If you’ve got some spare money sitting in a bank account then you could do a lot worse than divert it in to premium and super premium spirits.
But if you do so, be very careful who you seek advice from, choose your purchases carefully, and be prepared for the long haul. That’s the advice of Andy Simpson, a drinks investment specialist who is advising City investors on spirits and runs a website showing trends in drinks.
Simpson says that consumers of spirits are often erroneously divided in to two categories – those that drink what they buy, and those that collect it.
“But collecting isn’t the same as investing. There is a third category. Lots of spirits drinks are collectable but only 10 per cent of those will make the purchaser any money as an investment. I’m only interested in that 10 per cent.
The ideal purchase is a spirits drink that is rare and limited, but tastes good as well.
“Every week another limited edition drink is released so they are two a penny,” Simpson says. “You need to find something that will be in demand in the long term, and that comes through the taste. Plus the more bottles that are opened to be drunk, the rarer they become and the value goes up even more.”
Simpson accepts that there are spirits releases which can be bought today and sold tomorrow for a healthy profit, but he says you’re playing with fire if you go down that route.
“The people who buy something and then put it straight on EBay are the floor traders of the spirits world. That sort of dealing comes with high risks. I’m looking at solid investment for the long term and that might mean 10 or even 20 years.
“But the rewards can be substantial, and even in shorter periods of time, far far better than saving in the bank.”
Recent examples of short term excellent investments are The Macallan Royal Marriage, Ardbeg Feis Ile, and Highland Park Earl Haakon.
The top five distilleries to go for are Macallan, Dalmore, Port Ellen, Glenfiddich and Balvenie.
Macallan and Dalmore have shown the best returns consistently over the last 12 months according to th Whisky Highland Index, which monitors private and auction sales, while Port Ellen, a closed distillery on Islay whose stock is very rare, has moved up from fifth to third during 2011.