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Fall in rare
whisky investment could be caused by
uncertainty over Brexit.
According to the latest figures published by whisky analyst, broker and
investment experts Rare Whisky 101 the investment performance of rare Scotch has
dipped during the first six months of the year, the first such recorded half
year decline.
The value of the broadest measurement of the market, the Apex 1000 index
crystallised its first ever half year loss, dropping by 0.26%. This compares
with an increase of 9.91% during the same period last year.
According to Rare Whisky 101’s 2019 Half Year Report, reasons for the decline
include over supply of whisky during the early months of 2019, the continued
proliferation of new-start whisky auction-houses, and a decline in the
performance of the Macallan – the secondary market’s most dominant distillery by
both volume and value.
While Scotch whisky has underperformed against other markets and traditional
investments throughout the first half of 2019, including FTSE 100, Brent Crude,
and Gold, it has still significantly outperformed those very same asset classes
over the mid to long term, having increased 160% from December 2014.
Elsewhere in the latest report from RW101, Springbank has claimed top spot as
the number one distillery in the investor rankings, closely followed by silent
distilleries Brora and Glenugie. The Macallan’s late 2018 dip continued as it
moved from 4th at the end of 2018 to 7th by the end of June 2019.
Volume and value still soaring
While the rare whisky market recorded a dip in investment performance, the
number of bottles of Single Malt Scotch whisky sold at auction in the UK in H1
2019 increased by 43.90% to 71,544 (49,719 were sold in H1 2018).
The £ value of collectable bottles of Single Malt Scotch whisky sold at auction
in the UK in H1 2019 rose by 58.39% to a record high of £25,873,963 (H1 2018
value was £16,335,635).
While the average per-bottle price is up in H1 2019 (£361.65) compared to H1
2018 (£328.56), it dropped 4.30% from December 2018’s record high of £377.91.
Whisky investment analyst and co-founder of Rare Whisky 101, Andy Simpson
commented:
"On the back of ten subsequent years of growth in the investment performance of
rare whisky, we have seen an oversupply of bottles, the continued proliferation
of specialist whisky auction houses, and a record amount of money spent at
auction all combine to produce the rare whisky investment market’s first ‘blip’
since we started reporting these results.
"However, collectors, investors and buyers would be well advised to note the
dip. At this stage we do not believe it indicates the start of a longer-term
downward trend. In fact, looking the last three months of H1 alone (April to
June) the Apex 1000 index returned to slightly more significant growth of 1.29%,
moving from 825.92 points to 836.55.
"While the broader market might be showing some signs of stress, there are
plenty of pockets of growth for those who do their research and time their
market entry/exit well: as with all investments. For example, in contrast to the
Macallan’s secondary market woes, Springbank has turned in an incredible
performance, claiming top spot in the investor rankings for the first time.
"We remain confident that the right bottles from the right distilleries will
continue to offer a strong investment proposition. In fact our later than usual
reporting of the half year figures has allowed us to see growth return to the
market as the supply/demand equation has re-balanced. However, continued
uncertainty over the UK’s post-Brexit future makes it very difficult to predict
how the market will perform in the latter months of 2019."
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