How to invest in whisky

Whisky is a popular choice of tipple across the world. There are several types, such as Scotch, Bourbon and Tennessee, each with their own characteristics. Whisky needs to age for several years before it can be bottled, so it takes a long time for it to go from grain to glass. Some investors choose to invest in alternative investments like whisky in addition to traditional investments, such as shares or funds.

Can you invest in whisky?

Yes, but it’s not the same as “traditional” investments — it’s not available on typical investment platforms, and there’s additional factors to consider, such as storage and insurance. With shares and funds, you don’t receive a physical product, but when you invest in whisky, you are buying actual whisky, although you may never actually see (or taste!) it.

Is whisky a good investment?

Whisky can be considered to be a good investment, but there are risks involved. You can’t just find a half empty bottle of Jack Daniels in the cupboard from your uni days and expect someone to pay a small fortune for it.

As whisky ages in the cask, it naturally appreciates in value over time, as it becomes full bodied and better quality as it ages. There are whiskies that have been aged for 18 or 25 years that are sold for thousands of pounds — the amount of time put into the whisky is what gives it its value.

But you shouldn’t put all of your money into one cask of whisky. As an alternative investment, it’s best used to complement a traditional portfolio, giving you some additional diversification. You can’t predict the future, so whisky drinking might become particularly unpopular in the next decade which would decrease the amount people would be willing to buy your whisky for. While this is unlikely, it’s still something you’ve got to consider.

How much does it cost to invest in whisky?

This depends on how you choose to invest in whisky — if you choose to invest in bottles of whisky, you’re just looking at the cost of your initial purchase, and potentially a cost if you want to auction it when you sell it. When investing in casks of whisky, there are some additional costs involved, mainly for storage and insurance. This means that you don’t have to worry about finding somewhere to store your whisky.

Storage costs around £40-£50 per cask each year, and you may need to pay a percentage of your profits to the company you choose to invest with.

Ways to invest in whisky

There are a couple of different ways to invest in whisky, investing in bottles of whisky and investing in casks of whisky. Here’s how they work.

Invest in whisky casks

There are companies that allow you to invest in whisky casks. These companies typically own and store the casks, and they’ll charge you a storage fee when you purchase a cask.

You’ll have the ownership of the cask transferred over to you, and you may be able to visit and view it. When it comes to selling your whisky, you can auction it off. Sometimes these companies will take a percentage of your profits when you choose to sell.

Invest in whisky bottles

It’s possible to invest in bottles of whisky. There are some new providers that let you own a fraction of a bottle of whisky or case of whisky — typically ones that are of high value or expected to rise in value significantly. This doesn’t mean you’re entitled to that fraction, you’re often buying a digital token that gets you votes on what happens to the whisky, such as if you sell it.

Can you buy investment whisky from the supermarket?

You can. This is often how whisky investors start out, by seeking out collectable bottles and keeping them in a cool, dry cupboard until they’re ready to sell. It takes a little bit of work, as you’ll need to seek out rare bottles or bottles that you think will rise in value over time. This takes some whisky knowledge, so you’ll need to do your research into the different types and their costs. Some investors find this part of the fun, while others might be frustrated at having to put the extra work in.

Bottom line

Whisky can be a good choice of investment as long as it’s part of a diversified portfolio. Investing in whisky casks requires a rather large initial investment (from around £10,000), but investing in bottles would allow you to make smaller investments. There are sites that allow you to buy fractions of whisky investments, including bottles and cases. Make sure you factor in the costs of storage and insurance, and whether your chosen provider takes a cut of profits you make.

Finder survey: What alternative assets do you invest in or plan to invest in?

Around 1 in 20 Brits have invested in or plan to invest in whisky.

Frequently asked questions

• Do you pay tax on profits when you invest in whisky?

  You don’t have to pay tax on profits you make on your whisky investment. This is one of the benefits of investing in whisky, as with other investments you usually need to pay capital gains tax. Whisky is considered by HMRC to be a wasting asset, which is an asset that has a predictable life of 50 years or less.

• Is whisky a better investment than gold?

  There are pros and cons of both whisky and gold. Gold is considered to be a safe haven investment, which means that it tends to perform well during recessions. As whisky gains quality as it ages, it tends to rise in value. You’d need to be willing to stick it out for the long run.

• Will my whisky increase in value?

  As whisky ages, its flavour improves, which naturally increases its value. Understanding the value of your whisky isn’t the same as with shares – you can’t check your investment app to check.

• How much can you make from a whisky investment?

  This depends on how long you invest for – if you hold out selling your investment for a decade or so, you have the potential to earn a nice sum from your investment, but it’s difficult to know how much you’ll get until you have an offer to buy, whether that’s by auction or with an individual buyer. Watch out for sites that guarantee certain returns – there’s no guarantees with investments.