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Why It's a Good Time to Be Investing in Whisky Right Now?

Nov 18, 2020 2:22:43 PM / by Charles Agutter

This year, cask sales have increased greatly, with The Whisky & Wealth Club reporting a doubling of sales in 2020 compared to this time last year, for a total of 7.8million euros.

And there are tax benefits of investing and owning your own Whisky Casks.

 To say that these are uncertain economic times would be putting it mildly. The impact of the COVID-19 pandemic has already been felt across the globe and the fallout it set to extend well into 2021 and beyond. 

Gold has always been the traditional “safe haven” asset in times of crisis and indeed it is up 21% this year, a six-year high. However, for investors looking to diversify amidst the uncertainty of the pandemic, rare whisky could provide a valuable outlet. Fine wine has traditionally been the best performing of the so-called “passion assets” (alternative investment avenues that cover classic cars and rare art), but whisky has begun to pull ahead.

In 2019, rare whisky was up 40% compared to coins (12%) and fine wine (9%) and the ten-year growth has been a staggering 582%.

whisky index chart

Scotch whisky seems to be the cream of the investment crop in this regard; last year, exports reached £4.7 billion, accounting for a full fifth of all UK food and drink exports. Whilst the secondary market for whisky is relatively young, it is growing rapidly. Single bottles have begun to sell for extraordinary prices at auction; the £848,750 paid for a bottle of old malt in Edinburgh in October 2019 is almost double the record for the highest single bottle sale of a French wine.

A month later, in New York, a single bottle of Macallan 1926 fetched a record-breaking price of £1.2million.

whisky-cask-glass-smThis year, cask sales have increased greatly, with The Whisky & Wealth Club reporting a doubling of sales in 2020 compared to this time last year, for a total of 7.8million euros. The secondary market is currently being valued at over $40million according to market analysts, and the US Market in its entirety is already a $1billion industry. All these trends combined have given rise to some attractive predictions for those who would consider investing with rare whisky. The Whisky & Wealth Club itself recommends working with premium distillers in order to secure the best growth over time.

Price increase Distillery total-1

A ten-year hold time is the typical approach, similar to that of fine wine. Conservative estimates around returns put the number at approximately 16% per annum, with an annualised return on investment of 10% over ten years. The growing worldwide demand is already having an impact on the production process, with new distilleries opening yearly thanks to the investment in the market over the past decade.

If you are looking for a opportunities to diversity your investment portfolio, then buying a few casks of world-class whisky could prove to be an extremely luxurious contingency plan.




Topics: Whisky Investing

Charles Agutter

Written by Charles Agutter

UKV International

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