogue at £26,753, meaning a whopping 60 per cent leap in value in less than a year. No wonder whisky has turned into a collector’s item.
But for Murray the brave new world of investment whisky is something of a disaster. Not least because most whiskies bought by collectors are never drunk.
‘When I first started giving whisky tastings around the world over 20 years ago, every question I was ever asked was about the whisky,’ he says. ‘What can you recommend, what has the smoky taste, would I like this one…
‘No one used to talk about the value, it was about the pleasure of drinking the stuff.
‘About ten years ago one in ten questions were about investment. Now, at least 50 per cent of them are. Which one should I buy and hang on to, which whisky should I buy and forget about for a couple of years and sell on. To me that’s just wrong.’
Much of the new investment market has been propelled by Asia, where collectors from Japan, Taiwan and China in particular have taken an enormous interest in Scotch whisky – and have the big bucks to drive up prices.
MacLean attended last week’s Bonhams auction with a group of Chinese collectors, each eager to snap up a rarity. A number had their eyes on bottles of Black Bowmore, right, a particularly soughtafter Islay whisky. Three of them sold for more than £20,000 each. It’s a growing trend – a whisky will be bought and locked away, to be brought out later and sold on.
‘Frankly, for these investors it’s very unlikely these bottles will be opened, especially something like the Adami,’ says MacLean.
‘It’s a bit like owning Liverpool football club, having Jurgen Klopp as manager, and then just looking at the team and not letting them play,’ says Murray. All this means that the average price for a bottle of rare whisky has increased exponentially. In June 2016, an unusual whisky could be snapped up for £217.56. According to the Rare Whisky Index the average bottle value is now £328.66, and is predicted to rise to £340 by the end of the year. So where does that leave the amateur whisky collector, the sort who has a few decent bottles in the drinks cabinet and always asks for a Scotch for Christmas?
‘What he’s been left with is less choice,’ says Murray. ‘He can taste whiskies from more distilleries than in the past, but he’s not getting a chance to see what they’re like as they mature. The prices have gone up so much for the 25-year-olds and upwards that they’re now often out of most people’s reach.’
But if investment whisky is becoming more like the art world, with enormous amounts of money changing hands and high-value commodities vanishing for many years at a time, it also means that there are occasional frauds.
In August 2017, a Chinese martial art fantasy writer and multi-millionaire named Zhang Wei took his grandmother to Switzerland on holiday.
STAYING in the luxurious Hotel Waldhaus am See he decided to order a dram from an unopened bottle of 1878 Macallan single malt. The hotel was initially reluctant. After all, a malt that is opened loses value – and the hotel owner believed it was worth around £265,000. Zhang persuaded them, and paid £7,810 for a single glass of the stuff.
It turned out to be a fake. When Zhang wrote about the experience on his blog, whisky experts started poring over pictures he’d posted and remarked on discrepancies between the cork and the bottle.
It turned out the whisky was blended and had probably been distilled between 1970 and 1972.
But despite the fakes, the increasing trend for high-price whisky does not appear to be going anywhere soon.
This weekend, another 1926 Macallan, this time with a label painted by Sir Peter Blake, the artist behind the Beatles’ Sgt Pepper’s Lonely Hearts Club Band album cover, will go on sale in New York, and is expected to set a new record. Yet when it comes to bottles, such as the 1926 Macallan – a nip of which would cost around £19,000 – is it really worth it?
‘When I tasted it, the whisky was quite intense, dry and tasted of dried fruit with some hint of warming spice,’ said David Robertson, a former master distiller at Macallan and one of the very few in the world to have tried the dram.
‘But I had to try a lot of whiskies over the years and in my humble opinion, there were a number that were better than this.’