5 tips for Whisky collectors

Whisky collectors have always been around. Attractive bottles, promising contents and a good chance of financial profit have raised the number of collectors in these parts significantly.

There are those who collect for later consumption and those who collect for value. The connoisseur collector buys in order to enjoy the bottles later on. In case there is a blank space in his Whisky bar, a look into his cellar collection will be enough to find an excellent bottle to complement the bar. But not only the constant presence of the bottles but also the value has an influence on the collector (everything was better in the old days). But such an approach would be too easy. For the connoisseur collector it is also a matter of purchasing bottles at favorable prices. After all, the past has shown that the really good, rare and old bottles have become disproportionately expensive. A 21 year old bottle that used to cost under 100 Euro only a few years ago, nowadays will be hard to find at that price.

Which brings us to the value collector. At this point, his concern - just like the pleasure collector’s - is also the Whiskies’ price. However, instead of enjoying the price advantage in using the Whisky for himself, the value collector has the bottles’ resale value in mind. In the broadest sense, he is a speculator or arbitrage-hunter. But these harsh words do not usually apply to most of these value collectors. For the most part, those value collectors are looking for pleasure themselves. The bottles they cannot sell at a premium price at some other time or place, they will of course enjoy themselves.

It is debatable whether these value collectors shorten the market and artificially lower the output of bottles popular with connoisseur collectors. Because every bottle that stands in a cellar unopened is one less bottle that can be enjoyed. On the other hand, value collectors protect these bottles, so that connoisseur collectors will still have access to them in the distant future. However, and that drop of bitterness stays, the future gourmet will have to reach deeper into his pocket.

The past has shown many Eurozone crises and those who really scrutinize the numbers cannot see the Euro really being saved. Debts keep growing fast and some countries accept liability for other countries’ growing debt. Not even experts rule out the failure of the currency any more. In these uncertain times, some people count on real estate, others on precious metal and a few also on Whisky. The umbrella term is material assets. While the real estate market can crash and in the past there have been gold bans, the value flavor of a Whisky collection will remain. In times of a crisis that is not much of a use either, however, just like art the good bottles’ prices will recover after the crisis. This connection could be observed during the financial crisis in 2008.

Now, which Whiskies should one collect? Our customers keep asking us that question. The answer is simple: If we knew it ourselves, we would collect those bottles ourselves and would not have to make a living as mail order vendors. Nevertheless, I would like to give you five tips to get to a rock solid Whisky collection. And even if it does not lead to increases in value, you will still have a collection you can use for its original purpose - little by little.

Tip 1: Collect Scottish Single Malt Whisky

Wherever representatives of the British Empire placed their foot on foreign ground, they started distilling Whisky. The US, Canada, India, Australia, New Zealand, etc. But the original still comes from Scotland itself. And the powerful Scotch Whisky Association watches like a hawk so that no one tampers with that original.

The gigantic quantities of Whisky are still produced cheaply in large industrial plants in a continuous production process. This Grain Whisky is added with small quantities of Malt Whisky and sold as Blended Scotch Whisky, primarily in supermarkets. Very very rarely, these Blended Whiskies became collectors’ items. And when they do, it is only the most expensive ones. Tip three is connected to this.

So, do not collect inside the gigantic quantities of Grain Whiskies, but collect the Scottish Single Malt Whisky in its pure form.

Surely, in the past years, Whiskies from Japan and Taiwan have scored substantial success, also with collectors. But the market for these Whiskies is still small and volatile (swaying). Those who dare to enter that territory should already have long years of experience.

Tip 2: Only collect Whiskies of first class distilleries

One can discuss the value of distilleries night after night. Some like only the smoky Whiskies while others like only the natural ones. That may be quality features for the content of a bottle. However, these features reveal little about possible increases in value. Over the centuries, distilleries have build a reputation that is passed on from generation to generation among gourmets and collectors. That reputation cannot just be outrun by newcomers in the Whisky production with cask strength and omitted cool filtering.

The most famous distilleries of the past decades are the following. Please note that this is just my subjective choice. Experts will agree with some distilleries but will reject others and add another instead. Important for you to identify is that it makes a great difference whether a 25 year old bottle of a famous or unknown brand is offered on the market.

So, this is my list in alphabetical order: Ardbeg, Bowmore, Brora, Dalmore, Glen Grant, Glenfarclas, Glenfiddich, Glenlivet, Glenmorangie, Highland Park, Lagavulin, Laphroaig, Port Ellen, Springbank

Some of them barely made my list. For instance, Dalmore only reached an above average reputation 15 years ago. It is not sure whether that reputation will be able to keep up. On the other hand, the Springbank Distillery, which is extremely popular with collectors, massively oversold their stock, so for many years the collect-worthy bottles were not available in a sufficient number and collectors had to turn away. Every distillery has its pros and cons. But exactly that makes the thrill of collecting.

Tip 3: Buy bottles within a reasonable price range

Shortly, a buyer in the far east purchased a bottle Macallan 60 years for almost 1 million Euro. How much can a value collector still earn of this bottle in the future? How much can a pleasure collector save in future purchases? The likelihood for the price to increase to 1.2 million Euro over the next few years is not very high. Even then there would ‘only’ be 20% profit to make.

Instead, collect a bottle for 75 Euro, so an increase to 150 Euro will mean an impressive profit of 100%. Also, the number of potential buyers later on is a lot higher in the lower price range.

Tip 4: How to identify suitable bottles

A bottle Dalwhinnie 15 years has already been around for 25 years. And it costs exactly as much today as it did then. Technically, collectors would have made massive losses with such a bottle due to the ongoing inflation.

In purchasing standard bottles, one can only make profits when dealing with outstanding bottles that show slight differences in their design over the decades. Since a lot of connoisseur collectors are convinced that older equals better, offering a bottle of Lagavulin 16 years from 1998 can quintuple its price. This, however, really only works with world-class bottles.

The easier way is to purchase limited bottles. Bottles that, like Glenmorangie Private Edition, are mostly only there for one year. In these cases, the number of bottles is limited and the connoisseur collectors afflict these stocks from the very first day. Yet, it gets difficult when a distillery offers too many limited bottles. In that case, the singularity of one special bottle can easily be overseen in the vast range.

Tip 5: Where to buy and where to sell

The complete verification of the bottle’s history is important to the future buyer. There have been numerous scandals with refilled bottles in the past. They were Italian for the most part, but Germany too had its fair share of them. The damage for Macallan Distillery for instance amounted to hundreds of thousands Pounds Sterling.

So those who can show an original receipt along with their bottle will be trusted more by the buyers. However, not all vendors are alike in this area. When people fall for the most aggressive marketing tricks they might easily buy bottles from less trustworthy sources instead of getting fresh goods from the distributor. You will have to go with your instincts here. Don’t let ‘only one bottle available’ pressure you. If you have the slightest doubts, you should stay away from it and wait for the next opportunity - which will come around. In that case, the old German saying applies: Greed eats brain!

There are several good ways to resell a bottle that has been standing in your own collection for many years.

A. Among friends and acquaintances.

In case you are part of a Whisky-Club and/or have an extensive network of Whisky-Friends this would be the fastest way to transfer bottles at a medium price.

B. Online Auctioning Platform

There are numerous ways to offer your bottles online more or less anonymously. Note that the transfer should only follow advanced payment. And keep the accruing costs in mind. Experience has shown that, like among friends, only middle ranged prices promise a quick sale. People do not know each other and therefore are cautious. CAUTION! If you want to buy on these platforms yourself, be extremely cautious. More than one time, customers have complained to us about fraud. Again, the old German saying applies: Greed eats brain!

C. Auction Houses

If you want to sell a real gem from your collection that will guarantee a four- or five-digit price, in my opinion there is no way around a real, specialised auction house. Preferably in Great Britain, where there is the largest market. However, commissions are comparatively high. Here, as well, caution is in order. Obtain information about the auction houses’ reputation, before you commission one.