Old vs Modern whiskies - Mark Littler Ltd

OLD Vs MODERN

The Market For Old & Rare Whisky Bottles: Old vs. Modern Whiskies & Their Investment Potential

In the not-so-distant past, single malt whisky was considered a drink for those living north of the border, and somewhat inferior to its blended counterpart. However, in recent years, single malt Scotch whisky has become increasingly recognisable as a luxury asset and an alternative investment. In 2018, whisky bottles appeared on the Knight Frank Index for the first time. The Knight Frank Index is an annual report that details the performance of collectable luxury assets such as classic cars and wine. In 2018, whisky bottles vastly outperformed traditional luxury assets such as art, jewellery, and gold, more than earning their place in the annual report. This huge growth in valuation in comparison to more traditional luxury assets marks the transformation of single malt Scotch whisky from a drink to a status symbol. Since 2018, the market for whisky bottles has continued to grow and expand as more and more investors and collectors begin to educate themselves in the intricacies of the single malt market.

Such intricacies include the disparity between old and rare bottles of whisky and more modern releases. A novice whisky investor or collector would be forgiven for thinking that old and rare bottles and modern bottles will perform in similar manners. However, the reality is quite the opposite. Many people have begun to invest in whisky without an understanding of how different kinds of bottles behave on the secondary market. Old and rare bottles of whisky have, historically, seen a more stable growth in value. There are a myriad of reasons for this. Rather than explaining all of them in a sequential manner, it may be more prudent to look at a real-world example. Let’s take a look at the Macallan Private Eye and the Macallan Folio 1.

“...IN RECENT YEARS, SINGLE MALT SCOTCH WHISKY HAS BECOME INCREASINGLY RECOGNISABLE AS A LUXURY ASSET AND AN ALTERNATIVE INVESTMENT”

whiskies

The Macallan Private Eye is a classic NAS (no-age-statement) bottling of Macallan. It was released in 1996 in celebration of the 35th anniversary of the political-satire magazine, Private Eye. The bottle was released in a limited-edition run of 5,000 and had a price tag of £36 plus £6.95 for postage. In comparison to today’s prices this may seem like a very small price tag. However, in 1996, single malt whisky had yet to hit its stride, and so nearly £43 for a bottle of whisky was a hefty price to pay.

The bottle contains whisky from at least one 1961 vintage cask - the same year the Private Eye was founded. The label of the Macallan Private Eye was famously designed by Ralph Steadman, a British illustrator who is well-known for his political satire. The iconic screenprinted label is in classic satirical style, much like the style of Private Eye itself, playfully insinuating that the whisky “could be 1.96 years old”. The current auction record for a Macallan Private Eye is £8,700 for a Macallan Private Eye Gold Capsule.

The Macallan Folio 1 is the first bottling in the Macallan Archival Series. The series was created to pay homage to Macallan’s early marketing campaigns from the 1970s until the 1990s. The adverts were designed by Nick Salaman and David Holmes who produced over 250 adverts over their years working with Macallan. The Macallan Archival Series will, when complete, consist of 24 bottles. Six have been released to date.

The whisky in the Macallan Folio 1 is NAS and non-vintage. There are no official release numbers for any of the releases in the Archival Series, meaning that there could be a very large number of bottles currently on the secondary market (as auction data would seem to suggest). The bottle was released with a price tag of £199. The current auction record for a Macallan Folio 1 is £10,000.

Both of these bottlings hail from Macallan and they are both NAS, so what sets them apart from one another, and why has the Macallan Folio 1 fetched almost £2,000 more than the Macallan Private Eye at auction?

“ANOTHER THING TO NOTE ABOUT WHISKY BOTTLE INVESTMENT IS THAT THE QUALITY OF THE WHISKY, SEEMINGLY, HAS NO IMPACT ON THE VALUE OF ANY GIVEN BOTTLE. IT IS THE OPINION OF MANY WHISKY FANS THAT WHISKY IS FOR DRINKING, NOT FOR COLLECTING OR INVESTING.”

On the surface, the Macallan Folio 1 might seem like the better investment; the record £10,000 result is more than 50 times higher than the release price of £199. However, collectors and investors should not rely on auction data and numbers alone to guide their investments. Data without context can be dangerous. The Macallan Private Eye was released 19 years before the Macallan Folio 1 and, as such, has many more years of data to back up its growth. Since its first appearance at auction in 2004, the value of the Macallan Private Eye has grown on average 24% every year. This slow and steady increase in value indicates that the Macallan Private Eye is arguably a more sustainable long-term investment. By contrast, the Macallan Folio 1 saw massive growth within a much shorter time period. For the first couple of years after release, growth was steady. However, as time went on prices began to rise in a somewhat nonsensical manner. So much so, that in the first half of 2021, we saw a Macallan Folio 1 sell at Scotch Whisky Auctions for £10,000. This growth seems completely irrational when compared to the performance of another bottle such as the Macallan Private Eye, and is arguably unsustainable. Whilst many novice collectors would look at this data and see a great opportunity, seasoned whisky collectors and investors would hear alarm bells ringing. Rapidly increasing prices such as this often indicate volatility and the formation of a market bubble. And what do bubbles do? They pop.

Since the recording of the £10,000 result, the value of the Macallan Folio 1 has begun to fall, with many not meeting their circa £8,000 reserves. It seems that market confidence in the Macallan Folio series is beginning to falter. With almost no level of scarcity, history, nor any concern for age statements or vintage statements (the whisky in the bottles could be three years old) it is arguable that the Macallan Folio 1’s days are numbered. The bottle inhabits a completely different area of the market in comparison to the Macallan Private Eye, with most collectors being novices in the market who do not understand the value of scarcity and history within a bottle of whisky.

As such, it is better to rely not only on data but also on context when choosing to invest in a specific bottle. Interrogate the data - why is the bottle behaving in a certain way? What is driving the growth? Asking yourself these questions prior to purchasing will help to ensure long-term profits.

Another thing to note about whisky bottle investment is that the quality of the whisky, seemingly, has no impact on the value of any given bottle. It is the opinion of many whisky fans that whisky is for drinking, not for collecting or investing. Whilst that may be true of lower value bottles, a market has developed around old & rare bottles that is driven not by the quality of the whisky, but by the marketing and branding of a specific bottle. There are a few different examples that demonstrate this point. One such example is the Springbank 1919 50-Year-Old.

The Springbank 1919 50-YearOld was laid down to mature one year after the end of World War I and left to mature for five decades before being bottled in 1970. The whisky was first bottled in a pear-shaped bottle featuring Springbank’s distinctive gothic ‘S’ on the label. However, in the early 1970s, the whisky was rebottled into a tall, glass bottle with a new label, complete with with a wooden presentation box. The record price at auction for this bottle is £226,200. The record price for the pear-shaped bottle at auction is £20,000. That is more than 10 times less than the rebottling. The whisky did not change in any way, shape, or form. It was simply rebottled and rebranded and is suddenly worth 10 times more than its predecessor.

The same can be said for the Macallan 1937 37-Year-Old. The Macallan-Glenlivet 1937 37-yearold was first bottled in the mid 1970s by Gordon & Macphail. This old vintage and high-age statement Macallan sells at auction for, on average, £3,000. The same whisky was later rebottled as part of the Macallan Fine & Rare Series, complete with a new label and a wooden presentation box. The record price for this bottle at auction is £34,813.

A final example of this is the Black Bowmore 1964 Final Edition. The Final Edition (or third edition, as there are now six releases in the Black Bowmore series) was released in 1995 containing 1964 vintage, 31-year-old whisky. The bottle (and the other bottles in the series) have steadily grown in value over the past 26 years and currently averages around £8,000 at auction.

In 2021, Bowmore released the Black Bowmore 1964 DB5 in collaboration with Aston Martin. The collaboration was created to celebrate the Aston Martin DB5’s cultural impact since its first appearance on screen in the 1964 James Bond movie, Goldfinger. 1964 was also a pivotal year for Bowmore, as the year saw the arrival of a new boiler at Bowmore, signalling the start of a new era of distilling at the distillery. The release consisted of 25 bottles, and had a price tag of £50,000. The record auction price for this bottle currently stands at £81,000. An important aspect of this release to note is that the DB5 bottling contains the same whisky as the Black Bowmore Final Edition. Yet again, the rebottling is worth over 10 times more at auction than the original bottling.

“THE SPRINGBANK 1919 50-YEAR-OLD WAS LAID DOWN TO MATURE ONE YEAR AFTER THE END OF WORLD WAR I...”

The Bowmore case study is particularly interesting because it not only signals that quality has next to no impact on value, but also shows that single malt Scotch whisky is becoming so widely recognised as a luxury asset that luxury car companies such as Aston Martin are jumping at the chance to collaborate with Scotland’s best distilleries.

As such, the Macallan-Glenlivet 1937 37-Year-Old, the Springbank 1919 50-Year-Old Pear-Shaped bottle, and the Black Bowmore Final Edition are greatly undervalued in comparison to their rebottled counterparts. Whilst your whisky investment journey may not involve purchasing bottles such as the Springbank 1919 and the Macallan 1937, it is an important lesson to remember nonetheless. When choosing which bottles to invest in it is as important to consider the distillery or series from which the bottle hails as well as the vintage statement, age statement, and quality.

As the data pertaining to bottles such as Macallan Private Eye has shown, whisky bottle investment can be incredibly lucrative and rewarding. However, you should proceed with caution. The world of whisky bottle investment can seem daunting in the first instance, and this hesitation leads many to follow the crowd and flip modern bottles for a quick profit. However, if you are looking for a long-term investment then you must understand the nuances of the market and not be tempted to rely solely on modern releases with unusually rapid growth.

If you would like to understand more about the market for single malt whisky bottles then why not download Mark Littler Ltd’s Whisky Bottle Investment Guide? This 82-page guide introduces novice investors to the history and intricacies of the whisky market as well as equipping you with the tools to start investing proactively. This is the most comprehensive resource currently available for those wishing to start their whisky investment journey.

Mark Littler Ltd also has an active YouTube channel on which they post regular videos about everything from cask investment, to bottle investment, the world’s first Private Eye tasting, and more. If you would like to keep up with everything whisky, Mark Littler Ltd’s YouTube channel and blog are the places to go.

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