WHISKY, spelt with a -y, not -ey, is the amber-coloured elixir produced in Scotland, whose peaty water imparts its distinctive smoky flavour. While connoisseurs have long drunk and cherished the single malt, investors are now also buying up whisky to boost their investment portfolio.
According to Whisky Invest Direct, the cash price for an eight-year-old Scotch whisky bought new, and sold each year of the decade 2008-2017 shows average historical returns of 15.2 per cent per annum. This number is net of trading commission. "However, you would have paid storage fees of 15 pence per litre of Pure Alcohol (LPA) per year, bringing the return down to 11.8 per cent pa. This compares very favourably to deposit rates, but it does involve some risk.
"Adjusting for inflation your 'real' historical return would have been 8.1 per cent pa. Each of these figures was for an equal holding of typical malt and grain whiskies. Mixed together before bottling they make blended Scotch."
Brendan McCarron, head of maturing whisky stock at Glenmorangie, says: "The growing popularity of whisky as a drink has fuelled the growing interest in single malt investment. Right now, single malt Scotch is really in the best health that it's ever been. More people are interested in it, more people are drinking it. We've been laying down stocks in the 1980s and 1990s. There are different and rare whiskies coming out. Where there's rareness, the investors will follow."
He adds: "Every time you pick up a single malt Scotch you know that it is made in one distillery, and you know the location of that distillery in Scotland. When it says, for example, it's 22 years old, you know the youngest spirit in it is 22 years old, not the oldest. The biggest thing about Scotch whisky is the complexity of the flavour."
Unlike wine, Mr McCarron points out, this flavour does not change over time.
"Whisky will never go off, never spoil and never change, so it's a good investment. If you decide not to drink it today, it will still retain its flavour five years later."
His only advice about storing whisky is - keep it in the dark.
Not surprisingly, of course, the rarer the whisky, the higher the price. In October last year (2018), a 60-year-old bottle of the Macallan Valerio Adami, distilled in 1926 and bottled in 1986, fetched a staggering £848,750 (S$1.5 million) at an auction in Edinburgh.
Its title of world's most expensive whisky was quickly snatched the very next month by another bottle of Macallan 1926 60-year-old. This one, painted by Irish artist Michael Dillon, was sold for £1.2 million in a Christie's Finest & Rarest Wines & Spirits auction in London. As always, caveat emptor applies. As the interest in rare whiskies has risen, so has the number of fakes passed off as the real McCoy, or Macallan, so to speak.
Laboratory tests at the Scottish Universities Environmental Research Centre on 21 different bottles of rare Scotch whisky, potentially worth around £635,000, have confirmed them all as modern fakes. Based on these results, whisky expert Rare Whisky 101 (RW101) estimates that around £41 million worth of rare whisky currently circulating in the secondary market, and present in existing collections, is fake.
Even reputable hotels have been conned. In 2017, a Chinese millionaire paid 9,999 Swiss francs (S$1.4 million) for a single glass of whisky, purportedly an 1878 Macallan, from a bar in Waldhaus hotel in St Moritz, Switzerland. RW 101 established that the bottle's label was a fake. The hotel owner personally travelled to Beijing to apologise and refund the customer his money.
The upshot is: Ensure that you do your homework thoroughly before buying that coveted dram or bottle.
For the whisky makers themselves, they believe that the single malts they produce are to be savoured and enjoyed, rather than hoarded and coveted. Fraser Campbell, global brand ambassador for Dewars, tells scotchwhisky.com, "If you're buying 100 bottles of the same limited release just to bolster your investment portfolio, in my opinion you're no better than a tout snagging all the tickets for a concert just to sell them on. Get those bottles cracked open and share the love this year."
Certainly, a great deal of passion and love goes into the making of the Scotch whisky.
Glenmorangie's Mr McCarron waxes lyrical over the process. "Every week, every month, every year, you are trying to make a consistent spirit, and lay that down in a cask that will work. Every cask is different. When it gets to eight years, that's when you make your main whisky. You can keep them and see how they develop, but only a few casks will be good when they are old, and have the balance of wood and spirit."
"There are a few sweet spots for whisky - 12 years, 18 years, 25 years. It is the cask that does the magic, and it is our job is to find these casks at the right time."
Just when the whisky reaches its pinnacle is a combination of science, magic and guts.
"It's about sampling them and keeping them in your stock, holding them back and being brave enough to say, 'No, we are not going to bottle that right now. We're going put that away for 10, 15 or 20 years.' Every so often, magical things happen like the Ardbeg Twenty Something and the Glenmorangie Cask 31," says Mr McCarron.
Ardbeg Twenty Something is a rare whisky from 1996, when the distillery closed for about a year before being re-opened by new owner Glenmorangie in 1997. During this uncertain time, a few whisky enthusiasts set aside casks of the 1996 spirit. Among them was Mickey Heads, now Ardbeg's distillery manager.
Only 42 bottles of the 22-year-old whisky were brought to Singapore. Price information is available at Ardbeg Embassy, Singapore.
As for Cask 31, Glenmorangie experimented with a select parcel of 1996 spirit, which had spent 11 years maturing in American white oak bourbon casks. It was then transferred into an Oloroso sherry butt, where it remained for more than a decade. The resulting 21-year-old single malt is the first-ever exclusive bottling for Moët Hennessy Private Clients. Only 661 bottles from that single cask exist in the world. Less than 300 have been brought to Asia. Each bottle, priced around S$1,600 here, is numbered, in a hand-finished packaging.
Signed by Master Distiller Dr Bill Lumsden, it comes with a certificate of authenticity. W