There is a new investment product rubbing shoulders with gold and property. It’s called SMSW. With investors in India choosing to invest in the rarest single malts, whisky-based investment options are trending, says Shibaji Roychoudhury
Move over property, gold, stocks and commodities. The latest big ticket investment is rare single malt Scotch whisky. Priced between $3000 and $300,000 a bottle based on vintage, the rare malts, long a privilege of the rich, are now cheering up the upper-middle class in India and abroad — not to share a rare quality drink with friends, but as a high-return investment.
“When I first heard about this, I laughed. Who invests in a bottle of whiskeyIJ But then, a friend showed me statistics of these rare whiskies breaking the stereotype of being just collector’s item. I have invested Rs10 lakh in six rare single malts of Macallan (28), Delmore (21) and Black Bull (40). The prices of these bottles will triple in the next 5-6 years,” Prakash Dave, a Gurgaon-based businessman, says.
How profitable can investing in these rare whisky beIJ In 2008, if one invested £10,000 in quality single malt, the value of their collection at present will be worth £40,000. A lot of market investors are now calling it liquid gold.
“There are many investors using retailers, Internet auctions and whisky exchanges to grab rare and collectable bottles of single malt. Since 2009, there has been a 192.6 per cent rise in the market value of rare single malts scotch whisky (SMSW). In 2009, there were only 963 bottles sold, whereas in 2010 the number went up to 1024 and in 2011 to 1503, an astounding 50 per cent increase in investment grade bottles. In 2012, it was 1808,” Ashish Monga, director, White & Mackay, says.
However, just like the share market, not all SMSW bottles rise at this rate. In the fourth quarter of 2011, the market value of the top 250 bottles in the world rose by 179.97 per cent, the top 100 increased by 244.75 per cent and the top 10 increased by 401.75 per cent as compared to their prices three years back.
Although, the bottom 250 lost 44.93 per cent of original market value, the bottom 100 lost about 56.74 per cent while the bottom 10 staggeringly lost 70.77 per cent over the same period.
For investing in rare SMSWs one needs to do a lot of research in order to pick the right bottles.The reputation of the manufacturer, demand of the product and the distillery have to be kept in mind. One can’t just buy an 18 years old Glenfiddich and expect it to rise drastically in two-three years. The key is to choose from limited collections which, unlike a Glenfiddich or other prominent liquor brands, won’t be manufactured again. The reputation of the distillery increases the value of bottles many times. However, Glenfiddich had earlier launched a 36-year-old rare collection of 1,000 bottles at £799 a piece. Now, that one from the same company can prove to be a good investment as they won’t be remade in a while.
However, there are rarer and older distilleries in the Highlands where companies like Dalmore offer SMSWs which go back 30 years and more. A recent Dalmore Constellation Collection released only 20,000 bottles, 4,000 a year offering 21 SMSWs from 1964 to 1992. The range of this exclusive collection is from $3,048 going up to $30,525.
“We had a customer at Changi airport who bought a £102,000 bottle of Dalmore. As this was a huge sum, the credit card company called the customer to confirm his purchase. It was funny, because they thought he was buying a distillery. When they understood that he was buying a bottle of Dalmore’s finest, they were confused why someone would spend a fortune on it. He explained to them that it was an investment and the price of this bottle would double in a year,” David Robertson, Global Brand Ambbasador and Master Blender at Dalmore, tells you.
As per the Delhi Duty Free Services, there is at least a 30 to 35 per cent increase in premium liquor purchases. “We sell 15-20 bottles of single malts priced $500 a month and 2-3 bottles of premium single malts priced at $10,000. Thanks to this trend, the sale of single malts contribute about 35-40 per cent to our total income from liquor sales,” Abhijit Das, marketing head, Delhi Duty Free Services Pvt ltd, tells you.