How to invest in whisky

Hand a whisky-lover a time machine and they might well set the dials for 1993, when Oddbins began selling an Islay single malt matured for 29 years in sherry casks. The price of Black Bowmore – £110 a bottle – was considered pretty steep at the time, but not now.

No longer is whisky collecting a niche hobby purely pursued by earnest enthusiasts. Buoyed by a series of headline-grabbing sales – culminating in the £2.2m paid at Sotheby’s in November last year for a bottle of The Macallan 1926 Valerio Adami edition – we now live in a world of exclusive whisky auctions, investment funds and new releases with five-figure price tags.

So is whisky a sure thing, with lucrative returns more or less guaranteed? No. While the long-term price trajectory for rare bottles of alcohol remains highly positive, the market is going through a difficult phase. In its latest March quarterly update on the fine and rare whisky market, Noble & Co notes a “significant slump” in auction volumes, continuing a negative trend that began in the second half of 2022. While pricing has held relatively steady, volumes of bottles sold at auction above £100 fell 16% in the last three months of 2023 versus a year earlier. Volumes last December were down 18% and slumped 35% in January 2024.

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Where to invest in whisky

In part, the correction is linked to broader macroeconomic concerns and trends in the primary market. New releases of high-end whiskies are not selling through as quickly as previously, echoing the downturn in fine wine. The other factor at play is that the rare whisky scene is maturing. The remarkable gains of the 2000s and 2010s are unlikely to be repeated, simply because this is no longer such an undervalued commodity.

So, what should you buy, and where should you buy it? Rare whisky is a relatively illiquid market compared to fine wine, making detailed analysis of pricing trends perilous, so there’s something to be said for buying what you like. At least you can still enjoy your whisky if the market turns south.

Limited releases from marquee names are the obvious way to go, including whiskies from “ghost” (closed) distilleries. Port Ellen, Brora and Rosebank are famous names here, although all three have recently restarted production. Others include Glenury Royal, Littlemill, Ladyburn and St Magdalene. Outside Scotch, Japan’s Karuizawa and Hanyu are auction room darlings. Other big names in single malt circles include The Macallan – which has spearheaded the rare whisky boom – along with Springbank, Dalmore, Bowmore, Ardbeg and Laphroaig. Beyond Scotch, US whisky names to conjure with include Pappy Van Winkle, George T Stagg and William Larue Weller. In Ireland, niche bottlings from Midleton Very Rare are on the up.

Distillers have moved fast to cater for the new audience of collectors and investors. Diageo – the biggest name in Scotch – has its Prima & Ultima annual programme of rare aged whiskies. Meanwhile, the Grant family (of Glenfiddich fame) has released several tranches of esoteric, long-aged whiskies from its private stocks under the House of Hazelwood banner.

Invest in whisky: pleasure over profits?

Don’t forget independent bottlers – companies that sell whiskies sourced from third-party distilleries under their own name. Watch out for Gordon & MacPhail’s succession of long-aged releases from its astonishing inventory. Cadenhead’s, Signatory, Adelphi and Italy’s Samaroli are other good indie sources.

Primary market sources for these whiskies include retailers and online specialists, such as The Whisky Exchange and Master of Malt. On the secondary market, auction houses have an increasingly broad and sophisticated spirits presence, from big hitters Sotheby’s, Christie’s and Bonhams to specialists Whisky Auctioneer, Whisky Hammer and Whisky.Auction. As with any collectable commodity, buying from an established business with a proven record is a must, as fakes remain relatively commonplace, and even well-established online auctioneers fall prey to them occasionally.

And then there are casks. A number of cask investment schemes have sprung up in recent years, some of them promising huge – and usually utterly unrealistic – returns. The lack of regulation in this part of the market – don’t forget that a cask is essentially an open container with an easily removed bung – makes it a minefield for the unwary investor. Sage advice can be found on the website of the industry body the Scotch Whisky Association.

As with fine wine, storing your collection in the right conditions is vital. In the long term, whisky should be kept vertical (unlike wine), and at a constant ambient temperature away from harsh light. Professional storage (including insurance) is a safe and relatively inexpensive option, which admittedly comes with the obvious drawback that you can’t see your bottles, pick them up or show them off to your friends.

Does that matter? It all depends on how you view collecting whisky. If you’re doing it purely for investment purposes, then probably not. But whisky is a product designed to be consumed, and to give pleasure. For all the calculations of market trends, auction prices and likely returns, it ought to be about something else too – having fun.

This article was first published in MoneyWeek's magazine. Enjoy exclusive early access to news, opinion and analysis from our team of financial experts with a MoneyWeek subscription.

Richard Woodard is a freelance wine and spirits writer based in the UK. Aside from Decanter, he writes for several wine trade and media outlets including Imbibe, The Drinks Business, Harpers and Drinks International.

Since 2015 he has been the magazine editor of Scotchwhisky.com. He has formerly worked as a wine news reporter at Imbibe and a feature writer for Halycon Magazine.