Rare Whisky Are Being Poured Into By Some Investors – Here Is Why

There are booming investments in old, rare and exclusive bottles of whisky, according to analysts.

Noting a rise of 94 percent from the first half of 2016, the value of collectable bottles of Scotch sold at auction broke a record high of £11.18 million ($14.34 million) in the first half of 2017 in the U.K. alone, according to a report published Friday.

The number of bottles of single malt Scotch whisky sold at auction shot up by almost 50 percent since the first half of the previous year said Whisky brokerage and investment experts at valuation firm Rare Whiskey 101.

“The market is in good health, the bulls remain in firm control. Supply is increasing significantly but increasing demand continues to push prices higher for the right bottles,” Andy Simpson, broker and consultant at Rare Whisky 101, said.

Up from a previous high for the brand of £17,000 ($21,808) in 2015, selling for £65,210 ($83,656), a 50-year-old single malt brand, Macallan, was the most expensive Scotch sold in the first half of the year.

“Scotch, and indeed all whisky, investments have traditionally been an investment of passion,” Simpson added.

“Collecting bottles from a favorite distillery, or one bottle from every distillery, or birth-year vintages (mine’s 1972) are all popular ways of starting a meaningful collection.”

He said that there are three categories that such investments can be divided into. They are connoisseurs focused on consumption, and connoisseurs focused on consumption.

“Traditional collectors, the professional investors and the curious connoisseurs are creating an almost perfect bull market where demand consistently exceeds supply. Some of the most sought after bottles had tiny volumes released globally, so getting hold of them can be a huge challenge, irrespective of one’s budget.”

Time is of essence for whisky investors.

the value of the commodity is that “it gets better the longer you store it”, said Rupert Patrick, CEO of the online investing site WhiskyInvestDirect, earlier this week.

“Microchips, butter, you want to use them up quickly, but whisky – a five-year-old is always better than a one-year-old.”

Buying gold bullion was compared to buying gold bullion by him.

“If you think about a gold bar sitting in a vault, and then switch that image for piles and piles of Scotch whisky sitting in barrels – for 10-15 years sometimes – you’ve got an asset which is investable to retail investors through very clever technology,” he said.

According to fine wine and spirits merchant BI, demand for Japanese brands seemed to be leading the demand trend in the U.K.

The sales of Japanese whisky climbed by 232 percent since January 2017 was revealed by the firm on Thursday.

“Japanese whisky is certainly the latest discovery for whisky connoisseurs and the growing popularity is leading to increasing prices for the rarest varieties,” Gary Boom, BI’s managing director, said in a press note.

Seeing their bottle prices rise by as much as 30 times, sought-after brands like Yamazaki and Karuizawa led the charge.

According to Rare Whisky 101, a new U.K. and European record was set by the sale of a bottle of Karuizawa 1960 for £100,100 ($128,291) in April.

Boom’s sentiment was echoed by Whisky Investment Fund CEO Rickesh Kishnani.

He said: “Clearly we’ve seen a rise of Japanese whiskies here in Asia, especially over the past three years, and we see that continuing. Of course the Olympics coming up in 2020, the relatively low yen and continued interest in tourism in Japan has really made for a lot of interest in the single malt whisky business.”

(Adapted from CNBC)


Categories: Economy & Finance, Entrepreneurship, Strategy, Uncategorized

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