Blue diamonds are OK, but a rare whisky really is an appreciating asset

07 March 2019 - 14:26 By Nico Gous
Prices of rare whiskies are going through the roof as canny investors increasingly see them as a rock-solid investment.
Prices of rare whiskies are going through the roof as canny investors increasingly see them as a rock-solid investment.
Image: iStock/AlexPro9500

Rare whisky has achieved a 582% increase in value as an asset over the past decade and is increasingly being seen as an investment of passion by wealthy collectors.

"Some of the world’s wealthiest people, including Amazon’s Jeff Bezos, are reportedly big collectors. But it's in Asia where the trend seems to be accelerating fastest," says the Knight Frank 2019 Wealth Report.

The report offers a global perspective on prime property and investments.

"New direct flights between Edinburgh and Beijing, 40% annual growth in sales of Scotch to India and China, and a new record sale price of £1.2m (R22.4m) for a single bottle should have Scotland's distillers raising a dram or two," the report said.

The Knight Frank Rare Whisky 100 Index lists the world's 100 most desirable rare Scotch whiskys and tracks UK auction prices - which increased by almost 40% in 2018.

The report's editor Andrew Shirley said Asia is where the whisky trend seemed to be accelerating the fastest.

"Chinese tech entrepreneur Jack Ma's private jet has been spotted at Aberdeen airport, while whisky tourism was apparently one of the drivers behind the launch of a new non-stop flight from Edinburgh to Beijing in 2018," Shirley said.

"Sales of Scotch whisky to India, China and Singapore rose by 44%, 35% and 24% respectively in the first half of 2018 according to the Scotch Whisky Association, with single malts totalling almost 30% of total exports."

Whisky collector Andy Simpson said it was a "remarkable" year as two bottles of the same whisky broke the auction record price.

The first Macallan distilled in 1926 was sold for R13.2m (£700,000) in October and R22.4m (£1.2m) in November. Only 40 bottles of the record-breaking whisky were  produced.

"From a risk perspective, we believe the incidence of fakes can only increase while prices are so high and demand so robust," Simpson said.

But for some collectors the bottles are not enough, they want to buy casks.

Charlie Beamish, who runs a whisky business, said: "Putting your own whisky into customised decanters created for you by a premium crystal-maker and giving them to your friends in a stunning presentation box really is the ultimate gift."

Meanwhile, an asset class that was previously deemed a desirable investment appeared to have lost a bit of its shine in the past year.

The report said that 2018 was a "fairly positive year" for fancy coloured diamonds but they did not gain significantly in value as an asset.

"Prices across most colours and sizes rose slightly on average, even though the Chinese economic slowdown caused a decline in the number of fancy colour diamond retail transactions.

"At the top price points, where supply is permanently short, values were practically unaffected. Traders are holding firm, projecting an improved trading environment in the second half of 2019."

Blue diamonds were the top performers in 2018, with yellow values weakening slightly and pinks remaining stable.