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Whisky ‘outperforming many alternative investments’

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02/05/2013
Values for rare whisky are still rising despite the high volumes traded in 2012, says a new report.

The research from whisky investment experts Whisky Highland found that prices are still climbing despite the record number of full sealed bottles of single malt Scotch whisky sold last year 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 the rapid growth in the market is continuing with 3,789 bottles sold in the first three months of the year, which represents a 34.5% increase on quarter one 2012’s 2,818.

Andy Simpson, founder of Whisky Highland, said: “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.

The first three months of this year have seen a continuation of this bullish market in what Whisky Highland says 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%.

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 added: “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 returned 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 the first quarter’s figures showing an overall loss (2008 – 2012) of 28.12%.

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.

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