Top 10 most investable Scotch whisky brandsBy Amy Hopkins
Rare bottles of Scotch whisky may have reported record-breaking sales in 2014, but which brands experienced the greatest leap in value on the secondary market?
In recent years, increasingly more investors have turned their attention to the lucrative financial opportunities provided by the Scotch whisky industry.
As rare, vintage and aged stocks in the industry dwindle, they become coveted items at auction, usually selling for far and above their original price.
Rare Whisky 101 (RW101), launched by David Robertson and Andy Simpson last year, tracks the changes in how investable the rare whisky industry is, according to the movements of individual brands in its index.
“The niche aspects of Scotch whisky investing means that from an investment viewpoint it is mainly of interest to private individuals rather than institutions, who’d struggle to buy a meaningful allocation in the asset class,” said Simpson.
“Investing in whisky has certain advantages over wine – it doesn’t require the cool cellar-like conditions that wines often demand, bottles must be stored upright but can be kept in almost any environment.”
RW101’s annual review revealed that rare whisky investment had reached a record high last year, as the value of collectable bottles of Scotch whisky sold at auction soared 69.37% in 2014 to £7.656m, compared to £4.520m in 2013.
Often far less well known brands appear in the index showing both rarity and demand for certain bottles from certain distilleries.
Click through the following pages to see which whiskies RW101 finds to be the most investable.
Kicking off the top 10 of RW101’s index is the now silent distillery Glenugie. Although its whiskies are not very well-known, they are highly regarded among connoisseurs, and are becoming increasingly scarce.
Operational between 1831 and 1983 under a number of different owners, it is thought the distillery bottled a single malt just once in its lifetime. A select few independent bottlings have been launched, while owner Pernod Ricard has released just a handful of very limited editions.
The movement of Glenguie up the index demonstrates the trend of silent distilleries pushing growth in the rare whisky market, as independent bottles now outpace distillery official bottles.
A favourite among investors, Mortlach has experienced a resurgence in interest since owner Diageo revealed it had lined up a series of official single malt launches last year.
Predominantly used for blends including Johnnie Walker, the distillery’s new range is priced between £55 and £600, while its vintage bottles remain coveted items at auction.
Convalmore single malt Scotch whisky boasts an extensive and turbulent history which investors seek to capitalise on, as well as the pre-requisite ultra-limited stocks.
Founded in 1893 by Convalmore-Glenlivet Distillery Company, the distillery produced liquid principally to be used in blends until it was destroyed by a raging fire in the early 20th century.
Following a failed foray into grain whisky distillation, the distillery was bought by William Grant & Sons. Two official bottlings have been released but independent bottlings have proved successful among collectors.
7. The Macallan
One of the most surprising shifts on this list is that of The Macallan, which dropped 6 places on the investors’ index by the end of 2014, losing its top spot. However the brand is still the most collectable Scotch whisky on the secondary market, selling the most by volume and value.
The value of the brand, which makes up a quarter of the entire UK auction market, fell 7.4% over the course of the year. As such the total value of the market was hit, since “any protracted downturn in [The Macallan] prices sends ripples through the broader market”.
Many iconic Macallan bottles remained relatively static or increased slightly with others moving down in value significantly. The decline was felt across limited edition and modern The Macallan expressions – The combined value of The Royal Marriage, Coronation and Diamond Jubilee bottles fell in value by 17.7% during the year from £3,190 to £2,625.
6. North Port
Making the most significant leap on the investors’ index was North Port, a lesser-known whisky distillery that was closed down in 1983, among a number of others in the 1980s. The distillery had two small stills and shared its water source with local people.
Demand for the brand soared by the end of 2014, making it more investable for whisky aficionados than some of the long-established, well-known players.
Moving an incredible 13 places up the index is Killyloch, a brand rarely found as a single malt as most of its supply was sold to blends.
The whisky was produced at the now defunct lowland distillery Glenflagler Malt Distillery, which was demolished by Inver House Distillers in 1985. A bottle of 36-year-old Killyloch 1967 Limited Edition recently sold at auction online for £1,550.
4. Port Ellen
Closed in 1983, Port Ellen, based on Islay’s south coast, has become one of the world’s most sought-after single malt Scotch whiskies.
However, RW101 notes that the value of official Port Ellen fell by 15% in the final three months of 2014, potentially due to the rapid increase in retail prices on the primary market, causing consumers to go in search of brands with perceived “better value”.
The last three years have seen retail prices for the Port Ellen annual releases increase from £600 in 2012 through £1,500 in 2013 to £2,200 in 2014. The first official bottle released by Diageo in 2001 has more than trebled in price to £600.
3. The Balvenie
Moving up an impressive five spaces, The Balvenie became the third most investable Scotch whisky brand by the end of 2014.
While the distillery recently enticed investors with two £26,500 50 Year Olds, it is its Tun 1401 expressions, initially launched for £100, that has push it up in the index ranks.
2. The Dalmore
While The Dalmore’s Paterson Collection – which at £987,500 is the world’s most expensive range of Scotch whisky – still sits on the shelf at Harrods, the brand is one of the most investable on the secondary market.
Frequently coveted at auction, the Whyte & Mackay Scotch brand is renowned for its pricey, exclusive launches, such as the Constellation Collection which contains only whisky distilled in the 1960s.
Hugely investable, The Dalmore has been known to return up to 200% of its original value.
Brora is a perfect example of the soaring demand for whiskies from dormant distilleries, swiping the top spot on the investors’ index from The Macallan.
Moving up one place from 2013, the Diageo-owned brand exemplifies the 18.3% value increase of officially bottled releases from silent distilleries.
Stocks from the distillery, which ceased production in 1983, are now dwindling on the secondary market, driving consumer competition to acquire ultra-limited bottles.