Three bottles of whisky that had once sold for a world record price appeared at a Sotheby’s auction last Thursday evening, none of them getting near the current record, but all demonstrating that rare whisky is one of the most rewarding investments currently available.
Alternative asset classes such as stamps, watches, jewelry, coins and classic cars have long been seen as legitimate investments in the wealth portfolio of high net worth individuals, but in the last two decades a whole range of new asset classes have popped up with much to recommend them.
Sports memorabilia, entertainment entertainment, and cultural memorabilia are now massive global industries with sub-categories that are quite substantial industries in their own right. The sports memorabilia industry is vast, with an annual turnover of $5.4 billion in America alone, and although baseball cards is just one narrow segment of the sports memorabilia industry, it accounts for a billion dollar turnover each year in America.
The reasons for the success of these new investments of passion is that many of them are largely immune to bad news, which cannot be said for shares and equities. For the last few years, the wealth management reports have been touting the investment potential of alternative asset classes, and the hero category has been fine and rare whisky.
The resilience of whisky prices was a hot topic at the time of Sotheby’s auction on May 28, as Rare Whisky 101's end-of-year report on the state of the whisky industry in the midst of the global pandemic had been released just a few days earlier. Combining the information available on RareWhisky101, it seems quite clear already that whisky prices are more than just resilient.
The whiskies of particular interest that sold last Thursday evening at Sotheby's were two bottles of Dalmore 62 Year Old that fetched £266,200 (US$327,928) each and a bottle of Macallan 1928 50 Year Old Anniversary Malt that fetched £84,700 (US$104,341). The first two represented significant new record prices for the 12-bottle-only whisky, while the 1-of-500 bottle of Macallan set the third highest price in history.
The 1928 Macallan 50th Anniversary Malt
The Macallan 50 Year Old 1928 Anniversary Malt was the first limited edition whisky that was sold by The Macallan and the success of this particular whisky informed the marketing decisions that were to come for Macallan, most notably the limited edition Sir Peter Blake bottling, the limited edition Valerio Adami bottling and the creation of the now iconic Macallan Fine & Rare range.
At the time of release in 1983 this was the oldest and rarest bottle that The Macallan had ever released; an extraordinary whisky, aged in one of the distillery’s finest casks for more than half a century. Naturally, it played a significant role in Macallan's evolution, being rewarded with marketplace recognition (a world record price) in 1986. Christie’s auction house in Glasgow sold a bottle for £1100 (£1,265/US$1,905 including buyers premium) on June 17, 1986.
In retrospect, compared to the prices paid today, that doesn't seem like a lot of money but it was by far the most anyone in the world had ever paid for a bottle of whisky at that point in time. The headline in the local newspaper pointed out that the bottle was so expensive that each nip (shot) cost £55. At the exchange rates of the day, a shot of the world record whisky cost US$81.64.
The ensuing third of a century has seen a great deal change in the world of whisky, as investors and collectors have flocked to join connoisseur drinkers at auction. America likes its whisky, but not nearly as much as Asia in general and China in particular, so the limited supply of elite single malt scotch, which requires a non-negotiable 50 years to create a 50-year-old whisky, has seen demand vastly exceed supply for the last few decades, driving prices exponentially (quite literally) higher.
In the process, whisky has been transformed into a gold chip alternative asset class that is rivaling gold itself.
Whisky was still a relatively democratic tipple a third of a century ago, and although £1100 was an ungodly amount to pay for a bottle of whisky at that time, fine and rare whisky was still within the reach of the average well-heeled individual.
There were only 500 bottles of 1928 Macallan 50 Year Old Anniversary Malt ever produced. The whisky was produced from three casks dated between 1926 and 1928 and hence was actually bottled as a 55 year old in 1983, though it was labelled as a 50 year old.
It hence represents extraordinary value compared to the Macallan 1926 Macallan 60 Year Old, which now holds the aforementioned record price for any bottle of whisky – a bottle of 1926 Macallan 60 Year Old sold for £1,452,000 ($1,860,307) at a Sotheby’s London auction on October 24, 2019.
Having sold for £84,700 (US$104,341) at Sotheby’s last Thursday evening, the bottle of Macallan 1928 Anniversary Malt 50 Year Old did not quite match the recently established record price of £96,600 ($124,385 = £92,000 plus 5% buyers fee) set at an online Whiskyauctioneer sale on 20 February, 2020.
The previous record for the Macallan 1928 Anniversary Malt 50 Year Old was set at the Sotheby’s auction on 24 October 2019 whre the overall record was set, so it’s fair to say that whisky prices are at or near their very best, regardless of the pandemic. The price fetched at Sotheby’s last October was £87,120 ($108,518).
The Dalmore 62 Years Old
It is the other two bottles of whisky sold at Sotheby’s last Thursday night that highlight the complexities of the elite whisky marketplace.
Just 12 bottles of Dalmore 62 Year Old were released in 2002 and although nominally a 62 year old whisky, the scotch was hand-blended by Dalmore master distiller Richard Paterson from four casks of single malt laid down in 1868, 1876, 1926 and 1939 respectively, so each bottle contains whisky that is 75 years old, 125 years old and 133 years old.
Each of the 12 hand-blown bottles comes in its own lockable wooden display case, accompanied by a certificate of authenticity. What's more, each of the 12 bottles has a name, each reflecting a significant aspect of the Dalmore Distillery.
The first bottle of the twelve to reach auction was in December 2002, when it broke the world record price for a bottle of whisky by fetching £25,878 ($40,602) at McTear’s Auctions in Glasgow. To put that in perspective, that bottle of Dalmore whisky would have worked out to £1,109 ($1740) per shot if it had been consumed ... but it wasn't. This particular bottle of Dalmore 62 Year Old was dubbed “The Kildermorie” after the nearby Loch from which the distillery draws its water. It will appear at auction again later in this story.
The previous world record price had been set just a few months prior by McTear’s in the same auction house when a bottle of Macallan 1926 60-year-old Fine & Rare sold for £20,150 ($29,040). Note that an identical Macallan 1926 bottle currently holds the world record price at £1,452,000 ($1,860,307).
The final available bottle of the 12 Dalmore 62 Year Old held by the distillery (there’s one in the distillery museum that will remain there forever) was sold to Pennyhill Park Hotel, in England’s picturesque Surrey in 2005. The bottle was ordered in for one of the hotel’s best customers, and the bottle of Dalmore was sold retail for £32,000 ($58,502), breaking its own world record price for a bottle of whisky on May 24, 2005.
Just to make a point, the customer then opened the bottle and drank it in one sitting in the hotel’s oak-paneled Ascott Bar with the help of several friends.
This bottle was appropriately named “The Matheson” after Alexander Matheson, the founder of the Dalmore distillery. In perspective, this bottle is highly significant and will go down in history as the last world record holder to actually be consumed.
Compared to that original bottle of Macallan 50th Anniversary malt sold in 1986, each shot of the liquid gold drunk that evening cost £1,371 ($2,507). In 16 years, the cost of a world record tipple of single malt had increased by a factor of 40 (from US$81.64 to $2,507), but we're only just getting started.
This is the only known instance of a world-record-holding bottle of whisky being drunk – there may be others, and if you have evidence of such, we'd love to hear from you. This represents, we think, the last time that the pinnacle of old and rare whiskies were still whiskies and not some notional financial construct.
The world record for a standard bottle of whisky changed hands many times over the next six years, with at least four records held by other bottlings of Dalmore whisky in that time, before September 9, 2011 when one of the other 12 bottles of Dalmore 62 Year Old set another world record by selling for S$250,000 (US$203,673) in Changi Airport in Singapore to a passing Chinese businessman. If the Chinese businessman ever opens it, he’ll be paying $8,729 a shot.
Not surprisingly, that was a record that was expected to stand for a long time, though it lasted just two years before a bottle of Dalmore Brilliance 1926 sold for €250,000 ($344,655) in Amsterdam’s Sciphol Airport on October 23, 2013.
The world record has since moved on, and the Macallan 1926 60-year-old Fine & Rare and its brethren (the Valerio Adami, Peter Blake and Michael Dillon bottles all come from the same hallowed cask) are the only standard-sized bottles of whisky ever to sell for more than a million dollars apiece, and it is unlikely the current record will be broken by any whisky that isn't from The Macallan Cask #263 for a very long time.
The original 12 bottles of Dalmore 62 year Old keep showing up at auction though, with one of the 12 bottles named “The 12 Pointer” (referring to the distillery’s stag emblem) appearing at a Sotheby’s auction in September 2017 and fetching £91,650 ($121,362), and the Dalmore 62 Years Old Kildermorie went to auction a second time at a Christie’s auction in December 2017 fetching £114,000 ($151,892). Fifteen years earlier, the Kildermorie had set the whisky's first world record price of $40,602 in 2002.
Like death and taxes though, the inevitability of the whisky marketplace mandates that the increasing demand of Chinese collectors in particular and the ever-increasing number of collectors and investors elsewhere in general, will increase prices over time.
Both bottles of Dalmore 62 Year Old sold by Sotheby's on May 28, 2020, respectively “The Cromarty” and “The Mackenzie”, fetched identical amounts: £266,200 ($327,928). That’s more than double the last two prices fetched and more than 50 percent higher than the previous record for a bottle set at the height of the luxury buying boom in 2011. That works out to £11,409 ($14,054 ) a shot for the Dalmore 62 year Old.
The Dalmore 62 Year Old is no longer a competitor to the Macallan 1926 60-year-old Fine & Rare however.
And if you’re wondering what a shot of the record-holding 1926 Macallan 60 Year Old might cost, it works out to £62,229 ($79,727) per shot.
What this all means is that rare and exquisite whisky has somehow managed to stop being an alcoholic drink in the 15 years since May 24, 2005. That’s the last world record whisky to have been consumed, and it seems highly likely that it will never happen again.
Here's why!
The world record for a 700 ml bottle of whisky now stands at £1,452,000 ($1,860,307), meaning that a standard 30 ml shot from the world record bottle would now cost £62,229 ($79,727). Six bottles have sold for more than a million (three of them were Valerio Adami label Macallan 60 Year old 1926). When Whiskyauctioneers.com sells the next bottle of Macallan 60 Year old 1926, we feel certain there will be a seventh bottle, and perhaps the first $2.0 million bottle of whisky.