Monthly newsletter for December 2020

Dear Investor,

2020 has indeed been a wild year. First and foremost we want to wish all our friends and colleagues the best for 2021. We’re really happy to know that all members and friends of the Collective are safe and have come out of this period relatively unscathed, and hopefully (like us) a little bit wiser and more resilient in the process. Here are some of our own personal facts for 2020 from the Collective:

• Our #1 performing whisky in the portfolio is the Kinclaith 1969, that grew +90% in 2020
• Our worst performing bottle is the Tamnavulin 45 year old, which hit a low -50% (at the current price it is a bargain and we won’t be selling anytime soon!)
• We shelled out GBP15,000 on a Macallan 1979 Fine & Rare, our most expensive purchase this year (good news is that we’re up 33% on that purchase thus far)
• We made 169 bids on auctions (8 of them successful) and we traded 143 bottles amongst our network this year

There are very interesting supply-demand dynamics at play at the moment in the whisky industry, and it is something that we are watching closely as we get into 2021 to ensure we are able to maximise on these opportunities for our investors. Hanyu’s Ichiro Cards set recently broke a new auction record of US$1.52M at Bonhams Hong Kong, which is a 66% increase on the last auctioned set in August 2019 just over a year ago.  The Scotch Whisky Association (SWA) has given early guidance that 2020 will see a +30% drop in global exports in Scotch. This is mainly driven by the 25% tariff in the US but also amplified by the collapse of global hospitality, tourism and travel retail as a result of Covid. We have recently started to see job cuts in the industry with Diageo announcing distillery job losses, however we continue to see new and previously closed distilleries opening over the next year across Scotland, Ireland and Japan. These distilleries will be delivering supply to strong growth markets like India, Japan and China who are plugging the demand gap (expected 8.3%, 5.2 and 3.5% CAGR respectively, from 2020-2025), especially in the higher value rare and collectible bottles. 

Even with the gyrations of the SGD:GBP over this last month (and likely to continue into 2021 with Brexit negotiations), we have seen positive returns for our investors with strong performance from the Karuizawa 1981 Fazzino and Glenlochy Rare Malts 1969, which have returned 42.9% and 66.8% respectively this month alone. The most notable addition to the vault during October has been the Macallan Easter Elchies Black 2020, and have a couple of very exciting Macallans incoming for the new year.

We wish everyone a very happy Hanukkah, a merry Christmas and a great start to the New Year!

Marek, Marc, Neil, Gary