Gone but not forgotten

The distilleries of Brora and Port Ellen have long since shut their doors, but their much sought-after spirit lives on

T he distillery buildings at Brora on the Sutherland coast lie empty, cold and silent now, more than 30 years after spirit last flowed from their stills. Scotch whisky may be thriving around the world – and the neighbouring Clynelish plant continues to feed that demand – but Brora’s part in the tale is all but over.

Travel south and west, cross to the Hebrides and the whisky honeypot of Islay. At Port Ellen, even as the maltings labour to keep up supplies to the island’s producers, all is quiet at the distillery of the same name next door. The Islay whisky boom that has enveloped Laphroaig, Ardbeg and Lagavulin has passed Port Ellen by.

Well, not entirely. Both Brora and Port Ellen may have cooled their stills and closed their doors back in 1983, but the spirit they produced lives on – and is among the most sought-after whisky in the world. Like James Dean or Marilyn Monroe, their premature demise has only served to immortalise them.

When Brora was built in 1819, it was one of Scotland’s earliest purpose-built malt distilleries, and construction cost £750. £750? That wouldn’t buy you a single bottle of Brora in 2014.

Brora and Port Ellen have become the centrepieces of the annual Special Releases of single malts made by the multi-national which owns them, Diageo. The first Port Ellen Special Release more than a decade ago was priced at less than £100 per bottle; this year’s 35-year-old, of which there are fewer than 3,000 bottles worldwide, sells for a cool £2,200. Meanwhile, 2014’s Brora, also a 35-year-old, is £1,200. Collecting rare whisky is a bull market on the rampage.

‘Diageo is effectively playing “catch-up” with its pricing,’ says Andy Simpson, founder of Rare Whisky 101, a business which combines advice, consultancy and brokerage services to whisky collectors with a range of indices charting the performance of collectible bottlings. ‘Port Ellen and Brora are closed distilleries, so there is very little on the market. The casks are running out.

The first Port Ellen Special Release more than a decade ago was priced at less than £100 per bottle; this year’s 35-year-old sells for £2,200

‘Port Ellen [pricing] in particular has gone loopy over the past 12 months. The volume of releases has just gone through the floor, because there are so few casks left.’ Simpson reckons there were 56 new Port Ellen whiskies launched (by independent bottlers as well as by Diageo) in 2010; in 2013, that figure dropped to just six. It’s nearly all gone.

Time, however, can take its toll when a distillery has been closed for more than three decades. That is a long time for whisky to spend in cask and, if it’s not bottled in time, it becomes over-oaked, worn out and unpleasant to drink. Simpson says he has refused apparently attractive and rare casks on behalf of clients for that very reason.

Alcohol levels also drop with time – the fabled ‘angels’ share’ lost through evaporation – and, should they dip below 40% abv, the liquid can no longer be sold as whisky.

Thankfully, the inaugural release from The Winchester Collection, a planned series of 50-year-old whiskies from The Glenlivet distillery on Speyside, clocks in at 42.3%.

‘Vintage 1964’ is a liquid time capsule, laid down by Captain Bill Smith-Grant – last distilling descendant of The Glenlivet’s founder, George Smith – and there are just 100 bottles available, priced at roughly £18,000 each. Further releases will follow, with ‘Vintage 1966’ next in line.

Again, the hefty price-tag reflects the broader market: Simpson says just over 5,400 single bottle lots of malt whisky were auctioned in 2010. In 2013, the figure topped 20,000 and, by the end of October, 2014’s total was above 26,000.

If it’s not bottled in time, it becomes over-oaked, worn out and unpleasant

Similarly, Simpson’s Apex 1,000 index – a kind of FTSE or Dow-Jones of rare whisky which, similar to Liv-Ex with fine wine, charts the performance of key bottles – registered increases of 23% in both 2012 and 2013, and is projected to record 15% growth in 2014. This year’s slowdown is in part a reflection of the reduced number of historic rare bottles being traded – although Simpson does also anticipate a slight cooling in the market.

So is buying collectible whisky an infallible investment? Not if you do not know your stuff. Simpson’s indices also chart the surprisingly large number of black sheep – the apparently collectible whiskies that prove that such investments can go down, as well as up.

For instance, you might think that a bottling of Glenlivet Atlantic– a single cask whisky aged for 40 years – would be a sound choice; but one example fetched £1,750 at auction early in 2014, while another went for only £860 in early November.

‘The index of the worst-performing collectibles is down by about 8% this year,’ says Simpson. ‘We are seeing a lot of bottles from a lot of distillers that are bombing.’

Navigating this minefield requires specialist knowledge or advice, but a few general tips can help. Simpson reckons independent bottlings of ‘silent’ distilleries are a good bet, but advises looking beyond the obvious Brora and Port Ellen to less-heralded names such as Rosebank, St Magdalene, Glenugie, Banff, Convalmore, Coleburn, Millburn and Glen Mhor. Rosebank, for instance, can be picked up at auction for less than £100.

Among producing distilleries, Balvenie is exceptionally collectible, particularly vintage single cask bottlings from the late 1960s and early 1970s

Among producing distilleries, Balvenie is ‘exceptionally collectible’, he says, particularly vintage single cask bottlings from the late 1960s and early 1970s. Iconic distilleries with special anniversaries are also worth watching – for instance, Ardbeg’s bicentenary in 2015, which is sure to prompt a special release or two.

But even the most unassuming-looking bottlings may provide opportunities. The Macallan is a blue-chip single malt with reliable returns, and even relatively recent bottlings of its common-or-garden, 10-year-old expression are beginning to fetch higher sums, mainly because the company recently relaunched its core range without age statements in the UK.

International interest in collecting rare whisky is growing all the time, but the market remains dwarfed by the world of fine wine investment: Simpson calculates the global value of the secondary whisky market at about £100m, compared to fine wine at about £2bn. The idea of investing, say, £50m in a ‘whisky fund’ is laughable – because there simply is not the stock available.

As such, few speculators have been drawn to whisky in the same way as to Lafite, Pétrus and Romanée-Conti. ‘Out of the thousands of people I deal with, only one guy is teetotal,’ says Simpson. ‘He hates whisky and doesn’t like alcohol in general. All of the others enjoy a dram.’

And most of them follow the golden rule of buying at least two bottles of each ‘investment’: one to enjoy while the other (hopefully) appreciates in value. Because this is the kind of liquid investment that brings more than just a financial return.

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