Whisky investment has garnered buzz for the high returns, exemption from capital gains and, of course, the chance to indulge in rare, sumptuous spirits. Buyers looking to diversify their portfolio by acquiring whisky can do so in either cask or bottle format. Each offers unique advantages to buyers including significant profit margins as they age. Oeno has devised the world’s first whisky investment business model where clients can expect superior guidance, an exit strategy and unique opportunities that can’t be found on the market.
“Although it might seem like a romantic notion, owning a cask of whisky is a solid alternative investment strategy delivering consistent returns. Typical annual returns for cask whisky investment are between 8-10% and casks are normally stored securely “in bond” at the original distillery or in one of Scotland’s many bonded warehouses. This ensures impeccable provenance and authenticity as well as bringing tax benefits since VAT is only payable once the cask is bottled and leaves the distillery.”
Scotch whisky is making a resurgence in growth post-pandemic which is fantastic news for investors.
In 2019 the record for a single bottle purchase was broken twice when an extremely rare bottle of The Macallan 1926 featuring a hand-painted design by Michael Dillon went for an awe-inspiring £1.5 million.
Typical annual returns for investment in rare whisky bottles range from 8%-10% whereas growth on the secondary markets has been strong in recent years with auction sales recording a 40% rise in value from 2018-2019.
Whisky bottles are a secure, asset-backed investment which appreciates over time as rare bottles are consumed and diminished availability on the open market pushes prices upwards.
Unlike investment-grade bottles, even modest whisky casks pose excellent returns. Younger casks will have greater growth potential and start at a more accessible price point which makes them a viable, longer-term investment strategy. By contrast, older Scotch casks will remain a highly sought-after and attractive option for investors with larger budgets.
Minimising Risk & Maximising Reward
Storing, insuring and maintaining your cask in optimum conditions can be expensive and reduce any potential profits. Bottles are typically easier to store and can be kept in a cool, dark and secure place in your home.
With so many types of whisky, so many countries, and over 130 distilleries in Scotland alone, knowing which to invest in can be a minefield. There are regions to consider, cask types, history, pedigree and many more factors that can predetermine whether your investment will yield the return you hope for. This is why it’s crucial to seek expert guidance before you purchase a particular cask or rare bottle.
Many distilleries have had to close over the years due to lack of revenue and operating costs. These so-called “ghost distilleries” like Port Ellen and Brora can provide interesting investment opportunities. Since they have now ceased production, the value of the remaining bottles and casks will appreciate faster as supply diminishes.