FATHER’S Day, on 20 June, provides an ideal opportunity to start on the savings ladder with the nation’s favourite spirit - Scotch whisky. It may surprise many, but good profits can be made by carefully choosing leading malt whiskies.
The two main ways to invest - other than through shares - are by purchasing the spirit in bulk as it comes off the still or, when fully mature, in single bottles.
Both can give many hours of enjoyment, particularly the former for the convivial nature of distillers and their encouragement to see the distillation process.
Currently, only the Islay malts at Bruichladdich distillery are available to private investors for cask purchases. The plant was rescued in 2001 by a group of enthusiasts. It has one of only three cooperages at Scotch whisky distilleries. The others are at Glenfiddich and Balvenie.
There is a choice between lightly peated Bruichladdich, which shows floral elegance with age and the heavily peated Port Charlotte. You can specify the cask type and length of ageing which, of course, will influence the final style and value. A fresh Bourbon barrel of 200 litres (140 original litres of alcohol at 100 per cent) costs 775 and a refill Sherry hogshead of 250 litres 1,050. Stock is insured for ten years at replacement value.
As the spirit matures in Customs-approved warehouses, evaporation of 2 to 3 per cent a year does not incur a loss in excise duty to the investor, who only pays the tax when the Scotch is bottled and cleared for UK domestic consumption. If put in 70cl bottles at 46 per cent, expect 380 bottles after 12 years or about 290 bottles after 20 years.
To gain a good understanding of single malts, join the Scotch Malt Whisky Society. It obtains bottles direct from the cask, issues a bottling list six times a year, a newsletter twice a year and has club premises in Edinburgh and London. Annual membership is 50, or 75 with an introductory bottle. There is a 1 per bottle discount for orders online.
In looking for appreciation, choose distilleries in international demand with a good age in cask; closed sites (as the available stock is diminishing) and anniversary bottlings
The Whisky Exchange, established five years ago, has a good range, including a Cragganmore 29-year-old bottled 1973 for 139 and Macallan 49-year-old bottled 1953 at 2,000. Springbank from Campbeltown is available as a 1970 33-year-old at 150.
The bottler can be significant. Bowmore bottled by Sherriff’s Bowmore Distillery at 43 per cent has jumped from 70 to 300-350 in the past decade. A single year, such as Bowmore 1938, has increased from 400 to 600-700, while the 1963 has increased from 130 to 250.
The Macallan enjoys an international reputation and is unlikely to be harmed by news last month that it purchased bottles from Italy that turned out to be comparatively modern stock and not rare 19th century fillings. Martin Green, Scotch specialist at Glasgow auctioneers McTear’s, says it "will reject any entries which are dubious". Its next sale is on 22 September.
Single production years for the Macallan, like 1950, packed in original wood, have risen from 180 ten years ago to 300-400, says Green.
Commemorative events bring a premium. The bottling of the Macallan to celebrate the marriage of Prince Charles and Lady Diana Spencer has jumped from 140 to 350-400 in ten years. Even a ten-year-old from the distinguished Tain distillery of Glenmorangie has increased from 40 to 60-80 when the label commemorates Scotland’s 1990 rugby Grand Slam.
Bottlings to commemorate the Queen’s silver jubilee continue to rise in value. Gordon & MacPhail’s 25-year-old the Glenlivet has almost tripled from 110 to 250-300 at auction in the past decade. Bowmore’s bi-cententary 43 per cent bottling in 1979 has risen from 110 to over 250.
Long maturation in cask is much sought after. Gordon & MacPhail’s 1936 bottling of 50-year-old Mortlach from Dufftown has more than doubled in ten years from 200 to 400-500.
Scotch from plants that have ceased production are popular. Convalmore, mothballed by United Distillers in 1985, is now a rare Dufftown malt. The 13-year-old, distilled 1969, has increased from 15 to 80-120 in a decade, while a 16-year-old, distilled in 1966, from the Strathclyde distillery of Kinclaith has risen from under 17 to 250-300
Do not forget decanters of special Scotch. One containing 15-year-old Lagavulin from Port Ellen on Islay has jumped from 50 to 150-200 in ten years.
Contacts: Bruichladdich 01496 850221, Gordon & MacPhail 01343 545111, McTear’s 0141 221 4456, Scotch Malt Whisky Society 0131 554 3451, Whisky Exchange 020 8606 9388. Conal Gregory is a former prizewinner of the Scotch Whisky Association Award