Our Opinion: 2019

Whisky galore

One of my Ultra High Net Worth clients asked me to join him on a day trip to Scotland to visit a whisky distillery and have some tastings, before he made a significant purchase. Apart from being a thoroughly enjoyable day out, I learnt that rare whisky is emerging as the latest alternative asset class to excite high-net-worth investors. Knight Frank recently reviewed its Luxury Investment Index and now includes whisky among the asset classes that it follows.

The Knight Frank Rare Whisky 100 index, which tracks auction sales in the UK, rose 40% in value during 2018 and has increased by almost 600% over the past 10 years.

Casks of maturing single malt Scottish whisky are increasingly sought after as an investment and status symbol.

Supply is extremely limited, especially from the most iconic distilleries, and casks can easily command six-figure sums, if not more.

There has been a surge in the value of whiskies distilled in many other countries including the US, Taiwan and Japan. A Japanese 50-year-old bottle sold for almost US$350,000 at auction last year.

Some of the world’s wealthiest people are reportedly big collectors. But it’s in Asia where the trend seems to be accelerating fastest. Chinese tech entrepreneur Jack Ma’s private jet has been spotted at Aberdeen airport, while whisky tourism was apparently one of the drivers behind the launch of a new non-stop flight from Edinburgh to Beijing in 2018.

Sales of Scotch whisky to India, China and Singapore rose by 44%, 35% and 24% respectively in the first half of 2018 according to the Scotch Whisky Association, with single malts totalling almost 30% of total exports.

It seems single malts have taken over from wine and people are spending huge amounts on their cellars. A record £1.2 million paid for a unique bottle of The Macallan 1926, hand painted by Irish artist Michael Dillon and sold by Christie’s at its November 2018 whisky sale in London.

It’s not just Scotch that is in demand. A bottle of 50-year-old Japanese Yamakazi fetched US$343,318 at Bonhams in Hong Kong in August 2018.

The Whisky Exchange recently opened a new store on Great Portland Street, London, with thousands of different types of whisky from all over the world. I now send client there who show an interest but a trip to Scotland has to be the best place for investors to visit. I thoroughoy enjoyed my time at Aberfeldy and look forward to returning soon.

21st May 2019