Whisky Galore! The Tips on Investing

'Whisky Galore!' the wartime film and story of the people of Eriskay seizing upon the whisky cargo of a nearby shipwreck, has forged headlines and cultural associations of the drink, since it hit our screens almost 65 years ago. And the associations continue to this day. Last week, one lucky buyer paid £12,050 for two bottles of that now infamous cargo.

'Whisky Galore!' the wartime film and story of the people of Eriskay seizing upon the whisky cargo of a nearby shipwreck, has forged headlines and cultural associations of the drink, since it hit our screens almost 65 years ago. And the associations continue to this day. Last week, one lucky buyer paid £12,050 for two bottles of that now infamous cargo, though according to buyer's guide, they aren't fit for human consumption!

It's a shame, but why would anyone want to taste the drink, when they have a piece of history in a bottle? The same goes for that of the explorer Ernest Shackleton. When he set out for Antarctica in 1907, he ordered 300 bottles of the finest malt whisky for his companions. They never made it to the South Pole, but they did manage to leave several bottles that were discovered almost a century later, perfectly preserved in nature's freezer!

Both stories not only highlight the cultural value and appeal of whisky, but also the monetary value in these "exotic" assets. In both these instances, I would say these original bottles are very valuable and particularly for Shackleton, priceless.

So, if you are inspired about this "liquid gold", how are you able to get involved, start collecting and maybe make a bit of money from other types of whisky?

If you are interested in investing in whisky, then here are a few things to remember:

1.Smart Picks.

It may sound obvious, but you aren't going to make any money by going to the supermarket and picking up what you think to be valuable or tasty, even if the latter is true. The painful truth is if you can find it in your local supermarket, then it is not going to be worth too much to someone in ten, twenty or thirty years' time. There is little value without the lever of scarcity or rarity. High volume releases like the typical 10 or 12 year old malts are unlikely to appreciate.

2. Bottles not Barrels.

Whisky investing is not like the stock market, you can't just ring up your broker every hour to change your mind. Remember, whisky takes three years to sit in the cask before we can even call it whisky - and many people have had their fingers burnt investing in maturing casks. Our advice is to invest in known, bottled products.

3. Time.

If you're unwilling to wait long enough like the industry for it to enhance, develop and improve with age, then you're bound to be unsuccessful investor. We recommend a 3 to 5 year horizon as a minimum.

4. Costs.

You don't need lots of money to get involved. There are bottles that can cost tens of thousands and they will naturally grab the headlines, but if you are shrewd, you can find rare bottles that may cost a little more than your average malt. Last year, The Macallan released 2,012 special edition bottles to commemorate the Queen's Jubilee. Limited edition releases from many distilleries are attractive so grab the opportunity when you can.

5. Insight.

Like in all areas of life, some brands are valued more than others. The same is true of whisky. Do your research, pick the "iconic" brands and the "silent" stills and you give yourself a better chance of value appreciation. Interestingly, the "best" brands are often the ones whose whiskies are recognised to be the best quality. High quality = more chance of it being drunk = fewer bottles left = value growth! Not unlike the dynamics of fine wine! A great place to start your education is with Andy Simpson of Whisky Highland - have a Google to get going!

6. Global.

There are whisky snobs out there. Some, who like malts, would never buy a blend, though it would be false to assume their value is diminished. Whisky is truly a global drink, so remember what someone may not like in Stranraer, may go down a treat in Shanghai. Recent history confirms that malts dominate the collectors market but some are forecasting value opportunity in blends now...

7. Temptation.

This may be difficult, but if you intend to sell it on, then for goodness sake don't drink it! Alternatively, buy 2 of everything. Drink one. Keep one. The one you drink should be most enjoyable and now that it is taken out of circulation it will mean your second bottle is even rarer....

Like any alternative investment, it is wise to know your market before you consider parting with your money. As the market has demonstrated, some whiskies have increased in value by over 500% (Whisky Highland Data), whereas others have decreased, some by as much as 70% (Whisky Highland Data).

Yet, all the same, if something pops up, say a bottle to celebrate the birth of William and Kate's first child, then who knows, if he or she becomes our future monarch then that decision all those years ago may well have paid off.

As I have said before, as with all investments, all that glitters may not always turn out to be liquid gold. Follow some of my tips above and you may well be on your way to your own whisky galore.

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