Whisky expert outlines investment potential ahead of World Whisky Day

THE second annual celebration of World Whisky Day takes place this Saturday 18 May, an important day in highlighting the global significance of whisky and how important it is to Scotland and the UK.

David Robertson, formerly Rare Whisky Director at The Dalmore and Master Distiller at The Macallan, recently set up The Whisky Trading Company, to take advantage of the increasing demand for the rarest bottles of Scotland’s most famous export.

The company has identified 3,000 bottles of rare whisky as part of its initial stock, many distilled before World War II. The investment opportunity to acquire shares in the new business is currently being widened as it seeks to raise an additional £2-4 million to capitalise on market opportunities. The shares are issued under the Enterprise Investment Scheme (EIS) and attract certain tax benefits for qualifying UK tax payers.

Commenting ahead of World Whisky Day, David Robertson said: “It’s a fantastic day to celebrate what is truly a global drink. Not only will people be raising a glass in Scotland, but millions more will be enjoying a dram at home or in the pub, from Boston all the way to Beijing.

“The whisky industry is vital to the UK economy, bringing in billions of pounds in revenue, and its growing value as an investment is truly dynamic. Whisky is rarely viewed as such, but having spent my career in the industry I have seen rising prices and returns first-hand, which is why I have started The Whisky Trading Company last year.

“The volume of premium bottles being traded continues to grow significantly, with more than 20,000 expected in the UK auction market through 2013. If you had invested in the top 100 performing whiskies in 2008, you would have seen returns of 306 percent. With knowledge and insight there are huge returns to be made and it’s time to take whisky investment seriously.

“I hope by World Whisky Day in 2014 the whisky investment market will have become far more prominent in the minds of alternative asset investors and whisky enthusiasts alike.”

Notes:

• EIS: The Whisky Trading Company qualifies under EIS rules in order to deliver tax benefits for investors, depending on their circumstances. The main benefits are:
  • Income tax relief of 30 percent of the subscription (£1m cap per investor);
  • The ability to carry back the income tax relief to 2011/2012 for tax relief at 30 percent (£500k investment cap per investor);
  • Unlimited capital gains tax deferral relief;
  • Capital gains tax exemption on disposal of the shares; and
  • Unlimited 100 percent IHT relief after two years.
• Investment in alternative assets or exotic assets are becoming increasingly popular. An increasing number of investors are putting some of their wealth into more tangible assets such as investments in fine wine, art, classic cars, coins, jewellery, stamps, watches and now whisky, which diversifies their portfolio. They are deemed to be investments that are less correlated with macroeconomic shocks, the performance of the macro economy and the volatility of the stock market.
• Global socio-economic trends have led to an increase in the demand for luxury goods, which includes premium whisky around the world in both mature and emerging markets.
• The most valuable whisky ever sold at UK retail was 64-year old The Dalmore Trinitas, which fetched £120,000 in Harrods in 2010.
• The most valuable globally was a 62-year-old The Damore Sinclair, sold at Changi Airport, Singapore, which sold for £135,000 in 2011. (First sold in 2002 for £25,000 at auction, a second bottle was acquired and drunk at Penny Hill Park Hotel in April 2005 for £32,000 and the final bottle was then placed with Changi airport in 2011.)
• The value of rare and collectable whisky depends on reputation of distillery and the quality of the whisky itself. The most sought after whiskies usually originate from a number of places: extinct distilleries, classed as “silent stills” – Brora, Port Ellen, Rosebank; older aged vintage bottles; certain brands – particularly iconic brands such as The Macallan, The Dalmore, Balvenie and Glenfiddich, and, in particular, limited edition varieties – for example, Macallan released 2,012 bottles to celebrate Queen Elizabeth’s Diamond Jubilee and The Dalmore have recently released their Constellation Collection – and, finally, having a bottle in its original packaging in pristine condition is also key

About The Whisky Trading Company

The Whisky Trading Company is a specialist rare whisky merchant established in London and Edinburgh in 2012. It offers a unique opportunity for UK taxpayers to participate in the returns attainable from the rare whisky market by investing in a start-up supported by the benefits of the Enterprise Investment Scheme (EIS), a government-sponsored initiative to encourage investment in UK enterprise.

The company buys and trades only the rarest and super premium of whiskies and aims to deliver returns in excess of 15 percent per annum to its investors and shareholders. As with fine wine, there is finite supply and growing demand for rare whisky, with every bottle sold and consumed increasing the value of remaining stock. These market conditions coupled with our expertise in the industry deliver a strong investment opportunity for investors seeking to diversify their funds into alternative assets.

The company was set up and is managed by whisky expert David Robertson, who has over 20 years’ experience in the whisky industry including as Master Distiller at The Macallan. He also created and sold the world’s first £100,000 bottle of whisky, a 64-year-old Dalmore Trinitas.