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Is Whisky A Good Investment? It Can Be, But Selection Is Key


IT’S liquid gold for some, and it might just be liquid gold for your bank account.

Whisky investment and collection in Australia is booming, with cashed-up investors looking for other avenues to store their hard-earned money.

And the returns are more than pleasant, with some bottles increasing in value by 30 per cent in just six months.

The interest in whiskey investment has jumped more than fourfold in the past seven years according to the experts and economists say that this may be because traditional investments like bank deposits are flatlining.

But do you need tens of thousands of dollars to make a buck in the whisky industry? Experts say no, with the right bottles upwards of $300 still giving solid returns.

Larry Aronson, from Australia’s top whisky specialist store World Of Whisky, said the demand for whisky currently was unprecedented.

“I’ve worked in the industry for more than 25 years and I have never seen anything like this historically,” Mr Aronson said.

“Whisky is very trendy at the moment and people are getting more and more into it because they now have much more information. The prices of bottles are going up at an alarming rate.”

He said the number of investors in whisky had increased four fold in the seven years of his business.

“There are two types of investors — the first, who are investing in one bottle and putting that away for sale in a few years and the second, who is buying two bottles - one that they are going to drink and one that they are going to keep to sell on,” Mr Aronson said.

“Some limited-edition bottles literally within six months are escalating in price by 30 per cent, so if you buy the right thing you can make a good return.

“We had a customer who bought a $6000 bottle four years ago and that same bottle is now worth in excess of £16,000 ($28,000 AUD).”

Mr Aronson said unlike wine, whisky value was not always tied to its vintage and, once purchased, storing it did not require specific conditions that could affect future value or returns.

And there has been a move away from wine, according to the spirit seller.

“We’ve seen there is a move away from bottles of wine to bottles of whisky. People that have invested in a Grange, there is always a question mark about the quality in the bottle; how it has been stored. Whisky doesn’t need any special storage requirements - you just have to keep it out of direct sunlight in average room temperature.”

Mr Aronson said potential investors had to be smart and not just think any old bottle could deliver a return.

“You have to be collecting the right thing. Commercially available whiskies are fantastic but they won’t necessarily increase in price,” he said.

“The right thing is investing in distilleries that have closed down, nabbing any limited-editions that come out from well-known brands and the third is looking for unique bottles that will come to the market from time to time.”

Coles, which owns Vintage Cellars and First Choice liquor stores, is about to import a $25,000 bottle of Loch Lomond’s 50-year-old Inchmurrin single malt, because, according to sourcing manager Greg Lascock, there is de mand for premium collectable spirits.

The liquid will be transported to Australia in a special flight box.

It comes in a hand-carved wooden, leather-bound casing designed by the same studio — METHOD - who have done work for Burberry and Jaguar — and each crystal bottle is engraved with its own unique number.

And there will only be 60 in the world — making the release an in-demand item with investors.

“As one of the biggest sellers of single malt whisky in Australia, we are seeing more and more customer interest in collectable whiskies,” Mr Lascock told News Corp Australia.

“For these customers, one of the most sought-after qualities is rarity, which is why we have sourced one of the Loch Lomond 50-year bottles.”

Mr Lascock said that in the past few years but particularly the past 12 months there had been a significant boom in premium whiskey purchasing and investing. “We’ve seen double-digit growth and there is a definite premiumisation of the market,” he said.

While self-managed super funds were a key area for investment in non-traditional assets such as whiskies, art and wine, new rules in 2011 and phased in for five years meant that assets had to be stored in an alternative location other than the investor’s private residence.

John Maroney from the Self Managed Super Fund Association said official Australian Taxation Office figures showed that investment in collectables had gone down since 2012.

“In June 2012 there was $551 million invested in collectables whereas in June 2017 that was down to $303 million,” Mr Maroney said.

“One of the main reasons going down is those new rules.”

AMP chief economist Shane Oliver said investors were moving away from more traditional investments because returns had slumped.

“Interest in property has declined sharply and bank deposits too,” Mr Oliver said.

“There definitely has been a move in those directions towards more exotic investments or non-traditional investments and whiskey would fall into that category.”

“Whiskey could possibly be the next big thing that takes off.”

But Mr Oliver said it was important to remember that in some cases non-traditional assets could be harder to move.

“These types of investments are really subject to trends and are in the eye of beholder,” he said.

“If the fashion changes it could turn off whiskey and get into gin — it could be a bad investment.”

David Bassanese, economist at BetaShares said putting money in the bank was delivering “lousy returns”.

“One thing that investors getting into are themes and whiskey is thematic. Investors want to have fun with their cash,” Mr Bassanese said.

“But I would definitely say buyer beware in getting involved in that kind of thing because it may not end up being a great investment in the future.”

TOP TIPS FOR INVESTING IN WHISKEY

Know your stuff and do your research

Jump on rare releases from well known distilleries or distilleries that have just closed down

Look for other attributes of the product — packaging and even the bottle itself

Don’t think you need to spend thousands to make a buck. The right product will appreciate in value and you can score whiskies that are around $300 that could make a good investment.

Buy two if you have the cash and storage space.

TOP AUSSIE DROPS

Sullivan’s Cove — This Tasmanian whisky has won rave reviews including “World’s Best Single Malt” for its French Oak Single Cask.

Lark Distillery ­— Another Tasmanian success that won the Best World Whisky at the International Whisky Competition in 2014.

Tin Shed Distilling Company — This small Adelaide outfit, branded now as Iniquity, has had its single malt rated as liquid gold by international whisky doyen Jim Murray.

By Lanai Scarr

The Herald Sun

25 November 2017


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