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Master of Malt Blog

Tag: Whisky investment

Can drink brands use NFTs and still be sustainable?

We keep hearing a lot about NFTs in the drinks world but what we don’t hear so much is how much energy they consume. In a guest post, Joel Davidge…

We keep hearing a lot about NFTs in the drinks world but what we don’t hear so much is how much energy they consume. In a guest post, Joel Davidge from the Cocktail Service asks whether brands have to choose between sustainability and marketing efforts including NFTs, or can the two co-exist?

If, like me, you’ve been watching the spirits industry over the past few years, you’ll likely have seen two trends on the rise: sustainability and NFTs (non-fungible tokens). More and more drink brands are getting into the NFT scene in a big way, with Scottish distiller Glenfiddich releasing a 46-year-old single malt sold via BlockBar, a direct-to-consumer NFT platform.

NFTs are obviously a great way for companies create a buzz about their products. At the same time, brands are under increasing pressure to display their commitment to sustainability. But there is a contradiction here because, as we’ll see, NFTs consume a vast amount of energy. So, can brands do both? I wanted to find out, and so chatted to a few experts in the NFT and sustainability field.

glenfiddich-NFT

Glenfiddich’s 46 year old single malt was sold through BlockBar

What are NFTs?

First up, if you don’t know what an NFT is, then hop over to read Lauren Ead’s fantastic explainer. Put simply, an NFT is a digital token or receipt which records the ownership of a unique and permanent asset.

For drinks brands it works like this: a brand creates an NFT tied to a limited-edition bottle. The person who purchases the NFT could then trade it in for the physical bottle. But this is much more about investment and collectability.

Sustainability in the drinks industry

If you’re reading this, odds are you’re a discerning drinker. You’ll likely have noticed the flurry of sustainable initiatives popping up in recent years. From Patron teaming up with Annabel’s Mayfair to support the Amazon, to the Savoy Hotel introducing Portobello gin in sustainable EcoSPIRITS format, venues and brands across the industry want to be seen to be helping. 

Looking at the schedule for last year’s London Cocktail Week, I was struck by the number of sustainable activations on show. Though sustainability was not an official theme of the event, it was notable just how many brands were approaching their activations through the lens of sustainability. This is no surprise with Ernst & Young reporting that 84% of consumers say that sustainability is a consideration which is a potential problem for brands moving into NFTs.

Josh Sandhu

Josh Sandhu from Quantus

NFTs = lots of energy required

Each time you create or sell an NFT this uses a lot of energy. The exact amount is hard to calculate, but an analysis of 18,000 NFTs suggested that the average NFT has a similar carbon footprint to the amount of electricity generated in a month by a person living in the European Union. With statistics firm Statista reporting that NFT trading activity more than doubled between July and August last year, you can see why some see this as a growing concern. Josh Sandhu, co-founder of NFT advisory and gallery Quantus thinks we will reach a point in the future where NFTs underpin many of the items we purchase.

Can NFTs be sustainable?

So, if we are to increasingly use NFTs, can we do this in a way that doesn’t negatively impact the environment? One method, offsetting, describes taking action to remove carbon from the atmosphere to compensate for emissions made in other places.

Take digital artist Beeple, who sold an NFT for $69 million in 2021. The artist, whose real name is Mike Winkelmann has said he plans to buy into carbon offset schemes to ensure the impact of his work is net positive.

Josh Sandhu believes that creators and brands have an ethical responsibility to offset the carbon created during the NFT process: “The Cryptocurrency market uses vast amounts of energy and that comes with an environmental cost. Speaking to a number of artists, a lot of them have the same concerns and that’s been the primary reason some will not enter the space,” he said. “That’s not to say that there aren’t alternate solutions that are carbon neutral though, because there are,” he continues. “But it is to say that because we’re still so early in this technology, there’s a lot of misconceptions about it and some folks are already very set in their opinions and aren’t too interested in changing them.”The Unsustainable Truth Cover Image

Is it possible to do both?

In the case of Glenfiddich, last year the brand launched a pioneering sustainable transport system and plans to make it available across the whisky industry. So, if it’s simply about balancing the amount of carbon entering the at, one could argue that they are doing plenty to help the environment.

However, for writers David Ko and Richard Busellato, sustainability is more than simply offsetting the resources that we use; it is about answering honestly whether we should be using the resources in the first place. As the authors of The Unsustainable Truth, which explores how investing for the future is destroying the environment, they see NFTs as an unnecessary marketing ploy.

Whisky is already collectable 

“NFTs are attempts to create a collectible,” says Ko. For them, sustainability is the opposite of that; it is about being honest in our need and use of resources. Arguing that we do not need NFTs to appreciate products like a premium whisky, Ko uses the example of buying a rare edition whisky. “When we purchase at auction a rare bottle of island malt, you are purchasing something that genuinely takes effort to create and takes effort to appreciate. It is a piece of history sealed with a cork,” he explained.

Busellato agrees, stating that “good beverages, like good whiskies, possess a quality of their own that does not need NFTs to be appreciated. They are good not because they have an NFT attached, but because of the love, care and skill spent in creating them.”

To illustrate their theme, they use an example of a high-quality whisky distiller, one who appreciates that the quality of the water matters as much as the time and patience needed for the malt and peat to develop flavour. “A good distiller is not trying to hold back from using resources,” says Busello. “Nor does he or she need to justify their use. A good product speaks for itself and in doing so, speaks up for the need to conserve the resources. In such a world, we naturally recognise that resources do not come for free and spend as much effort in ensuring they have a future as the whisky they help us produce has a future.”

Is offsetting enough?

Recalling my earlier discussion with Josh Sandhu, I raise the idea of carbon offsetting as a potential solution. Both Ko and Busello are dubious. “We have to be careful of the promises of offsetting,” responds Busello. “What offsetting does is to promise we can use resources first and they will be replaced later. In particular, we can burn fossil fuels and emit greenhouse gases now, and what we have emitted will be reabsorbed later.” He went on to say: “Unfortunately, the greenhouse gases we emit now will make climate worse whether it is absorbed later or not, and there is no guarantee that they will be absorbed. This makes it more important we keep fossil fuels for things that are really necessary.”

Whilst the world searches for ways to produce energy cleanly, both Ko and Busello are of the opinion that when we have to use fossil fuels, this should be reserved for things which really matter. “Hospitals in remote areas of poor countries may have no choice but to use fossil fuels. When we have to use fossil fuels, using them to run the hospitals is better than to show off our wealth.”

As NFTs continue to grow in popularity, it’s clear that there are several factors to consider before using them as part of a marketing strategy. Whilst they can be a great tool to introduce whisky and other spirits to new audiences, initiatives such as offsetting can only do so much to lessen the environmental impact of NFTs. As we begin to use this technology more and more, we may need to ask: should we even be creating these things at all?

Joel Davidge writes about sustainability and the drinks industry for The Cocktail Service.

 

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Tips for investing in whisky (and avoiding scammers)

Today, Ian Buxton returns to one of his favourite topics, buying whisky in cask. He’s come up with some tips to help you not to get scammed. Here are seven…

Today, Ian Buxton returns to one of his favourite topics, buying whisky in cask. He’s come up with some tips to help you not to get scammed. Here are seven tips for investing in whisky.

I was thrilled to see Dr Nick Morgan’s piece here last week on whisky investment scams from the 1960s and ‘70s. It’s strange, but like the proverbial bad penny, these things keep coming around.

More than one hundred years ago people were getting fooled, thanks to the Pattison brothers but it seems we never learn. Skipping over Dr Morgan’s examples, we can fast forward to the £10m Cavendish Hamilton Cask Management ‘investment’ debacle of the early 2000s. And, not to say I’ve already warned you – but I’ve already warned you here, more than once.

So, how to be sure the great British public won’t get fooled again? Here’s my simple, seven-step, cut-out-and-keep, whisky investment guide.

Ken Grier investment

You could make a fortune out of investing in whisky. But you probably won’t

Seven tips for investing in whisky

1) Don’t!

And this is my TOP TIP. Retire to a quiet, dimly-lit room with a large dram of your favourite whisky and repeat to yourself the sacred mantra ‘whisky is for drinking; whisky is for drinking’. Try to imagine setting alight a huge pile of money – your savings. Imagine your partner’s reaction when you show them the ashes of your carefully-planned future. Then drink more of that delicious whisky.

If the fever has not passed then this is what you need to know.

2) Distilleries can go under

Remember that distilleries can and do fail. So, if you decide to buy a cask from one of the more recently-opened operations, bear in mind that it may not be around by the time you want to sell. Even if they survive, their whisky is highly unlikely to be in anyone’s blend recipe so there will be virtually no trade market for your cask. You’re effectively just supporting a new start-up: fun, emotionally satisfying but an investment only in your pleasure.

3) Don’t pay too much  

Be aware that prices for private casks have increased substantially in recent years. Once the cost was set by the trade price for fillings and was a modest premium on what the industry paid. Today, all too often it’s little more than a slight discount on the eventual retail price. In other words, you’re being asked mature whisky prices for new make. The easy money has left the building.

4) Do some digging

Don’t just take their word for it. Don’t be impressed by a glossy brochure or slick website and never, ever fall for phone calls pressing you for an immediate payment suggesting you will miss a ‘once-in-a-lifetime opportunity’. Check out the people behind the pitch. The web doesn’t forget, so be prepared to dig and don’t be surprised to find a dodgy history. If there are no names obvious then smell a rat. Search names at Companies House (it’s free). If your promoters have a history of failed companies or a suspiciously long list of directorships, then walk away.

whisky crash

Ian Buxton contemplating buying a cask of whisky

5) Make sure you have a Delivery Order

You have to get the Delivery Order (Do). Do not accept a ‘Certificate of Ownership’ or similar document from an intermediary, it’s spurious. Without the Delivery Order if something goes wrong you’re on your own. And, it may sound obvious, but check first that the person selling you the cask actually owns it themselves.

Think of the DO like the V5C for a car – the owner’s logbook. But know this: when you buy a car, you’ve bought it. It’s yours. Now imagine that the manufacturer could step in at any time, perhaps years later, and tell you how far or how fast you could drive it. Or who you could take as a passenger. You might come to think that you don’t actually ‘own’ the vehicle after all, even though you parted with the money. Be aware that many of the casks sold today to private buyers come with strict caveats on what you can and can’t do with the whisky – so if you plan to bottle and retail it at huge profit, think again because the small print often explicitly forbids this. Don’t imagine that you can slip this under the radar because brands watch the market very carefully and you will be hearing from their lawyers soon.

Historically, that wasn’t the case. Once you’d shown you had paid the tax and bottled the whisky, it was yours. Or you could sell the cask under bond and the new owner was free to do what they wished. Increasingly, that’s not possible, which is why tales of lucky owners who turned a few thousand quid into hundreds of thousands of pounds will never, and can never, be repeated. Be happy for them but forget it – it’s never going to happen to you. The lawyers have seen to that.

Tip 6: prepare to do some work

If you’re planning to bottle it yourself, then get ready for some hard work. Trust me, because I’ve done it. Organising shipping, bottling, labelling and selling your whisky while keeping on the right side of the law, and the original distillery will take time and effort and more money than you think possible. There’s more paperwork than fun, believe me. But, if you must, good luck (you’ll need it).

#7. Refer to step 1

 

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Whisky investment déjà vu

A number of warnings about whisky investment firms have appeared in the press, and on this blog, in the past year. But, as Dr. Nick Morgan explains, dodgy schemes promising…

A number of warnings about whisky investment firms have appeared in the press, and on this blog, in the past year. But, as Dr. Nick Morgan explains, dodgy schemes promising big returns are nothing new. And many of them ended in tears. Here is whisky investment déjà vu.

These are the sorts of things that clog up social media feeds of the whisky curious: “15 – 30% capital growth per annum”; “in four years your matured whisky may double in value”; “malt whisky investment shows an average profit of 50% at maturity.” Outlandish claims from firms that sprout up from nowhere like new leaves on a springtime tree, and they might well be from 2020, but these particular claims date from the late 1960s and early 1970s, when investors, principally in the United Kingdom and the United States were lured into whisky investment schemes by promises of returns beyond the dreams of avarice.

The last whisky boom

Between 1950 and 1970 production of malt whisky had increased over fourfold in Scotland, (and grain whisky more than fivefold), as distillers struggled both to replenish inventories depleted during the second world war, and satisfy an apparently unquenchable thirst for blended Scotch all over the world. However, stocks of maturing whisky ate away at the capital of both producers and brokers, many of whom began to look to cash-rich post-war economies as a way of financing their inventories. Potential buyers were lured into schemes unaware of what they were buying, often ill-informed about the volatility of prices for grain whiskies on the open market, or of the fluctuations in the pricing of malts as demand from blenders shifted.

Along with advertisements from numerous investment companies (‘Brigadoon Scotch Investors’ being, perhaps, the most appropriately named) articles appeared in American newspapers with headlines such as “Aye, the clans smile on such investments” commending the “opportunities for investors of more limited means to participate with a simplified type of transaction”, selling parcels of Scotch for as little as $1000. In reality, what these companies (some of whom did, and some of whom didn’t have access to stocks of maturing Scotch through partners in the UK) were selling were not casks of whisky, but rather warehouse receipts, giving title to either real or imagined inventory. These practices soon attracted the attention of both State authorities as well as the Securities and Exchange Commission (SEC), which took the view that these warehouse receipts represented unlicensed investment contracts under American legislation, and were thus in breach of the law.

Why Irish whiskey needs a moment of self-reflection

Whisky, you could make money out of it, but you might be better off drinking it

Whisky investment déjà vu

It soon became apparent from a series of investigations by the SEC that this technical breach of regulations was not the only thing wrong with these get-rich schemes.  

Michael Lundy & Associates, and its partner company Scotch Whisky Limited, were among the first to be investigated, partly because Lundy was also being pursued for the sale of fraudulent property investments in Florida, which along with his sale of warehouse receipts would see him eventually jailed for six years. Lundy was also found to have misled whisky investors by claiming that aged whisky would automatically increase in value (rather than being priced according to the law of supply and demand), by making it appear that the investment was insured against all risks by Lloyds of London, and that it would be straightforward for investors to take physical possession of the casks for which they held receipts should they want to.

A self-styled publicity-seeking maverick

Also feeling the long arm of the SEC in London was war hero, former wine merchant, and whisky entrepreneur John Haffenden. A self-styled publicity-seeking maverick he charmed drinks and business writers (but less so the PR agencies whose bills he struggled to pay) with his very public contempt for the authorities, be they the American courts, the whisky establishment of the Distillers Company, or the Scotch Whisky Association (“bootleggers who’ve turned respectable”). “Thanks to disastrous public relations,” he wrote in one of his regular acerbic newsletters, “the Distillers Company which has in the past wielded almost feudal power over the rest of the trade in Scotland, is losing its grip”. 

Haffenden’s business was whisky broking and blending. He declared his ‘Highland Silk’ blend to be a “rare blend’ of half malt and half grains, matured for at least four years, with at least twenty percent Glenlivet’s”, “S.M.O.O.T.H”, and “popular with both sexes”. In a gushing interview with Haffenden for the Illustrated London News in 1970, Peta Fordham wrote “writers have a soft spot for any David who successfully challenges the Goliaths in a world in which the individual finds it increasingly difficult to survive”.  

Blend your own whisky

This particular David caught the imagination of the press in both the UK and the USA with a series of quirky headline-capturing innovations. His ‘Master Blenders kit’, launched in 1969, was a do-it-yourself blending pack containing four single malts and one-grain whisky. “A three-year-old child standing on his head could use it to produce a whisky better than most proprietary brands” observed Haffenden in an interview with an American newspaper; “you can blend whisky in five minutes,” he told another. 

Haffenden claimed that hundreds of thousands of the kits had been sold all over the world. Harrods, he said, described it as their “best selling thing for years”. A much-trumpeted launch event for 400 MPs in the ‘long bar’ of the House of Commons ended in an acrimonious fiasco, but unbowed Haffenden nominated himself for a Queen’s Award for Exports on the basis of the alleged success of his kits. Two other eye-catching projects were ‘Haffy’s whisky sour’, the first in a promised range of pre-mixed Scotch cocktails, and ‘the Nightender’, an automatic dispensing machine, that promised hotel guests all-night drinking “at bar prices”.

Haffenden claimed to have pioneered the selling of casks as investments in the United States in the early 1950s and had been active in the UK since at least 1965.  He suggested in advertising that the value of cask investments could triple over three or four years, advertising his firm’s services in the United Kingdom as “the leading whisky brokers”, claiming maturing stocks of between eight and twelve million gallons, and offering potential punters a free illustrated booklet on ‘Scotch Whisky Investment’. In the USA he partnered with the Rimar Corporation, which promised returns of between 20% and 25% to investors “disgusted with the stock market.”

Ivan Straker - Glenlivet

Ivan Straker (left) from Glenlivet Distillers warned about outlandish whisky investment promises (credit: Douglas Moir)

High-pressure sales techniques

Like Lundy, the Rimar representatives deployed high-pressure sales techniques which wilfully misrepresented the nature of the investment (investors were never told what whiskies they were buying), the likely returns, the risks involved, the nature of the insurance that was on offer, and the difficulties associated with transferring casks from Scotland to the USA. The whisky was sold to investors with a mark-up of between 36 and 70 percent on its market value, partly to fund the hefty commissions paid to salesmen. Haffenden Rimar was banned from trading in the United States in 1973. A long list of other traders who followed in its wake were also banned, including some names still familiar in the Scotch whisky industry today,

Until this point the British financial press had been woefully uncritical of such schemes: “a minimum investment of £500 could be troubled or trebled in three or four years’ time if the whisky cult spreads to new countries abroad” said The Sunday Times enthusiastically in 1965.  Sentiments began to change with leading figures in the industry such as the Glenlivet Distiller’s Ivan Straker speaking out against them “‘the poor investor is being hoodwinked by glowing literature”) and even the normally beige Scotch Whisky Association expressing reservations. The FBI, Interpol, and fraud squads in Glasgow and from Scotland Yard were on the case.

Haffenden disingenuously recast himself as the saviour of the poor investors led astray by ‘cowboys’, but his various business interests were crumbling and in 1974 his brokerage company received a winding-up order. A subsequent business, Haffenden International Marketing, was short-lived and equally unsuccessful.

Keith St John Foster

Enter at this point Keith St John Foster, a former Daily Telegraph junior financial journalist, with a business promising to deliver greater transparency to hapless investors, and “introduce some order into an essentially chaotic market”.  Brokers, said St John Foster, “benefit from the virtual conspiracy of silence within the legitimate trade to feather their own nests at the expense of the private investor”. With “considerable trade backing” and thus access to insider information St John Foster’s company claimed a unique position “to place funds in stocks of high return and high security”. The American press reported that his firm would “in time evolve into a major commodity market”.

Fate determined otherwise. The new company faced legal challenges to its advertising and by the end of 1975 was heavily in the red, with St John Foster being declared bankrupt in 1977. In the same year St John Foster, then described as a ‘commodity broker’, was accused (and acquitted) of being involved with four other men in the murder of a drug dealer on the Isle of Wight. Then only months later he was convicted of the attempted murder of his estranged wife and jailed for eight years. He later reinvented himself as Aphelion, an international ‘parfumeur’ who apparently made custom scents for Princess Diana and Ivana Trump among others. Such is the tangled webs of the lives and careers of whisky investment experts.

Old casks at Glen Garioch

Old casks at Glen Garioch

Glen Garioch, Glenrothes

Arthur G Schuffman’s whisky expertise was somewhat questionable when he set up Perthshire Scotch Whisky in New York in 1973 and began selling warehouse receipts for casks of White Abbey blended Scotch whisky to investors, guaranteeing fantastical returns of over 55% after a two-year maturation period. The six-year-old whisky was sold to investors for $6.80 a gallon, although investigators subsequently put its worth at $1.50 to $2 a gallon.   

In a textbook boiler room operation, Schuffman and his partners targeted “unsophisticated investors” with glossy mailshots which were followed up by high-pressure telephone calls, making “numerous misrepresentations about the value of Scotch whisky as an investment”. Perthshire Scotch Whisky would, it was promised, either buy the whisky back or assist them in selling it to third parties. “Like a masterpiece of art”, claimed the company’s advertisements, “White Abbey appreciates in value as it ages”. Neither Schuffman nor his partners waited to see if their claims were true. After luring twenty-seven or more investors to part with over $60,000, they closed down their smart Park Avenue South office, leaving no forwarding address. As it turned out, jail was their eventual destination.

We’ve been here before

There is no doubt that with the right advice there is money to be made from speculating in cask purchases; there always have been. There can be a great deal of pleasure in simply buying a reasonably priced cask from a new distillery, either as an individual or with a group of friends, for bottling and enjoying at some later date. But those tempted by the seductive promises of many whisky investment firms today, keen to “find out why investors are going crazy over whisky” might do well to reflect on the experiences of the late 1960s and 1970s when incalculable losses were experienced by investors in both the United States, the United Kingdom, and elsewhere as a result of illegal and fraudulent practices. 

Then as now, tempted by glossy brochures, seductive (and mostly misleading) promises of huge returns, investors placed trust in companies whose resources and expertise in whisky was minimal, whilst their salesmanship was weaponised. The deluge of new firms over the past three to five years with little or no proven background in Scotch whisky, desperately trying to steal a share of the profits of the whisky investment bubble, exactly mirrors the experiences of the past. And we know how that ended.

Perhaps then we should consider not the catchy and almost hysterical advertising claims of the 1970s, but rather the news headlines that followed in their wake such as: “Con man sentenced in liquor swindle”; “amateur suckers for Scotch whisky investments”; and “Scotch whisky racket bad news.” It has to be hoped it’s not a lesson too late for the learning.’

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Ken Grier on what makes an investment-grade spirit

After a recent tasting of Dictador’s latest 2 Masters release, MoM caught up with affable marketing mastermind Ken Grier to find out just what makes a spirit ‘investment grade’.   “I help people…

After a recent tasting of Dictador’s latest 2 Masters release, MoM caught up with affable marketing mastermind Ken Grier to find out just what makes a spirit investment grade.  

“I help people do cool stuff,” says Grier, explaining his job. “I did it for Macallan for 20 years and I had a lot of fun. Now I do it for other people. These are not just vanity projects, it’s about connecting with consumers in a highly distinctive manner: telling stories, making people dream, helping people to feel smarter, cooler and giving them more status. A moment of really special enjoyment where you go, ‘Wow, I can’t believe you’ve opened that’.

Grier helped to put The Macallan on the world stage. After retiring from the Scotch mega brand’s parent company, Edrington in 2018, he set up his own consultancy firm, De-Still, where he helps brands to reach their potential. A potential that often includes becoming an ‘investment grade spirit’. He describes investment-grade spirits as having a particular cocktail of ingredients, including provenance and often some history.

The second thing we can say is that they would normally carry some degree of distinctiveness in terms of liquid. Whether that be a rarity, a complexity within that. These things make something collectible. There is definitely something about scarcity and genuine rarity.

Investment-grade spirits also have a certain aesthetic, Grier explains, whether that’s simple elegance or an activation such as the £50,000-a-bottle Bowmore and Aston Martin collaboration.

You either want something that gives an incredible user experience or something that makes people feel there is some arbitrage there – that they feel they bought smartly, they have the respect of their friends, they feel good about it. And they might make a small return on it.

Ken Grier

Ken Grier in his Macallan days (photo courtesy of Macallan)

Beyond whisky

While whisky is firmly on the investment-grade radar, Grier says there are other categories that are interesting. Though he also suggests it’s often more about the brand than the category.

Rather than rum per se, if we look at Dictador in particular, and the cocktail we talked about, it ticks a lot of the boxes. It has been around since 1913, third-generation master blender and the remarkable cache of very old rum that they’ve carefully curated in good wood is amazing.

He also points to collaborations such as the latest Dictador 2 Masters Niepoort. The ultra-premium limited edition is the work of Port winemaker Dirk van der Niepoort and Dictador’s master blender Hernan Parra. The £800 rum is made from four vintage Columbian rums from 1971, ‘74, ‘78 and ‘80 aged for 12-16 months in Port pipes.

Innovation in 2 Masters has created something unique. This idea of having real friendships, real collaborations in different terroirs, different climates is really exciting,” Grier adds.

Elsewhere, he mentions Mezcal and his client Amores’ Logia project, which makes use of wild agave. “The limit on the production is the amount of agave a donkey can carry,” he says. “It goes into the areas of scarcity and it’s a very different product experience because the agaves are very different.

Both Cognac and baijiu – and the Martell and Moutai brands in particular are on Grier’s investment-grade radar. But baijiu aside, he says it’s a tough area for white spirits. White spirits are more difficult,” he says. Some of them do have some provenance – Beefeater for example – but they don’t have rarity.

Ken Grier investment

It’s not just whisky that makes for a sound spirit investment

Secondary market

Now we know what makes an investment grade spirit, what’s in it for the drinks companies that make them? Well, Grier agrees “100%” that selling spirits on the secondary market is a good PR exercise for the producers and he speculates that The Macallan is now 39% of the entire Scotch whisky market at auction.

“I’m a big, big fan,he says of the secondary market, which can build caché for a brand and establish price points, “which can be helpful”. He also says the secondary market helps to expose brands to a wider category of people and in a different way.

Whether people use auctions to find liquid that will create a special connection with friends or as alternative asset classes, Grier says the secondary market is “very, very useful”. “Places like Sotheby’s do a great job,” he adds. “The way that they actually publicise brands, bring them to more people, tell interesting stories… and very often that raises good money for charity.” He mentions a Macallan that raised $460,000 for Charity: water.

Ken Grier investment

The Macallan Masters of Photography

To drink, collect, or both?

While there are benefits to the secondary market, there are some that believe spirits should be consumed – and not traded.

To me, it’s both,” says Grier. The liquid in the bottle is always at the centre. When I did the stuff at The Macallan, like Masters of Photography, the M Decanter, they were beautiful and interesting objet dart, but the liquid was also superb. It was put together for a specific purpose; it was aligned to the story and part of the whole objet d’art. And I’m proud of that.

“Ultimately, all of these things should be capable of being consumed and enjoyed. Because the purpose of alcoholic beverages is to consume and enjoy them,” he adds.

Grier says people chose to keep some products back because they are beautiful and because of the scarcity and intrinsic value.

“People see a value in them which is fine. And if people want to do that, that’s great. It’s when people buy them and flip them very quickly that I get worried for the industry because that means people are trying to make a very quick profit without really understanding.”

He highlights the many approaches to investment grade spirits, including the love, care and knowledge displayed by collectors as well as smart purchasers and those that open and enjoy the liquid.

“I’ve seen all sorts of things,” he says, “but if you specifically have in your mind to buy today and sell tomorrow, I’m not sure what that necessarily does for the industry.

Ken Grier investment

Casks are a tricky market to get right

The potential perils of casks

At this point in our conversation, talk turns to casks. There has been a lot in the press lately about the perils of buying casks as an investment opportunity.

“If you have a wonderful cask from a great make – a Balvenie, a Bowmore, Laphroaig, then that’s to be applauded, bottled carefully, enjoyed, and savoured. I think it’s a lot of the casks from no-name companies – ‘whisky 568% growth! Outstrips any other index!’ That’s when you’ve got to be a bit worried.

Grier reminds us that good wood is the basis of good whisky – and he says that if you’re careful about the type of wood, the type of spirit from a reputable brand, and the way it’s matured, then a cask is something that can be a legacy.

He also reveals his own legacy: “I’ve got a cask of Macallan that I laid down and I prize that.” He says it will be for his own consumption with his friends and family. (Ken, can we be your friend?)

Ken Grier

Ken Grier at the recent launch for Dictador 2 Masters Niepoort

How to get into investment-grade spirits

When it comes to offering advice on buying high-value booze, Grier has some wise words. “The first thing is: be clear on what your budget is, then look at the character of the liquid – it’s got to be something that is interesting. I’d certainly look at the brand – what do you know about it? Its heritage? Then I’d ask myself what character am I looking for from that liquid and over what time horizon? Do I want to enjoy it or keep hold of it and hope for future appreciation? Am I collecting? Be clear with your objectives. If you do that, it’s very difficult to go wrong.

Our chat winds down with a look at Grier’s own investments, which include a bottle of the 1972 Macallan Fine and Rare, which was bottled in 2002.

“I paid £500 for it, there were only 100 bottles in the cask… I saw one come up recently and it was £26,000, so that was decent,” he says.

And we part with one last story, a tale that suggests even the experts aren’t immune to the odd ‘accidentally-opened bottle’.

Grier tells the story of when his mother-in-law came to stay a few years ago, to look after the children while he went away.

“I left her a bottle of Famous Grouse – she was a Famous Grouse drinker. I came back and to my horror, my blue box bottle of 30-year-old Macallan was almost empty. That’s probably three and a half grand,” he says. Though he was happy there was a thimble left to try.

Nevertheless, an expensive babysitter.

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The Nightcap: 28 May

It’s time to welcome the long weekend with a dram and all the latest from the world of booze. 125-year-old Port, 185 years of Glenfarclas, and someone’s been overdoing it…

It’s time to welcome the long weekend with a dram and all the latest from the world of booze. 125-year-old Port, 185 years of Glenfarclas, and someone’s been overdoing it on the fantasy at Diageo, it’s all in the Nightcap: 28 May edition!

It’s the weekend folks and boy is it a good one. Not only is it longer for British readers, thanks to the Spring Bank Holiday, but it’s also the first weekend of the Islay Festival! You might have seen that we’ve already got some features on our blog regarding the event, but be sure to look out for our daily deals too, and check out this delightful Spotify playlist which should help you get in the spirit of things. Just because we can’t be on Islay itself, that doesn’t mean we can’t enjoy the wonderful whisky it produces and celebrate this amazing island.

Elsewhere on our blog, we launched one of the most incredible Father’s Day competitions you’ll ever see with Drinks by the Dram. Did someone say a year’s worth of whisky/rum as a prize? No, really. Get entering now. If you’re still stuck for ideas we have plenty of options. We also learned the story behind a very famous blend, found out how gin brands can stand out in such a crowded market, and got the inside scoop on pairing whisky and ice cream. There was even time to enjoy a party drink associated with Tom Cruise and some delicious apple brandy.

And be sure to join us this week on the Clubhouse App as we’ll have lots to talk about what with the small matter of the Islay Festival for us and our guests – Kristiane Sherry, Dave Worthington, and Richard Legg – to discuss!

Lagavulin 12 year old 2021 Special Releases

Flaming Aslan’s mane!

Diageo’s latest Special Releases labels are literally fantastic 

We got quite a surprise in our inbox this morning with a sneak preview of the labels for this year’s Diageo Special Releases. Our in-house filmmaker Ken Evans described them very accurately as “someone’s been on the fantasy novels over lockdown and had a ‘brilliant idea’.” Lagavulin has a flaming lion and Talisker is being marauded by a sea monster, while there’s all kinds of new age woo woo going on at the Singleton of Glendullan. They are wild. The labels which had been submitted for approval by the Alcohol and Tobacco Tax and Trade Bureau in the US were shown on the American Whiskyart blog. As well as the quite literally fantastic graphics, there’s a high level of information on the labels about these limited releases. The line-up consists of a Lagavulin 12-year-old aged entirely in refill casks, a Talisker 8 “from a selection of our smokiest reserves”,  a 19-year-old Singleton of Glendullan finished in Cognac casks, Cardhu 14 finished in red wine casks, Royal Lochnagar 16 from refill casks, Oban 12 from ex-bourbon and refill casks, a 13-year-old Mortlach aged in refill and virgin casks, and a mighty Lagavulin 26-year-old aged in first-fill Oloroso and PX casks. They’re all bottled at cask strength. All we can say is if the whiskies are as wild as the labels, we’re in for a treat.

 

The Three Drinkers

And then there were two

Colin Hampden-White leaves Amazon Prime show The Three Drinkers

In a move that some in the industry are comparing to Robbie leaving Take That, it was announced yesterday that Colin Hampden-White has left the Three Drinkers. Hampden-White was the spirit expert of the trio whose superpower was wearing blindingly loud shirts. The other two drinkers, Aidy Smith and Helena Nicklin, will continue the team’s myriad activities including an Amazon Prime programme, online magazine and Bring a Bottle podcast. The third spot will be kept for a “revolving range of guests” with the emphasis on “diversity”. It’s not clear how much this is Hampden White’s decision or whether he didn’t fit in with the group’s future plans. The press release, which only sports a photo of Nicklin and Smith, states that Hampden-White “plans to concentrate more on his international whisky pursuits” but also that he is “stepping down… to allow a broader range of talent to be represented.” Hampden-White himself commented: “I hope this leaves room for new faces and new ideas to further the diversity in all things for The Three Drinkers.” Smith echoed the ambiguous tone of the release saying “while we are sad to be saying ‘au revoir’ to Colin, what this change will allow us to do now is very positive. We’ve listened to what the drinks world needs right now and that is a much needed diversity push….” So did Colin get the push?

The Nightcap: 28 May

There aren’t many of these Dunnage tasting packs so get them while you can!

Glen Scotia reveals line up for 2021 virtual festival

Glen Scotia has revealed the schedule for this year’s virtual malts festival which will go live on 7 June. Whisky fans the world over will soon be able to access a range of different events and content by visiting www.glenscotia.com/festival. Master distiller Iain McAlister will be joined by a host of famous faces in a packed programme that features the likes of Charlie MacLean, Neil Ridley, Joel Harrison. Festival-goers can expect an interactive virtual tour of the distillery, a virtual tasting of this year’s festival edition, historic tales from the once whisky capital of the world as well as the keenly anticipated dunnage tasting. This year the tasting will explore the influence of casks on the final liquid, with a particular focus on bourbon, refill American oak, and European oak finishes. There’s not going to be many Dunnage Tasting Boxes so get them from www.glenscotia.com while you can.  The annual Campbeltown Malts Festival is a tremendous celebration and a great opportunity to talk about Scotland’s fifth and smallest malt-producing region and its whisky-making heritage. We highly recommend you get involved if you’re a whisky enthusiast.

The Nightcap: 28 May

Will Liam Hirt’s new program make the splash he hopes?

Still In Cask to revolutionise whisky? 

Every now again we get an email in our inbox from a brand that claims it’s going to change the industry. They almost never do, but we like the optimism. This week’s bold newcomer is Still In Cask, a global platform that says it will give consumers the opportunity to buy shares in a cask of spirit directly from a distillery, from as little as £20 a Cask Share. The self-described “innovative business” has been developed to “democratise the ownership of cask spirits and assure consumer ownership using a public blockchain”. You’ll forgive us for being a little sceptical, but the cask market appears to be the boomiest part of whisky at the moment and the amount of investment and new brands we’re seeing gives us a slight cause for alarm. However, it’s comforting to know then that the brain behind this is Liam Hirt, as in the founder of Psychopomp Microdistillery and Circumstance Distillery, which means it’s at least being run from someone who knows whisky and not just some folks who made a few quid in the city and want to diversify their portfolio. Kicking off this start-up, which is now live to the public, are some  impressive names: Nc’Nean, Circumstance, Cotswolds, Mackmyra, and Connacht Distillery, which is also promising. Hirt says that cask ownership is usually reserved “for those that can afford an entire cask or those that can form a syndicate of like-minded individuals” which leads many enthusiasts to be excluded. He also says cask purchases are “historically complex and investment focused making it even harder to get involved”. Whether he has the solution or not will remain to be seen. For more info or to register your interest, head to StillInCask.com.    

The Nightcap: 28 May

We tasted this range and are big fans

Belvedere launches Organic Infusions range

As a brand that has spent a fair amount of time and money ensuring people understand how much it values its raw materials, it’s shouldn’t come as much of a surprise to anyone that Belvedere has entered the organic category with a new range of flavoured vodkas. There are three expressions, the first being Blackberry, Lemongrass with a hint of Sage, the second is Lemon, Basil with a touch of Elderflower and the final bottling is Pear, Ginger with a drop of Linden Honey. Each is made with organic Polish rye vodka, fruits, and botanicals which are farmed with no artificial pesticides, additives, or chemicals. We were fortunate enough to taste each at a virtual launch hosted by global brand ambassador Mike Foster, who says “the time is right and the demand is there” for organic, flavoured products. He added that the new range, coupled with the brand’s Made with Nature campaign, demonstrates that “Belvedere is dedicated to evolving the vodka category into one more rich in substance, more comfortable with the natural approach and more in tune with well-being and responsible lifestyle choices.” It’s a process that has paid dividends, in our opinion. They’re beautifully made spirits, each one is elegant, flavourful, and versatile that make tremendous Vodka Sodas and we can see people having tremendous fun whipping up all kinds of cocktails. Which you’ll be able to do soon as the range will be available from Master of Malt in the near future…

The Nightcap: 28 May

Well these don’t look similar at all…

Lidl lands in hot water for ‘Hendrick’s lookalike’ gin 

Anybody who shops in Lidl or Aldi will know the discount supermarkets love to create slightly cheeky imitations of established products. Just ask Colin the Caterpillar. Once again this approach has landed them in hot water, however, after Lidl was told it must stop selling a redesigned bottle of its Hampstead Gin. At the Court of Session in Edinburgh, Lord Clark awarded an interim interdict to the makers of Hendrick’s Gin, ruling Lid’s brand breached the established brand’s trademarks. The temporary order stops Lidl from selling the redesigned bottles in Scotland following William Grant & Sons’ claim that the supermarket remodeled the Hampstead gin bottle to resemble the “apothecary-style bottle” used by its gin brand. Which, honestly, is not an unfair suggestion. They look pretty identical. Same dark bottle. Same diamond-shaped label. Similar fonts. The Hampstead gin bottle even has cucumbers on it, which feels like a line crossed (Hendrick’s is famously infused with cucumber). In an amazing turn of events, during an earlier court hearing, social media comments about the redesign were read out, which included gems such as “Hmmm…Reminds me of another gin, but I just can’t put my finger on it… ” and “Looks a lot like another bottle of gin😉”.Lidl said it was disappointed by the ruling, naturally. Maybe the folks over there can console themselves with a drop of Jameson’s. Sorry, we mean Dundalgan Blended Irish Whiskey.

The Nightcap: 28 May

How else would Glenfarclas mark the occassion?

Glenfarclas marks 185 years with whisky

The great thing about being a famous distillery is that whenever you have an occasion to celebrate you already have the perfect thing for it: whisky! So it should come as no surprise to anyone that Speyside distillery Glenfarclas has released a limited-edition single malt whisky to celebrate its 185th anniversary. The producer, who began legally distilling in May 1836, is launching just 6,000 bottles of the Glenfarclas 185th Anniversary Edition in the UK priced at £120. The whisky was made the way all Glenfarclas whisky is, with spring water that emerges from granite under the slopes of Ben Rinnes which is combined with malted barley and double distilled in direct-fired copper pot stills. For the 185th Anniversary Edition, two-thirds of the liquid was filled in sherry casks and the remaining booze into ex-bourbon casks. Oh, and those casks used to make the whisky span six decades, don’t y’know? The whole thing was then bottled up at 46% ABV and slapped with a celebratory label and tin. “Due to my grandfather’s foresight, here at Glenfarclas we are very fortunate to have casks in our dunnage warehouses from seven different decades, from the 1950s to the 2020s,” says George Grant, sixth-generation family member, and current sales director. “To mark 185 legal years we have selected some of our finest casks from across the decades and put together a whisky with old, rich, sherried flavours that remain fresh and vibrant in your glass.” And our very own Ian Buxton has produced an up-dated 185th anniversary edition of his history of Glenfarclas – available only from the distillery

The Nightcap: 28 May

They’ve been through, well, not a lot to be honest, but something.

One Eyed Spirits kills Ron de Jeremy brand and relaunches

You may be aware that about a decade ago a spirits brand decided to create a rum named after “the most famous Ron in the world” as the Spanish word for rum is ron. One Eyed Spirits chose Ron Jeremy, who at the time was known as a the porn film star who became part of mainstream culture. In the last few years, however, numerous allegations have been leveled against Jeremy and he now faces serious jail time after being arrested on charges of rape, sexual assault, and more by the Los Angeles County District Attorney’s Office. As you can imagine, One Eyed Spirits terminated its commercial agreement in August 2020, commenting that continuing with the brand was “not a morally sustainable option” and that “the joke is over”. But the brand is determined to stay in the rum world and has created a new range called Hell or High Water. There’s not much info on the rums themselves, all we know is that there will be an XO expression, the “smooth and dry Hell or High Water Reserva” and the “rich, deep and spicy Hell or High Water Spiced. Most of the press release was instead dedicated to outlining that One Eyed Spirits has overcome obstacles and backstabbing, naming its rums after the expression, “come hell or high water”, as a reference to them being willing to do whatever it takes to overcome difficulties or obstacles. It’s laid on a little thick, to be honest, and it’s worth remembering that One Eyed Spirits are far from the true victims of Ron Jeremy’s alleged actions.

Taylor's Single Harvest 1896

Compared with some whiskies, this £4k Port is a steal

We taste Taylor’s 125-year-old Port

Taylor’s has made a thing in recent years of releasing exceptionally old Ports of superb quality. And this latest release from 1896 is no exception. It’s billed as a ‘single harvest’ Port rather than a ‘vintage’ as it was aged in cask rather than bottle. For 125 years! But it’s actually a comparative youngster compared with some Taylor’s releases such as the 1863 and the 1855. Adrian Bridge, Taylor’s managing director commented: “The launch of a wine as old, valuable and unique as this one occurs only a handful of times in a generation. It is by its nature, a historic event in its own right, which Taylor’s is proud to share with wine collectors and connoisseurs of rare wines.” He added: “Savouring such a wine is a once in a lifetime experience.” Only 1,700 bottles have been filled and they will cost around £3950. It’s a lot of money but compared with say, Brora’s recent £30,000 Triptych release, it’s actually a bargain. Our tiny sample bottle filled the room with a heady aroma when we opened it. The wine is almost impossibly complex with strawberries, balsamic vinegar, furniture polish, and Brazil nuts on the nose while to taste you’d never guess it was 125 years old. It’s fresh and vital with a finish you can measure in weeks. What an extraordinary Port.

Charles-MacLean tastes El Dorado

The moment when Charlie MacLean winces is priceless

And finally… Charlie MacLean tastes tonic wine on camera

Eldorado Tonic wine has produced a series of videos with Charlie MacLean and they are hilarious. We’re sure MacLean will need no introduction to Master of Malt readers but Eldorado might. It’s a rival product to the infamous Buckfast, known as LD in Glasgow, it’s extremely popular in Scotland, hence roping in whisky expert MacLean who doesn’t even pretend to know anything about the brand. “I’m not actually sure what a tonic wine is,” he says in the first film. Nor does he pretend to enjoy it. The best bit of the video is when after coming up with some serving suggestions, he gamely sips it out of a coupe. Then at 1.14 winces visibly and says “mmmm, it’s a swanky drink”, before presumably reaching for a bottle of Lagavulin to take away the taste.

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A warning about whisky investment

Ian Buxton returns to one of his favourite topics this week, the rapidly-expanding whisky investment market. It can’t keep going up forever, he warns, and there are signs that the…

Ian Buxton returns to one of his favourite topics this week, the rapidly-expanding whisky investment market. It can’t keep going up forever, he warns, and there are signs that the bust is coming soon. You have been warned!

There’s an old story, probably apocryphal but containing a great truth, about the Great Depression of the 1930s which was triggered by the crash of the New York Stock Exchange.  Offered advice by a shoeshine boy on a share to buy Joe Kennedy began selling his portfolio. “You know it’s time to sell when shoeshine boys give you stock tips,” he’s said to have observed.

A stuck record?

Now I realise that I’m in danger of sounding like a stuck record, having criticised the whisky ‘investment’ craze for a number of years now. And it’s certainly true that, even relatively recently, had I bought some whiskies for future sale that I preferred to drink I would be sitting on some handsome capital gains. The recent appreciation in the prices of the most sought-after bottles have been truly spectacular. Undoubtedly some people have made a great deal of money.

But if you’re expecting a mea culpa or tearful confessional, please look away now. As far as I can see the inflationary trend in whisky collecting and investment is silly and getting sillier, egged on by a group of advisers, auctioneers and, sadly, even distillers who have a clear vested interest in seeing the whole mad circus continue indefinitely. Call me cynical if you will but I fear that what are seeing are prices driven ever upwards by the Greater Fool theory of investment.

On The Nightcap this week we've got fancy Macallan!

Elaborate packing on the latest release from Macallan

Whisky is for drinking

Three points then:

Firstly, whisky is for drinking, not locking away in a vault. That’s not to say that a very special or rare whisky shouldn’t be reserved for a suitably special occasion but, eventually, all whiskies should be drunk. That is why they were made and to hoard them in the pursuit of monetary gain disrespects the people who made it and the convivial spirit of whisky itself.

Secondly, all that glisters is not gold. Great whisky does not need lavish packaging. It’s expensive and wasteful. Consider for a moment some of the most expensive wines in the world – the Burgundy grand cru Domaine de la Romanée-Conti or Château Cheval-Blanc from Bordeaux for example. They’re packed in essentially the same style as their everyday supermarket own-label equivalent – slightly nicer label, much better cork and heavier glass to be sure – but the bottles will be visually identical and the differences are marginal when the relative retail prices are considered. They don’t need a crystal decanter, silver stopper, hand-crafted oak box or leather-bound journal because the wine speaks for itself. The informed buyer has no need of the superfluous trappings that increasingly surround high-priced whiskies.

And finally, I maintain that this will end in tears. Rather like Joe Kennedy’s shoeshine boy the boom in prices is drawing in all kinds of speculators and ‘investment’ funds promising advice for a fee on what whisky to buy. I’ve been around this industry for longer than I care to mention yet almost every week now I’m seeing new firms that I’ve never heard of fronted up by slick ‘Loadsamoney’ City types offering alluring returns on whisky. They, of course, make money whether you win or lose. Beware of people contacting you out of the blue with apparently generous offers. If it seems too good to be true it almost certainly is. Question their motives in offering to cut you in – if it was that easy they’d certainly keep it to themselves.

On The Nightcap this week we learn the youths are investing in casks!

Pssst, wanna buy a cask of whisky?

What goes up, must come down

Whisky is now a traded commodity on the London International Vintners Exchange (Liv-ex). The purchase of single casks is once again booming but prices bear increasingly little resemblance to trade filling prices, suggesting that should the private buyer wish to liquidate their investment by selling into the blending market an unpleasant surprise awaits.

Having no wish to be sued I name no names but suggest you proceed with caution. There have been scandals and short-lived booms before. History teaches us to beware whenever whisky and investment occur in the same sentence. Be it the distillery investment boom of the 1880s and 90s, the Pattison scandal or, more recently, the Cavendish Hamilton Spirit Management cask sales fiasco, the end is the same – the unlucky small investor limps away nursing a substantial loss.

Don’t let it be you!

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