Whisky set for a golden decade

3rd January, 2012 by Dominic Roskrow

"We paid for our home thanks to our booze collection"

Whisky expert and enthusiast Mahesh Patel says that some whiskies will rise up to 20 times in value in the next decade – making it the perfect vehicle for investment into the New Year.

And the entrepreneur, collector, invents organiser and independent bottler says that anyone can get involved in whisky investment if they take the time to find the right bottles and are prepared to be patient.

Commenting on Robert Parker’s assessment of the wine market in the coming years, Patel dismissed recent comments questioning the validity of investing in whisky as nonsense and took issue with the criticism that there was something fundamentally wrong with collecting or investing in whisky rather than drinking it. The two weren’t mutually exclusive, he said.

“Whisky is for drinking and for investing in,” he said. “If people say that whisky was made for drinking so should be drunk, that’s fine. But wine was made for drinking too. In fact the more these whiskies are drunk, the less there are of them and the more valuable they become.”

Patel, who is the organiser of what is arguably the world’s most prestigious whisky show, The Universal Whisky Experience, which takes place in Las Vegas at the start of March, says that whatever an individual’s view of whether you should collect and invest in whisky from an emotional point of view, it has no bearing on whether whisky is a good product to invest in.

“I think that whisky certainly has the ability to not only increase in value 10 fold, but 20 fold in the coming decade.  Ten years ago if a distillery came out with a bottle for, say, £1,000, people thought this was crazy, but today expressions are selling to from £5,000 to £20,000 pounds and selling. I would say that Scotch has certainly proved itself with this. Let’s look at the original ‘Black Bowmore’ when it came out in the early 90s, it cost about £200. Today a bottle sells for £3,000-£4,000.

“It is just like wine. Both are commodities that produce rare vintages, have prestigious premium brands with investable grade products and both are consumable products, thus making the remaining rare expressions even more valuable.  In fact I would go to say that whisky is even a better investment, as it requires less maintenance compared to wine and still more affordable to invest currently, unlike wine. ”

Patel says that anyone can invest in whisky and that at the moment wealth doesn’t come in to it.

“Absolutely not. We are at the right time in whisky investment history. There are many limited production expressions out there that can be bought around the £100 mark, and which will definitely appreciate. This is unlike wine investing, which is probably 20 to 30 years ahead of whisky. A very good example of an affordable whisky to invest in today would be the ‘Shackleton recreation’ which retails for £100 and is selling out fast. Another is the Ardbeg Blasda which was originally around £30 and is now close to £100 if you can find one. There are many more whiskies that fall in this category.”

Patel has a wide range of investable commodities and says that potential investors should seek out advice and stay with the obvious investable whiskies.

“Just like wine there are a number of premium brands that I invest in, which have proved to be great investments. When it comes to whiskies I would say that Scotch whisky has the most investable brands, then followed by some Japanese and Irish, then bourbons. Now when it comes to Scotch you should invest in limited expression from iconic distilleries that are closed, such as Port Ellen, Dallas Dhu, Rosebank and Brora. The distilleries that are currently in production and have shown to have great investable products are: Macallan, Ardbeg, Dalmore, Bowmore, Springbank, Glenfiddich, Highland Park, Balvenie, Glenlivet and Glenfarclas.”

With demand expected to continue to rise exponentially not just in the obvious countries such as China, India, Russia, Brazil but in markets across South East Asia, Eastern Europe, South America and Africa, Patel says whisky’s future is bright – but it will come at a cost, and prices will rise. Just as Parker said recently that there’s no point in moaning about high wine prices as they are only a fraction of where they will be in a decade, so it is with whisky.

“I am confident that the future of whisky investment will continue to be very bright, as more and more people get exposed to whisky,” says Patel. “We are just starting out here. How can anyone say that investing in whisky is misleading? It is very comparable to wine investment firstly, and less risky. With any investment there is always a degree of risk, but unlike the stock market or real-estate, I think it is less risky, however returns might be smaller for some people, but certainly safer and it is a real asset, which can be drunk if things get bad. All the evidence support whisky as a credible investment.”

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