whisky investment practical guide

Whisky as an Investment: A Practical Guide

Whisky has become a globally relished beverage. The opportunities which this popularity boom provides for investors are every bit as attractive. This moneyland.ch guide introduces you to the basics of whisky investment.

Whisky – or “whiskey” in Ireland and the U.S. – now enjoys a large fan-base around the world. In Switzerland, whisky leads the spirits lineup with regards to popularity and quantities imported.

But in spite of this, the thought of whisky as a financial investment can seem somewhat abstract. Rare wines are a far more established investment option, insofar as alcoholic beverages are concerned.

But whisky investments are no longer uncommon. As early as the 1980s, auction bids for the “water of life” (from the Irish “uisce beatha”) rose to dizzying heights. Whisky connoisseurs in all corners of the globe are ready to cough up thousands of francs for the chance to sip down the liquid gold. The highest price fetched for a single bottle of whisky to date is 100,000 Swiss francs.

All things considered, there are compelling arguments for taking whisky investment into consideration. Prices are a question of supply and demand, and demand for whisky is high. Although the European market has stagnated, whisky demand in Asian countries like China has skyrocketed.

The constant appearance of new, mass-produced consumer whiskies on the market are forcing traditional whisky producers out of business. The appearance of new, quality whiskies is rare, and when these are produced, it is only in limited quantities.

Single-malt Scotch

Investments in single-malt Scotch whisky have met with exceptional success. Traditionally, investors held onto single-malt whiskies for long periods of time after purchasing them. It is of crucial importance that you pay close attention to the amounts produced, as only highly limited whiskies are likely to experience major increases in value.

A good general rule: Only batches limited to 10,000 bottles or less are likely to see major value gains. Just be prepared for per-bottle price tags in the hundreds of francs when buying top quality whisky.

Whisky: quality indicators

All proper whisky should be matured in wooden barrels for at least 3 years. Aside from that, age is not the deciding factor in determining quality. “The older the better” rule may apply to red wine, but it does not apply to whisky. That fact has contributed in part to the increased popularity of “no-age-statement” whiskies.

Choosing the right distillery is far more important when making an investment. The entire production process should take place at a well-known distillery and the whisky should be bottled on the premises, rather than by a third-party bottler. Single-cask whiskies bottled at original cask intensity are particularly interesting as an investment. Other quality criteria are distillation frequency, the presence or absence of supplementary colorants, the spring water used, the quality of the ingredients and the characteristics of the barrels in which the whisky is matured.

Non-Scotch whiskies

In addition to the world famous Scottish whisky brands, a number of interesting opportunities are available outside of Scottish borders. Even whiskies from Japan – such as Suntory’s Yamazaki Single Malt Sherry Cask 2013 – have been highly awarded. If you don’t mind taking risks, you can opt for fine whiskies from Ireland, the U.S., Canada, Germany, Austria, France, the Czech Republic (Hammerhead), India (Paul John), Taiwan (Kavalan), Australia, or several other countries.

Even Switzerland hosts more than a dozen whisky distilleries. Appenzeller Brauerei Locher (which also offers whisky treks through the Aplstein), Etter in Zug, Z'graggen in Lauerz, Rugen in Interlaken and Käsers Schloss in Elfingen are a few examples of Swiss distilleries.

As with any other capital investment, it is important to inform yourself well in advance before making a whisky investment. A range of newsletters and other publications provide up-to-date information about the latest developments in the whisky world. One of the most influential of these is “Jim Murray’s Whisky Bible”.

Whisky: How to go about selling your stock

You can choose from several options when it comes time to sell your whisky. Auctioning your whisky on eBay is a flexible way to profitably sell your assets. Alternatively, you can also sell whisky at dedicated whisky auctions, such as the online “Scotch Whisky Auctions” platform.

Make sure to properly establish the value of a bottle before putting it up for sale. This can be accomplished, to varying extents, using valuation indexes such as the World Whisky Index. If you plan to sell via auction, remember to take auctioneer fees into account, as these will take a bite out of your profits.

The moneyland.ch team

More on this topic:
Investing in wine: a practical guide
Online broker comparison
Swiss private banking comparison

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