Prof­its ga­lore: how to in­vest in whisky

The Daily Telegraph - Your Money - - MONEY -

For most, whisky has just one ben­e­fit, ad­mit­tedly a big one: it’s en­joy­able to drink. But in­creas­ing num­bers are dis­cov­er­ing that in­vest­ing in the “wa­ter of life” can also be prof­itable – and fun, too. Whisky in­vest­ment is boom­ing. The num­ber of bot­tles sold at auc­tion in Bri­tain has risen from 20,211 in 2013 to 49,719 in 2017 and is on track to reach 100,000 this year, ac­cord­ing to Rare Whisky 101, a spe­cial­ist in the area. The value of bot­tles sold at auc­tion was £3.5m in 2013 but is ex­pected to be £36m this year. Prices av­er­aged £328 in the first half of 2018.

Much of the rise in whisky trad­ing has been fu­elled by over­seas buy­ers. Charles Ash­ton of Ch­effins, an auc­tion­eer, said: “Among the big­gest buy­ing groups for aged sin­gle-malt whiskies are the Chi­nese, Ja­pa­nese and In­dian mar­kets, which are, of course, push­ing up val­ues.”

Any­one con­sid­er­ing whisky in­vest­ment should al­ready have a well-bal­anced port­fo­lio and be happy with the risk in­volved. The usual route is sim­ply to buy bot­tles and hope to sell them for a profit.

It is also pos­si­ble to in­vest in en­tire casks of the spirit or buy into whisky funds, but this is more spe­cial­ist.

The trick, of course, is to buy the right bot­tles.

Andy Simp­son of Rare Whisky 101 said “bril­liant liq­uid from iconic dis­til­leries in lim­ited re­leases” was the key to whisky in­vest­ing.

Within this, sin­gle-malt Scotch makes up the vast ma­jor­ity of the whisky in­vest­ment mar­ket.

While coun­tries such as Ire­land, Ja­pan and the US make a good deal of whiskey (strictly, only Scotch whisky drops the “e”), Mr Simp­son said in­vest­ment in these drinks had not yet taken off. Blended whiskies also tend to be un­pop­u­lar with in­vestors.

“Sin­gle-malt Scotch whisky has that ca­chet and many na­tions just view it as the best,” he said.

Even within the realm of sin­gle­malt Scotch whisky, cer­tain dis­til­leries’ out­puts in­crease in price more than oth­ers.

At the front of the pack is The Ma­callan, which alone pro­duces 12pc of the whisky bought and sold at auc­tion. Mr Ash­ton said: “The Ma­callan is cur­rently the name most sought after, with the Pri­vate Eye brand, which was launched in 1996 and had a re­tail price of £36, now sell­ing for around £2,000 to £2,500.”

Such is the de­mand that the dis­tillery last month set the world record for the most ex­pen­sive bot­tle ever sold at auc­tion – £848,750, for a 60-year-old bot­tle of The Ma­callan Va­le­rio Adami.

Aside from The Ma­callan, es­tab­lished Scot­tish dis­til­leries such as Ard­beg, High­land Park and Glen­dronach are also promis­ing bets for would-be in­vestors.

But it’s not all about buy­ing into big­name brands. Whisky in­vestors also favour cer­tain flavours over oth­ers, and this trans­lates into the prices paid for bot­tles.

Cur­rently, whiskies aged in sherry bar­rels, and which have picked up some of that flavour and colour, sell very well.

Mr Simp­son said: “It tends to be the very heav­ily sher­ried, rich, fruity Christ­mas-cake taste that peo­ple go for. That is a dis­tinc­tive flavour pro­file, but very in de­mand.”

In­vestors also tend to buy with their eyes and pay more for darker drinks than lighter ones.

To source bot­tles that are likely to in­crease in value, buy­ers can ei­ther keep a close eye on auc­tions and

As whisky auc­tions boom, Sam Barker iden­ti­fies five pos­si­ble vin­tages for novice in­vestors

Tele­graph top five – the Scotch whiskies to in­vest in De­mand for Ma­callan is high – as are prices – but the brand is a solid in­vest­ment.

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