In the last five years I have seen a constant increase in whisky prices I am interested in. I remember when a interesting new Ardbeg was only £60 or when a 25 years old Ardbeg Lord of Isles was so expensive at £150…
Many persons are now joining the wagon of whisky investment just for the future ( or immediate sometimes ) reward. So read why I think that this is quite a bad idea if you don’t know what you are doing.
I am a whisky collector, I collect whisky, really. Many friends have told me as an insult that I don’t open bottles. And yes, I don’t usually open them. I collect because I love the way the bottles look and love to see them one after the other, to put my hands on them. There is so little moments better than opening a box full of whisky… well, maybe having a dram of them may be better :)
An open bottle of whisky last several years on my cabinet, so I have an extra problem keeping open bottles at hand.
But I don’t buy whisky as an investment. I haven’t sold a single bottle of my collection nor I will (by now, until my country’s economy finally collapse I am forced to beg on a street corner). The whisky collection profit is an interior growth in knowledge and pleasure.
So, why do I think it is a bad idea to invest in whisky?
First reason, Price
Ten years ago or even something as close as five years ago whisky prices were a hell more reasonable. I remembering not buying Ardbeg Lord of Isles for £199 because it was too expensive.
Actually, any pesky unlimited limited release goes easily above £100 for whiskies that are barely 10 years old.
If you read people saying how much they won selling such bottle or such other bottle, just keep in mind their original buying price perhaps was very low compared to today’s standards.
Second reason, Profit margins
Although you may got a bottle for a nice price and sell afterwards for a good sum you. You still need to find a buyer for it. So you usually have three different choices:
a) Auction houses. When you sell a bottle in an auction you usually have to pay the auctioneer a percent of the bottle final price and a price for each item you want to place in the auction. Commissions can range up to 10% of the final price of the bottle.
If you are not near the auction’s house, you may need to send the bottle by mail which takes another bite on this profit margin.
b) Direct sale. You can avoid all the hassle and commissions and sell yourself the bottle directly. Maximum profit but there are many dangers here… first, you may not know the person buying you the bottle at all, the bottle may get broken, lost or undelivered.
If I would have good a penny each time someone has written me for buying something of my collection ( that it is not for sale I just state it again! ) I would be rich by now.
c) Shops. Some retailers ( most of them nowadays ) are buying old whisky bottles and collections. Problem here is that shops are in selling whisky for profit and profit can only be achieved by buying at a low price and selling the same stuff at a high price. That’s bad for you and good for the shop.
Thrid reason, Risks
I won’t be a true spaniard if I don’t talk about risks. Whisky investment is a risky one, not just because you may end losing money but because you may end losing whisky. If you are putting your future wealth on a fragile glass bottle full of distilled cereals you are a bit mad.
Bottles get broken every day. Shattered. Whisky evaporates slowly but constantly from the bottle even when closed. You have to store them in a perfectly controled enviroment to avoid changes of temperatures or high temperatures at all.
So if you spend £500 in that unique-special bottle of Macallan that will be worth ten times more in five years based on previous prices increases just take these thee free tips:
1) Don’t tell your wife about it. Serious!
2) Store it in a cool place, away from direct sunlight.
3) Never ever take it out of where it is stored to show off a familiar.
If despite all the above you still wants to invest in whisky, be welcome to A Wardrobe of Whisky. If you are going to buy whisky, at least buy good one ( check recommended and Best of the Best ) because you may end on the future drinking your investment.
If even after reading my kind words for you, you still want to invest in whisky, just go ahead and buy Macallan :)
What do you think? Have you invested in whisky?
Don’t miss the second part of this article!