I get a lot of offbeat press releases, especially about the wine and spirits industries, but this one takes the cake. According to “whisky valuation experts” Whisky Highland, “the market for Investment Grade Scotch (IGS) is continuing to outperform other alternative investments and commodities. Four year figures, from 2008 to the end of 2011, will reveal that an investment in the top 10 performing whiskies would have achieved a gain of more than 400%. An investment in the top 100 would have returned a 245% gain, whilst the top 250 would have returned 180%.”
Gold, which has been a red hot performer and popular alternative to stocks and bonds, rose “just” 146% over the same period, while diamonds hardly appreciated, merely 10%, according to Whisky Highland. Suddenly fine whiskies are looking pretty attractive - even if you don’t drink them.
Here’s more of their data: “A total of 8,500 bottles were last year sold at auction compared to 1,500 four years ago. The value of that auction market reached A$5.9M in 2011 and is expected to rise to A$25M by 2020. Global investor and collector bottle retail sales confirm that the retail sector is also booming with bottle sales thought to total 85,000 per year worth around A$65 million. The fourth quarter of 2011 saw a significant jump both in sales and volume, with more than 3,000 bottles coming up for auction in the UK with sales totalling more than A$885,367, compared to less than 2,000 a year earlier with sales reaching around A$590,244.”
A few weeks ago I wrote about the annual Universal Whisky Experience in Las Vegas, which has just happened. At that event Andy Simpson, founder of Whisky Highland, presented what he claimed was the world’s first Whisky Investment Seminar and unveil the latest complete three year data for Investment Grade Scotch. Simpson launched Whisky Highland in 2010 to offer a whisky valuation service for collectors and investors. He has tracked every bottle sold at auction since, and his company now offers “the world’s first and only online single malt Scotch whisky Valuation Library.” Taking a quick look, this online resource appears to help owners settle the age old dilemma, “guzzle or hold?”
Commenting on the latest market data, Simpson said: “Over the last twelve months, the market for whisky investment has begun to catch the eye of the investment community. Some of the rare and limited bottlings from the top performing distilleries such as The Dalmore and Macallan are achieving eye-watering returns at auction, outperforming most other forms of alternative assets. I’m confident that it won’t be long before whisky is viewed in the same light as art, wine or classic cars, offering a genuine and creditable alternative to these more established asset classes. We can already see this happening with the growth of the dedicated whisky auction market. Where you would previously see a few bottle of whisky bolted on the end of a wine auction, there are now a number of dedicated whisky auctions taking place across the UK and further afield in countries such as Hong Kong.”
Perhaps the highest profile event in the history of whisky retailing occurred last year, garnering tons of press when a traveler at Singapore’s Changi Airport bought a bottle of The Dalmore 62 for a new world record price of A$184,451 over the counter. At auction, the most expensive bottle ever sold was a single Macallan 64 year-old for A$428,550. Macallan has always been my favorite spirit, so I am hoping this confirms I have good taste, though I usually limit my excess to the 12 year old, of which I could get over 9,000 bottles for the price of one 64 year old version. That’s my kind of investing.