# Whisky Investment



## Ijustnewit (16 May 2013)

Hi , I'm considering buying a barrel of whiskey from a local Tasmanian distiller (NANT) as an investment. Do any other forum members have any experience in this sort of investment ?
 Cheers IJN


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## Tyler Durden (16 May 2013)

Ijustnewit said:


> Hi , I'm considering buying a barrel of whiskey from a local Tasmanian distiller (NANT) as an investment. Do any other forum members have any experience in this sort of investment ?
> Cheers IJN




I don't know man, it sounds kinda..."risky"...mwahahahahaha.

Sorry I couldn't let that one go


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## prawn_86 (17 May 2013)

Cant find the article now, but if you bought the top 10 scotches every year for the last 10 years and held them as a collection, your portfolio would be up well over 50% pa for the last 10 years


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## sinner (17 May 2013)

prawn_86 said:


> Cant find the article now, but if you bought the top 10 scotches every year for the last 10 years and held them as a collection, your portfolio would be up well over 50% pa for the last 10 years




I'd take the figures with a grain of salt since they come from an industry body

http://www.whiskyhighland.co.uk/discover/whisky_highland_index/getting_it_right.html





http://www.worldfinancialreview.com/?p=1165


> Recent analysis carried out by Whisky Highland, an investment house specialising in so called “liquid gold”, backs this up. According to their statistics, if you had invested £100,000 in the top 10 performing bottles back in 2008 they would now be worth more than £400,000 – an incredible gain of more than 300%.


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## jimmyizgod (17 May 2013)

The best thing about Whisky as an investment vehicle is it's a highly liquid asset.


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## prawn_86 (17 May 2013)

sinner said:


> I'd take the figures with a grain of salt since they come from an industry body




Fair enough.

The issue for me would be needing to buy 2 bottles so i could drink one and leave the other as an investment. Same as wine, whenever i want to cellar something i have to buy a few bottles


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## boofis (17 May 2013)

Do whisky barrels have environment requirements for storage conditions?


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## Ijustnewit (17 May 2013)

The investment I'm looking at is buying a 100 litre barrel . It is kept at the distillery and is matured, they are a government registered bond store , taking around 4 to 5 years. The returns are guaranteed at 9.5 % per annum with a " guaranteed buy back on maturation". Insurance is included in the price , but you can opt for additional insurance to comply if you're using it as part of a SMSF. Any thoughts ?
You also get the bonus of a few 500ml samples of the product along the way.


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## chops_a_must (17 May 2013)

jimmyizgod said:


> The best thing about Whisky as an investment vehicle is it's a highly liquid asset.




Yyyyyyyyyyeeeeeeeeessssssss.


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## prawn_86 (17 May 2013)

Ijustnewit said:


> The investment I'm looking at is buying a 100 litre barrel . It is kept at the distillery and is matured, they are a government registered bond store , taking around 4 to 5 years. The returns are guaranteed at 9.5 % per annum with a " guaranteed buy back on maturation". Insurance is included in the price , but you can opt for additional insurance to comply if you're using it as part of a SMSF. Any thoughts ?
> You also get the bonus of a few 500ml samples of the product along the way.




Got a link? Im interested just for fun


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## boofis (17 May 2013)

prawn_86 said:


> Got a link? Im interested just for fun




http://nantdistillery.com.au/barrel-sales/ 
I assume that's it, wouldn't mind it if they payed you to take the barrel for storage as it'd be a nice way to use up dead space but they retain control :bad:


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## prawn_86 (17 May 2013)

haha had a look, it is quite interesting. Title stays with the buyer incase of insolvency which was my first concern


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## Garpal Gumnut (17 May 2013)

Ijustnewit said:


> Hi , I'm considering buying a barrel of whiskey from a local Tasmanian distiller (NANT) as an investment. Do any other forum members have any experience in this sort of investment ?
> Cheers IJN




I'm a bit confused, are you interested in buying "Whisky" of the Scottish type, or "Whiskey" of the Irish type.

There is a huge difference, the former being far inferior and thus less likely to accumulate value than the latter.

gg


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## DJG (17 May 2013)

prawn_86 said:


> haha had a look, it is quite interesting. Title stays with the buyer incase of insolvency which was my first concern




I also read that.
The terms/conditions seem quite reasonable and straight forward.

Basically a high yielding bond, without the coupon payments (or they're
accumulated and only paid at maturity + face value), also with a 'guarantee' repayment.


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## Serpentis (17 May 2013)

I do like a good whisky, and given the return and terms that sounds like it could be fun.

But some things seem a bit odd. If you include the GST you have to pay then this 4 year investment becomes 6.9%p.a. Can you do anything with that GST paid, deduct it from the tax paid on the profits at the end or anything? 

And they say on the site there that you save about $3k if you buy the trilogy set. Does that mean that buying an individual barrel is (12,500 + 3000) / 3 = $5166, and the return from that is the same as the 3 barrels 17970 / 3 = $5990 per barrel. Which is a 3.77%p.a. yield. And that's before GST, after GST it's almost nothing! 

I do like whisky, but I like getting a good return on my money even more. And since I don't live near any of their bars, that offer of a membership and events doesn't appeal either. Might buy myself a bottle of their whisky though!


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## galumay (17 May 2013)

What worries me is how 'loose' they are in documenting the real rate of return, the 9.5% is irrelevant and misleading because of the GST component, not sure how they are legally able to promote it in this way.

I wonder if a taxpayer who is registered for GST would be able to claim an input for the GST when purchasing and then 4 years later pay 10% GST of the total sale price. If this is how it works then the real return is less than 9.5% - but not much.

Ok, my rough maths for this is, effective purchase price is $12500 after claiming GST input credit, effective sale price after GST is $16336 which means the effective compound rate is about 9.2% 

Still looks an interesting deal!

What risk am i buying for my 9.2%??


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## harj (17 May 2013)

Serpentis said:


> I do like a good whisky, and given the return and terms that sounds like it could be fun.
> 
> But some things seem a bit odd. If you include the GST you have to pay then this 4 year investment becomes 6.9%p.a. Can you do anything with that GST paid, deduct it from the tax paid on the profits at the end or anything?
> 
> ...






Dont they state on their "offer" document that the guaranteed return is based on the ex-gst price of $12500 and the end return is $17970, which doesnt equate to 9.5% as per my calculations??

I work in the SMSF sector and a few funds are investing in this.

Seems interesting, might have a go at it.


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## galumay (19 May 2013)

I did a bit more research on this company and found they are also seeking to raise money via a $5m convertible note issue, minimum $50K, 3 year term, 10% paid quarterly.

I thought a bit more about the risks with either investing in the barrels or the notes and I dont think the returns are enough to offset the risks. 

The barrels in particular would leave you in a very bad situation if Nant folds, sure you own them and the whiskey within, but they are in bonded store in Tasmania, you will need to pay excise and then find a buyer, organise freight and gain access to the store to secure possession - the potential to earn 9.2% compounding seems to me to be far too little for the risk.

The other thought that I had was I would only risk a small amount of capital in such a high risk and speculative purchase, so even if everything went smoothly the overall gain in dollar terms would be small - i would then regret not having risked more capital! Conversely, if they folded I would likely lose most of my initial capital - and regret having gambled on such a risky proposition.

So at the end of my consideration it appears to be a "lose, lose" situation and I decided to give it a miss.


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## galumay (19 May 2013)

harj said:


> Dont they state on their "offer" document that the guaranteed return is based on the ex-gst price of $12500 and the end return is $17970, which doesnt equate to 9.5% as per my calculations??
> 
> I work in the SMSF sector and a few funds are investing in this.
> 
> Seems interesting, might have a go at it.




See my post above yours for my calculations of the real returns.

IMO if it is true that SMSF's are speculating in this sort of scheme then perhaps more regulation is needed!! Next people will be buying lotto tickets with their SMSF's.


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## Ijustnewit (20 May 2013)

Hi , Thanks everyone for your great comments and ideas on this post. Some things have come to light for me from people that are way more experienced investors than me . So thank you all  I'm still considering a small investment and nothing I can't afford to lose. But I have to get a better idea or prospectus of what the insurance actually covers.
Cheers IJN


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## Ijustnewit (6 July 2013)

An update news article on the Tasmanian Whisky Industry

http://www.abc.net.au/news/2013-07-06/tas-whiskey-given-high-praise/4802850?section=tas

I've spent a bit of time drinking my investment money of late , give all the snow wind and rain it's a great warmer upper by the fire.

Cheers 
IJN


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## prawn_86 (7 July 2013)

Yes i believe this story is going to be on Landline on ABC today also


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## sydboy007 (7 July 2013)

Ijustnewit said:


> Hi , I'm considering buying a barrel of whiskey from a local Tasmanian distiller (NANT) as an investment. Do any other forum members have any experience in this sort of investment ?
> Cheers IJN




I can see it working if you are buying something rare.

Something like the Johnny Walker Diamond Jubilee would fit the bill.  Only 60 made worldwide. At 200K a bottle you can understand why.

I'm sure there's limited editions, or some already rare / vintages bottles out there.  it'd be a bit like buying grange or top notch champagne to store away.


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## DJG (7 July 2013)

In the article they're talking about increasing supply up to 200,000..wouldn't this make your investment somewhat diminishing? - Or is it because you're buying it, then letting it sit for X years, it's becoming worth more, to them anyway.


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## prawn_86 (7 July 2013)

DJG said:


> In the article they're talking about increasing supply up to 200,000..wouldn't this make your investment somewhat diminishing? - Or is it because you're buying it, then letting it sit for X years, it's becoming worth more, to them anyway.




If supply is increasing due to demand then it could make it worth the same, or more, depending on how much the demand is increasing


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## DJG (7 July 2013)

prawn_86 said:


> If supply is increasing due to demand then it could make it worth the same, or more, depending on how much the demand is increasing




I was also thinking that, and surely they wouldn't just go increasing supply for the point of it unless the demand is there.


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## So_Cynical (7 July 2013)

prawn_86 said:


> Yes i believe this story is going to be on Landline on ABC today also




The Landline story made it look like a good investment...here's the iview link.

http://www.abc.net.au/iview/?series=2293598#/series/2293598


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## Country Lad (7 July 2013)

Garpal Gumnut said:


> I'm a bit confused, are you interested in buying "Whisky" of the Scottish type, or "Whiskey" of the Irish type.




Actually, it of the Tasmanian type which is winning awards and is a variant of the Scottish type.  There are some very good single malt whiskies being produced in Tasmania which even the Scots say are excellent.  NANT is one of them.  You should try some.

With their growing reputation and increasing sales the NANT deal seems a reasonable investment.   

Cheers
Country Lad


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## prawn_86 (7 July 2013)

So_Cynical said:


> The Landline story made it look like a good investment...here's the iview link.






Country Lad said:


> With their growing reputation and increasing sales the NANT deal seems a reasonable investment.




Yeh i think the LandLine story answered a few concerns i would have. Biggest issue is still if the distillery goes bust and you are left having to transport the barrel to another storage facility.


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## Ijustnewit (22 March 2014)

Another award for one of Tasmania's Whisky producers , Sullivans Cove Whisky now the Worlds best Single Malt .  ABC Story below

www.abc.net.au/news/2014-03-21/sullivans-coves-world-wisky-win-for-single-malt/5336498?section=tas


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## Lincoln Poynton (25 March 2014)

Well don't have any idea about investment on Whiskey because never invest on food items. Because their price fluctuate very quickly. but have ideas on other short term investments which can give you enough returns.


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## So_Cynical (25 March 2014)

I had an idea the other day watching a new ABC story on the Tassie Whiskey industry...it reported that the quality of the barrels has a lot to do with the quality of the end product, so that got me thinking that perhaps it was possible for someone to set themselves up as a whiskey maturer.

Someone that buys good young single malts and blends and then barrels them under perfect conditions to mature and therefore increase in value, so after say 10 years the whiskey that you barrelled 10 years ago at a cost of $30 per litre would (10 years in the future) be worth $70 or $80 per litre? 

Just an idea.


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## Ijustnewit (24 July 2014)

Some more Tasmanian whisky news.

http://www.abc.net.au/news/2014-07-22/new-whisky-centre-of-excellence/5615066?&section=news


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## Value Collector (24 July 2014)

Lincoln Poynton said:


> Well don't have any idea about investment on Whiskey because never invest on food items. Because their price fluctuate very quickly. but have ideas on other short term investments which can give you enough returns.




To me this scheme is more of a financing scheme than  a commodity play, distillers have to have large amounts of capital tied up in stock which has to sit and age for years, I think this scheme is just a way for the distillery to free up their working capital by having an investor buy their stock, and they can then buy it back when its ready to sell. They are guaranteeing the buy back price so your not taking commodity price risk, your just basically earning interest on your money.

The position of the investor is more of a bond holder than a commodity owner, your bond is however secured by a barrel of whiskey,


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## Joe Blow (21 November 2014)

I was browsing CNN Money today and when I saw this article I remembered this thread and thought it may be of interest: http://money.cnn.com/2014/11/20/investing/whiskey-investing/index.html


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## IrishPhil (19 April 2017)

Well this story did not end well, was anyone here burnt?
http://www.abc.net.au/news/2017-03-09/hundreds-of-nant-whisky-barrels-never-filled-audit/8338106


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## galumay (19 April 2017)

IrishPhil said:


> Well this story did not end well, was anyone here burnt?
> http://www.abc.net.au/news/2017-03-09/hundreds-of-nant-whisky-barrels-never-filled-audit/8338106




Well I looked at them 4 years ago, you can see my posts on the previous page. Its nice to get it right for the right reasons sometimes! Sorry to those who were invested.



galumay said:


> I thought a bit more about the risks with either investing in the barrels or the notes and I dont think the returns are enough to offset the risks.


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## IrishPhil (19 April 2017)

Yes, I read the old comments with interest. 
Was doing some Google research into this:
http://coburnsdistillery.com.au/mem...bd0dfad16195615ab61bd82e2d7156b2c0ed449495ccf

Can't say I'm filled with confidence now!!


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## peter2 (19 April 2017)

It's great to see some follow-up after several years. In this case it's completely negative, but it has educational value.


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## IrishPhil (19 April 2017)

Yeah I felt compelled to register and share the news on Nant in case it hadn't crossed your radar. Interesting to get updates on old topics in my experience. Hindsight etc.


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## sptrawler (19 April 2017)

Went to the distillery while on holiday's last year, it looked like a nice setup, fortunately there was a private function on.
I have been known to get carried away, after a few beverages.


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## STBarett (11 May 2017)

This is a great investment, if you dont drink


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## basilio (10 March 2019)

There is an excellent article on the ABC website regarding the fallout of Nant's bankruptcy. Well worth a read.
*On the rocks: The untold story of the Nant Whisky scandal*
A series of intriguing connections between boardroom players behind the scenes of Nant's collapse raises new questions about who got paid while others lost millions.
https://www.abc.net.au/news/2019-03...old-story-behind-investment-collapse/10784396


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