Is whisky a good investment? Since a 30-year-old Macallan cask sold for US$580,000, buyers are snapping up barrels of Scotch – and not just to drink
Smart distilleries offer cask investment schemes for people looking to buy casks to eventually bottle and drink – while for others it is an investment in a market that can yield spectacular returns
For whisky aficionados, investing in a complete cask is perhaps the ultimate romance. To have your own hogshead or butt, filled with spirit from your favourite distillery, stored and matured especially for you, is a distinct and rare pleasure.
Some may be looking to buy casks to eventually bottle and drink themselves, while for others it is an investment in a market that can yield spectacular returns. A rare 30-year-old sherry hogshead from Macallan Distillery sold for almost HK$4.5 million (US$580,000) in a Bonhams auction in Hong Kong at the end of last year, setting a new world auction record for a whisky cask, while the market for rare whisky overall has shown growth for a decade.
More distilleries are today offering cask investment schemes, including small private whisky makers, such as Ardnamurchan, Lagg and Ardnahoe, and especially new brands looking to raise cash upfront.
The giants also have their cask programmes, such as Diageo’s impressive Casks of Distinction, which offers exceptional examples from their 50 warehouses and almost 10 million casks across Scotland. Pernod Ricard’s Midleton distillery in Ireland has its Very Rare Cask Circle, while The Macallan, owned by Edrington, offers clients the chance to create their own cask of Macallan from scratch, selecting the cask, filling it with new-make spirit and then laying it down for a minimum of 12 years.
Casks range in cost from around £1,000 (US$1,200) to millions, and vary vastly in size and type of wood, as well as style, quality and age of liquid. Every cask is unique – even when two identical casks are filled at the same time with the same spirit, they will turn out slightly differently.
But while finding your own whisky magnum opus might seem like a dream come true, for the uninitiated enchantment can soon fade to costly disappointment.
Andy Simpson, of whisky analyst and broker Rare Whisky 101, recalls an inquiry about selling a 49-year-old cask of what would have been the oldest aged whisky from a particular distillery at the time. “It was quite exciting,” Simpson says. “But the cask sample showed thick green liquid that looked like engine oil – utterly undrinkable. The only solution was to tip the contents down the drain.”
All casks fall prey to what is known as the angel’s share – evaporation of spirits through the wood – and will drop below 40 per cent alcohol to be no longer legally considered whisky if they are left in their cask too long.
Even young casks can be risky.
“There are horror stories,” says Andrew Macdonald Bennett, of Goldfinch Whisky Merchants. “Someone came to me after he bought a relatively young cask, about six years old. When a cask is new-make, it has a high alcohol content, of around 63.5 per cent ABV, but his cask was very low, around 40 per cent, and the only reason for alcohol content to drop so low so quickly is poor wood. Below 40 per cent, the value drops out of it.”