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Issue 70 - Money for Barrels

Whisky Magazine Issue 70
February 2008

 

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Money for Barrels

So you'd like to invest in Whisky? Ian Buxton reports

It's a good plan. After all, you know something of the subject, you enjoy the product and whisky's prospects look exceptionally good. So what do you do?

There are three routes with, as you might expect, some highways and byways to add interest and excitement.

You could buy some shares in a distillery.

Sadly, there are no longer any pure whisky companies quoted on the London Stock Exchange. They have long since been swallowed up by the various waves of industry consolidation that mark the ebb and flow of the whisky business.

But you can buy shares in two global drinks giants, Diageo and Pernod Ricard.

Both offer a widespread portfolio of different products, offering you some protection if whisky drinkers switch to rum, vodka or gin.

Both have outstandingly successful whisky and other spirit brands and both are well placed for the potentially huge growth anticipated if the nascent markets of Brazil, Russia, India and China develop as hoped.

Leading whisky analyst Alan Gray of Sutherlands in Edinburgh has been watching the whisky industry for more than 40 years.

During the current turbulence in global stock markets he recommends caution but says: “These are basically very good companies with excellent long term prospects but don't rush in right now. There may be buying opportunities over the next few months due to the market's volatility.” Recently, an investment in Diageo would yield about 3.5 per cent, though it's capital growth you're really looking for. However, ...

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