Tasmanian Whisky: Investing In The Spirit From Down Under

Wine And Whisky

Tasmanian Whisky: Investing In The Spirit From Down Under

Tasmanian whisky gained global prominence in 2014 when a whisky from Australia’s island state was named the world’s best single malt. Now Tasmania is home to nearly 20 distilleries, and its whisky industry has seen a surge in demand from around the globe. David Bowden takes us on a trip down the Tasmanian whisky trail.

Published on 12 July 2017

Any tourist authority that maintains a website on whisky has to be taken seriously. The informative Tasmanian Whisky Trail is the essential reference for those who love a “wee dram” and want to use it as a guide in their travels around Australia’s island state.

The spirit of Tasmania

Yes, you read correctly: Tasmanian whisky! Many will be surprised to learn that Australia makes whisky – and not just any whisky, but the world’s best whisky; at least in 2014 when the Sullivans Cove French Oak Whisky from Tasmania won the title of the world’s best single malt whisky at the World Whisky Awards (marking the first time a whisky from somewhere other than Scotland or Japan was awarded this honour). Owners of whisky bars around the globe were on the next plane Down Under to secure bottles of the award-winning drop and whisky drinkers around the world sat up and paid more attention to Tasmania.

While Tasmania doesn’t have the heritage of Scotland, the win didn’t come from nowhere either – Bill Lark, one of the key pioneers of the whisky industry in Tasmania and the founder of Lark Distilling, set up his distillery near the Hobart docks back in 1992.

Now almost 20 Tasmanian producers of distilled spirits (including whisky) and liqueurs are keen to capitalise on Sullivans Cove success. Isolation has led to innovation with distilleries now using the abundance of fresh raw ingredients from one of the greenest parts of the world to craft carefully curated spirits.

There are many similarities in the landscape to be drawn between the home of whisky in the Scottish Highlands with Tasmania’s Central Highlands.

Handcrafted is often associated with Tasmania’s whiskies and most distilleries champion quality over quantity. This means that most Tasmania whiskies are priced at the premium end of the market.

Tasting Room Nant Distillery Bothwell

Drinking versus investing

Like wine, drinking and appreciating whisky is one thing, but investing in it is another. Some investors found this out the hard way recently with the Nant fiasco (the distillery went into receivership in the first quarter of 2017 and the ownership of its stash of whisky barrels is currently being disputed by various parties). According to media reports, Australian Whisky Holdings (AWH) uncovered – during its due diligence in the process of purchasing Nant – serious anomalies including barrels in the inventory that were empty and discrepancies in the alcoholic volume with some other barrels.

There are some who think that what happened to Nant investors – who purchased barrels and were expecting a 9.5% per annum return in four years, upon the whisky’s maturation – could have a negative impact on the future of the Tasmanian industry. But – even in the wake of the Nant debacle – there are still many investors who are keen to pour their money into Tasmanian whisky.

Apart from purchasing directly from the distilleries, investors can also buy into companies such as AWH or purchase Tasmanian whisky at auction. AWH, a publicly listed company, was established to gain direct equity participation in selected branded distilleries and to partner in developing export markets. It holds a 48% stake in Lark Distilling, for example.

One of the inherent problems of buying Tasmanian whisky at auction is the lack of a track record for an industry with just a few decades of history. As aged whisky is highly prized by investors, it is much more common to see Scottish whiskies on the auction block than their Tasmanian counterparts.

Premium Tasmanian whiskies and ryes come at a price – Sullivans Cove Special Cask (A$750, US$572), French Oak (A$450, US$344) and Belgrave Oak Whisky (A$250, US$191). And there are more affordable whiskies – Belgrave Black Rye (A$52, US$40) and Hellyers Road Single Malt Original (A$76, US$58).

Should an investment in Tasmanian whisky fail, at least you can enjoy drinking your purchases and thinking about what could have been

World’s Best Whisky Sullivans Cove Tasmania

Investment Tips

  • Whisky evaporates and Tasmania’s whisky barrels are thirstier than Scotland’s – so check the expected loss before any barrel purchase.
  • While it’s possible to import directly from the distilleries, shipping costs, insurance, and relevant duties and taxes must be borne by the buyer.
  • Tasmanian whisky production is small, making some bottles difficult to acquire – Sullivans Cove produces 18,000 bottles per year, for example, while one of Scotland’s smallest producers, Edradour churns out 250,000 bottles per annum. Naturally, this adds to the rarity and collectability of Tasmanian whisky

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