Whiskey Investment

I once tried to buy shares from the on campus bank in DCU, the helpful teller reminded me that shares can go down as well as up. On reflection, I can see it was a gentle reminder to a millennial that life is not always an upward curve. The same is true of any investment and the same is certainly true of whiskey.

Whiskey investment is extremely attractive right now. Lucrative returns driven by a massively expanding Asian market mean that the rare whisky Apex 1000 Index which tracks the price of 1000 of the most collectible bottles of Scottish single malt has seen a 550% increase in value since it began back in 2008. These thousand bottles have been carefully selected to represent our broadest picture of how the values of a spectrum of collectable bottles of Scotch are performing as a collectable or investment bottle. *

Whiskey when cared for correctly can last over 100 years and even when a bottle has been opened you can take around 3 years to consume the precious liquid inside. It’s one of the reasons I’m far happier to pay €100 for a bottle of whiskey and less so for a bottle of wine – the whiskey will last significantly longer and will hold long after it’s been opened! I’m sure wine aficionado’s out there will disagree however.

Many expensive and collectible bottles represent a moment or celebrate an event, which makes these bottles rare and unique. A great example of this are the bottles created during the Fèis Ìle on the island of Islay every year by the 8 distilleries there.  These bottles begin to appear online hours after their release for multiples of the Recommended Retail Price. Whether you agree or disagree with the profiteering practice it’s a fact that many people have financed their entire trip to the island by flipping the special limited edition bottles which are only available on the island!

By contrast, Asian collectors tend more towards building a collection and are less likely to be found flipping the liquor for short term profit in the same manner as their Western counterparts. Chinese whiskey sales are ever increasing and even a small change in consumer behaviour in such a populous nation can have massive effects on price and scarcity.  The demand comes from China’s increasingly urbanized population and its rising middle class that is expected to rise to approximately 630 million by the year 2022. This represents an opportunity for the careful collector moving forward. Huge investment has been seen from major brands recently in the region and will certainly continue moving forward.

So when it comes to investing in whiskey, what does it take to cultivate a seasoned collection? Where do you even start? What are the liabilities? Where are the pitfalls? Allow me to furnish you with some pointers:

  1. A little knowledge is a dangerous thing. You need to know what you’re buying. If a deal seems too good to be true, it probably is. There’s a big counterfeiting market out there and many unscrupulous sellers trying to part a fool from their money.
  2. Upright storage in a nice cool space without exposure to direct sunlight is essential. The last thing you want is to come back to a bottle which has evaporated into the ether.
  3. Always have a plan on how to liquidate your assets. Bottles which can be sold to collectors or restaurants are essential. There’s no point in having 100 bottles of standard blended swill which is of little value to anyone but you stacked up in your cupboard.
  4. Remember taste is subjective as is price. Before Jim Murray declared Japanese whisky a sensation the price of bottles were quite reasonable. Since having been anointed in Murray’s infamous whisky bible both price and availability has been massively altered.
  5. It helps if you like whiskey. If all else fails you can always drink it up. Whiskey can be collected but if you ask me its best enjoyed.

 

Sláinte!

 

* Note: The full graph along with the accompanying 2016 report is available on rarewhisky101.com and is an excellent indicator of how your bottles are performing.

If you’re still interested check out an article I wrote for greatdrams.com last year, find it here: http://www.greatdrams.com/collecting-whiskey/collecting

 

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