Here’s why you should invest in Whisky

24 Sep Here’s why you should invest in Whisky

The value of collectible bottles of Scotch whiskies jumped by 34pc to £4.6m over the first half of the year as demand for rare single malts soared despite slumping sales by retailers.

A record-breaking 20,638 bottles were sold on the open market between January and June, 35pc more than last year, led by strong appetite for bottles of Brora, Dalmore and Port Ellen, according to the brokerage Rare Whisky 101.

The growth of the collectibles industry comes amid a weak period for the primary market. Sales of Scotch whisky, one of the largest segments of the UK’s food and drinks sector, fell by 7pc to £3.95bn in 2014.

“The dead hand of marketing is gaining an ever tighter grip on the single malt category, where retail releases are becoming non-age stated (NAS) and the number of bottles ever more prolific,” said Andy Simpson, co-founder of Rare Whisky 101. “The dearth of truly collectible releases over recent years has only fuelled demand for older and discontinued past releases where quality and rarity are powerful motivations for purchase.”

Mr Simpson added that he expects the rarities market to continue to outperform the broader Scotch industry as “the value of scarcity increases demand from connoisseurs, collectors and investors”.

However, even the thriving collectible Scotch market pales in comparison to the rapid growth of demand for Japanese whiskies. Collectors are increasingly turning towards Japanese distilleries, which could explain why the Vintage 50 Index, tracking some of the rarest bottles of Scotch in existence, gained less than 2pc in the six-month period.

The value of Karuizawa bottles, whose distillery stopped production in 2000, were 66pc higher than last year.

A 1960 bottle of Karuizawa set a new record for a Japanese whisky sold an auction when it was snapped up for 918,750 Hong Kong dollars (£77,007) on Friday.

Japan’s Yamazaki Single Malt Sherry Cask 2013 was declared the best whisky in the world by the Whisky Bible 2015, the first time in the book’s 12-year history that the top five did not include any Scotches.

“Traditional Scotch brands will, of course, always remain popular with collectors. However, the emergence of overseas brands such as Karuzaiwa has certainly shifted the dynamics of the whisky collector’s landscape. It remains to be seen whether this is just a blip or the beginning of a longer term trend,” Mr Simpson said.

The 100 top peforming bottles of investment grade Scotch increased in value by 9pc in the first half of the year, while the top 250 and 1000 gained 6pc and 8pc.

Since 2008, these indexes have yielded 506pc, 386pc and 245pc respectively.

However, a deluge of less valuable bottles hitting the auction block weighed on the value of the lower market, knocking 7pc off the Negative 100 Index in the January to June period.

Overall, the average bottle price fell to £223.08 from £225.94 six months earlier.

The Investors Distillery Rank tracks the percentage change in value:

Rank Brand Change in ranking
1 Brora =
2 Dalmore =
3 Port Ellen +1
4 Mortlach +5
5 Bowmore +13
6 Macallan +1
7 St Magdalene +4
8 Talisker +4
9 Ardberg +10
10 Milburn +3
11 Glenugie -1
12 North Port -6
13 Balvenie -10
14 Convalmore -6
15 Brackla +7
16 Glen Albyn +19
17 Glen Grant -2
18 Banff +7
19 Glenlochy +9
20 Glenury Royal -6
21 Rosebank +12
22 Ardmore +19
23 Glenfiddich +16
24 Dallas Dhu =
25 Lochside +1
26 Lagavulin +8
27 Springbank -4
28 Hillside -7
29 Clynelish +11
30 Laphroaig +6

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