Whisky might not be the most conventional buying opportunity – but for this investor, it’s a commodity worth investing in.
Rupert Patrick, CEO of whisky trading website WhiskyInvestDirect, said that investing in Scotch whisky is a long-term investment comparable to buying gold.
Patrick’s business is part of the BullionVault group, which enables investors to trade gold, platinum and silver online.
“BullionVault’s software translates very easily to scotch whisky,” he told CNBC’s “Street Signs”.
“If you think about a gold bar sitting in a vault, and then switch that image for piles and piles of Scotch whisky sitting in barrels – for 10-15 years sometimes – you’ve got an asset which is investable to retail investors through very clever technology.”
Rare, sought-after whisky brands have climbed 34.6 percent in the last 12 months, according to the Rare Whiskey Icon 100 Index.
Patrick’s firm buys the spirit as a commodity directly from distillers, to then make a return on the investment at a later point.
“We buy new, so it’s come off distilled into the cask beautifully, (and) it stays in their warehouse,” Patrick said.
“We pay rent, we keep it there – like gold, don’t move it from there for as long as you can – and then make that “buy-back-able” for other distilleries and blenders later down the line.”
The investor explained that whisky was an attractive investment opportunity due to being a slower, long-term industry like gold rather than a rapidly evolving one.
“Scotch whisky is a very steady, long-term business,” he said. “Volume growth has been 1.5 percent for 35 years. Now if you take that same period and what has happened to maturing stocks, seven-to-eight percent is what investors have had over that time.”
He added: “But up until two years ago when we opened WhiskyInvestDirect, you’ve never really been able to take advantage of that unless you were a whisky distiller or blender. So seven-to-eight percent has been the long-term growth. We can’t predict the future but we see the outlook for scotch as very, very positive.”
Patrick said that the value of the commodity is that “it gets better the longer you store it”.
“Microchips, butter, you want to use them up quickly, but whisky – a five-year-old is always better than a one-year-old.”
Source: cnbc
Whisky could be just as sound an investment opportunity as gold