November 2, 2023
“Whisky Investments: Unveiling the Appeal of a Spirited Venture”
Investing in whisky is becoming increasingly popular, and here’s why:
- The whisky market is at an unprecedented level. The demand for premium single malt whisky is immense, and it’s hard to imagine a situation where consumer demand would significantly drop.
- Only 56 million liters of all Scottish whisky (8%) is retained as single malt, and this relatively small volume has a target audience of 500 million whisky consumers worldwide.
- In October 2021, VCL Vintners auctioned a 30-year-old Macallan for $2.3 million, setting a new world record for the highest price of a cask sold at auction. This record surpassed the previous one set by Bonhams in 2021 for HK$4.4 million ($573,000). The sold cask was one of the few produced in 1991 and, apparently, is one of the oldest casks of Macallan. The cask contained about 608 bottles of whisky, which means that the price per bottle was approximately $5,705, doubling the previous auction result.
- All whisky in casks is stored in a warehouse in Scotland and, as a result, is exempt from VAT. When you decide to bottle the whisky and the cask is removed from the warehouse, excise duty and VAT will be charged. Usually, a cask is sold while it is still in the warehouse, and therefore these taxes are not applied.
- For UK taxpayers, capital gains tax is not considered applicable because whisky in a cask is considered a “wasting asset” due to the “angel’s share” (evaporation).
Factors affecting the price of whisky:
- Year of production, type of cask, distillery, age, ola (Original Litres of Alcohol), rla (Remaining Litres of Alcohol), and abv (Alcohol by Volume).
- The whisky market is growing due to enormous demand and limited supply, especially for rare and old whiskies.