E Brochure 2012 Hk

Welcome to Global Spirit Merchants……. GSM were established as an answer to the ever increasing demand for Single Malt Whisky across the Asia Pacific regions. As Hong Kong’s leading specialists of Single Malt Whisky and pioneers of Whisky investment here in Asia, GSM have a solid reputation and network of supply that ensures our private clients have access to the most exclusive and sought after Single Malt Whisky in the market.

We trade only the very finest examples of rare and exclusive Single Malt and are Asia's preferred hub for securing and trading for investment purposes. GSM specialize in all of the markets best performing whiskies together with many exclusive limited edition bottles and private cask offerings from the likes of Macallan, The Dalmore & Bowmore.

With head offices in Hong Kong & trading offices in Shanghai, GSM are well positioned to meet the investment requirements of both corporate and private clients throughout Asia. As the Whisky market continues to boom, GSM provide a successful diversification from the more traditional investments such as stocks & shares, bonds, managed funds and

even property.

The details within this 2012 Edition / E- Brochure will educate you further and provide

all the facts and figures you’ll need to make an informed decision in this rapidly

expanding and highly lucrative market.

Market History

Single Malt Whisky is Asia’s leading liquid investment and substantial prices are paid for bottles from the most prestigious distilleries.

Until the late 1980s, Single Malt Whisky remained relatively rare outside Scotland, however in the last decade there has been a consistent growing demand from countries like Russia, India and in particular China.

Since the year 2000, sales in China alone have risen from $10 Million HKD, to over $1Billion HKD per annum and this figure is rapidly on the rise as China forecasts sales to rise a further 100% in the next 3-5 years.

To track the market’s performance at auction, the (WH) Index was established in 2008 and since then prices at auction have risen significantly. From 2008-2011, the prices of the top ‘100 Whiskies’ increased in value by a phenomenal 163%, outstripping some of the very the best performing investments , including Gold which appreciated by 146% in the same period. In 2011, the Whisky market showed consistency throughout, with the overall value of Single Malt Scotch increasing every quarter. It is fair to say the demand for Single Malt Whisky has exploded in Asia and GSM are perfectly positioned to assist our private clients in developing high yielding investment portfolios in this rapidly expanding market.

GSM targets only the very best performing whiskies which have risen in excess of 297% since 2008 (source. FT Adviser).

Market Expertise

Together with a team of market analysts and Whisky experts, GSM’s Chief Adviser is one of Greater China's leading independent voices on whisky and sits on judging panels for both the World Whisky Awards & International Wine & Spirits Competition here in Asia. Steve Notman actively works with the Scottish Government promoting Scotch Whisky in Mainland China, along with the Scotch Whisky Association and leading Scotch Whisky brands specifically on Whisky mentorship, protection and training. Not only was Steve mentored by some of Scotland’s leading Master Blenders and Distillers that include Whyte and Mackay's Richard Paterson, he also received high commendations from Scotland’s First Minister Alex Salmond and will this year become the youngest in history to receive Scotch Whiskies most prestigious award to services to the industry by becoming a ‘Keeper of the Quaich.’

Market Performance

*The above graph shows performance of Single Malt Whisky at auction from 2008-2011*

‘WM’ INDEX - 2008-2011

Portfolio Management

As part of our on- going service, GSM assigns each new

client an experienced Portfolio Manager to assist in

developing a tailor made portfolio that meets your

investment requirements. You will receive detailed

market updates, portfolio assessments and advice

regarding the development of your whisky portfolio.

GSM will guide and advise all private clients throughout

the term of investment ensuring maximum results from

the market. We deal only in the very finest, rare and

unique bottles from all of the leading distilleries & private

bottlers that are proven performers in the market.

We aim to provide you with a diverse range of

investment opportunities ranging through the spectrum

of short (1-3 years), medium (3-5 years) or long term

holds (5-10 years).

Trading

There are a number of different exit strategies you may consider when trading your Whisky Portfolio.

The most successful option is to trade through one of Asia’s leading

auction houses and our partners in Hong Kong, Bonhams. In 2010,

Bonham’s Hong Kong took the grand stage of Asia’s hugely

successful first year of Whisky auctions.

In 2011, these ground breaking auctions started to gain huge

momentum with many of the featured whiskies yielding returns of

over 50%-300% above their estimated highs. We believe 2012 is

set for even greater success with four highly anticipated auctions

scheduled starting in March.

For the first time, private clients here in Asia are in a position to

benefit directly from the massive demand for Single Malt Whisky

sweeping across the Asian markets.

GSM’s Private Client Department will assist clients in arranging the necessary paperwork for auction and in

identifying the highest prices in the market to trade your portfolio. Auction fees typically work out at around

15%.

Alternatively, you may wish to benefit from our in-house trading division which will arrange for your stock to be

sold privately with a brokerage of only 10%. This strategy has proven to be an extremely efficient trading

platform for existing clients and one which is exclusive to GSM clients.

Storage & Insurance

When you open your trading account with GSM, a private Storage &

Insurance account will be opened in your name.

We use facilities in Hong Kong & Macau that ensure your Whisky is

stored and insured professionally and can only be accessed by yourself or signatory on the account.

This allows for complete transparency and security of investment at all

times. Storage & Insurance fees are very minimal and work out at

approx. HKD$200 per case, per annum.

“

The Press: Who Says what?

Whisky investors cheered by rise in values By Jane Bradley / Sunday 29 January

“Three-year figures reveal that an investment in the 100 best-performing whiskies in 2008 would have risen by 163 per cent in 2011, while gold – which has soared due to the recession – rose 146 per cent. Diamonds rose by just 10 per cent, while shares and crude oil stock values fell”. http://www.scotsman.com/scotland-on-sunday/scotland/whisky_investors_cheered_by_rise_in_values_1_2084366

Whisky Set for Golden Decade By Dominic Roskrow / December 30, 2011

“I think that whisky certainly has the ability to not only increase in value 10 fold, but 20 fold in the coming decade. Ten years ago if a distillery came out with a bottle for say £1000, people thought this was crazy, but today expressions are selling to from £5,000 to £20,000 pounds and selling. I would say that Scotch has certainly proved itself with this. Let’s look at the original ‘Black Bowmore’ when it came out in the early 90s, it cost about £200. Today a bottle sells for £3000-£4000”. http://thewhiskytastingclub.co.uk/Blogs/domblog/2011/12/30/whisky-set-for-a-golden-decade/

Liquid gold: Why whisky investments can hit the spot By James Longman / December 17, 2011

“Fine whisky has been part of Scotland's heritage for more than 500 years, but it is only recently that investment opportunities have opened up for its most famous export. With global demand for

luxury whisky on the rise, putting your money into rare bottles of Scottish single malt could make you some pretty neat returns”. http://www.usatoday.com/money/industries/food/story/2011-12-18/cnbc-whisky/51911208/1

A Palatable Alternative Investment Market

By Andy Simpson – Investing in Whisky & Champagne December 2011

“If you’d bought the current best performing 250 bottles of whisky in 2008 (at auction in

the UK) they would have cost £42,508. In today’s market they would be worth £94,884, an increase of 123.21 per cent. If

you’d done the same with the top 100 bottles, the increase is 162.96 per cent and the top 10 would have gained by

297.62 per cent, according to the Whisky Highland index”.

http://www.ftadviser.com/2011/12/05/investments/alternative-investments/whisky-a-palatable-alternative-investment-

market-6NGTKARuUR0p4Eg2IbilLK/article.html

FAQ’s

How does the market work?

The underlying principles of Single Malt Whisky investment is influenced by the laws of supply and demand. On

the supply side, there are relatively few investment grade labels, whose production levels are extremely limited

in quantity. On the demand side, there are a growing number of high net worth individuals around the world

seeking to own and/or drink these Single Malts. The only way to ease the pressure is for prices to go up.

Investment grade Single Malt Whisky is also an improving asset. As Single Malt is aged in the cask it becomes

more desirable and therefore more valuable. At the same time, once the whisky is bottled it’s consumed making

it even rarer, which in turn adds yet more upward pressure on prices.

What is an investment grade Single Malt Whisky?

To be regarded as a good investment, a Single Malt requires all or most of the following attributes:

It must have strong, consistent global demand and recognition.

It must show consistent upward price movement beyond a minimum set return.

It must be produced from a single cask limiting its quantity to a maximum of approx 500 bottles.

How do I monitor my investment?

Your Portfolio Manager at GSM will guide and advise you in make strategic investment decisions. We keep you

up to date with all market activity and advise when to buy, sell or hold your Whisky investment. We provide an

ongoing advisory service throughout the term of the investment and charge no management fees.

How much do I need to invest in a portfolio of Single Malt Whisky?

You can invest as little as HKD$50,000 for a small portfolio containing some very exclusive bottles. However, a

recommended minimum investment level of around HKD$200,000-HKD$500,000 will get you started with a

perfectly balanced portfolio.

How do I get involved?

Carefully review the facts and figures. Consider a

budget that’s comfortable and make a note of any

questions you may have. One of our brokers will be in

touch with you to discuss the market further and to

review trading portfolios.

Alternatively, we invite you to make an appointment

to come into our HK Whisky Lounge for a private

presentation and portfolio selection. This can be done

by contacting our HK trading room directly on

+852 3752 8178 or by email

[email protected]

WWW.GLOBALSPIRITMERCHANTS.COM

So why invest in Single Malt Whisky?

- Top 10 risen by 297% since 2008 - Thriving Auction Market - Decreasing Availability - Tangible Asset - High Yielding - Low Risk - Tax Free Profits - High Demand - Minimum Stress - Consumable

Shanghai Office: 2501 Wheelock Square 1717 Nanjing West Road Shanghai 200040 Phone: +86-21-6157 5373

Head Office: Suite 2304, The Kinwick Centre 32 Hollywood Road Central, Hong Kong Phone: +852 3752 8174

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