Top 9 Things to know for Whisky Investment in Singapore
Whisky investment is fast catching on in Singapore and other major Asian cities. The Scotch Whisky Association says that the demand for single malt whisky has skyrocketed in the recent times, with sales increasing by 190% in the past decade.
This alternative investment market in whisky was opened up following the launch on online portals that enabled people to purchase and sell units of rare and aged whiskies. While previously only serious aficionados used to purchase whisky for the specific purpose of collection, today several mainstream investors are joining the bandwagon.
Whisky production takes time – the liquid needs to mature in oak casks, and the process takes years; in fact, the more it ages, the higher the quality of whisky. For this precise reason, the supply of whisky is not able to keep up with the demand, especially in Asian countries.
The broader wine market has slowed down just a little but, it is offset by a higher demand for fine wines, rare whiskies and other exotic spirits. The reason for this is that Asian investors are becoming more sophisticated and discerning about what they want to drink, and what they want to collect. Rare and interesting products from the West are becoming quite the rage.
Though most investors prefer to collect single malts, some premium and rare blended whiskies are also fetching high prices at auctions.
Here are some things you need to know about investing in whisky:
1. As a pure instrument of investment, premium whisky has performed significantly better than conventional assets hitherto craved by connoisseurs like rare stamps and coins, paintings, sculptures and pottery.
2. Whisky is a non-perishable product. It also does not age once it is bottled. This means that the price stays pretty stable, and storage is much easier than products like wine.
3. Single malt whisky can only be made in Scotland. It requires malted barley, available only in Scotland, and single malts are produced only in one distillery – unlike blended whiskies. It is made in copper stills in a batch process, and is aged for a minimum of three years in oak casks. Pick single malts from the famous distilleries like Macallan, Glenfiddich, The Balvenie, and so on.
4. The flavor of the whisky depends to an extent on its age; the lesser the age, the more the whisky flavor is like the distillery. The greater the age, the more similar the flavor is to the cask in which it was aged.
5. Apart from the actual cost of the whisky itself, there are several other costs associated with this investment, like bottling, transaction, transport, storage and distribution. Therefore, it would be wise to make investments that amount to a minimum of $50,000.
6. It is important to ensure that you have adequate assets like cash, property, bonds, and so on, before you plunge into whisky investment, as it is a very speculative market. Whisky is also quite an illiquid asset.
7. Keep a watch for single cask releases and limited quantities. This tells you that the whisky is rare, and therefore, valuable enough to collect. Distilleries that have closed down in the recent past are a good place to start; as they are no longer producing, their whiskies are guaranteed to be rare. Examples are Port Ellen and Brora.
8. As far as possible, invest in what you really enjoy drinking. This way, even if the market plummets, you can still enjoy your investment. If you’re wondering how the market may hit bottom, look at this example: 20 years ago, a Port Ellen whisky would have cost you a mere £ 30. However, today, you will need to shell out a whopping £ 1500 for the same – simply because of its limited availability and rarity. The thing is, there comes a limit beyond which you will not see the price rising; then there is only one way to go – down. So if that happens, you can simply open the bottle and knock back a peg or two! But don’t worry; as of now, up is the only way to go – with a severe shortage for whiskies aged 30 years and over, and demand shooting up with every single day, you’re good. In fact, according to David Robertson, director of rare whiskies at White & Mackay, auction of rare bottles are fetching around £ 5 million, and are expected to cross £ 15 million by next year.
9. Investors can buy bottles directly, through whisky funds, or through online investment platforms specifically geared towards whisky. These organizations often conduct private and exclusive whisky tasting events in Singapore, in addition to auctions, pre-bottling releases, and so on. They often provide the services of an expert, who guide them about rare whiskies to look out for and invest in, which to hold, which to sell, appropriate storage, whisky cellars and so on.
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