Earlier this month, a four-decanter lot of Glenfiddich single malt whisky from the 1950s went under the hammer for £830,000 at The Distillers One of One charity auction, setting a new world record for Glenfiddich sold at auction. At the same event, at Barnbougle Castle, near Edinburgh, a bottle of The Balvenie 1964 – one of the oldest expressions of Balvenie ever released – sold for £140,000, almost three times its lowest estimate of £50,000.
All of this was great news for The Distillers’ charity, which intends to use the funds to help disadvantaged young people in Scotland. But how did we arrive at the point where a single lot of four bottles of whisky could realise the same price as a three-bedroom London flat?
“Those who have been in the trade a while remember it not being like this at all,” says Isabel Graham-Yooll, director of Whisky.Auction, the online spirits auctioneer. “Some people remember the over-production and under-demand of the seventies and eighties which created the ‘whisky loch’ – the whisky equivalent of the wine lake.”
The secondary market was still embryonic in 1999 when Sukhinder Singh and his brother Rajbir founded The Whisky Exchange, a place where people could buy and sell old and rare whiskies as well as new ones. “We were the only ones,” says Singh, “Whereas there were lots of people dealing in fine wine at that time.”
Jonathan Driver, managing director for private clients at William Grant & Sons, makes a more explicit connection between fine wine, and the more recent rise of the secondary whisky market. “On a macro level, market turbulence has driven the desire to explore tangible alternative asset classes,” he says, “Also, there is a direct relationship between the wine category and the evolution of the single malt category in the last decade.
“There are similar behaviour patterns – look at how wine auctions were thriving twenty years ago. Whisky auctions have evolved in this direction too. Single malt whisky has undoubtedly benefited from the sophistication of wine and it has followed this model in ways that other spirits categories have not.”
Like fine wine, single malt whisky attracts drinkers, collectors and investors although it’s not always the case that a buyer will fall into just one of those three categories. But, however you cut it, the number of people around the globe who are interested in the spirit is huge. As evidence of this, Singh points to the success of the Macallan Edition Series, a highly collectible set of annual releases, the last of which came out in 2020 with an RRP of £95 and which you can now find on Amazon at £254.99.
“As soon as the last retailer had sold out, they’d go into auction and the price doubles. Now these releases are [up to] 250,000 bottles. For the world. Do you see what I’m saying? That just shows how big the market is today.”
Singh also says that at the Whisky Exchange they have seen an increase in the price people are comfortable to pay for what might be considered an “everyday” bottle. “Three years ago I would have said to you it was around £70. Now it’s more like £150-250. People are not afraid to spend that on a bottle of whisky.”
Of course £250 is a tiny fraction of the £840,000 realised at the One of One charity auction for the lot of four 1950s Glenfiddich single malts but it helps to demonstrate how, from this broad base, the whisky pyramid can stretch up so high.
Andy Simpson, a lifelong whisky collector former investment banker and now a whisky investment analyst and co-founder of Rare Whisky 101 says, “Accounting for some of the growth we’ve seen is an interest from HNW buyers who are spending £20,000, £30,000, £40,000, £60,000 on a bottle of whisky they’re going to drink and that’s taking stock out of the market globally.” This of course increase rarity value in some bottles which can have the effect of increasing price.
The Knight Frank Luxury Investment Index, published annually as part of the Knight Frank Wealth Report, positions whisky as an alternative investment asset alongside coloured diamonds, cars, wine and art. However, Simpson, who works with Knight Frank to create it, cautions against using this to make a broad interpretation of the fine whisky market. “The index is a hundred of the oldest, rarest, most expensive bottles of single malt Scotch whisky ever created by some of the most talented distillers in the industry.” As he says, “If you want to invest in whisky you need to do your research. I’ve had 33 years of experience so I know what I’m doing and I still make mistakes. Don’t spend what you can’t afford to lose.”
At the end of the day, as Singh says, “Whisky is about drinking.” It’s best not to forget that.