Have you ever had something so precious or important to you that you won’t share it with anybody else? I’m sure that most of us have that little secret that we don’t want to share. There is always in the background that little pleasure that you know of something that nobody else does and for one moment you have got one up on your contemporaries and peers. These small bits of internally held glories can often be as a result of hard work and perseverance and not something you want to give away too readily, lest that wee advantage you have is lost. It is something that I have experienced in two social groups of people I mix in and in both of them this feeling has been building again.
As I live in the Highlands of Scotland, there are plenty of opportunities to get out into the wide outdoors. Camping and hillwalking are great activities and for those who aren’t aware, there exists a type of remote accommodation called bothies. A bothy for the uninitiated is usually an old farm or estate cottage in a remote area that has been abandoned. These are often restored enough to provide a basic shelter for hill walkers. These can be just four walls and a roof, to well maintained buildings with sleeping platforms and a fire place or stove. Almost none have running water and there is no electricity. The best you can expect is that there maybe a couple of seats and a table to get out of the elements.
Bothies are free to use, many being in the care of the Mountain Bothy Association. Until the dawn of the MBA, knowing the location of bothies was very much down to local knowledge, or just looking at a location on a map and walking in to see if the building there exists or is even habitable. Tents were always advisable and still are just in case the bothy is full. If you were lucky, then you might meet a fellow walker and around the fire exchange stories of experiences which may include the locations of other bothies if your fireside companion has deemed you worthy of the knowledge.
Fast forward to the digital age. Now bothy locations that are in the care of the MBA are now published on their website. One member of the MBA went further and published a book detailing the best bothies and how to get to them. No longer did you need to put any effort into finding a doss when out walking. It’s as though bothies for some had lost their magic, as now everybody could find them. Some people wanted to keep “their special bothy” secret and all to themselves without more hordes descending to spoil the wilderness and peace they thought they would have forever. There were also worries about unsavoury characters using bothies as party houses in the wild or vandalising them.
It’s a bit of a double edged sword, as more people interested in bothies also means more people exposed to the MBA and in turn more potential people joining and taking part in the maintenance. Anyway, the misuse of bothies has been going on for years and I don’t believe it is appropriate to blame the Bothy Bible for all this as there is no proof this book did cause a quantifiable rise in problems. I have to say that I was against its publication and still am, although my views have softened somewhat and I’ve allowed myself the slight hypocrisy of buying a copy to see what the fuss was about. Being of a grumpy traditionalist nature, I feel you should earn your stripes and get out there and look for bothies yourself, but prepare to use your tent if you are out of luck. Conceivably that same concept could exist in whisky to a certain degree, as I feel that whisky has many parallels to these issues, generating internal quandaries in people who often have what would be described as misplaced ideals in what whisky represents. I’d even include myself in that potential moral misalignment but experience is telling me I may actually be right this time.
The vast majority of us will have a preference for a distillery or bottling. Even if you don’t, then I do. It is my wee holy grail, my top trump, my little bit of experience that I may have that you don’t and keeps me feeling warm and fuzzy inside. I haven’t ever had a bad bottle or nip from this distillery. It isn’t that well known, yet hides in plain sight. I pass it’s location every now and again, giving me a small bit of anticipation for when I taste it’s golden nectar once more. It was my inquisitive nature that discovered this distillery, not by looking at social media or taking others opinions into account, indeed my first taste was when social media was only physically talking to each other in the pub, well before smart phones and tablets. So let’s just call this distillery Glen Blabbermouth, as I did tell somebody my little secret and advised them to keep quiet about it. Before I knew it, my wee hint was all over the internet circles we share. I see it mentioned more and more, and while this gives me a smug feeling of being ahead of the curve on realising how good it is, I feel worried the name of one of my favourite distilleries is now receiving more exposure in social media.
And here is where whisky forms a dichotomy. It’s supposed to be a social drink, it’s supposed to be shared. Don’t we (I) take part in whisky social media to pass on our experiences and learn from others? By holding something back then do we start to remove more from the community than we contribute? I feel that in my attempt to keep the secret I have from the wider community that I’m doing something wrong, yet the need to share experiences of a delicious and consistent performer burns more of a hole in the mental pocket than currency in the hands of a child staring at the shelves of a toy shop.
It’s not the oneupmanship that drives this feeling towards a veil of secrecy. Forget the days of FOMO, there is a new fear lurking in the mind of this whisky enthusiast, probably even more of us if we’re to be completely honest. Fear of Missing Out will become old hat. FOBO is its new companion – Fear Of Being Outed. It’s a fear that once the whisky that you hold dear becomes more in the community consciousness, that it will become more difficult to get and / or will become as expensive as a jar of Unicorn urine. Let’s face it – some of the bottles that have rocketed into the spotlight as flippers and other assorted parasites have decided are now part of the current whisky zeitgeist may as well be unicorn wee-wee as neither will be drunk due to the insane prices paid. This happened to Springbank – remember when it was relatively easy to get a bottle at RRP without queuing or ballot?
While supplies of Glen Blabbermouth are sustainable, it isn’t as common as some, with only a few official bottlings over the years, it’s mostly available from low volume independent bottle sales. It is maybe understandable why some people keep some whisky secrets to themselves. While I might be wrong to express this feeling, I am currently hoping the heat dies down eventually and I can live my life secure in the knowledge that my favoured whisky is not rising in price due to a sudden popularity when my secret gets out.
As for my indiscreet friend – is he in trouble? No, not really. When you hear of others enjoying bottles from your favourite secret distillery, there is a sense of satisfaction that you may have saved somebody from drinking sub-par whisky. I have also taken the precautionary steps of making another malt one of my secret go to drams. Only this one is definitely being kept secret.
One distillery that I am starting to pay a little more attention to is Linkwood. In common with a lot of distilleries in the Diageo portfolio, it’s not a brand with a massive presence due to mostly being used to provide spirits for blends. But it is unique on my blog, for I have already reviewed it twice and as it turns out, the last time wasn’t so long ago. While the only official bottle is the Flora And Fauna, there are plenty of independent bottlers releasing some very good editions. Gordon and MacPhail do a nice bottle in their distillery labels range at 15 years old. But another whisky bottler that has really made me sit up and take notice is Murray McDavid (MMcD). Both their Spirit of Speyside editions of Auchroisk and Inchgower that I tasted from last year were great, so when Aberdeen Whisky Shop advertised the MMcD Cask Craft range, I was standing up like a meerkat. These were marketed by flavour profile, and it was just coincidence that fruity and sweet happened to be a Linkwood. No age statement, only a cask type (Madeira Barrique), but at £32 a pop I felt it stupid not to. And here is what I found.
Linkwood Fruity & Sweet (MMcD Cask Craft)
Region -Speyside Age – NAS Strength – 44.5% abv Colour – Old Gold, (0.6) with a hint of pink Cask Type – Madeira Barrique Colouring – No Chill Filtered –No
Nose – Raspberry ripple ice cream, hint of vanilla and cereal. Could almost be Cranachan. Sweet white wine. Floral note (rose water) which was similar to Turkish Delight appeared when I rubbed some spirit onto the back of my hand.
Palate – Light oily mouth feel. Quite spirit forward to begin with but not aggressively so, though can be a bit bitter. Raspberries, red currants delivers a small measure of astringency that I find in medium dry white wines. Toasted peanuts and honey. Not very complex at all.
Finish – warming medium finish, sweet with a burst of spices and milk chocolate. Vegetal notes appear, like kale.
Not the best Linkwood I have ever tasted. I quite like a Madeira cask whisky, but this one didn’t light my fire as much as I thought it would. It’s undoubtedly a young whisky, with a spirit forwardness, a lack of depth and also noticeably lacking an age statement. But let’s not get too picky. Here we are easily seeing the distillery character of a light, fruity and slightly grainy spirit, which I got more in the nose than the palate. To be disappointed is a valid point but perhaps the cask craft here is the subtlety in which the finish has been applied. It isn’t a bad dram, despite being a little thin. £32 wasn’t a bad price to pay for this but there are better value drams out there.
As I’ve reviewed this distillery now, it’s not my new secret favourite distillery, though it does have a tenuous link to the one that is. There’s one thing sure and certain – I won’t be telling you what is!
Whether or not you want to, it is pretty hard to escape the fact that the world of whisky is expanding beyond all expectations. We don’t even need to stop at whisky, for there is still a lot of expansion in other distilled spirits such as premium rums and craft gins and it doesn’t seem to be stopping. More and more people are getting in on the concept of collecting. I’ve been asked by quite a few people recently about collecting and its enough to make it worthwhile to write another article on it. I’ve already written extensively on this in the past, but I feel now it is appropriate to bring you a more up to date article which encompasses some of the experiences that I have had as well as conversations I have had with various people within the whisky industry.
What is collectible?
This is all down to personal preference. We all have different things that excite us in the whisky world. Some people only collect from one distillery, some people may only collect certain vintages, certain age statements. We’ve all heard of the generous father who gave his son a bottle of 18 year old Macallan for his birthday, allowing his son to sell it and use the profit to help him move onto the property ladder, there really is no limit on what is and isn’t collectable, but you have to look at why you are collecting and this will determine what will be suitable for you to collect.
This is a question I put to Andy Simpson of Rare Whisky 101. Andy has been a whisky collector as long as he has been legally allowed to be, as well as being a collector, he is a broker, valuer and consultant to the Scotch Whisky Industry. Andy and I had some very interesting conversations over our joy of whisky collecting and seeing as I was going to have to rebuild my collection slightly, I thought it made sense to ask Andy what would be appropriate to collect in the future.
“There are three properties to collectible whiskies” Andy explained to me over the phone. “which are desirability, collectability and investability.” He went onto explain how every bottle will have different amounts of each property, and where it has good levels of all three, then that is where you have a suitable bottle.
Desirability. Does the bottle have a physical property that makes people want to own it? Is it a whisky with an in demand flavour profile? Does it have attractive packaging?
Collectability Is it a rare release? Is it from an in demand distillery or bottler? Is it part of a set that you already own? Is it discontinued or from a silent distillery?
Investability This can be a product of the desirability and collectability. This is because if a whisky is rare and in demand, then the chances of it being investment grade are high. However, true investment grade whisky is likely to beyond the means of most people reading my blog. We are looking at items like Macallan where some bottles easily reach into five figures. Investability (which isn’t really a word in the English dictionary) is not likely to occur from a bottle that can be bought in your local supermarket. You are looking to source bottles at specialist whisky shops, distilleries or auctions to get a better chance of making a profit.
If you are considering whisky that has all of these attributes then you have a bottle that is likely to be in demand.
What sort of collector am I?
I think it is fair to say that the vast majority of collectors are people who perhaps just collected a bottle here and there, perhaps to drink, perhaps to save for a rainy day. Few might go down the investment route from the beginning. Has it been that people have got the idea that is often fuelled by the media and the producers themselves that whisky is a premium investment option? Just because something appeared on the Knight Frank index does not mean it will continue to do so.
The types of collector fall into a handful of very easy categories. 1/ Drinkers – Those who want to collect to have a good stash of a favourite dram on standby. 2/ Hobbyists. Those who take pride in owning bottles. 3/ Investors. Those who are buying whisky in order to realise profit, expecting their whisky to go up in value. 4/ Flippers. Those who take advantage of new releases to sell quickly after release to those who either can’t wait for a bottle or aren’t able to get a bottle.
Of course there can be blurring of the borders between the four types of collector. I don’t know if a flipper actually counts as a collector as some don’t even touch the bottle they buy, often getting retailers to send straight to the auctioneers. Personally, I’m a bit of the first three types. I have whisky in store that I know I plan to drink, whisky I’ve wanted to own because I like the presentation and whisky I have bought deliberately as an investment.
For those who drink or those who collect just to own bottles they admire, then what they choose to collect is entirely personal and dependent on their own tastes. However if you want to collect to realise a profit, no matter how small, there are guidelines that you would be well advised to stick to.
1. Have a collection policy or an aim.
This might not be particularly obvious, but if you want to maximise profits, then you have to target what you want to collect. In the start of my collecting journey, I initially started collecting bottles from distilleries that could be seen on my journey between home and Aberdeen. As this passes through Speyside, that encompassed many distilleries. I didn’t just collect any bottles, I collected those that were limited edition. Let’s face it, a standard 12 year old Glenfiddich unless its ancient is never going to realise much value.
I moved onto collecting Flora and Fauna bottlings. It’s advisable if you are going to collect a certain type of bottle, then attempt to get the whole collection. When the time comes to sell, you will be able to attract two types of buyers; those who want the whole collection or those who wish to a bottle at a time. Make sure however you are aware of the likely cost of all the collection before you start. For instance, many Flora and Fauna bottles cost around under £200. However, rarer bottles like the white cap first editions often go for over £400. The holy grail of the collection is the Speyburn, which was only made for one batch according to legend. This bottle has started regularly achieving hammer prices of over £2000.
2. Buy bottles that are likely to realise an increase in value
There is absolutely no sense in buying bottles for investment just because they are available. They have to be able to realise an increase in value and realistically you need to be buying bottles that will be in demand in the future. Bottles that would come under this criteria are most normally limited editions with low numbers released. There is a problem with the title ‘Limited Edition’ as in a lot of cases it isn’t really rare at all.
Realistically speaking, if you can buy it off the shelves of your supermarket, then it is generally not going to be a bottle that will be collectable. There are some exceptions, but you will have to generally keep hold of the bottle for many decades to realise a decent increase in value.
Unfortunately, many bottles increase in value not due to the whisky inside of them, but due to the brand. The whisky inside them may not be the best example of what that distillery can produce, but the demand is there. Distilleries such as Macallan, Ardbeg, Highland Park and Glenmorangie spring to mind. It is pretty hard to lose money on a Macallan bottle, but you have to buy the right one. The quality of the whisky in a 1980’s distilled 10 year old is far superior to some of the Double Oak and Triple Oak expressions available now in my opinion so it pays to do your research. Not that any are bad whiskies, it’s all a matter of relativity and personal opinion. And while I did say it was hard to lose money on a Macallan bottle, it is possible and I personally know of one person who has lost £100 on a higher value release. It’s not me I hasten to add, although the person in question is quite open about it.
Bottles that are likely to go up in value are those from silent distilleries, bottles that were popular and discontinued, single cask bottles from an in demand distillery. Cask strength editions are quite worthy as well, but you have to keep an eye on how many are produced. Something like Glenfarclas 105 will not go up in value, as it is a core range and many thousands have been produced, however a limited run of a cask strength bottle such as a Glenfarclas family cask will most likely increase in value, or a bottle such as a festival release with limited numbers.
Also popular are the bottles from first releases from new distilleries. However buying these on the secondary market soon after release usually means the price has been distorted by flippers, so it is always better to buy straight from the initial point of sale.
3. Know of the potential value of the bottle before you buy.
Yes, it is nice to get your hands on a rare Glenugie, the Peterhead distillery that was the first distillery to close as part of the 1983 mass cull of distilleries due to a surplus of production. However when buying such a bottle, it is always better to get it straight from a retailer on the primary market. If you buy such bottles on the secondary market, such as from an online auction or whisky broker, then you have to be aware of the going price for the bottles. While you may be happy in paying £400 for the bottle at auction, it’s not really a good investment if the ceiling for that bottle is £450. A closed distillery may not be the best example, as eventually supply will run out at some point, but the same goes for any bottle. Look at those people paying over £2000 for a Macallan Genesis – the market price has seen a lot of these bottles sell now for around £1400 at auction. Yes, given time the price will probably go back up again, but that depends on how demand continues for them. If you overpay, then you have to hold onto the bottle for longer to realise a profit, or stand to make a loss.
It’s worth pointing out that in some cases, original bottlings often are more profitable than independent bottlers, but this is not always the case. Buying a whisky bottled by Signatory, Gordon & Macphail, Cadenhead, Adelphi, James Eadie, That Boutique-y Whisky Company amongst others can realise good prices. Certainly an Invergordon 42 year old whisky from TBWC I’ve been chasing has certainly increased in value, and I know from the bidding action it is very much in demand. I think the original release price for Batch 15 was in the region of £115. I had to pay close to £200 once auction fees were considered. However, I have tasted it in the past and it is a great dram, making a good explanation for why the price has gone up.
4. Know your potential buyer
When buying, think about who is likely to buy what you are selling. This is why gimmicks like the Game Of Thrones whisky wasn’t really a good investment. Apart from those complete sets flipped just after release, it is rare to see a complete set break even. It is unlikely to ever make much of a profit if any at all. Limited editions tied to a TV show are unlikely to make money as they are normally manufactured in large amounts.
‘Limited Edition’ is often a misnomer, as something produced in its hundreds of thousands, but only made available for a 6 months or so is still technically a limited edition. You need to see my article on Game Of Thrones whisky to understand that the only people likely to buy this are fans of the show. And they’ll already have a set or two. With no real auction demand, unfortunately you are stuck with it or will not be able to sell for any profit. Remember most auctioneers take between 5 and 10% on the hammer price which when Game of Thrones has already got a hammer price well under the original RRP makes the blow a little bit harder.
This is why I always advise do not buy anything you are not prepared to drink. Buying bottles like Macallan, Ardbeg and Highland Park may have higher prices, but there is a healthy secondary market for these bottles, as people buy them to drink, especially whisky bars in Asia who’s clientele are demanding rare whisky and are prepared to pay for it.
This is also the risk in single cask bottlings. You need somebody to want the single cask whisky you have as there can be duds going about that haven’t been well received, but this can be mitigated by buying from an in-demand distillery. It’s hard for me to suggest individual distilleries, but I myself have usually restricted myself to single cask bottlings from GlenAllachie, GlenDronach, Invergordon, Glentauchers, Dailuaine, Benrinnes and Tamdhu. I have other single casks, but these for me are the brands I like.
5. Don’t overstretch.
It goes without saying that you should not overstretch. If you are a low grade investor, the best advice I can give you is set a budget for what you are prepared to spend to collect. Perhaps a monthly budget – you don’t have to spend it all in one go, but perhaps roll it over to another month. What ever you do, it is important not to spend more than you are prepared to drink, as there is a possibility that the situation may happen. With that in mind, it is also helpful if you collect stuff that you would enjoy drinking – if you don’t like peaty whisky, then there is no sense in collecting Ardbeg for example. Just in case, you understand! It all depends whether or not you are prepared to take the risk.
6. Speculate to accumulate.
As with any investment, you have to consider what bottles give most value. I’ll put it here that if you are only going to collect bottles at £30ish then the chances of any sort of profit are minimal. They are not extinguished, but from my experience the more you can spend on a bottle, the more it is likely to have a chance in going up in value. I can give three examples to show relative profits.
Aberlour 10 – decent enough whisky. Can be bought for £35-45. I am aware that it is getting discontinued in favour of a 12 year old expression. This whisky is mass produced, and while a decent whisky there will be a lot of this hanging around in people’s drink cabinets. It’s a simple yet pretty good value Speyside whisky. However, it is highly unlikely in the period of 10 years to double in value.
Old Pulteney 17 – Another mass produced whisky, but perhaps not as much as the Aberlour above. This was discontinued in 2018. It was reviewed by American YouTube vBloggers Scotch 4 Dummies as potentially the best Old Pulteney ever. Cost used to be £74ish. I’ve just had a look on Amazon, and the cheapest new one they are advertising is £203. It can be had a lot cheaper elsewhere, but the thing is that editon was a very popular whisky. Just looking at one auction site, the price has peaked at £110, yet averages at £85. It has only been discontinued for two years, so many of the people buying it are likely still to be drinking it. Once supply narrows down, this will be a good whisky from an old era. The price is likely only to do one thing.
Bruichladdich Octomore X4+10 – Now we look at a whisky that was a limited release. £150 on release and only 3000 produced. Sold out instantly. This is a quadruple distilled whisky at 70% and ten years old. However it was only in a 50cl bottle. However just looking at one auction site, this peaked at £281 some three months after release and now sells for anywhere between £210 and £250. Even at the lower value, thats £60 in less than a year on an initial investment of £150. As these get drunk, the value will only go up, but will reach a ceiling value of which I estimate to be in the £300 – £350 range maximum. I own two, and I can guarantee one will be getting cracked open.
Can you see the pattern? The more that gets spent on a whisky, the potential to realise an in value increases also. In my experience if you spend below £100 a bottle as an investment, you are unlikely to see great profits and it may only hold its value. Factor in selling costs and you may only break even. However, if you are collecting as a hobby because owning certain whiskies or brands gives you an amount of pleasure and pride, then profit is not your main motive so you should not expect to make any. Harsh, but fair as you’ve received value in the pride factor and not the monetary factor.
7. Be aware what is getting relabelled.
For those who want to collect a specific whisky, they are more likely to be looking for all variants of it. So when a distillery is rebranding, people will want the new style in their collection. Doesn’t necessarily have to be an expensive whisky. Example – GlenDronach, BenRiach and Glenglassaugh were all sold by Billy Walker to Brown Foreman. While there has not been a rebranding of all the whisky (BenRiach recently has undergone a rebrand), there has been subtle changes to the bottles, such as the new Master Blender signature changing to Rachael Barrie instead of Billy Walker. This gives the bottling a distinct ‘marker’ of when it was produced, therefore collectors in the future will easily be able to tell the era the bottle was from.
Another distillery that has rebranded, Glengoyne, recently had it’s 18 yr old expression for sale on Amazon for £20 less than normal retail, possibly in an effort to sell old stock. That is good for drinkers (cheap drink!) but is also good for collectors who have more margin to realise a profit should they ever sell.
This is why with intelligent buying, you don’t have to go for the expensive whisky. It can be enough to buy an affordable bottle and just wait for a rebrand or a recipe change. An example is GlenDronach 15 Revival. The original recipe had to be discontinued for three years due to lack of sufficient stock to make up the malt. Three years later, it reappeared and has since undergone another recipe change according to my sources. The original bottles have increased
8. Be aware what is getting released or discontinued.
First bottlings from any distillery are usually a safe bet, especially if in limited numbers. Be careful if you are buying them on the secondary market as you may be overpaying, Similarly be aware of what is getting discontinued.
It can help being on the mailing lists of distilleries to see when new releases are coming. Often that gives you access to any ballots for limited releases or first chances to purchase. I used to be on the mailing list for a few distilleries, such as Macallan and Ardbeg, but have now decided to cut back as I am no longer really interested in these brands enough to be on their marketing lists.
9.Make sure you have a place to keep your collection
It’s all well and good collecting whisky. But if you are not drinking it, or not drinking it quick enough, then you will have to ensure that you have somewhere to keep it. If you are collecting for investment, then you need to make sure that it is in a place that keeps your bottles in prime condition. I’ve written on this extensively here and here (click on links) but to quickly summarise it needs to be somewhere not exposed to constant light and the temperature has to remain stable and not at extremes – lofts, attics and garages are not good places. I personally have a storage locker, but that comes with its own risks – see here
10.Make sure it is covered.
Again, I have gone into this in detail before here and here, but regardless of where you keep your collection, make sure that it is covered under insurance. Keep an eye on the values of any high value bottles as they may go up and exceed the single item limit on your house insurance. Having large amounts of bottles in your house may also compromise your house insurance too if there was a fire. Best look into specialist insurance. This is a given if you are using a storage facility – get professional whisky insurance and don’t rely on the insurance offered. There are normally limits on alcohol pay outs -my first storage location limited me to £10K.
11.Keep an eye on the value of your collection.
You need to keep an eye on the value of your collection for a few reasons. Firstly and most importantly is for insurance purposes. This will make sure you have adequate cover for your collection.
Keep a regular check on what the more expensive bottles in your collection are doing at auction. These are the bottles that you stand to make the most profit on if bought at the right price, but equally could be the bottles you lose most on. You may find that the price is dropping as a bottle is going out of favour and it may be a good time to sell. However, don’t let one or two auctions be the decider – use a service like Rare Whisky 101 to check every so often to see the average prices. Investment in whisky bottles is best played out over the long term, similar to any investment, so it is sometimes better to hold your nerve.
If collecting to realise profit, then you have to keep an eye on how to sell it. There are limited options as it is illegal to sell alcohol without a licence, therefore you have to use an auctioneer or a broker. These often come with charges or commission, so you have to factor this into your final profit or loss.
Auctions are a risk as you need somebody to want to buy your bottle for it to sell. Ideally you want two or three people to want to buy it, as a bidding war often results in a better price for you. But here’s the hint why you don’t really collect stuff off the supermarket shelves – its been made in its thousands, supply is likely plentiful on the secondary market, therefore people don’t have to have bidding wars.
The other risk in selling is that you have to ensure that you are not selling in quantities regularly enough that could attract the attentions of the authorities. You may be selling in such a way the tax authorities may deem you as a trader. This could have legal as well as tax implications. Advice I have been given in the past is that if not selling everything at once is sell in larger tranches.
You have to be aware that selling bottles of whisky, this can expose you to tax liablity, especially Capital Gains tax if you reside in the UK. This is because unlike casks of whisky, bottles are not seen as a depreciating asset and therefore can be used in any tax liability. Of course, this depends on how you sell it as you will also need to avoid being seen as a trader too if conducting frequent sales. A reputable whisky broker will be able to advise you.
l would like to point out that this is not an exhaustive list. If you decide to collect for profit, then all I can really say is do not spend more money than you can afford to lose or drink. It’s a hobby, do not let it be your downfall. If you want to make bigger levels of profit for less work, I’d consider cask purchase ONLY THROUGH A REPUTABLE DEALER and not through any of these advertised investment schemes. Cask investment also potentially comes with some large tax costs and you need to have a plan on what to do once the cask reaches maturity. Essentially the only way to make profits is to sell in bond.
It doesn’t take a genius to see that collecting in whisky is becoming more and more popular. However I feel in the UK that we are potentially in the path of a perfect storm that may crash bottle auction prices and also affect the industry as a whole. Back in the 1980’s the whisky industry severely constricted due to oversupply. Whisky distilleries were shut wholesale, some never to reopen. The term coined for the period I’ve often seen as the ‘Whisky Loch’. Well, I feel we are reaching a point that we now have a Glass Loch building in the cupboards across the UK. Supply has never been so good, and with many new distilleries coming online, people are seeing bottle collecting as an easy way to make money.
However, I feel the dam holding back the Glass Loch is on shaky foundations. While auction prices are healthy at the moment, the global economy may not be. Without taking the political view but based on fact, the UK economy is in a very precarious position, caused by the Coronavirus and the potential effects of Brexit. Should the economy fail and there is mass unemployment or raised taxes, there will be a pinch on the pockets of the public. People will then see their whisky for what it is – a luxury. Faced with having to make mortgage payments, I predict that a good many people will be selling parts of their collections or even in their entirety. This will have the result of potentially lowering secondary prices.
This has two outcomes for us as collectors and investors. Falling auction prices mean availability of bottles at reasonable prices goes up. Any investment in whisky should always be seen as a long term strategy. Buying cheap now at auction could realise great benefits in the future. But in the second outcome it also potentially means that our collections go down in value too. Hold your nerve as long as possible. Those people who do will benefit, as the lowering of prices will also potentially mean more of those collected bottles get drunk or end up in the hands of those who will drink them. A shortening of supply means when the market swings back the other way, our bottles will be that little bit rarer. And worth more.
Please realise that I am not a professional and am only writing this based on my experience as a collector myself and what I have seen in market performance within the secondary market. I cannot reiterate enough that you must only purchase what you can afford to drink or are comfortable to lose.
Last bits of advice? Collecting for personal enjoyment or profit can give immense levels of satisfaction. You can learn lots about the whisky industry as you research your bottles. Have fun but remember that when the fun stops, stop.
And don’t forget to open a bottle in the stash every now and again. Collecting without tasting is a bit soulless.
It has been a nailbiting and momentous week here at Scotty’s Drams HQ. I lost my job as the premier hypocrite of the Strathspey and Badenoch area, when my Macallan Folio 5 did sell at auction and I made the grand total of £37.20 after taking auction fees into account. I don’t even have the title of the worst flipper in the world, as at the same auction, some people were taking losses over £230 on their Macallan Easter Elchies Black 2019 release – one of the many Macallan releases that did not have numbers confirmed and turned out to be a lot more than people anticipated.
In other auction action, I submitted a bundle of whisky miniatures to a couple of auctioneers, and the items at Whisky Auctioneer in Perth did a lot better than anticipated. I had the opportunity to buy around 50 nips from a guy locally who was selling them on behalf of his mother, as they belonged to his late father’s estate. I paid £50 for them, as I didn’t really have time to inspect them properly and I had no idea of what they were worth. Imagine my surprise when the total hammer price was £211! With me being me, (and the local area as well as the whisky world being very small), I had told him that if it made much more than £50, I’d give him the profits, so nobody could think I was taking the mickey or taking advantage of people. Believe it or not, I do want Scotty’s Drams to be known to have a smidge of integrity! It has been a great result for myself, but especially to the recipient of the extra cash and I am glad it is going to a good cause.
The final thing that I want to point out for this week was the news that retailers were slashing the prices of the Game of Thrones editions as released by Diageo in collaboration with the HBO series. The Whisky Exchange and Master of Malt were offering around 30% discount on the 9 bottles, and I had seen on line that another retailer were said to be offering 40%. You can imagine the response on the social media channels about people who feel conned that they paid significantly more to collect the series. I will remind you that I warned about this in my article I wrote about the Game of Thrones whisky set back in November 2019. Click on the link if you want to be reminded of what I said.
I’ll not go over old ground, as this will make the article unnecessarily long. However, I can understand the angst of people who feel conned, but why did they pay so much in the first place? They believed the hype of a limited release that was never really going to become rare – not in the next 40 years or so anyway……. I bet the person who paid £1400+ for his set at auction feels especially aggrieved, especially for one of two things – a lowering of the retail price will crash the auction price. This is definite for the short term and most likely for the medium to long term. Why do I think this? It is only the truly gullible or those who cannot get it any other way will pay more on an auction site than it costs at retail. Secondly, now the retail price has dropped, potentially many are going be offloading it ASAP if they don’t want to drink it, thus probably ensuring a very easy supply to secondary market at auctions. Additionally, because of such a large price drop, the perception of quality has been damaged and any last vestiges of thought about the range being a collectable commodity that will make healthy profits have been blown away.
We have to also remember that people thinking it was a limited edition were conned into thinking this, or what is much more likely that they chose not to look at the facts. This whisky was released in massive numbers, probably tens of thousands of bottles per each edition. Coronavirus is still rarer than GoT whisky. The only way it was limited was that Diageo has probably set a limit in the time for these products to be marketed. I doubt they consciously limited the production over that period, given the amounts in circulation.
Let us put that into some sort of perspective – in December last year Bruichladdich released 3000 bottles of their Octomore X4 series. This is the quadruple distilled single malt, that is part of a series that has been released as spirit and at 3 years old. When it was placed in their online shop, the website crashed as people tried to get hold of a bottle. I was lucky, and after 4 hours trying I managed to get 2 bottles. Still, when you look around, you can still get hold of it at auction, albeit at substantially more than the £150 release price. I bought 2 as I intend to drink one and put the other alongside my other X4’s as a collection. Even at 3000 bottles, which is only around 10 casks worth of whisky, this is not especially rare. How much less rare is the GoT whisky? I do hope that you have got my point here, as we now have to expand on what probably drove the demand.
I came to this thought based on another article I had read online. Another blog / review site I like reading during my online wondering is The Dramble. Indeed I recommend it. It has a collection of writers, although most of the content is written by its co-founder Matt Mckay. He recently wrote an article about the Talisker Distillery Exclusives, and he raised an interesting point about these distillery exclusives, and how some people feel this is unfair as they are missing out if they can’t get to the distillery. I had to laugh as they certainly missed the point of exclusives. Matt touched briefly on the FOMO fanbase. For those of you who aren’t as hip and down with the kids and street language, I can tell you that FOMO stands for ‘Fear Of Missing Out’.
Let us face it, some of us do have moments of fear that we are going to miss out on something. I am no different. Back in those dark, dark days when I was on the Macallan mailing list, I entered the ballots and crossed my fingers. I never wanted to flip any bottles – I wanted to own something that would be worth a bit of money in the long term. Of course I was trying to avoid paying the money the secondary market would eventually command. So it comes to pass that I guess in the case of the Folio 5, I have to be honest with you and I took my eye off the ball. The unforced error of not really noticing there was no commitment to limit the numbers to the same level as usual was a mistake many had made. After all, no numbers were officially confirmed for Folio 4, and it was accepted around 2000 bottles were released. Surely Macallan wouldn’t do the dirty and release 20,000 bottles, ensuring 18,000 could not collect the full set? That’s exactly what they did.
The problem I feel with limited releases (and I speak only as an enthusiast with no part in the whisky industry) is that too many people have seen the profits that some people have made and are now only too keen to buy a whisky and hopefully make the same profit. Those with little experience also misunderstand the meaning of limited release. A limited release can still have hundreds of thousands of bottle released as long as it’s only sold for a fixed time. Releases such as Ardbeg’s annual release, coupled with pretty much anything Macallan releases on a limited basis normally initially makes money and drives the flippers and those determined to obtain a bottle to buy and sell in a frenzy similar to that when a lamb is dropped in a pool of piranhas. This has perhaps provoked people who do not normally buy whisky as an investment to perhaps want a piece of the action. It is a very dangerous game to play with no knowledge and people have, and do get financially burnt by it. I’ve been buying and selling whisky for 6 years now at auction, and I know – even I get caught out sometimes, but I accept the swings and roundabouts of what I collect.
The only way such a release of whisky could ever hope to become rare and expensive is if people drink it. And while with GoT this is still theoretically possible, the whisky released was never the best products the distilleries were capable as of and there was just so many bottles released. I’ve tasted a couple of the GoT editions, and they are pretty so-so. Not bad but not good either.
So why have the prices dropped so far? I would guess that now Game of Thrones is completed and no new episodes are to come, the series has dropped out of immediate public consciousness and now they are not buying it in the same amounts. My limited experience with retail in other areas would suggest this creates excess inventory to get rid of and to do this then the easiest way is to drop the price.
Fear Of Missing Out – not having the whisky from your favourite TV show, or not being able to collect it in order to make a profit at a later date is probably what has driven this release. Possibly a bit of intrigue to see how each edition ties into each family in the story. But to be fair, it isn’t just limited to the gimmicky release that GoT obviously was. It is the same with every release from Macallan, Ardbeg, Bruichladdich amongst others. Our admiration for the brand, our desperate desire to have something no other collector has, or at least have it first, or to even just get a couple to flip so those desperate enough can get their hands on it blinds us to some harsh economic realities if we don’t take into consideration the realistic supply an demand in the future.
And here is the crux – FOMO often takes our attention from the most important thing – the whisky itself. Consider that in the whisky world that fully missing out is a rare thing – what’s on the market will eventually come around again, at least in the secondary market, and when it reappears, it may come back cheaper. FOMO is driving a monster in the whisky market which has the risk of eating itself, something those who have felt cheated over Game of Thrones are now realising, but it can be applied to those who overpay for anything. I’ve seen Macallan Folio 5 auction for a hammer price of £900. If that person failed to win the original Macallan ballot, how silly do they feel now when they could have bought mine at auction for £320 rather than overpaying the first flipper that came along? The signs of the greatly increased out-turn were all there when they were appearing on auction sites before the Macallan Ballot was complete, so why would you pay nearly 4 times the RRP?
Marketing is something that we as whisky geeks that we all have to be aware of, as it so often promises something and very often does not meet our full expectations. Fair play to Diageo – they shifted shed loads of non-premium whisky at non-premium prices and those who know very little about whisky or have duller palates are suddenly exposed to nine distilleries in the Diageo stable. Where they will not get people continuing to buy GoT bottles as it is limited, they will then most likely start buying the more profitible (for Diageo) releases from these distilleries after they made GoT fans more aware of their offerings. Diageo really couldn’t lose from this venture.
The important thing to bear in mind is that if we are true whisky geeks, FOMO should never really guide us – our palate should in the first instance, but I have to admit that I can miss this myself, and often become a bottle chaser, which is an unhealthy habit. FOMO and bottle chasing can and does lead to missing out on other things, though you often miss that point as well.How ironic.
For those amongst you reading this who have more experience than me, I hope that you are nodding your head in agreement, for you know the truth that things will eventually come back around. You may have to wait somewhat. I have that feeling with the Dailuaine I lost out on in the week previous to last. We have to move on….
In summary –
Don’t always believe the hype on new releases.
Never plan on making money, and only spend what you can afford to drink. That is what you might be doing if the price crashes
Make sure you know how many are being released
Don’t be afraid to miss out. There are thousands of fantastic whisky expressions out there, and because you don’t have one, this means you have money for another.