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Thursday 18 September 2014

Investors switching from wine to whisky

22nd August, 2014 by Lucy Shaw

As the value of the world’s top fine wines continues to decline, investors are increasingly turning to rare single malt Scotch and Japanese whisky instead.

Hanyu Ichiro’s popular Malt Card series

As reported by Bloomberg, investors are seeking out single malt Scotch brands like Macallan, Bowmore and Dalmore along with Karuizawa and Yamazaki whiskies from Japan.

In reaction to the growing number of fine wine investors setting their sights on whisky, Rickesh Kishnani, CEO of Hong Kong-based Platinum Wines, set up the world’s first whisky fund in June.

Last week, a bottle of Hanyu Ichiro’s Malt Ace of Spades Japanese whisky sold for HK$85,750 (£6,670) at a Bonhams auction in Hong Kong, topping the price of a case of Château Margaux 1982 sold at Sotheby’s in New York in June.

The bottle was number 5 of 122 distilled in 1985, aged in an old Sherry cask and bottled in 2005.

Hanyu Ichiro’s Malt Ace of Spades recently sold for £6,670 at auction in Hong Kong

Auction prices for old and rare whisky are soaring – Sotheby’s sold a 6-litre Lalique decanter of Macallan “M” single malt in January for a record HK$4.9m.

According to the Investment Grade Scotch index, the top 100 single malts gave an average return of 440% from the start of 2008 till the end of July this year.

“It’s crazy, demand has exploded,” David Wainwright, senior managing director of auction house Zachys Asia, told Bloomberg.

With the value of old and rare whisky on the rise, the recent spike in demand has fuelled fears about speculators flooding the market.

“A lot of people are jumping in now who didn’t think about whisky as in investment four or five years ago – the needle is getting closer to the bubble,” WhiskyCast’s Mark Gillespie told Bloomberg.

With around 100 distilleries in Scotland producing single malt, many are unable to keep up with the recent rise in demand due to whisky’s lengthy ageing process.

Bloomberg reports that the auction market for whisky in the UK will reach £6.75m this year, up from £5m last year.

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