When Aaron Chan heard that a liquor store in Athens might have a rare Hanyu Ichiro Malt Japanese whiskey, he phoned the shop from Hong Kong. Unable to make himself understood in English, he e-mailed photos of the distillery’s distinctive playing-card labels. The owner replied with a picture of his bottle. It was the Ace of Spades.
“That was my Eureka moment,” said Chan, who paid about HK$6,000 ($774) for the bottle two years ago. “The Ace of Spades was very, very rare already.”
Last week, a similar bottle went for HK$85,750 at a Bonhams auction in Hong Kong, 14 times what Chan paid and slightly more than the price of an entire case of 1982 Chateau Margaux that Sotheby’s sod in New York seven weeks earlier.
Forget Bordeaux first growths. Investors are falling over themselves to snag iconic single-malt scotches like Macallan, Bowmore and Dalmore and Japan’s rare Karuizawa and Yamazaki whiskies. Bars dedicated to the amber liquid have sprung up from Manhattan to Singapore, and prices are rising to dizzying levels. Sotheby’s sold a 6-litre Lalique decanter of Macallan “M” single malt in January for a record HK$4.9 million.
“I’m not really an advocate of buying whiskey and flipping it” said Heather Greene, director of whiskey education at the Flatiron Room in Manhattan, a haven for spirit lovers that offers tasting classes to aspiring connoisseurs. But I’m getting questions from people asking if they should buy a couple of cases and sell them for double.”
Double? Try quintuple. According to the Investment Grade Scotch index, published by Whisky Highland in Tain, Scotland, the top 100 single malts delivered an average return of 440 percent from the start of 2008 till the end of July this year. That compares with a 31 percent gain in S&P 500 stocks index and a sobering 2 percent drop in the Liv-ex 100 Benchmark Fine Wine Index.
The surge in prices is great news for Mahesh Patel, an Atlanta real-estate developer who has amassed a collection of more than 5,000 bottles over the past 25 years.
“Everything I have is appreciating,” says 47-year-old Patel, whose cache is insured for close to $6 million. “I am a believer of buying two of everything. One to open and enjoy, the other you put away if it’s rare”.
One exception to his two-bottle rule is a Dalmore Trinitas 64 Year Old, which he bought in 2010 for 100,000 pounds ($166,455). Only three were ever made.
As the value of the top malts rises, the temptation to keep bottles for investment gets stronger.
“Current prices make me hesitate about drinking as freely as two or three years ago,” says Chan, whose 500-bottle collection includes all 54 of the Hanyu playing-card series (including the two Jokers).
One reason for the surge in prices is that distillers simply can’t react to the increase in demand fast enough because whiskey takes so long to age. Even a standard duty-free Glenfiddich or Glenlivet spends 12 years in the cask, and investment grade scotches many more. The 1962 Macallan the villainous Raoul Silva offered James Bond in “Skyfall” was aged for half a century.
Whiskey, derived from the old Irish phrase for “water of life”, is made from a mash of fermented grain, yeast and water that is distilled and then aged in oak casks. A single-malt is produced from malted barley at one distillery.
As each cask ages, some of the spirit evaporates, a loss known as the “angel’s share.” A 50-year-old barrel can lose as much as 60 percent of its contents.
Some of the most conveted whiskies come from casks left over from “silent distilleries” that ceased operation decades ago. A batch from Port Ellen on the Scottish island of Islay, which was shuttered in 1983, is still releasing vintages as they come of age. The 1978 sold last year, one bottle per customer, for 1,500 pounds.
If you like your scotch with ice, there’s a box of Mackinlay’s Rare Old Highland Malt that was exhumed in 2010 in the Antarctic, where it had been left by explorer Ernest Shackleton in 1907. Protected by the Antarctic Heritage Trust, the 11 bottles will never be uncorked, but a wee dram was drawn from one by syringe and a replica produced by Whyte & Mackay in Scotland.
“I’d like to taste the original,” says Mark Gillespie, who runs virtual tastings on WhiskeyCast from Haddonfield, New Jersey, and sampled the reproduction.