Liquid gold: Why whisky investments can hit the spot
— -- Fine whisky has been part of Scotland's heritage for more than 500 years, but it is only recently that investment opportunities have opened up for its most famous export .
With global demand for luxury whisky on the rise, putting your money into rare bottles of Scottish single malt could make you some pretty neat returns.
"Over the last 10 to 15 years, the demand for whisky has just increased," says Sukhinder Singh, director of The Whisky Exchange.
"My feeling is that the risk in whisky is quite low," he said. "I can just feel the demand globally; even very recently I'm watching prices go wild over the past six months."
While the U.S. remains the top Scotch whisky importer, with more than $400 million worth sold there this year, Asia has seen the largest increase. Demand from Singapore rose 64%, making it the third largest importer, and in Taiwan demand was up 45%.
The Macallan distillery is one of Scotland's most famous brands, and has become a strong name in whisky investment.
David Cox, director of fine and rare whiskies at Macallan, says, "We were one of the early pioneers if you like, in the release and availability of very rare and old whiskies. As we released these onto the market, that, together with the reputation of the Macallan, attracted collectors and connoisseurs around the world."
Whisky writer Jonny McCormick explains global interest this way: "Just in the last couple of years we've seen new auctions open up by Bonhams in New York and in Hong Kong, and these sales are extremely popular. We've seen nearly 100% sales by lot and by value and the American collecting market is extremely lively. The Chinese and Japanese market is very popular."
Cox also highlighted the increasing importance of less traditional markets.
"Russia has become a very, very important market for us," he said. "There's still many collectors in Europe and certainly North America as well, who are on the lookout for special Macallan bottlings. But as a proportion of the ones that we are releasing these days, certainly we are seeing a higher and higher percentage going to Asia-Pacific and to Russia."
For the potential investor, names like the Macallan are a great bet; a 64-year-old Macallan auctioned last year for charity achieved a world-record price of $460,000. While of course not all bottles are fetching these kinds of prices, Singh says investors have a budget in mind — and enough space to house a collection — then getting into this market is easier than it used to be, and specialist shops and auctions are the places to be.
"It's much easier now that it was a number of years ago," he said. "As the demand for whisky has increased, more and more specialist whisky shops have cropped up.
"There are a number of auction houses. I remember when I started there was only one, and there was only one auction a year. I think today there are three or four auction houses doing whisky and each of them are having maybe anywhere between three to four sales a year, which is quite a lot."
"A collection of about 120-150 bottles . . . is a nice size collection. You'll have a balance of some really standard stuff, you'll have some very rare stuff which is quite expensive, but it's a controllable size."
