Whisky Focus - Values for Rare Whisky Continue to Climb

Values for Rare Whisky Continue to Climb

2nd May 2013
Rare whisky values continue to rise according to figure released today.

In spite of a significant increase in the volume of rare whisky traded during 2012, values are still rising according to figures published today by whisky investment experts Whisky Highland.

Last year saw a record number of full sealed bottles of single malt Scotch whisky sold in the UK on the open market. In 2011 there were 8,696 bottles sold, this increased by 62.7% in 2012 to 14,150. Early 2013 figures suggest this rapid growth in the market is continuing. Quarter one 2013 saw 3,789 bottles sold which represents a 34.5% increase on quarter one 2012’s 2,818.

Whisky Highland’s founder Andy Simpson commented “With this rapid increase in supply we would have expected to see a stabilisation or even a slight decline in overall values. Quite the opposite has happened, with rare and old bottles of whisky continuing to outperform many other alternative asset classes”.

The top 1,000 performing bottles of Investment Grade Scotch (the Whisky Highland IGS1000 Index) increased by 23.27% over the course of 2012, yielding an overall increase of 123.01% between 2008 and the 31st of December 2012.

Quarter one 2013 saw a continuation of this bullish market in what is typically the quietest quarter of the year. In quarter one 2012, the IGS1000 increased by 2.68% compared to a 6.05% increase in quarter one 2013.

At the top end of the market, the IGS10 (the top ten performing bottles of Single Malt Scotch) saw a second quarter of declines to the end of 2012, when overall 2008 – 2012 yields moved from 557% to 508%. To a large extent, this decline was reversed in quarter one 2013 when the index increased to 542%. This positive momentum is being led by rare bottles from iconic distilleries.

The Whisky Highland Index top 10 brands are:
  • No. 1 – The Macallan
  • No. 2 – Port Ellen
  • No. 3 – The Dalmore
  • No. 4 – Balvenie
  • No. 5 – Ardbeg
  • No. 6 – Brora
  • No. 7 – Bowmore
  • No. 8 – Glenury Royal
  • No. 9 – Highland Park
  • No. 10 – Glenlivet

Simpson commented "We are still witnessing continued increases in value for the right bottles from the right distilleries. The story is not quite so attractive at the other end of the scale with the worst performing bottles of single malt Scotch continuing to tumble further into red territory."

The negative index, the IGS(neg)1000, saw a further decrease in value through 2012. The worst performing 1,000 bottles would have yielded an overall loss of 28.65% between 2008 and the 31st of December 2012 (2008 – 2011 loss was 22.75%). The continuing decline in values for the worst performing bottles seems to have stabilised into early 2013 with quarter 1 figures showing an overall loss (2008 – 2012) of 28.12%

From an investment perspective the most sought after brand remained The Macallan. Continued increasing demand is pushing prices to new record highs. The 2011 Macallan ‘Royal Marriage’ bottle originally retailed at £150. This bottle now sells for around £900.

Many silent (closed) distilleries are now suffering from exceptionally short supply as existing maturing stock continues to deplete rapidly. The likes of Port Ellen, Brora, Rosebank and Glenury Royal are experiencing unprecedented demand for an ever decreasing pool of both bottles and whisky still in the cask.

The current dynamics of increasing global demand and decreasing stock of suitable investment grade bottles has maintained a very bullish market in the face of an ever more challenging economic climate.

Simpson concluded "These results are very impressive and further cement rare Scotch’s credentials as a viable alternative investment. While it must be borne in mind that whisky values can fall, as has been seen in some areas of the market previously, the current situation remains exceptionally buoyant. I still maintain whisky should be viewed as a long term investment of 10 to 20 years although clearly short/medium term increases are being experienced at the moment."

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