Is Whisky Investment a good idea?

Last Updated on 30 October 2024 by Dan Wilderness

Hello everyone! I’m a member of various groups debating a number of personal finance topics, and one that occasionally crops up is the idea of investing in whisky, and if it represents a good asset as an investment opportunity or not. It’s started to become to be a surprisingly common question to be asked, so much so that I’ve decided to do a post on it.

(Obviously I’m talking long term immediate consumption – a good whisky is something I’ve developed an appreciation for! If you’ve got a favourite tipple please do let us know in the comments below).

Investment in Whisky tends to be one of those things that pique people’s interest

More seriously however, there’s a number of reasons I’m quite cynical about this part of the investment market, and so I thought I’d write some detail on where there may be benefit from investing in whisky, but some of the real areas of caution you need to beware of.

As ever – our normal note that we take care with what we write on this site but it is not official “financial advice” and whatever investments and savings you enter need to be right for your circumstances. We always suggest doing your own further research. If you’re in doubt about anything, it’s worth consulting a regulated and reputable financial advisor who can provide tailored advice built for you.

Unbiased is a resource that can help you match with an advisor who matches your needs.

How does Whisky Investment work?

There are two main core types of Whisky Investment, both of which are generally considered to be alternative rather than mainstream investment:

Whisky Cask Investment

With Whisky cask investment, you “put up” the money in advance to buy a cask at a reduced rate, in the understanding that it cannot be sold until it has matured. At the point it does, you theoretically receive any profits from the bottle or sale.

Whisky Bottle Investment

With Whisky bottle investment, you are literally purchasing an existing bottle of (usually rare) Whisky in the expectation that it’s value will increase via scarcity over time.

Pros and Cons of Whisky Investment

In this case, I am purposefully going to start with the Cons, because I think they deserve to be centre of attention.

Cons of Whisky Investment

Whisky is an unregulated Investment

Whisky is completely unregulated as an investment, meaning there’s little protection for you in the market if things go wrong. If someone sells you an expensive bottle for investment that turns out to be actually Jack Daniels, your investment becomes worthless or the person that takes your money vanishes into thin air, there’s no protections for you at all.

We’d always caution against investing in unregulated investments at all times – but if you’re considering it, you really need to do your research on who you’re dealing with.

The unregulated nature differs to more mainstream assets such a stocks and bonds which are generally move heavily regulated and subject to investor protections.

Being unregulated is a painful combination with our next point:

Whisky investment is difficult to verify against fraud

The very nature of whisky investment means you’re buying a “closed” product which you cannot open, be that a bottle/cask or unseen product.

That’s really challenging, because it creates real challenges in verifying that the product is what it says it is. There are plenty of legitimate firms and breweries operating in the sector who act with good intentions – but also plenty of fraudsters who see the opportunity to rip you off.

Some of the more reputable companies publish a regular record of specifically who owns which casks with them.

Whisky investment can be a gamble, unless you’re a subject matter expert.

There are many Whisky’s out there, and masses of variability in terms of what will actually sell or not! It’s very easy to create projections on future value and what an investment might return you, but much harder to actually deliver on them.

Knowing if something is a great investment in the Whisky space really requires a depth of knowledge – proven trends and track records or what works in particular markets.

One of our “Golden Rules” here at The Financial Wilderness is to only invest in something you understand, else keep it as simple as possible.

Whisky is an illiquid investment

Obviously it’s the purest sense of the word Whisky is a liquid – but in an investment sense to make any meaningful gain will require holding on to the investment for a significant amount of time, and the ability to always sell out can’t be assumed if you need the money.

Pros of Whisky Investment

Whisky prices have increased

There has been some good performance in the overall Whisky market over the last few years with an overall trend for vintage bottles seeing increases in value since 2018. For those lucky enough to hold them, there’s also what could be described as significant increases for some rare bottles.

Whisky investment is tax free in the UK

Investing in a Whisky Cask in the UK, made in a barrel and stored in a warehouse is classified as a “wasting asset” meaning that it has an expected life of less an 50 years. As such, the investment becomes exempt from capital gains tax on the return (the exact benefit will depend on your tax band).

Alternatives to Whisky Investment

A alternative and potentially safer way to invest in Whisky can be to buy shares in publicly listed drinks companies.

A number of the well known brand in Whisky are actually owned by the drinks giants – and so you can limit your risk against very specific investments by buying shares in them instead, in expectation there may be some correlation between the two.

What do we think of Whisky investment?

(All opinion based rather than financial advice). Despite recognising the price appreciation in Whisky investment, we would note that the returns over the same period haven’t been that different if investing in major stock market indices.

Whilst admittedly Whisky investing might be more fun, we guide towards taking the route of minimal risk for maximum gain – so prefer standard financial markets products which are more liquid and face less of the challenges of market fraud.

The one exception is for those who can confidently say they really know their stuff about the Whisky market – real expertise is something that can put you ahead!

Any questions?

If you have any questions about our article on we’d love to hear from you! Just drop us a note in the comments below.

And that’s it!

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