Uncommon Scotch whisky costs surge on investor flight to security

Uncommon whiskies have emerged among the many largest beneficiaries as volatility in monetary markets sparked a flight to security and youthful buyers fuelled demand for tangible belongings.

Robust investor demand has pushed the worth of “positive and uncommon” single malts up by greater than a fifth this yr with volumes leaping 23 per cent, in keeping with a report by Scottish funding financial institution Noble & Co.

In distinction, the FTSE 100 and S&P 500 have traded flat this yr.

The Edinburgh-based funding financial institution mentioned the report, carried out with knowledge science firm Brainnwave, tracked about 580,000 transactions in whisky auctions held over the previous decade.

The report provides to proof of the resilience of whisky, the mainstay of Scotland’s £15bn food and drinks business, within the face of a price of residing disaster internationally.

In 2021, Scotch whisky accounted for 75 per cent of Scottish food and drinks exports, 22 per cent of all UK food and drinks exports, and 1.4 per cent of all UK items exports, in keeping with the Scotch Whisky Affiliation.

Noble & Co mentioned market turmoil had strengthened the standing of bottles of uncommon whisky as different investments.

Duncan McFadzean, head of Meals & Drink at Noble & Co, mentioned the expansion in public sale gross sales was principally pushed by bottle costs between £100 and £1,000, indicating curiosity from youthful patrons preferring tangible belongings to monetary devices, and from these shopping for items.

In that phase, the worth elevated by 40 per cent whereas volumes had risen 30 per cent within the first three quarters of this yr to the top of September in contrast with the identical interval in 2021.

“Whisky nonetheless appears to be a well-liked asset to carry in your portfolio,” he mentioned, including that there was no indication but that market turmoil, slowing economies and rising rates of interest had been hurting demand. “However I wouldn’t need to predict it massively for subsequent yr.”

Elite Wine & Whisky, an funding firm that gives investment-grade whisky to non-public shoppers, mentioned it had seen a bounce in demand after then chancellor Kwasi Kwarteng’s “mini” Funds in September despatched the pound and UK authorities bond costs tumbling.

The corporate has elevated turnover 70 per cent to this point this yr to £17mn, from £10mn in 2021. Within the six weeks after the “mini” Funds, it obtained the identical quantity of inquiries from potential collectors that it might usually get in three months.

“We noticed quite a lot of buyers, spooked by what was occurring within the markets, come to us to take a look at investing in whisky casks instead possibility,” mentioned Nick Greene, managing companion at Elite Wine & Whisky.

A growth within the whisky market and distilleries has prompted questions on whether or not there’s a bubble pushed partly by an excessive amount of optimism over a possible commerce deal between India and the UK.

“The market has an enormous, world infrastructure fuelled by intelligence and a world community that’s closely invested in, which is why discuss of a bubble isn’t one thing we consider in,” mentioned Greene. “We might welcome an FTA [free trade agreement] with India however I wouldn’t say we’ve got wagered an excessive amount of on this.”