The Single Malt Fund Trading Company

15 April, 2020

2020 – Q1 Whisky Investment and Market report

Covid-19

Firstly, we hope that our readers and their families are safe and well and coping during these unprecedented times. From its roots in Wuhan, China, Covid- 19 has now spread across the globe, devastating the world economy. Business is on hold, central banks are printing money like it is going out of fashion and stock markets are going up and down like a yoyo. The drinks industry has, of course been rocked, like everyone else. The on trade in most markets has shut down, although losses have been, in some way, compensated by people stockpiling from the off trade ahead of lockdowns. Moet Hennessy (owners of Glenmorangie and Ardbeg) reported sales of -13% in Q1, which was not bad given the climate. Q2 is expected to be much worse. Diageo, the world’s biggest alcoholic drinks company has estimated the impact of Covid-19 on organic net sales to be between GBP 225 million and GBP 325 million in this fiscal year. Pernod Ricard is forecasting a 20% decline in sales this year and, like Diageo, are suspending share buy backs in order to preserve cash. Production across the whisky world has either been scaled back or halted although talks are now under way to reopen distilleries and bottling plants. Everyone agrees that the long term prospects for the Scotch industry remain strong, so it is good to see that, amid the crisis, the industry is focusing on looking after it’s people and supporting industry partners, such as bartender associations.

The Rare Whisky Market

In the midst of the Covid-19 crisis, we received news from Rarewhisky101, the leading analysts of the secondary whisky market, that the secondary market for rare whisky remains buoyant. The key takeaways from their Q1 2020 report were as follows:

  • The APEX 1000 (covering 1,000 different bottles/whiskies with more than 36,000 measure points in Q1) increased 3.22% during Q1 2020.
  • Volume wise, 33,665 bottles were sold during Q1 2020, compared to 34,000 in Q1 2019 – a decrease by merely 0.9%.
  • Value per bottle increased encouragingly from ≈ £ 316 on average in Q4 2019, to ≈ £ 323 on average in Q1 2020 (£ 326.28 in March) .

We are also greatly encouraged by the news from Sotheby’s that a bottle of Karuizawa 52 year old sold for a record price for Japanese whisky of GBP 363,000 in their auction in March.

The Single Malt Fund has always maintained that there is little correlation between the market for rare and collectible whisky and the more traditional stock and bond markets. This news of an increase of 3% in the value of sales of rare whisky at UK auctions bears this out. When one compares this 3% growth with a drop of 25% in the FTSE or a decline of 60% in the price of Brent Crude, it is arguably the case that investing in rare whisky is as attractive now as it has ever been. As the guys at RW101 ask; “could whisky be a new safe haven similar to gold?”

Very hard to predict what the future holds, given the current climate, but there are reasons to be confident. Time will tell.

TSMF Activities in Q1 2020

Understandably, things have been quiet on the trading side during Q1, with focus on fund raising and then, towards the end of the quarter, dealing with the Covid crisis. We are also forging ahead with the development of our e commerce platform. Despite the unprecedented times, we did manage to get our hands on a few bottles from our local and friendly supplier at Irish Distillers in Q1. When offers of the rarest and most collectible brands in Irish Whiskey come along, it would be irresponsible of us to ignore them. The launch of Redbreast 27 was THE highlight of the quarter. To get hold of some of the very limited quantities of this iconic release from, arguably, the hottest brand in Irish whiskey right now, was very pleasing indeed.

Slainte!
Ed Forrest
MD, The Single Malt Fund

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16 November, 2020

Midleton Dair Ghaelach Bluebell Forest Tree 6

Composed of Single Pot Still whiskey between 12-23 years old and matured initially in American oak barrels. This gorgeous whiskey is finished in native virgin Irish oak casks. These casks have been sourced from Bluebell Forest, Castle Blunden Estate in County Kilkenny. Every bottle can be traced back to one of six different 130 year old Irish oak trees that were sustainably felled.

16 November, 2020

Midleton Very Rare 2018

The 2018 edition of the Midleton Very Rare vintages is a luscious whiskey and it comes in the new and suitably lavish packaging and bottle. Smooth, with notes of vanilla and fruit, it has a rich spicy pot still finish. Yet another fine example of the stunning quality coming out of Irelands leading distillery.

16 November, 2020

Midleton Very Rare 2017

From the most sought after collection in Irish whiskey comes this 2017 edition of the Midleton Very Rare Vintages. It comes in the last of the old- style packaging. It is a complex fruity whiskey, that culminates with a long spicy finish, a true pot still character.

16 November, 2020

Redbreast 27

After nearly 3 decades resting in casks that once held bourbon, sherry and ruby port comes the oldest ever release from Redbreast whiskey. The brand that continues to win the most prestigious awards for Irish whiskey has now created a stunningly rich and intense pot still whiskey. One of the pinnacles of whiskey from the island of Ireland.

thesinglemaltfund.com

The Single Malt Fund AB (publ)

Business ID: 559118-4949

ISIN: SE0010547299

AIF-Trustee: Finserve Nordic AB

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