How investing in whisky can reap substantial long-term rewards

As stories of impressive ROI's from whisky investment continue to be shared in the media, Molly Codyre speaks to the team at Tomoka Whisky about cask and bottle investment and the opportunities that can come from both

Whisky is a golden-hued spirit; a liquid asset with enduring luxury connotations. An enormous industry has been built from the making, distribution and consumption of whisky around the world, from distilleries in the Scottish highlands to dedicated whisky bars in Tokyo and fine whisky stores in the City of London.

A scotch whisky has to have been distilled and aged within Scotland, bourbon in the US, and Japan is also seeking to put in place strict geographical requirements to take advantage of its massive growth.

This liquid gold lives up to that moniker in more ways than one. In October 2019, a bottle of Macallan 60-year-old whisky – distilled in 1926 and bottled in 1986 – was sold at auction for £1.5m, making it the most expensive bottle of alcohol ever sold. The following year, in 2020, the story emerged of a 28-year-old British man whose father had bought him a bottle of 18-year-old Macallan whisky every year since he was born for his birthday. What was a £5,000 investment over his lifetime (approximately £178 per bottle) has become a £40,000 deposit for his first home.

Our interest was suitably piqued, so we decided to pay a visit to the experts at Tomoka Fine & Rare in The Royal Exchange. A unique concept, the new Tomoka store allows customers to browse and buy bottles on the ground floor, while also offering bottle and cask investment advice and guidance and tasting opportunities in its upstairs space, as well as bottle storage in the vaults below. “You can expect about a 7 to 12% return on investment each year on casks,” Jass Patel, CEO of Tomoka says. “But it’s not a short-term thing. This is something you put down for five to ten years.”

The ground floor at Tomoka is a sight to behold. Bottles of whisky ranging from entry-level prices up to the multiple thousands line the walls, with rare and limited-edition finds waiting to be discovered. A bottle of 2019 single malt Miyagikyo Nikka Whisky retailed for £2,000 at the time of its release. Just three years later, you can find it for £6,995 at Tomoka – and that’s for a fair market price, if you're lucky enough to be able to find a bottle.

But while rare Japanese whisky has seen exponential demand and with it an exponential growth in price, the real boom right now can be found in bourbon. It’s a simple case of scarcity – demand heavily outweighing supply and pushing up prices as a result. The team point out a bottle of Blanton’s single barrel Bourbon that’s priced at £120. “Six months ago, you could have got that bottle for at least £60 less,” says Patel.

While bottle investing can be fruitful, there’s also plenty of opportunity within whisky casks. The initial investment can be anywhere between £4,000 to the multiple tens of thousands of pounds, depending on the age of the cask you’re purchasing, the reputation of the distillery and other finer details like the quality of the cask itself – sherry tends to be the most popular, lending a subtle, sweet finish to the whiskies that age in them. Size can vary too – barrels or hogs heads tend to fit around 250 litres, while some casks can hold up to 500 litres of whisky.

Asset investment is more popular than ever. With market instability lingering from Coronavirus and world conflict, it can be reassuring to have your money tied up in something tangible. If the last few years have proven anything it’s that there is no industry more safe than alcohol, particularly when it comes to whisky, a product that ages well and doesn’t face the danger of spoiling. The team at Tomoka have shown that while £1.5m might be out of most investors’ budgets, there are ample and affordable opportunities in both bottle and cask investment to help you see an impressive return on investment – the kind of long-term gains to which you’ll happily raise a glass.

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