Whiskey & Wealth Club Newsletter
2024 Q4 Newsletter
Whiskey & Wealth Club are proud to introduce our new segment, where we’ll regularly be unpicking the latest from the cask whisk(e)y market landscape.
The twilight of 2024 presents a particularly auspicious moment for those who embrace whisk(e)y, not just as the world’s best drink, but also as a promising asset class.
From emerging trends in the whisk(e)y market to shifts in global economies, this newsletter aims to equip you with insights that will enhance your industry knowledge. Join us as we uncork the latest developments in whisk(e)y investment and navigate the complexities of today’s financial markets.
How does the new UK budget affect Capital Gains Tax?
Kicking things off with the most recent events, the new government budget is out, and it comes as no surprise that Capital Gains Tax (CGT) is being increased. A new measure would swell lower-rate CGT tax from 10% to 18%, and higher-rates will go from 20% to 24%, with rumours of this being pushed further Chancellor of the Exchequer Rachel Reeves considering a raise in CGT to 39%.
Here’s the good news: The UK is one of very few countries where whisk(e)y casks are generally exempt from Capital Gains taxation (CGT). And with CGT going up on other asset classes, you can safely assume that a fresh new wave of investment capital is hurtling towards cask investment in the immediate future.
United Kingdom: Whisky casks are considered “wasting assets” (assets with a predicted lifespan under 50 years), making them Capital Gains Tax exempt for individual investors.
Ireland: Whilst Ireland taxes most capital gains, collectible assets, including whiskey casks, can qualify for certain exemptions depending on investment conditions.
(Tax laws can be complex and are subject to changes, so consulting a tax professional in the respective country is advisable)
Scotch Whisky Market
Diageo is doubling down on its investment in India, one of the world’s largest consumer and export markets for Scotch whisky. This move by the spirits giant underscores the conglomerates confidence in the region and its vision for long-term growth in what we have long deemed to be a high-potential market.
Meanwhile, the UK remains on course to strike a free-trade agreement with India, paving the way for massive reductions to duties. The hotly anticipated deal will usher in huge cuts to the current 150% tariffs levied on Scotch imports to India, potentially resulting in £1 billion of growth over the next five years.
Compounding this optimism, Warren Buffett’s Berkshire Hathaway remains bullish on Diageo, retaining shares worth more than £40 million. Despite Buffett dumping popular tech stocks including Apple, his decision to hold onto Diageo is a strong signal of confidence in the broader Scotch whisky industry. Buffet’s Diageo position remains unchanged since the first Q1 of 2023.
A UK-Thailand deal is a huge win for the Scotch industry. Thailand has signed a trade deal with the UK designed to boost trade and investment between the two nations and open the country up to British businesses, and Scotch is set to benefit.
Irish Whiskey Market
With new distilleries popping up all over Ireland, the data for Irish whiskey shows more than 140% growth in overall market value since 2010. At this time, there were only 4 distilleries in Ireland. 14 years later, there are now 43 distilleries on the Emerald Isle, which highlights the unbound potential of this Celtic Tiger.
In the super-premium segment, Irish whiskey’s growth has been even more dramatic. Over the past 20 years, high-end premium and super-premium Irish whiskey in the U.S. market grew by an astounding 1,053% and 2,779%, respectively. The Revival of Premium Irish Whiskey
This surge in demand is largely due to a rising interest in premiumisation, where consumers are increasingly seeking higher-quality, aged, and limited-edition products. The global growth of the premium and super-premium sectors of the Irish whiskey market over the past two decades has been substantial, not just in the US—where it remains the fastest growing style of whiskey on shelves—but worldwide.
Overall Irish Whiskey Market Growth: Globally, the Irish whiskey market has experienced over a 400% increase in the past 20 years. This explosive growth is fuelled by demand in both traditional markets like the U.S. and new regions such as Asia, Latin America, and Africa.
When it comes to high-end cask investment specifically, the rarity and age of Irish whiskey in the barrel has made it a highly sought-after investment asset in virtually every major marketplace. Super-premium offerings have consistently outpaced standard products due to scarcity and the allure of premium craftsmanship.
In the next newsletter, we’ll be taking a closer look at the Bourbon and Canadian whisky markets.
If you could like to find out more about the current cask availability that we have at Whiskey & Wealth Club, click here to contact one of our specialists today.
