Why buying an $18K bottle of scotch may be worth it

Turns out trading malts can yield up to 214% returns

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An unnamed buyer dropped $18,556 on a bottle of whisky this week in Toronto—the priciest in an exceptionally rare trio on offer in Ontario.

The LCBO bought only three bottles from the Scottish Dalmore’s Constellation Collection—the 1991, 1980 and 1976 editions. While they sold the youngest one for $4,976 earlier in November, the other two were snapped up this week at $9,226 and $18,556 respectively.

Now, you ask, why would anyone pay that much for a bottle of whisky? It’s a reasonable question. And it comes with a reasonable answer: Because they probably stand to make a lot of money.

Since 2008, the top 100 most heavily traded malts (known as the Rare Whisky Icon 100 Index; yes, it’s a thing) have delivered a return to investors of 214%. That compares with about 41% for the S&P 500. We are living in a bull market for investment grade whiskies—identified as releases of fewer than 500 bottles—and if you know what you’re doing, there’s money to be made. If not, there are some very expensive mistakes to enjoy.

It’s unclear whether the person who dropped nearly $5,000 on the Dalmore Constellation 1991 Cask 27 will ever take in its nose of roasted hazelnuts, coffee and dates or savour its notes of black toffee and raisins. It is possible that someone might purchase a bottle like this to celebrate a cracking occasion.

But whoever bought the 1976 Cask No. 3 ($18, 556), or the 1980 Cask No. 495 ($9,226), almost certainly won’t bother opening it. Because that would spell the end of the value. These bottles are most likely destined for the secondary market, to be auctioned off in Glasgow or Hong Kong at some future date. And given the recent history of whisky prices, they will almost certainly net a tidy profit for their owners.

But what gives one whisky the value of a new Volkswagen and another the value of a used one? It’s the story, largely. Here’s the story behind those rare Dalmores.

They started off just as every Dalmore whisky does, at the company’s distillery in the Scottish highlands north of Inverness. But shortly after being poured into American White Oak casks to rest, these particular specimens were selected to be housed in Warehouse 2, which is master distiller Richard Paterson’s personal playground. Here, for the past 40 years,Paterson has been hand-picking casks  to study and toy with: What will happen if we transfer the contents of an American White Oak cask to one that used to hold port? What if we then moved it to one that held Cabernet Sauvignon?

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The knowledge Paterson gleans from his experiments do eventually find their way to liquor store shelves in the form of reserve editions: The Dalmore Cigar Malt ($180) and the King Alexander III ($300), couldn’t have existed without the knowledge discovered in Warehouse 2. But they’re also ordinary malts for ordinary folks who want to share an extra-special treat with friends around the holidays.

Those experiments though, the actual contents of those casks Paterson has been playing with for decades? Those are prized possessions for the Dalmore, the kinds of bottlings that distilleries let out in drips and drabs, to drum up headlines and draw journalists out to tastings. As Jonathan Driver, the Dalmore’s rare whisky director, told a small crowd in attendance for a tasting of the Constellation Collection at a Toronto LCBO: “You can only sell what you’ve got.”

And when you’ve got stuff like this lying in the back of your closet, well yes, you make a big deal of it. But first you let it sit there for a good long while.

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–This story was updated on Nov. 24 at 3:31 pm to reflect the sale of all three Dalmore whisky offerings–

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