In recent years, there has been a huge surge in the amount of people who are moving away from traditional bank based and financial investments and moving towards alternative commodities such as gold, art and wine.
But one alternative investment that has been making the headlines recently is cask whisky. We’ve had Roger Parfitt, a 59 year old bank manager from Coventry make the news after making £225,000 at auction from two aged Scotch casks he purchased back in 1994. The ‘forgotten cask’ has also recently made the news – which is an aged cask of Macallan that the owner totally forgot about, which shocked the public after being sold for roughly £1 million this year. Data from Google tells us searches for the keyword ‘whisky investment’ have increased by 487.5% in the past four years.
One of the main questions you might ask when thinking about a whisky investment, is should I opt for Irish or Scotch whisky? We’ve broken down some pros and cons about both spirits to help guide you and help you make a more informed decision.
Of course Scotch whisky takes up the largest market share by a country mile. In 2021, Scotch Whisky exports were worth £4.5bn. Roughly 44 bottles of Scotch are shipped around the world every second – totalling over 1.3bn bottles a year. Scotch whisky is a huge pillar of the Scottish economy, with Scotch whisky exports accounting for 75% of all Scottish food and drink exports in 2021.
Scottish distilleries are the world’s most renowned distilleries, with their history dating back to the early 1400s. Rare casks from distilleries such as Macallan have auctioned for over £1 million in recent times.
So you might ask yourself, why would I look to invest in the Irish whiskey market?
The Irish whiskey market has shown tremendous growth in recent years, growing by roughly 300% over the past decade. In the mid-1900s, the Irish whiskey market dominated the world whiskey market, having a global share of around 70%. Unfortunately the industry went through some troubling times, and by the end of the 1900s there were only a few operating distilleries left.
However, the Irish whiskey market made a great bounce back. In 2020 they produced 12 million cases of whiskey, and the IWA (Irish Whiskey Association) predict the production to rise to 24 million cases by 2030.
Despite the rise in production, there is a massive demand for Irish whiskey which hugely outstrips the supply. Irish whiskey export figures are growing year on year, with the main importer being the USA purchasing $1bn worth every year, which equals around 5 million cases.
Countries across India and Asia are also getting a taste for Irish whiskey, with their Irish whiskey sales increasing year on year. In fact, there were 136 million bottles exported to India in 2021, which was an increase of 44.3% from 2020.
It is important to note that there are only 32 operating distilleries in Ireland, compared to the 130 distilleries in Scotland. When demand hugely outstrips supply it gives a great opportunity to investors.
Another important point to note is that you will very rarely see a bottle of Scotch whisky under 10 years old. Irish whiskey is often bottled and drunk as young as a 3 year old whiskey, which gives investors a great opportunity to release their profits in a shorter amount of time.
As a whiskey investor myself, I own several Irish and Scotch casks. From a personal point of view, I can understand why people are more inclined to invest in Scotch whisky. UK investors like the fact it is a UK based investment and is backed and regulated by HMRC. Scotch also has a huge history and with countless stories online regarding Scotch casks sold for fortunes, it is no surprise investors are flocking to Scotch casks.
However, if you are looking for high returns in a shorter space of time, I would advise investing in Irish whiskey casks. The secondary market may not be quite as large (for now) however the supply and demand factors are pointing the market in the right direction, and the popularity of Irish whiskey around the world is sky rocketing.
If you’re interested in investing in either Irish or Scotch whisky with London Cask Traders, please drop us an email at [email protected], or call us on +44 (0) 20 3744 3900 and one of our friendly and professional portfolio managers will be happy to speak to you in further detail.
For more information you can also visit our website at www.londoncasktraders.com. Thank you.