A hand-painted bottle of The Macallan 1926 Scotch sold for US$1.5 million (AU$2.14 million) last year, breaking records and highlighting what many investors already knew – whisky can make you money.
Rare whisky appreciated in value by 40 per cent last year, bringing its 10-year change in value to an incredible 582 per cent – higher than coins, wine, art, watches, cars and diamonds.
It should be noted that this figure relates to the Knight Frank Rare Whisky 100 Index, which tracks 100 bottles of the world’s best Scotch whisky. So this appreciation is for the best-of-the-best whisky.
“Last year was a transformational one for rare single malt Scotch whisky,” said Andy Simpson from whisky consultancy Rare Whisky 101, which compiled the index.
“Looking to 2019, we see prices continuing to harden for the right bottles from the right distilleries, as well as increased interest in more affordable bottles from the second tier. But certain pockets could see a correction.”
And it’s popular among the world’s elite: Amazon’s Jeff Bezos and Alibaba’s Jack Ma are both reportedly collectors.
Why is this surge happening?
There’s a few reasons. One big one is that whisky is cool again, thanks to shows like Mad Men and Suits.
And at the same time, big liquor companies are making more whisky and more exclusive blends, producing rare, collectible drinks.
Then there are the Asian investors “going mad for malt whisky”, as the editor of The Wealth Report, Andrew Shirley put it.
There are new direct flights from Edinburgh to Beijing and back as sales of Scotch whisky to India, China and Singapore rose by 44 per cent, 35 per cent and 24 per cent in the first half of 2018.
“It seems single malts have taken over from wine,” said Sami Robertson, a Knight Frank global property ambassador who works closely with clients based in Singapore.
“People are spending huge amounts on their cellars. I was talking to one of my contacts recently who paid well over £100,000 (AU$187,000) for a single bottle.”
While it used to be a niche, investors are now “gobbling up anything they can find”, said spirits collector Brian Robinson.
But that doesn’t mean it’s easy, warned auction house Barrons.
The reality is that the competition has increased just as quickly as prices have.
“At this point in the cycle, I’d say profits are harder to come by, because there are already so many well-established collectors and traders that have effectively cornered much of the market for investment bottles,” Robinson told Barrons.
“But that doesn’t mean there isn’t still some fun to be had, and some money to be made if someone’s willing to put in the work.”
It means that buying a collectible bottle could mean waiting for years to purchase and then more years for it to appreciate.
“Sure, there are some collectors out there that make six figures trading whiskey, but they are few and far between,” Robinson said.
“Just like day traders in the stock market, the vast majority of whiskey collectors won’t be making any real money. Do it because you think it’s fun, not because you think you’ll make it big.”
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