INVESTMENTS in rare whisky have hit record levels in the UK with more than £6 million spent at auction in the second quarter of the year.
The total of 21,617 bottles is 71 per cent higher than the same period last year, when 12,638 bottles were sold, according to data from whisky analyst and broker Rare Whisky 101.
An increasing number of ‘professional investors’ are turning to whisky, according to David Robertson, co-founder of Rare Whisky 101, in addition to collectors and connoisseurs.
Mr Robertson said fresh investment from North America and Asia, and an increase in investment funds being set up as vehicles to invest in Scotch, are driving value and volume.
“We speak to a number of auction houses, and they are seeing lots of new entrants coming to the market from North America and Asia,” he said. “From our perspective we’re seeing more professional investment-minded people who are working with us and asking us to source collections on their behalf, which they might want to tuck away in a warehouse along with their fine wine collection.”
These investors have helped spend £6.18m on rare whisky at auction, compared to £2.80m in the same period in 2016, an increase of 121 per cent.
The average bottle cost of £268 was also record-breaking and auction houses can sell up to 6,000 bottles per month.
Mr Robertson and his business partner Andy Simpson set up Rare Whisky 101 in 2014 to offer a whisky valuation service, brokerage and consultancy.
To date, its biggest deal was brokering the sale of two bottles of 60 year-old Scotch whisky for £300,000.
“In the mid 2000s, even 2010, it was inconceivable that someone would spend more than £10,000 on a bottle,” said Mr Robertson.
He said current growth numbers were “crazy”, adding: “When we launched [in 2014], we did projections as to where the auction market would be, and we under-called the market. We didn’t expect or forecast it would be as voluminous and how much the values have increased on a lot of bottles.”
Mr Robertson also noted that an increasing number of investment funds are being established to buy into the rare whisky market. One such fund is the Hong Kong-based Platinum Whisky Investment Fund, set up in February 2016 by fine wine merchant Rickesh Kishnani. It has attracted $10m in funding from 40 private investors committing $250,000 each.
“It’s becoming a bit more sophisticated,” he said, adding that this is an area which could “put upward pressure on prices, as there will be more people wanting more whisky”.
For now, the figures underline the continued trend of value growth exceeding volume growth.
In June alone, Rare Whisky 101 noted a 54 per cent increase in volume and a 94 per cent increase in value of auction sales, compared to June last year.
The majority of sales come through online platforms, with Mr Simpson noting: “The growing popularity of online auctions, combined with recent moves by traditional rare whisky retailers to set up their own auction sites, continues to drive demand.
“By joining the secondary market sector, these bricks and mortar retailers have finally realised that they can’t afford to lose rare whisky customers to the auction market.”
Mr Robertson said another new line of business for the company was sourcing aged barrels for investors – a single barrel, he said, could sell for “many hundreds of thousands” of pounds.
“Until fairly recently everything we did was in bottles, but more people are looking for casks,” he said. “Some investors want it bottled there and then so they’ve got 247 bottles, and others want to buy it as a 32 year-old but will hold until it is 40 and bottle it.”
The interest in rare whiskies is also leading producers to launch more limited products, he added.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules here