Whisky Investment: An IntroductionHampton Wealth
Whisky investment has been an exclusive corner of investing for many years. Forbes reported in December 2019, that the largest private whisky collection was to be auctioned at an estimated $10 million.
The world of investments is extremely diverse. There are nuances that many can only hope to understand. From corporate bonds to securities and equities. Savvy investors will without a doubt look for (as many) ways to diversify.
Whisky investment being the exclusive little corner that it is, attracts not only enthusiasts of the fine liquid, but investors from all walks of life. Not to mention the Whisky Investment market saw an explosive growth rate of 162% over the 4 years leading up to 2019.
Whisky Investment: A Growing Exclusive Club
Rare Whisky 101’s 2018 report highlighted that the value of collectible bottles grew by 62% within the previous year. The report also noted that the number of bottles sold more than £10,000 rose from 91 in 2017 to 265 in 2018.
Now, bottles are good – if that is all you are looking for. Buy a limited edition bottle and keep it till it’s nice and dusty right? Well not quite, when we talk Whisky Investment, we talk about Cask Whisky.
This is on a different playing field. Investing in casks direct from distilleries gives you ownership of those casks. Before we get into the nitty gritty of purchasing Whisky Casks, let’s talk some fun facts.
Whisky Investment: The Facts
- 93% of Scotch Whisky is sold abroad (i.e. internationally).
- There are about 125 functioning distilleries in Scotland.
- 42 bottles of Scotch Whisky is shipped to 175 markets internationally each second. Approximately 1.3bn bottles a year.
- As of 2019, about 22 million casks of Whisky are maturing in warehouses in Scotland, waiting to be discovered.
- The Spirit needs to mature for at least 3 years in Scotland.
Whisky Investment: The Benefits
- Whisky is an Investment of Passion
- It is not subjected to UK Tax because it is considered a wasting asset
- Considered a Store of Wealth (more on this later)
- You will own an asset that you can see, feel, touch and taste (again more on this later)
- Whisky investment is not market reliant, is recession proof and a time investment.
- It is a HMRC protected investment – which means that it is a government backed investment.
Just a timely story
To illustrate some points above, here is a little story.
Mr. Anderson decides to invest in 3 casks of whisky, each for a family member. Approaching his advisors, he was advised on the casks to invest in. Throughout the years, Mr Anderson would visit his investment every few years and have a bottle drawn from it (own a physical asset & investment of passion). When Mr. Anderson’s family members finally take ownership they may decide to sell the casks. The casks are then sold in bonds and each family member will enjoy the return on investment (store of wealth and time investment).
We will be writing much more on the subject of Whisky Investment, so watch this space for future posts.
Alternatively, you can contact us today to find out more about Investing in Whisky and whether it would be a good option for you, your family or even your client.
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