$20,000 just a drop in the ocean
This real-life event was the inspiration for the 1947 Compton Mackenzie novel Whisky Galore, filmed in 1949 as Whisky Galore! In 1987, eight bottles were retrieved from the wreck and sold for a total of £4000. In 2010, another Whisky Galore bottle sold for £4200.
This is an indication that old and rare whisky, even bottles that can't be drunk, is now regarded as an investment. Well, some of it. The Times estimates that if you had invested in the top 100 performing whiskies in 2008 you would now be sitting on a profit of 306 per cent, "far better than the returns from any major stock market".
Which explains why the secondary market for rare whisky in Britain is rapidly expanding. According to The Times, just over 2000 bottles were sold at auction in 2008. This rose to more than 14,000 bottles in 2012, with no sign of slowing.
This niche market began to take off in 2008 when Bonhams UK introduced specific whisky auctions at, naturally enough, their Edinburgh salerooms. Apart from exceptional rarities such as the 62-year-old bottle of Dalmore that sold for £32,000 in 2005, a typical standout result back then was £1860 for a bottle of Highland Park single malt, considered one of the most desirable brands. That bottle should now be worth three times that, if not more.
The Times quoted Andy Simpson's Whisky Highland company, which tracks results of all whisky sales at British auctions. In the past five years the top 1000 bottles have returned an average of 136.5 per cent, with the top 10 returning 541.7 per cent. A warning: the bottom 10 went down by 71 per cent.
There is also a growing appreciation for fine whisky in Australia, though relatively few bottles appear at auction, at least not enough for any whisky-specific sales. Australian connoisseurs, such as Craig Daniels of the Adelaide-based Malt Whisky Society of Australia, prefer to drink their whisky rather than watch it appreciate.
"Serious malt-whisky fans rank distilleries in a sort of Top of the Pops," Daniels told this column in 2009. "You might get some argument about the order but most people would include Ardbeg, Bowmore, Laphroaig, Lagavulin from Islay, Glenfarclas, Macallan and Glenlivet from Speyside, Springbank from Campbeltown and Highland Park and Talisker from the islands."
All these brands are, or were, available in Australia, though unlikely to be found in your local bottle shop. You'll need to search the few speciality liquor outlets that stock imported whiskies.
The experts agree that for investment purposes the rule is to stick to single cask malts, which are globally recognised as the best. And think outside the traditional box.
Scotland no longer has the monopoly on fine whisky. Some bottles from the (now-closed) Karuizawa distillery in Japan retail for more than £10,000 in Britain.
There are also distilleries of note in Australia, including David Baker's Bakery Hill Distillery in North Balwyn.
Critics have given Baker's whisky the thumbs up.
The highest end of the market has performed best over the past five years. The four distilleries given the ultimate platinum rating in Britain are Balvenie, Dalmore, Macallan and Port Ellen.
These have performed best at auction with an average return of 57.2 per cent.
The best individual return is registered by Brora, a Highlands distillery that has closed.
For those who want to invest rather than drink, whisky is less temperamental than fine wine but still needs to be kept away from direct light and heat. Bottles should be kept upright to prevent cork deterioration.
Unfortunately, for investment purposes the golden rule is that bottles can't be opened, not even for a wee dram.
Top shelf
Now is an especially good time to start investing in fine whisky, says Melbourne expert Gregory Forrester, from cheaperthandan.com. The value in the bottles listed below is in holding on to them until they are hard to get, which means not opening the bottle for a few years at least. This could be the ultimate challenge.
The whiskies listed are moderately priced with long-term investment potential, and Forrester says some have already increased in value in the last few years.
Most are available in bottle shops that specialise in imported whiskies, so one of these could be perfect for Father's Day:
William Larue Weller 2010 Limited Edition (Kentucky Whiskey): price in 2011, $260; estimated value in 2013, $300.
Thomas Handy Sazerac 2010 Limited Edition (Kentucky Whiskey): 2011 price, $200; 2013 price, $300.
The Famous Grouse 18-year-old: 2011 price, $90; 2013 price, $120.
Glenfiddich Malt Master Limited Edition: 2013 price, $90; new release.
Glenfiddich 15-year-old Distiller Edition: 2013 price, $130; new release.
Glenfiddich 125th year Anniversary Edition (with certificate of authenticity): 2013 price, $200; new release.
Connemara Cask Strength 2008 Double Gold (Irish Whiskey): 2011 price, $100; 2013 price, $130.
Kilchoman 100% Inaugural Islay 2008: 2011 price, $140; 2013 price, $180.
Bunnahabhain XXV Islay Boxed Edition: 2011 price, $400; 2013 price, $600.
Old Pulteney 21-year-old Whisky Of The Year 2012: 2012 price, $150; 2013 price, $200.
Glendronach 21-year-old Vint Release: 2011 price, $180; 2013 price, $250.
Bruichladdich Laddie Classic Edition 01: 2013 price, $90; new release.
Adelphi Selection Caol Ila 11-year-old: 2011 price, $150; 2013 price, $250.
Frequently Asked Questions about this Article…
Rare whisky has become an investment asset because scarcity and collector demand have driven auction prices much higher than many stock markets. The Times reported that the top 100 performing whiskies since 2008 returned about 306%, and Whisky Highland data showed the top 1,000 bottles returned an average 136.5% over five years (with the top 10 returning 541.7%). That said, returns vary widely and the bottom 10 fell 71%, so it can be rewarding but also risky.
The secondary market has expanded rapidly in Britain. Auction sales increased from just over 2,000 bottles in 2008 to more than 14,000 bottles in 2012. Specialist whisky auctions—such as those Bonhams UK introduced in Edinburgh in 2008—have helped fuel that growth, and headline sales (for example a Dalmore and historic bottles from the SS Politician wreck) have attracted significant attention.
High-end Scotch distilleries have performed strongly. The four given a platinum rating in Britain—Balvenie, Dalmore, Macallan and Port Ellen—have been among the best with an average auction return of about 57.2%. Closed or rare distilleries like Brora have recorded some of the best individual returns. Popular collectible names also include Ardbeg, Bowmore, Laphroaig, Lagavulin, Glenfarclas, Glenlivet, Springbank, Highland Park and Talisker.
Yes—experts quoted in the article advise sticking to single cask malts for investment purposes because they are globally recognised as the best collectible whiskies. The article also suggests thinking beyond traditional Scottish releases (for example Japan’s now-closed Karuizawa and select Australian distilleries) when building an investment-focused collection.
For investment bottles, keep them away from direct light and heat, store bottles upright to protect the cork, and never open them—opened bottles destroy the provenance and most of the investment value. Proper storage preserves both the bottle and its marketability at auction.
Australian whisky is gaining appreciation, but relatively few bottles appear at auction compared with the UK market. The article notes notable Australian distilleries such as David Baker’s Bakery Hill in North Balwyn, which critics have praised. That makes Australian whiskies interesting, but the market is smaller and less auction-driven than Britain’s.
Yes. The article cites Melbourne expert Gregory Forrester who recommends some moderately priced bottles with long-term potential, noting value comes from holding them until they become hard to get. Examples provided include William Larue Weller 2010 LE (US$260 in 2011 to an estimated US$300 in 2013), The Famous Grouse 18-year-old (US$90 in 2011 to US$120 in 2013) and Glendronach 21-year-old (US$180 in 2011 to US$250 in 2013). These examples show modest price appreciation for certain releases, but past movement is not a guarantee of future returns.
Whisky investing carries several risks: prices are volatile (the article notes the bottom 10 bottles fell 71%), the market is niche and driven by collector tastes, provenance and condition matter, and bottles must remain sealed—in other words you can’t drink your investment. You also need secure, climate-appropriate storage and patience, since value often comes from scarcity over years.
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