Whisky tops luxury investment index

08 March, 2019 by Andy Young

Investing in whisky has been given the thumbs up by the Knight Frank Luxury Investment Index, which details the performance of popular luxury investments.

The Index included whisky for the first time this year, and given the increase in popularity and price of rare whisky. The Knight Frank Rare Whisky 100 Index, which tracks actual UK auction hammer prices, increased by almost 40 per cent through 2018 and by almost 600 per cent over the last 10 years.

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The index forms part of the Knight Frank Wealth Report, which said: “A transformational 2018 for rare single malt Scotch whisky. We saw one bottle set a new world record price of £700,000 in October, only to be beaten one month later when another bottle sold for £1m.

“Looking to 2019 prices will continue to harden for the right bottles from the right distilleries, as well as increased interest in more affordable bottles from those in the second tier. Both were bottles of The Macallan distilled in 1926.”

That record price paid for whisky was for a bottle of The Macallan 1926, hand painted by Michael Dillion, which was sold by Christies.

Editor of The Wealth Report and the Knight Frank Luxury Investment Index Andrew Shirley said: “The stunning price growth of rare single malt whiskies shows that the appetite for new alternative asset classes remains strong among high net worth investors.

“However, we are seeing growth soften for some of the other asset classes in KFLII like classic cars that had been performing exceptionally strongly. This is partly down to a slowdown in activity by speculative investors and a return to a genuine collector-driven market. Despite this, the best examples in each asset class are still setting records when they come up for sale.”

He added: “We see prices continuing to harden for the right bottles from the right distilleries, as well as increased interest in more affordable bottles from the second tier. But certain pockets could see a correction.

“To some extent we saw that with The Macallan 18-year-old index, which fell by 2.9 per cent in 2018. This followed a 142 per cent increase in 2016 and a further 35 per cent increase in 2017, so perhaps an adjustment was to be expected.

While whisky topped the index, wine came in third (with coins sandwiched by the two drinks), with the report stating: “2018 saw further rapid price escalation of Burgundies, with top Grands Crus from the “R”s (Raveneau, Romanée-Conti, Roumier and Rousseau) accelerating, and driving our Burgundy index up 33 per cent.

“It’s likely that the pattern of polarisation favouring blue chip wine from top producers will continue, with prices accelerating in particular as the wines approach their drinking windows.”