Rare whisky sees dip in investment performance due to over supply

The investment performance of rare Scotch has dipped during the first six months of the year.

Peter Blake Macallan 60 year old bottle of whisky sold for £500,000 in auction at Bonhams - auctioneer Charles Graham-Campbell

This marks the first such recorded half-year decline, according to new figures published today by whisky analyst, broker and investment experts Rare Whisky 101.

The value of the broadest measurement of the market, the Apex 1000 index, crystallised its first ever half-year loss, dropping by 0.26 per cent.

This compares with an increase of 9.91 per cent 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 per cent 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 fourth at the end of 2018 to seventh by the end of June 2019.

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 the first part of 2019 increased by 43.90 per cent to 71,544 (49,719 were sold in the first half of 2018).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. While the broader market might be showing some signs of stress, there are pockets of growth for those who do their research and time their market entry/exit well: as with all investments.”