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Investors are pouring thousands into rare whisky

by Jonathan Adams

Investors are investing huge money in rare whisky

Investors are pouring money in rare whisky and the value of old and rare whisky is touching record high prices. The market of old and rare whisky is seeing great investment. In the UK alone, bottles of Scotch broke a record high of £11.18 million ($14.34 million), which is a rise of 94% from the first half of 2016, said report. Out of the various types, a 50-year-old single malt brand, Macallan, was the most expensive Scotch sold in the first half of the year. It sold for £65,210 ($83,656), up from a previous high of £17,000 ($21,808) in 2015. Sale of Scotch to Asia grew has grown by 55 per cent in the last 12 months.

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

“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, told CNBC via email on Friday.

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

Simpson added.

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

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He said there are three types of Whisky investors, which include collectors, professional investors and connoisseurs. Out of them, the collectors build an inventory, the professional investors use it as an investment and the connoisseurs are centred 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.”

Rupert Patrick, CEO of the online investing site WhiskyInvestDirect, told a business channel that the value of the commodity is that “it gets better the longer you store it”.

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

“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.

Meanwhile, Japanese brands are in high demand in the UK, according to fine wine and spirits merchant BI. The most sought after brands are Yamazaki and Karuizawa and their price rise up to 30 times. The firm revealed that sales of Japanese whisky climbed by 232 per cent since January 2017.

“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.

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

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.”

Rare Whisky 101’s Simpson said that whisky investment went beyond the U.K. market.

“It’s really a global market,” he said.

“We’re seeing new rare/old whisky buyers (for drinking, collecting and investing) emerging all over.”

He added:

“Continental Europe is also home to a huge community of passionate rare whisky enthusiasts – particularly for long discontinued bottles. The U.S. remains a massive market with some of the largest collections being in America.”

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This article is for information purposes only.
Please remember that financial investments may rise or fall and past performance does not guarantee future performance in respect of income or capital growth; you may not get back the amount you invested.
There is no obligation to purchase anything but, if you decide to do so, you are strongly advised to consult a professional adviser before making any investment decisions.

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