The extraordinary rise of single malt Scotch whisky – and how 2018’s £1m bottle will likely be be the first of many

Whisky prices have gone through the roof of late, with 2018 seeing a 40% rise – but is it a bubble or the genuine emergence of a new collectible asset?

The rise and rise of whisky as one of the world’s most astonishing investments has been nothing short of extraordinary. The world record sale price of whisky was broken twice in the space of a few weeks at the end of last year – both times by a 1926 Macallan.

The first fetched £700,000 at Bonhams in Edinbrugh in October. It was part of a limited release by Macallan of a 1926 whisky cask that was bottled 60 years later in 1986. 12 of the bottles were released in 1989 with labels designed by pop artist Peter Blake, designer of the Beatles’ legendary album over for Sergeant Pepper’s Lonely Hearts Club Band. 12 more were released four years later with labels designed by Italian artist Valerio Adami. The £700,000 bottle was one of the latter dozen, and was a couple of hundred thousand more than a pair of similar bottles had each fetched just a few months earlier in April.

A couple of weeks later, however, a similar bottle – albeit one with a Peter Blake label rather than an Adami one – went for a fair bit less at Sotheby’s in New York. Had the whisky market hit its peak? Not a bit of it.

The very next month both hammer prices were made to look like the sort of money you’d pay for a bottle of Aldi single malt. Another example from the same batch sold for £1 million at Christie’s in London, this time in a bottle sporting a one-off design by Irish artist Michael Dillon. Take into account the various fees and the actual price paid was £1.2m.

The vintage bottle of Macallan which sold for £1.2 million

The reason it went so high? Well, there’s the obvious: Macallan is the world’s most sought-after single malt, the 1926 its rarest bottling, and the Dillon bottle the rarest example even of that – one whisky blog referred to it as the ‘Holy Grail of collectible Macallans’.

Beyond that, though, why? We’re talking about a bottle of booze rather than a great work of art – though of course this sort of bottle blurs that line considerably. Is it really rare, unique and special enough to justify that sort of price? Or is this a bubble, in the manner of everything from tulips to Bitcoin over the years, which will one day seem absurd to future generations.

‘Whisky guru Charles Maclean apparently gets mobbed by collectors when on lecture tours in Asia’

Genuine appreciation and enthusiasm has undoubtedly helped fuel the boom, but speculation is absolutely part of the equation. There is also a suggestion that some ‘collectors’ are actually consumers, happily drinking the fine single malts and clarets which they buy at auction, rather than merely putting them in a dusty cellar. Obscene as the sums involved might be, we can’t help admiring such chutzpah – and unlike those who race £1m classics at Goodwood, there’s no ‘repairing’ a bottle of whisky once you’ve drained the final dram.

Knight Frank recently tackled this question in their annual Wealth Report, which called 2018 a ‘transformational year’ for rare single malt, reported aggregate price rises of 40% and predicted that ‘prices will continue to harden’ for those lucky enough to hold a bottle of something from one of the ‘right distilleries’.

The Macallan Valerio Adami 1926, a 60-year-old Scotch, fetched £700,000 in October 2017. Although 12 bottles of The Macallan Valerio Adami 1926 were produced, it is not known how many of them still exist. One is said to have been destroyed in an earthquake in Japan in 2011, and it is believed that at least one of them has been opened and consumed. (Pic: Alamy)

“Don’t drop it… DON’T DROP IT!!!”. The Macallan Valerio Adami 1926, a 60-year-old Scotch, fetched £700,000 in October 2017. Although 12 bottles of The Macallan Valerio Adami 1926 were produced, it is not known how many of them still exist. One is said to have been destroyed in an earthquake in Japan in 2011, and it is believed that at least one of them has been opened and consumed. (Pic: Alamy)

Indeed so keen were the researchers on the whisky market that they even commissioned a separate report, ‘Why Asian investors are going mad for malt whisky’, which described it as ‘an investment of passion by high-net-worth collectors’.

Whisky guru Charles Maclean apparently gets mobbed by collectors when on lecture tours in Asia, according to the report, while the private jets of Chinese billionaires are regularly spotted at Aberdeen and Edinburgh. It’s not just Scotch, however: Japanese whiskies are also sought-after, with one selling for around £300,000 last year.

Extraordinary stuff. If you’re reading this with a dawning realisation that you’ve either drunk or given away a bottle that might now be worth a fortune, don’t feel too bad – even the experts have been caught out. Sukhinder Singh, founder of the Whisky Exchange and one of Britain’s foremost experts on the Water of Life, told Knight Frank that he sold one of those 1926 Macallans for just £5,000 few years ago.  ‘I don’t feel too bad,’ he added. ‘I’ve still got a few bottles.’