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Rare whisky investment soars, but market leader The Macallan drops in value

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A record number of collectable bottles of Scotch whisky were sold at auction in the UK during 2014 with the market leader The Macallan experiencing a significant drop in value, according to the first collectors and investors’ annual review produced by the whisky consultancy Rare Whisky 101 (RW101).

The RW101 review analyses the sale and purchase value of every bottle of rare Scotch whisky sold at auction to determine the value of the UK market and the most collectable bottles.  The number of Single Malt bottles sold during 2014 soared by 68.22 per cent at 33,998 (2013: 20,211) resulting in a 69.37 per cent increase in the value of collectable bottles, which now sits at GBP7.656m (2013: GBP4,520m).

Bottles from ‘silent distilleries’ (no longer in production) led the growth as independent bottles now outpace distillery official bottles.  The review saw a significant change to the overall landscape of collectable Scotch with The Macallan (25 per cent of the market) falling by almost 7.5 per cent.
 
RW101 provides advice on unique, unusual, rare and collectable whiskies – prices for which have boomed in recent years.  The consultancy produces a number of indices to track the most valuable, investable and collectable bottles as well as the best and worst performing distilleries and brands.
 
Co-founder of RW101 and report co-author, Andy Simpson said:  “The most striking change to the overall landscape of collectable Scotch through 2014 is Macallan’s movement from top place down to seventh place in the investors index.  Total Macallan values re-traced 7.43 per cent over the course of 2014.  Putting that into context, Macallan accounts for a quarter of the total GBP value (GBP1.987m out of GBP7.656m in 2014) of the whole UK auction market: that huge portion of the market fell in value by 7.43 per cent.
 
“Many limited edition and more modern Macallan bottles took the brunt of the falls – The Royal Marriage, Coronation and Diamond Jubilee bottles had a combined worth of GBP3,190 at the end of 2013, and that fell by 17.71 per cent to GBP2,625 by the end of 2014.”

 
Conversely, certain other less traditional ‘collectors and investors’ brands succeeded, enjoying dynamic growth, with GlenDronach (a possible replacement for Macallan in many cases with its heavy Sherry influence) and Arran being good examples of taking an increased share of the wallet at auction.
 
Virtually all silent stills performed well, with some of the less well known distilleries such as Banff, Littlemill and Glenugie becoming both increasingly scarce and increasingly sought after as evidenced by impressive increases in price.
 
Values held up impressively throughout the first three quarters of 2014 with the Rare Whisky Apex 1000 Index (RWApex1000 – the top performing 1000 bottles) showing a 14.54 per cent increase to 30 September 2014.  These increases slowed to a near standstill through the last three months of the year, where only 1.28 per cent growth was realised.
 
Andy Simpson added:  “The interest in buying single malts at auction is very much from those who appreciate the drink, the packaging and all that Scotch whisky encapsulates as much as it is from investors with a keen eye for something that’s rising in value.  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.
 
“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.  As a result whisky can and should be kept in pristine condition – the value can drop dramatically if damage is done to the bottle or labelling or if the “fill level” drops indicating poor closing resulting in evaporation. And, thankfully, there is no evidence that whisky spoils like wine after decades or even centuries and will not turn to vinegar.”

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