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Rare Scotch investment drops for first time

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The value of rare Scotch whisky sold at auction has declined for the first time in 10 years as the popularity of whisky auctions continues to grow.

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Investment decline: The increase of new auction sites has diluted the overall value of bottles sold

An oversupply of rare bottles and an increasing number of new online auction houses are to blame for the rare whisky investment market’s ‘first “blip”’, according to Rare Whisky 101.

The value of rare Scotch sold at auction in the first half of 2019 dropped by 0.26%, against an increase of 9.91% during the same period in 2018.

During the six months, Scotch whisky underperformed against other traditional investments, including the FTSE 100 and gold. The news comes after early indications of a softening market emerged in May this year.

Rare Whisky 101, which tracks the value of rare Scotch through its Apex 1000 index, said the declining value of rare Macallan – the secondary market’s ‘most dominant’ distillery in volume and value – was also to blame for the dip.

Andy Simpson, co-founder of Rare Whisky 101, said: ‘On the back of 10 subsequent years of growth in the investment performance of rare whisky, we have seen an oversupply of bottles, the continued proliferation of specialist whisky auction houses and a record amount of money spent at auction all combine to produce the rare whisky investment market’s first “blip” since we started reporting these results.’

‘However, collectors, investors and buyers would be well advised to note the dip. At this stage we do not believe it indicates the start of a longer-term downward trend.’

The whisky valuator noted that there are ‘plenty of pockets of growth for those who do their research and time their market entry/exit well: as with all investments’.

It said the volume of single malt Scotch whisky sold at auction in the UK during the period increased by 43.9% to 71,544 bottles, with Springbank now leading the investor rankings, followed by Brora and Glenugie. Macallan placed seventh as of June 2019.

Simpson added: ‘We remain confident that the right bottles from the right distilleries will continue to offer a strong investment proposition.

‘In fact, our later than usual reporting of the half year figures has allowed us to see growth return to the market as the supply/demand equation has re-balanced.

‘However, continued uncertainty over the UK’s post-Brexit future makes it very difficult to predict how the market will perform in the latter months of 2019.’

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