THE 2019 FULL YEAR COLLECTORS AND INVESTORS REVIEW. RARE 101

INVESTMENT GROWTH RETURNS TO THE RARE WHISKY MARKET. CONTENTS

3 Executive Summary Full Year 2019

9 Supply and Demand

12 Investment Comparison

16 Market Share by Volume – Top 10 Distilleries League Table

20 Market Share by Value – Top 10 Distilleries League Table

23 Rare Whisky Collectors Ranking – League Table

25 Rare Whisky Investors Ranking – League Table

27 Grain in Granularity

35 Crystal Ball Gazing – What Next?

RW101 | FULL YEAR REVIEW 2019 2 FULL YEAR 2019 Executive SUMMARY

RW101 | FULL YEAR REVIEW 2019 3 SPRINGBANK RETAINED ITS HALF YEAR NUMBER ONE POSITION IN THE INVESTOR RANKINGS, CLOSELY FOLLOWED BY SILENT DISTILLERIES ROSEBANK AND BRORA.

POUND FOR POUND, MACALLAN NOW ACCOUNTS FOR ALMOST 40% OF MARKET.

RW101 | FULL YEAR REVIEW 2019 4 VOLUME AND VALUE ANALYSIS

VOLUME VALUE £ 160,000 £70,000,000

140,000 £60,000,000 143,895 120,000 £50,000,000

100,000 £57,707,707 £40,000,000 107,890 80,000

£30,000,000 83,713

60,000 £40,772,550

£20,000,000

40,000 58,758 £14,211,767 £9,562,405 43,458 £10,000,000 £25,060,058 20,000

0 £0 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019

The number of recorded bottles of Single Malt The recorded £ value of collectable bottles of sold at auction in the UK in FY Single Malt Scotch Whisky sold at auction in the 2019 increased by 33.37% to 143,895 (107,890 UK in FY 2019 rose by 41.54% to a record high of were sold in FY 2018). £57,707,707 (FY 2018 value was £40,772,550).

RW101 | FULL YEAR REVIEW 2019 5 RW101 | FULL YEAR REVIEW 2019 6 AVERAGE BOTTLE VALUE

AVERAGE £ PER BOTTLE APEX 1000 INDEX £450.00 45.00%

£400.00 40.00%

£350.00 35.00% £401.04 38.37% £377.91 £300.00 30.00%

£250.00 25.00% 30.01% £299.36 27.51%

£200.00 20.00% £241.87

£150.00 £220.04 15.00%

£100.00 10.00% 14.36%

£50.00 5.00% 7.17%

£0 0.00% 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019

The average per-bottle price increased by From a small mid-year loss of 0.26%, the broadest 6.12%, from £377.91 in 2018 to £401.04 in 2019. measurement of the market, the Apex 1000 Index, returned to growth in the second half of the year, finishing up 7.17%.

RW101 | FULL YEAR REVIEW 2019 7 THE TOP TEN INVESTORS DISTILLERIES

THE TOP TEN DISTILLERIES SOUGHT AFTER BY INVESTORS ARE:

SPRINGBANK

ROSEBANK

BRORA

BEN WYVIS

KILLYLOCH

DALMORE

BOWMORE

GLENUGIE

LOCHSIDE

PORT ELLEN

Despite impressive market share results, from an investment perspective, Macallan exited the top 10 investor rankings for the first time, finishing in 11th place.

RW101 | FULL YEAR REVIEW 2019 8 Supply AND DEMAND

TO REPEAT THE OPENING OF THE HALF YEAR REPORT: “THE FIRST HALF OF 2019 SAW VAST SUPPLY ON THE AUCTION MARKET. IN OUR OPINION, OVERSUPPLY”.

THROUGHOUT THE SECOND HALF OF 2019 SUPPLY REMAINED HIGH, BUT RELATIVELY CONSISTENT. THAT ENABLED DEMAND TO CATCH UP AND ULTIMATELY EXCEED SUPPLY.

RW101 | FULL YEAR REVIEW 2019 9 MONTHLY VOLUME AND VALUE ANALYSIS

MONTHLY VOLUME 2018/2019 MONTHLY VALUE 2018/2019 18,000 £12,000,000

16,000 15,830 £10,215,760 15,220 £10,000,000 14,000 13,347

12,000 11,495 £8,000,000 11,099 11,006 10,867 9,961 11,985 12,003

10,000 11,633 11,444 £6,096,163 11,160 8,870 £6,000,000 10,554 £5,460,018 £5,418,466

8,000 10,066 £4,845,076 9,158 9,104 8,916 8,349 7,976 7,746

6,000 7,111 £4,000,000 6,885 £3,343,511

4,000 £4,519,199 £4,379,357 £4,171,662 £4,322,345 £4,387,367 £4,160,410 £2,000,000 £4,236,673 £4,010,733 £3,861,500 2,000 £3,342,756 £3,127,263 £3,125,598 £3,148,340 £2,627,833 £2,562,155 £2,441,534 £2,327,461 0 0 £2,349,077 JUL '18 JUL '18 JUL '19 JUL '19 SEP '18 SEP '18 SEP '19 SEP '19 FEB '18 FEB '18 FEB '19 FEB '19 JUN '18 JUN '18 JAN '18 JAN '18 JAN JUN '19 JUN '19 JAN '19 JAN '19 JAN APR '18 APR '18 DEC '18 DEC '18 APR '19 APR '19 DEC '19 DEC '19 OCT '18 OCT '18 MAY '18 MAY '18 MAY OCT '19 OCT '19 MAY '19 MAY '19 MAY AUG '18 AUG '18 AUG AUG '19 AUG '19 AUG NOV '18 NOV '18 NOV NOV '19 NOV '19 NOV MAR '18 MAR '18 MAR '19 MAR '19

October 2019 showed a spike in both the volume and value of bottles sold at auction in the UK. The huge value peak can largely be put down to a significant collection of whisky being sold as a one-off at Sotheby’s. If we add a trendline, while the upwards trajectory is still clear, the rate of growth appears to be slowing as the UK secondary market for rare whisky starts to mature. We should not expect the vast rates of growth moving forward that we have seen in the past. As the number of bottles in the market is clearly finite, once supply plateaus, assuming demand remains the same or increases (which it evidently is doing) this bodes well for further investment gains.

RW101 | FULL YEAR REVIEW 2019 10 “...OCTOBER 2019 SHOWED A SPIKE IN BOTH THE VOLUME AND VALUE OF BOTTLES SOLD AT AUCTION IN THE UK.”

RW101 | FULL YEAR REVIEW 2019 11 Investment COMPARISON

THIS COMPARISON STARTED AT THE END OF 2015 OBSERVING PERFORMANCE FIGURES FROM 31st DECEMBER 2014.

WE CONTINUE TO PROVIDE THESE AS A RUNNING COMMENTARY ON SCOTCH WHISKY’S PERFORMANCE AS AN ALTERNATIVE ASSET-CLASS IN ITS OWN RIGHT.

RW101 | FULL YEAR REVIEW 2019 12 THE 2019 FY FIGURES ARE CHARTED ALONGSIDE A RUNNING TOTAL

FY 2019 FIVE YEAR PERIOD FROM DECEMBER 2014 25.00% 200.00%

180.00%

20.00% 23.49% 160.00% 181.76%

140.00% 18.87% 15.00%

120.00% 14.51% 10.00% 100.00% 12.10%

80.00%

5.00% 7.17% 60.00% 75.09%

40.00%

0.00% 28.18% 15.89% 20.00% 14.87% 36.52% -4.19%

-5.00% 0.00%

FTSE 100 FTSE 100 GOLD $/OZ APEX 1000 APEX 1000 GOLD $/OZ DIAGEO (DGE) DIAGEO (DGE) LIV-EX FW 1000 LIV-EX FW 1000 BRENT CRUDE $PB BRENT CRUDE $PB

From a pure investment perspective, Single Malt Scotch Whisky had its worst year as an investment since records began. To add balance, the Bank of recently reduced the interest rates on some of their savings accounts from a heady 0.2% pa gross, to a whole 0.1% pa gross.

RW101 | FULL YEAR REVIEW 2019 13 APEX1000 – 5 YEAR PERFORMANCE AND 5 YEAR AVERAGE

45.00%

40.00%

35.00% 38.37% To add further balance; on an averaged 30.00% five-year basis, our benchmark Apex 1000 Index has increased by an average of 23.46%

25.00% 30.01% per year.

27.51% The late publishing on this report has shown 20.00% us that in January 2020 the Apex 1000 Index

23.46% increased by 0.92% where January 2019 saw

15.00% a dip by 2.01%. It’s still very early days yet, however, we appear to be returning to more buoyant trading conditions again. 10.00% 14.28%

5.00% 7.17%

0.00% 2015 2016 2017 2018 2019 AVERAGE

RW101 | FULL YEAR REVIEW 2019 14 Market SHARE 2019

RW101 | FULL YEAR REVIEW 2019 15 Volume NUMBER OF BOTTLES SOLD

EACH DISTILLERY IS MEASURED ACCORDING TO ITS PERCENTAGE OF MARKET SHARE OF THE NUMBER OF BOTTLES SOLD AT AUCTION IN THE UK OVER THE COURSE OF 2019.

THIS IS THEN RANKED AS A LEAGUE TABLE AND COMPARED TO THE FULL YEAR 2018. WE’VE ALSO INCLUDED THE 2019 HALF YEAR RESULTS TO PROVIDE MORE INSIGHT.

RW101 | FULL YEAR REVIEW 2019 16 TOP 10 VOLUME MARKET SHARE

ANNUAL RANK 31 DECEMBER 2018 % HALF YEAR 2019 % 31 DECEMBER 2019 % MOVEMENT

1 MACALLAN 13.85% MACALLAN 16.62% MACALLAN 15.62% =

2 HIGHLAND PARK 5.61% HIGHLAND PARK 4.72% ARDBEG 4.93% UP 1

3 ARDBEG 5.02% ARDBEG 4.65% HIGHLAND PARK 4.41% DOWN 1

4 BRUICHLADDICH 4.10% BRUICHLADDICH 4.01% BOWMORE 3.81% UP 1

5 BOWMORE 3.72% BOWMORE 3.79% LAPHROAIG 2.96% UP 4

6 SPRINGBANK 3.63% 3.28% GLENFIDDICH 2.90% UP 2

7 GLENDRONACH 3.57% LAPHROAIG 2.85% GLENDRONACH 2.74% =

8 GLENFIDDICH 3.26% GLENDRONACH 2.80% LAGAVULIN 2.72% UP 5

9 LAPHROAIG 3.09% SPRINGBANK 2.49% BRUICHLADDICH 2.64% DOWN 5

10 GLENMORANGIE 2.92% LAGAVULIN 2.44% SPRINGBANK 2.62% DOWN 4

On a year to date basis Macallan have extended their grip on the market. Their market share of volume has, however, shrunk from their 2019 half year peak. Highland Park and Ardbeg appear to be in a long-term tug-of-war for second and third place. Both have impressive ‘back catalogues’ of collectables and both are capable of releasing some of the finest spirit in the industry. Bruichladdich’s drop isn’t as extreme as it seems. So we can compare distilleries at a sub-brand level as an investment, we’ve now split Bruichladdich into three – Bruichladdich, Bruichladdich (Octomore) and Bruichladdich (Port Charlotte). This mirrors what we’ve previously done for Springbank and for Tobermory.

RW101 | FULL YEAR REVIEW 2019 17 “SIGNIFICANT YEAR ON YEAR GROWTH IN VOLUME AND VALUE WAS ACHIEVED BY ROYAL LOCHNAGAR. A SINGLE CASK RELEASE WAS AT THE HEART OF THAT.”

RW101 | FULL YEAR REVIEW 2019 18 LARGEST % CHANGE IN VOLUME SHARE

ROYAL LOCHNAGAR 191.08%

OBAN 136.98%

CLYNELISH 121.79%

BENRINNES 55.46%

GLEN SCOTIA 46.33%

GLENALLACHIE 45.16%

GLEN GARIOCH 38.71%

MILLBURN 37.92%

GLENDULLAN 34.56%

INVERLEVEN 29.40%

0.00% 50.00% 100.00% 150.00% 200.00%

As a percentage increase in market share for the whole of 2019, it is a top-three Diageo clean sweep as it was at the half year.

RW101 | FULL YEAR REVIEW 2019 19 Value

USED IN CONJUNCTION WITH VOLUME, THE £ VALUE ‘SHARE-OF-WALLET’ FIGURES CAN BE INSIGHTFUL FOR THE COLLECTOR/INVESTOR.

IF VOLUME FOR A PARTICULAR DISTILLERY REMAINS STATIC OR INCREASES AND THE £ VALUE DECLINES, THIS COULD SIGNAL A SOFTENING IN THE MARKET FOR BOTTLES FROM THAT DISTILLERY. CONVERSELY, IF VOLUMES DECREASE BUT VALUES INCREASE OR REMAIN THE SAME, THIS COULD INDICATE A HARDENING OF PRICES AND INCREASING DEMAND.

RW101 | FULL YEAR REVIEW 2019 20 TOP 10 VALUE MARKET SHARE

ANNUAL RANK 31 DECEMBER 2018 % HALF YEAR 2019 % 31 DECEMBER 2019 % MOVEMENT

1 MACALLAN 37.79% MACALLAN 37.11% MACALLAN 39.53% =

2 BOWMORE 7.58% BOWMORE 8.79% BOWMORE 8.59% =

3 ARDBEG 4.26% ARDBEG 4.38% ARDBEG 4.06% =

4 PORT ELLEN 3.39% PORT ELLEN 3.41% SPRINGBANK 3.06% UP 2

5 HIGHLAND PARK 3.36% LAPHROAIG 3.22% PORT ELLEN 3.01% DOWN 1

6 SPRINGBANK 2.81% SPRINGBANK 3.02% LAPHROAIG 2.96% UP 1

7 LAPHROAIG 2.66% HIGHLAND PARK 2.69% HIGHLAND PARK 2.65% DOWN 2

8 GLENFARCLAS 2.34% GLENDRONACH 2.04% LAGAVULIN 2.06% UP 4

9 GLENDRONACH 2.28% LAGAVULIN 2.00% GLENFARCLAS 1.89% DOWN 1

10 GLENFIDDICH 1.95% GLENFARCLAS 1.90% BRORA 1.82% UP 4

As with volume, the top 10 distilleries are ranked and then measured against their 2018 results. As with our volume results, we’ve added in the 2019 half year figures for comparison and trend analysis. There is almost no stopping Macallan’s utter dominance of the collectors market (we’re not saying the investors or drinkers market), with virtually £40 out of every £100 spent at auction in the UK on Single Malt Scotch Whisky being spent on Macallan.

RW101 | FULL YEAR REVIEW 2019 21 LARGEST % CHANGE IN £ VALUE SHARE

ROYAL LOCHNAGAR 207.26%

BRACKLA (ROYAL) 83.81%

CLYNELISH 78.97%

TORMORE 65.81%

INVERLEVEN 64.21%

FETTERCAIRN 46.27%

BENRINNES 41.94%

SPRINGBANK (HAZELBURN) 36.94%

DALMORE 30.31%

MILTONDUFF 29.69%

0.00% 50.00% 100.00% 150.00% 200.00% 250.00%

The top 10 distilleries which increased their £ value market share in 2019 are listed above.

RW101 | FULL YEAR REVIEW 2019 22 RARE WHISKY Collectors RANKING

THE COLLECTORS RANKING IS A LEAGUE TABLE BASED ON AN EQUAL WEIGHTING FOR VOLUME AND VALUE SOLD AT AUCTION IN THE UK USING ALL DATA FROM THE ENTIRE DATABASE RATHER THAN THE ANNUAL NUMBERS USED FOR SHOWING MARKET SHARE.

RW101 | FULL YEAR REVIEW 2019 23 COLLECTORS LEAGUE TABLE

31ST DECEMBER 31ST DECEMBER MOVEMENT 31ST DECEMBER 31ST DECEMBER MOVEMENT RANK RANK 2018 2019 (FULL YEAR 2019) 2018 2019 (FULL YEAR 2019)

1 MACALLAN MACALLAN = 16 GLENLIVET ARRAN DOWN 1

2 ARDBEG ARDBEG = 17 CAOL ILA CAOL ILA =

3 BOWMORE BOWMORE = 18 DALMORE DALMORE =

4 HIGHLAND PARK HIGHLAND PARK = 19 TALISKER CLYNELISH UP 10

5 BRUICHLADDICH LAPHROAIG UP 1 20 ROSEBANK BUNNAHABHAIN UP 2

6 LAPHROAIG GLENFIDDICH UP 1 21 BRORA TALISKER DOWN 2

7 GLENFIDDICH SPRINGBANK UP 1 22 BUNNAHABHAIN BRORA DOWN 1 23 ABERLOUR ABERLOUR = 8 SPRINGBANK LAGAVULIN UP 1 24 GLEN GRANT MORTLACH UP 1 9 LAGAVULIN GLENMORANGIE UP 1 25 MORTLACH ROSEBANK DOWN 5 10 GLENMORANGIE PORT ELLEN UP 1 26 GLENGOYNE GLEN GRANT DOWN 2 11 PORT ELLEN BALVENIE UP 1 27 GLENROTHES GLENROTHES = 12 BALVENIE GLENDRONACH UP 1 28 KILCHOMAN GLENGOYNE DOWN 2 13 GLENDRONACH GLENFARCLAS UP 1 BRUICHLADDICH 29 CLYNELISH NEW 14 GLENFARCLAS BRUICHLADDICH DOWN 9 (OCTOMORE) SPRINGBANK BRUICHLADDICH 30 NEW 15 ARRAN GLENLIVET UP 1 (LONGROW) (PORT CHARLOTTE)

Owing to the change in the way Bruichladdich is being reported, that’s the biggest shift. Clynelish’s ever increasing popularity moves it up a massive ten places as more interesting bottles appear more frequently.

RW101 | FULL YEAR REVIEW 2019 24 RARE WHISKY Investors RANKING

THE INVESTORS DISTILLERY RANKING IS BASED 80% ON THE PURE % INCREASE IN VALUE FOR ALL BOTTLES, WITH A SMALL 10% WEIGHTING ON THE HIGHEST AVERAGE PRICE (ALL BOTTLES) AND THE OVERALL HIGHEST PRICE (10%) OF A SINGLE BOTTLE.

RW101 | FULL YEAR REVIEW 2019 25 INVESTORS LEAGUE TABLE

31ST DECEMBER 31ST DECEMBER MOVEMENT 31ST DECEMBER 31ST DECEMBER MOVEMENT RANK RANK 2018 2019 (FULL YEAR 2019) 2018 2019 (FULL YEAR 2019)

1 BOWMORE SPRINGBANK UP 2 16 GLENURY ROYAL DALLAS DHU UP 1

2 BRORA ROSEBANK UP 11 17 DALLAS DHU GLENLOCHY DOWN 2

3 SPRINGBANK BRORA DOWN 1 18 DALMORE ARDBEG DOWN 7

4 MACALLAN BEN WYVIS UP 3 19 GLEN GARIOCH LAPHROAIG DOWN 13

5 GLENUGIE UP 3 20 COLEBURN GLEN ORD DOWN 2

6 LAPHROAIG DALMORE UP 4 21 MILLBURN COLEBURN DOWN 1

7 BEN WYVIS BOWMORE DOWN 6 22 LOCHSIDE GLEN ALBYN DOWN 2

8 KILLYLOCH GLENUGIE DOWN 3 23 CONVALMORE GLENURY ROYAL DOWN 7 SPRINGBANK 9 CLYNELISH LOCHSIDE UP 13 24 CONVALMORE DOWN 1 (LONGROW) 10 DALMORE PORT ELLEN UP 2 25 GLENDRONACH MORTLACH UP 3

11 ARDBEG MACALLAN DOWN 7 26 BANFF BRACKLA (ROYAL) UP 22 ST MAGDALENE 12 PORT ELLEN NEW ENTRY 27 LAGAVULIN GLEN GRANT UP 5 (LINLITHGOW) 13 ROSEBANK CLYNELISH DOWN 4 28 MORTLACH GLENDRONACH DOWN 3 SPRINGBANK 29 GLENESK/HILLSIDE DOWN 5 14 ST MAGDALENE ST MAGDALENE = (LONGROW) 15 GLENLOCHY MILLBURN UP 6 30 HIGHLAND PARK BANFF DOWN 4

This league table is where we place the most emphasis for brands being sought out by connoisseurs, collectors and investors. It is a temperature test for demand and a measurement of which bottles are increasing, and equally decreasing, most in value. Springbank moves up three places for the year and retains its number one position from the half year report. The other significant shift is Macallan exiting the top ten ‘investors’ distilleries for the first time. Other significant changes are Laphroaig and Bowmore moving down the league by thirteen places and six places respectively.

RW101 | FULL YEAR REVIEW 2019 26 GRAIN IN Granularity

RW101 | FULL YEAR REVIEW 2019 27 IN EDRINGTON BEAM ’S “THE WHISKY YEARBOOK” SINGLE GRAIN WAS FEATURED AS BELOW.

“Single grain continues to make an impact. Over the last four years we have seen the growth of a new “category” within the category: The relentless growth of single – led by brand leader, Haig Club. The category now accounts for 89,178 cases and sales of £21.5 million in 2018, a rise of 24.7% from 2017. What is more, this growth is forecast to continue. We forecast that sales will reach 179,783 cases in 2022, which would represent an increase of 101.6% in just four years – faster growth than the gin category (though from a smaller base). In the same time period, we can see the value of single grain rising to £42.1 million, representing a 95.9% increase on 2018 levels.”

This is really the first time a spotlight… maybe a small torch has been shone onto the category at all. Previously overlooked, even ignored (we are guilty of that too), could Single Grain Scotch Whisky represent any sort of an attractive investment?

RW101 | FULL YEAR REVIEW 2019 28 VOLUMES AND VALUES

VOLUME VALUE AVERAGE £ VALUE 2,000 £300,000 £160

1,800

£250,000 £150

1,600 1,768 £154.79

1,400 £273,672.42 £200,000 £140 £146.83

1,200 £139.91 1,000 £150,000 £130 1,114

800 £163,573.16 £128.63

777 £100,000 £120 600

400 £53,254.51

£108,709.01 £110 £50,000 £116.75 414

200 £27,203.52 233

0 £0 £100

2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019

We undertook some analysis into volumes, value and investment performance. The UK auction market for bottles of Single Grain Scotch Whisky is a fraction of the market.

RW101 | FULL YEAR REVIEW 2019 29 AS A DIRECT COMPARISON THE SINGLE GRAIN MARKET IS STILL FRACTIONAL TO THE SINGLE MALT MARKET; IN COMPARISON TO THE MALT MARKET. THAT SAID, ALL THE PERFORMANCE METRICS ARE HEADING IN 2019 THERE WERE – IN THE RIGHT DIRECTION –

143,895 1,768 bottles of bottles of Single Grain Scotch Whisky SINGLE GRAIN VOLUME Single Malt sold at auction in the UK. Scotch Whisky has increased by 658.80% GRAIN IS 1.23% sold at auction of the malt market in over the past five years. in the UK. terms of VOLUME.

£57,707,707 £273,672 in value of in value of Single Grain Scotch Whisky SINGLE GRAIN £ VALUE Single Malt sold at auction in the UK. has increased by 906.02% Scotch Whisky GRAIN IS 0.47% sold at auction of the malt market in over the past five years. in the UK. terms of VALUE.

£401.04 was the average £154.79 was SINGLE GRAIN AVERAGE price per bottle the average price £ PER BOTTLE of Single Malt per bottle of Single Grain Scotch Whisky Scotch Whisky sold at has increased by 32.58% sold at auction auction in the UK. over the past five years. in the UK.

RW101 | FULL YEAR REVIEW 2019 30 SINGLE GRAIN 100 INDEX (SG100)

120.00

115.00

110.00

105.00

100.00

95.00

90.00

11/06/2018 26/11/2018 21/01/2019 25/11/2019 25/12/201722/01/201819/02/201819/03/201816/04/201814/05/2018 09/07/201806/08/201803/09/201801/10/201829/10/2018 24/12/2018 18/02/201918/03/201915/04/201913/05/201910/06/201908/07/201905/08/201902/09/201930/09/201928/10/2019 23/12/2019

In terms of a meaningful index to measure the investment performance of Single Grain as a category, there’s not enough market data to work back very far. We have been able to create the Single Grain 100 Index starting at the end of 2017.

RW101 | FULL YEAR REVIEW 2019 31 AVERAGE PRICE PER 70CL BOTTLE THE SG100 INDEX INCREASED £800 6.71% IN 2018 AND 8.29% IN 2019. IN EFFECT OUT-PERFORMING £700 SINGLE MALT FOR 2019! £600 £714.27

£500 THE AVERAGE PRICE PER 70CL BOTTLE OF SINGLE GRAIN SOLD £400

AT AUCTION BY AGE STATEMENT £443.38 £300 IS VERY TELLING. WE’RE PURELY

USING INDEPENDENT BOTTLES £200 HERE AS THERE ARE SO VERY £236.04 FEW OFFICIAL BOTTLES WITH £100 £61.17 MEANINGFUL DATA TO WORK WITH. £130.41 0 £111.45 THE SINGLE MALT FIGURES ARE 20 YEAR OLD 30 YEAR OLD 40 YEAR OLD

ALSO PURELY FOR INDEPENDENT Single Grain Single Malt BOTTLES AND EXCLUDE MACALLAN, BOWMORE, DALMORE The above graph illustrates the average price differences between similar aged Single Malt and Single Grain bottles. AND ANY SILENT STILLS AS THESE For Single Grain, the 30 year old shows a +82.20% value SIGNIFICANTLY DISTORT CERTAIN increase compared to the 20 year old, and the 40 year old AGE STATEMENTS. shows a +111.79% increase on the 30 year old. With Single Malts, these same comparisons show that a 30 year old's value increases by +239.99% from the 20 year old bottle, and this drops to only a +61.10% increase between the 30 and 40 year old bottles.

RW101 | FULL YEAR REVIEW 2019 32 “SINGLE GRAIN AUCTION PRICES (INDEPENDENT BOTTLES) INCREASE IN VALUE Y 111.79% FROM A 30 YEAR OLD TO A 40 YEAR OLD.”

RW101 | FULL YEAR REVIEW 2019 33 FROM A ‘VALUE PER YEAR’ So, is Single Grain the next BIG ‘thing’? Never say never, but in reality, no it isn’t in our opinion. It PERSPECTIVE, SINGLE GRAIN DOES lacks the allure and years of industry marketing that malts have had. However the sheer volume APPEAR TO REPRESENT SOMETHING (or lack-of) on the market will to some degree OF A GOOD-VALUE-BUY. preserve its scarcity. But don’t overlook older aged Single Grains, as there’s clearly increasing demand (the average price per bottle at auction is increasing along with supply which is always a good sign of high IF YOU’RE LOOKING FOR A demand). There’s little, if any, chance they’ll even slightly catch up with Single Malts on a ‘price- 40TH BIRTHDAY GIFT OR A 30TH per-age’ basis, but bottles might just be steady and consistent with a 6% to 8% increase in value WEDDING ANNIVERSARY GIFT per year. The SG100 Index will now feature online THEN SINGLE GRAIN REPRESENTS along with our other suite of indices. A GREAT BUYING OPPORTUNITY, COSTING JUST 33.05% OF ITS EQUIVALENT SINGULARLY The Edrington Beam Suntory Whisky Yearbook can be MALTED COUSIN. downloaded here: https://www.thewhiskyyearbook.com/wordpress/wp-content/ uploads/2019/06/The-Whisky-Yearbook-UK-2019.pdf)

RW101 | FULL YEAR REVIEW 2019 34 Crystal Ball GAZING

RW101 | FULL YEAR REVIEW 2019 35 ARE WE STARTING TO SEE FATIGUE CREEPING INTO THE MARKET AS THERE APPEAR TO BE MANY LIMITED RELEASES WITH NO AGE STATEMENT AND A RELATIVELY HIGH PRICE-TAG?

ARE CONSUMERS (DRINKERS, COLLECTORS AND INVESTORS) STRUGGLING TO DIFFERENTIATE WITH MACALLAN BOTTLINGS NOW? FOR THE FIRST TIME IN MANY YEARS, WE’RE SEEING LIMITED RELEASE MACALLAN BOTTLES SELL FOR LESS THAN THEIR RETAIL PRICE AT AUCTION. THE 2019 EASTER ELCHIES BLACK IS A GOOD EXAMPLE; IT RETAILED FOR £750 AND NOW REGULARLY SELLS AT AUCTION FOR £600–£650.

RW101 | FULL YEAR REVIEW 2019 36 Unless something changes, in our opinion, Macallan will have little chance of regaining their number one spot in the investment league in the secondary market. Anecdotally, based on the many conversations we have with fellow collectors, it looks like Macallan may have lost the ‘heart’ of some of their most loyal previous brand advocates. There will always be ultra-rarities which will grab headlines and attract much positive press… The glossy crystal chandelier above the ocean liner ball-room appears in good order but the engine room most of us mere mortals operate within might need a service. More positively, demand for ‘traditional’ Macallan casks is still very high. Prices have gone through a revolutionary phase of growth in the past five years and demand is still very much exceeding supply for heavily sherried great quality casks. These are so rare now, they’re almost becoming viewed in the same light as the very rarest of bottles – prized possessions of almost limitless value. But is it simply that the balance of supply and demand needs to be redressed? If £4 out of every £10 spent at auction in the UK is on Macallan then surely it’ll either take time for demand to catch up or the market requires some calm… e.g. stop ‘flipping’ contemporary Macallan and actually drink some!

RW101 | FULL YEAR REVIEW 2019 37 WHAT DO YOU BUY THEN? Discontinued younger age stated ‘standard’ bottles from many years ago continue to be hugely desirable. Laphroaig 10 year olds from the 1970s, Lagavulin 12 year olds, Talisker 8 year olds…the list is almost endless. Tiny supply and the continued demand of the curious connoisseur should keep these bottles of yesteryear ahead of the masses. Age matters more and more – While NAS (No Age Statement) is necessary to maintain supply in a market where we become flippant with age (e.g. “it’s just a 10-year-old”), older age stated Scotch is becoming more and more prized. Whatever the quality, whatever the brand/ distillery, older is better from an investment perspective. With the exception of a few rarities (Tun1401 batch 1 etc) this won’t change. We also think there should be a pride in stating an age however young that may be. Be three and be proud! We’re still seeing increased interest in some of the previously overlooked gems which are becoming more desirable as an increasing number of consumers become connoisseurs, then collectors. We still see value in buying Clynelish, Mortlach, GlenDronach, Talisker and many others.

RW101 | FULL YEAR REVIEW 2019 38 AS THE CORONAVIRUS TAKES HOLD, IT’LL BE FASCINATING TO SEE WHETHER SCOTCH CAN ACT AS A HEDGE FOR TRADITIONAL MARKETS. IT’S A PHYSICAL ASSET WHICH IS EASILY STORED AND BOUGHT REMOTELY.

Some are saying buy big into gold. Will that be the case for liquid gold?

RW101 | FULL YEAR REVIEW 2019 39 © RARE WHISKY 101 ALL RIGHTS RESERVED