Collecting Whisky – Part 3

An affordable plan is needed!

In my second article, I outlined the things that would and wouldn’t be collectable, and I hope that was helpful. But now we move further down the line and make another big decision – what is the budget for collecting?

For those of you just joining the series, links to the first two articles are at the end of this article.

It can never be underestimated how much you want to spend. Pick a limit and stick to it. You might feel that I am being a bit of a dictator on this, but if you are going to be collecting using online auctions, this can rapidly be addictive and can see you reach your limit.

It goes without saying that once you have decided what you want to collect, you need to thoroughly research the prices that these items sell for. You will find that the internet is your friend, as you can search if the bottle is available in retail, or how much these go for at auction. The advantage of looking at auction sites (and you have to be smart by looking at more than one), you can also see trends in prices.

An example setting a budget would be saying you’d spend up to a fixed amount every month or any other appropriate period of time. Of course if you don’t spend your budget, you could maybe carry it over to the next period. The important thing is not to over stretch yourself. Don’t assume that you can just sell a bottle if you over stretch yourself. You might not get back what you paid for it.

Another point If collecting a series, make sure you will have the budget to complete the series. This is because if you cannot complete the series, what you have bought may not realise as much value if you come to sell.

A good example is the Flora and Fauna series. 26 bottles. Some are still in production (around 9) and can be bought for under £50. Most of the discontinued ones are available at auction between £120-£450. The Speyburn bottling was only made for one run, and is quite rare – expect to pay £1000 – £2000 per bottle.

Of course, perhaps time is not an issue for you, most collectable bottles will usually come back again at some point. They aren’t always drunk, and they may make a reappearance. Certainly I’ve seen the same bottle of Glenmorangie Swamp Oak Reserve turn up at auction more than once. Don’t look for it now…. it’s going nowhere for a while. – wink wink!

Eventually it may be the case it will be affordable, but leave it too long and the price may well go beyond your reach. This is why you need to consider if you will be able to afford to collect a series.

I can’t advise you on what budget to set, as it all depends on what interests you, and how much disposable income you have.

Lastly, before setting a budget, also factor in storage costs if you want to collect a sizeable collection. This will depend on location, but I pay £65 per month plus another £50 a month for my storage unit. Having said that, mine is not a drinking collection, although I do have a separate drinking stash.

How to make the most of your budget

The only way to maximise the buying power of your budget is to have a plan. And like the character Hannibal from the 80’s TV series ‘The A-Team’, it’s great when a “plan comes together.” And this is why it is a bad idea to just spend your money without careful thought.

If you are on the path of creating a drinking collection, many whiskies have similar tastes, so you need to do the research to find out where they sit within the flavour map. Personally, I don’t like to keep to the one sort of malt whisky. Although I do enjoy a peated whisky, I’ve gone off Ardbeg, so I’d not collect the whiskies that are similar to Ardbeg. I’m more of a Laphroaig fan.

Random doesn’t work….

The thing I’ve been itching to say is that there is very little advantage either to a collector or a person who will drink their whisky to just collecting any bottle. Random doesn’t work efficiently. You certainly will not always get the value that sees that bottle go up in price. If you are drinking it, that isn’t so bad, as you are only 28 drams away from a new purchase. Still, you might have to endure a bottle of blandness or lose face by offering it to guests. The kitchen sink may provide the answer.

What you need to find is focus, and the best thing to do is have a collection policy. Not only will this help you get a good gathering of bottles, but will help protect your wallet.

What is a collection policy?

Quite simply put, a collection policy is a targeted approach to collecting in which you focus on a specific area. Some collectors may only collect bottles from a specific brand or distillery, some concentrate on bottlings from a specific area. I have used this concept to great effect which has meant I am not buying random bottles. Examples of policies I have used are:-

• a bottle from the three distilleries that were in Inverness.

• a bottle from each of the distilleries in Dufftown. Only exception was Parkmore which closed in the 1930’s and the remaining barrels were destroyed.

• a bottle from every distillery I pass through between where I live and Aberdeen. As this requires driving through the heart of Speyside, it was a major undertaking and I still need one or two bottles.

• Complete the Flora & Fauna collection. I’ve almost completed 2 complete ranges with nearly every first edition, plus all wooden boxes.

• Will be starting on the distilleries of the Lowlands once I complete a previous policy.

It’s worth remembering that in all of this, I have been looking for the limited edition bottles rather than the mass produced products of these distilleries. So far Glenfiddich was the hardest, as I didn’t want to spend an absolute fortune of it, but as Glenfiddich is a popular brand, rarer bottlings are a bit harder to come by. The one I picked was one of the last whisky batches made by the distillery while it still used coal to fire the stills. If I did get a mass produced whisky, I made sure it was discontinued.

Think about what your collection policy would be? What interests you? If smokey and peaty is your thing, consider collecting Islay and other West Coast Malts. Perhaps you want to collect all the malts from a geographical area; in Scotland there are 5 areas – Highlands and Islands, Islay, Speyside, Campbeltown and Lowlands. There are only 9 distilleries on Islay, but Ardnahoe has not released anything yet. There are only 3 distilleries in Campbeltown (Springbank, Glen Scotia and Glengyle) so this can help focus spending and collecting.

Some people only collect from one or two distilleries, although this is usually the ‘premium brands’. Macallan also is a popular choice, but I have a particular opinion on this which many of you may disagree with. The problem with Macallan is that quite a lot of people buy the bottles on release just to sell them straight away to cash in on demand (also known as flipping). It is my opinion that this actually harms the long term value of the whisky, as people are buying on the secondary market at inflated prices. One of the many examples would be the release of Macallan Genesis. Originally retailed at £495, this was released to commemorate the opening of their new distillery. Within a month they were appearing at auction for £4000+. Now you can pick one up at auction for under £2000, which is still a healthy profit for a seller, but not so good for the first buyers on the secondary market who paid double. How would you feel if you paid £4000? That means other bottles will have to do well of you still want to turn a profit.

However, it only takes a distillery to fall out of favour and you’re investment may be at risk. Those with high value bottles will be trying to sell on, and the market will become saturated, dropping the price even further. I’ll be writing an article about Macallan and my thoughts in the future, but the point I want to make is that perhaps it is best not to put all your eggs in one basket.

Whatever you decide to have as a collection policy, I’d recommend as far as possible to purchase numbered or less common bottles, but still in demand. There is no point in collecting something anybody can buy easily, as there will be no scope for an increase in value.

Conclusion

Thanks for reading this far. I appreciate that there is a lot to go over but this will focus your mind, you’ll have a targeted and coherent collection, and your bank account will be at less risk of being prematurely and needlessly emptied.

To summarise

⁃ set a budget and do not exceed it

⁃ Consider a collection policy

⁃ Only collect worthwhile bottles

⁃ Try to diversify your collection

In the next article I’ll be looking at how to keep your collection

Slainte Mhath!

for those catching up….

Article 1 Beginning a collection.

Article 2 What is and isn’t collectable

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