1. ROARING FIRES, MEN crowded
around glasses nodding appreciatively
at the liquid inside, glorious Speyside
distilleries surrounded by the majestic
burns, and ruddy-cheeked vagabonds
drawing the last precious tot from a bottle
of Glenbattered… these are the images
commonly associated with whisky.
Now, though, an increasingly large
number of people are seeing there’s
more to Scotland’s national drink than
just hot toddies, as certain brands of IGS
(investment grade scotch) are selling
for astonishing amounts, and the noble
usquebaugh has become elevated to an
alternative investment asset. Descended
from Scottish stock as I am, and an avid
drinker of Talisker, I was surprised,
nay, almost dismayed, to see that my
favourite dram was only 15th on the
Whisky Highland IGS1000 – a list that
has recorded the best-performing 1,000
bottles of single malt whisky from the
end of 2008 up to the current quarter.
So, before you get excited and dig out
that bottle of 10-year-old Jura from the
cabinet, for a whisky to deliver significant
returns it must fulfil certain criteria.
First of all, single malt whisky is
always considered the best investment.
Only blends that were distilled in the
early 20th century (pre-WWI) might be
worth anything, but still won’t command
the high price tags of old single malts.
You have to do your homework, and
soberly, too. Just as you wouldn’t go to
Tesco for a rare case of Château Pétrus,
or buy shares in a company you’d never
heard of, so you must think equally
carefully before investing in a relatively
new market. Only purchase directly from
specialist whisky retailers and reputable
auction houses, or buy limited edition
and commemorative bottles from the
distillers themselves upon the day of
release. First, they must be an iconic name,
like Macallan, Ardbeg, or Dalmore to
ensure their quality, and secondly be of
cask strength (usually 60% ABV, which is
more expensive to produce, and appeals to
the upper-premium market). Like many
investment-grade opportunities, older
is better. And when it comes to quantity,
single-cask and limited-edition bottlings
are always the most in demand. Macallan’s
Royal Wedding bottling sold out in a few
days in 2011, and while then on sale for
£150, it now commands prices of more
than £1,000. With inflation like that, you
can see why so many people are going
whisky-a-ga-ga. The top 1,000 whiskies
on the IGS1000 index alone have gone
up 157.27% since fourth quarter 2008.
Martin Green has worked as an
auctioneer for the past 25 years, with the
last five spent at Bonhams in Edinburgh,
and can see why it is an attractive
acquisition (taste aside, of course).
“It’s not subject to change in the same
way that wine is,” he says. “It has a much
longer shelf life. But don’t expect it to
make an instant profit. In my experience,
you should be looking at a long-term
investment – at least a decade – if you want
a considerable change in what you paid for
something.” Bonhams runs four whisky-only
auctions a year, and Green sees a recurring
pattern of the most coveted of bottles.
“The top of the list is always Macallan,
but there are many others: Bowmore,
Dalmore, Springbank Glenmorangie,
Glenfarclas [pictured over the page], and,
of course, distilleries that are now closed.”
Herein lies another of the central tenets
about investing in whisky: if you want
to be sure that that your investment
will net you a significant return, find
one from a ‘silent still’, that is, distilleries
that are either closed or have run dry
of whisky. These include Port Ellen,
Glen Mhor and Brora. Companies like
Diageo (which owns Lagavulin) may
have whisky stocks left from any of
these closed distilleries, but they won’t
release to the public how much there
is remaining until it has all been sold.
Bottle conditions and fill levels are
also important. Make sure the bottle is
full right up to the neck, as three-quarter-
full bottles could indicate a faulty seal that
may have led to a disproportionate share
for the ‘angels’ (ie evaporated whisky).
Another factor pushing up prices is
the emerging markets and the fact that
whisky holds such a prestigious kudos
abroad, even for entry-level blends. Sitting
in the ‘exclusive but inclusive’, semi-private
area of the Scotch Whisky Experience’s
retail shop on the whisky tourist Mecca that
is Edinburgh’s Royal Mile, retail manager
Keith Mackay shows me a list of bottles
bottles that reach £10,000 on his iPad.
“There are lots of different types of
people from overseas who visit the shop
– especially during the Olympics when
people popped up for a day or two,” he
says, as I cast my eye around thirstily
at the 300 different single-malt, grain
and blended scotch whiskies, and whisky-
based liqueurs, from all over the country.
“We had a Chinese businessman who
came to us wanting to make a significant
purchase. A lot of Chinese groups are
always looking to buy expensive whiskies
to take back home to their families, to
invest and to show off.”
But is simply buying the most expensive
available limited-edition whisky a guarantee
of healthy returns? Andy Simpson runs
whiskyhighland.co.uk, a personalised
whisky advisory service with its very own
valuation library. He uses prices and data ▶
The Spirit of the Age
As prices of limited editions soar, distilleries are bombarded by collectors, and middlemen blossom
across the premium single-malt world, ALISTAIR MACQUEEN asks: is whisky the new wine?
Top of the list is always
Macallan, but there are many
others: Bowmore, Dalmore,
Springbank and up to a
certain extent Glenmorangie,
Glenfarclas, and, of course,
distilleries that are closed
HEDGEHEDGE
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2. ▶ amassed from the Whisky Highland Index
to track bottles’ and brands’ value based on
what has been paid on the auction market,
and offers very practical advice. “Stick
to the icons, and the limited releases,”
he says. “They’re getting fewer and fewer.
Independent bottlers are coming into
their own, like the Scotch Malt Whisky
Society (which uses only numerical codes
to identify their bottles, instead of showing
the brand names) is a perfect example.
A lot of it is driven by age: the further
back a vintage goes, the more it is worth.
But yes, anything that’s iconic, old, or
anything from Port Ellen, Brora, St
Magdalene… there’s nothing left.”
Scarcity is a problem many investors will
come up against, as many of these antique
releases have, for obvious reasons, been
drunk, or are in the cabinets of collectors.
There are also certain limited releases
that prospective investors should avoid:
whiskies that are housed in spectacular
or custom-made cases, or partnered with
designer names and celebrities – what
Andy refers to as ‘whisky bling’.
“Ignore anything that’s overpackaged,
that crosses two asset classes, that has
both diamonds on it and whisky in it:
it just doesn’t work.”
Turcan Connell Asset Management
CEO Alex Montgomery has another view
about this ‘liquid gold’ versus other, more
traditional investment vehicles, like shares.
“If you compare the two investments side-
by-side,” he says, “the first one (shares) is
liquid, the prices are transparent and the
other one is not liquid, and the prices are
opaque. So if you opt for the second choice,
you need to be confident that you’re going
to get a super return to compensate you
for giving up the first choice.”
For those who know what they’re doing,
however, and have the capital to invest in
something they can afford to lose – then
join a very parched market in search for
in-demand single malts. And remember,
as any reputable whisky-shop employee
will tell you (or any pliant tourist on the
Royal Mile), buy one to drink and one to
keep. We’ll raise a glass to that… H
Alistair stayed at The Edinburgh Hotel du Vin, 11
Bristo Place, Edinburgh, EH1 1EZ; hotelduvin.com
Three Bottles to Invest in Now
Dalmore Zenith, from £50,000
A blend of the last drops of three
whiskies (1929, ’51 and ’64), this
drop went to auction online with
a £50,000 reserve. Thus far, no
sale price has been announced,
but we’re guessing it was high.
Port Ellen 34-Year-Old Special
Release 2013, £1,500
This single malt will set you back
a cool £1,500, but don’t worry,
you’ll taste the value. Distilled
in American and European Oak
casks lying dormant since 1978,
it’ll feel like disco never died.
Talisker 27-Year-Old 2013, £475
Only 3,000 of these individually-
numbered Taliskers were made
available upon its release this
year, so your skates will have to
be on. The only distillery on the
Isle of Skye, Talisker produces
rich malts with a volcanic edge.
The further back a
vintage goes, the more it
is worth. But yes, anything
that’s iconic, old, or
anything from Port Ellen,
Brora, St Magdalene…
there’s nothing left
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