Whisky Cask Investment

Billxx

I'd steer clear if I were you.  I have a friend who buys bottles of rare whisky, his collection has appreciated in value.  But he does this as a hobby, not as an investment vehicle.  Macallan seems to be his preferred purchase.  Occasionally we share a bottle!

What_time_is_it

Definitely a hobby activity that MIGHT make you money as a bonus.
Do you want to buy some magic beans?

jimjames

BaldyBaldy said:

I am considering investing in a few casks of whisky -- I have approx. £10-15k to invest and I'm happy to put it away for 10-15 years

I've been in discussion with 2 companies

Out of interest why are you not dealing with the distilleries directly? Is it because these companies are offering to make the process much easier or have been advertising to you?

I've seen many ads recently for whisky and wine investments, virtually all of which look very suspect. In the same way that many of scam investment companies look great when you're handing over your money they may be less good when you come to redeem. Investments for 10-15 years are absolutely perfect for scammers as they will be long gone when you actually want to redeem; most scams only seem to last a few years until they've sucked enough people in so way beyond that is ideal for them.

If you do decide you absolutely want to go ahead then make sure you research the company you are handing money over to. I'm in no way suggesting that any of the companies you are looking at are scams just that a long investment horizon is ideal for someone to not be genuine.

Eden Mill don't appear to have a distillery yet and their website appears to be breaking UK trading law as there is no company information or contact address on it (they may not actually be a company but that's not great sign either) They may have just missed off this detail as an oversight but it prevents anyone from checking their details and is a legal trading requirement.

Whisky Partners is a trading name of Decant Group Limited that has only been in existence since 2019. Selling cask investments to punters is clearly a very profitable business -maybe more so than actually buying casks - they made £11m profit on £27m of sales in 2023 which is pretty good going!

Albermarle

Be wary of whisky cask 'investments' - Which? News

daveyjp

If you want a cask of whisky it should be done because you enjoy whisky and its a hobby purchase, not an investment.

You  then decide which whisky you want to buy, contact the distillery which produces it and do a deal with them directly.  Just remember buying a cask of whisky doesn't look expensive.  The expense comes when you want it to leave the warehouse and the taxes have to be paid.

A friend did this with two of his friends and he will now either have a barrel of 15 year old or he will have sold it, I no longer see him to ask.

As part of the deal they were allowed 6 bottles a year as it matured and he kindly gave me a bottle when it was 5 years old.

boingy

Billxx said:

I'd steer clear if I were you.  I have a friend who buys bottles of rare whisky, his collection has appreciated in value.  But he does this as a hobby, not as an investment vehicle.  Macallan seems to be his preferred purchase.  Occasionally we share a bottle!

And that's the only reason to "invest" in whisky. I have a bottle of Highland Park that is the same age as me. It doesn't really mature any further once it's in the bottle but it pleases me to have such a thing. We have a tipple on very special occasions. As for buying it in a barrel from a middle man. Blimey. That's right up there with the riskiest thing in the kingdom of Risk. 

kipsterno1

I have previously owned a cask (with two friends) and it made a very good return. Would I buy another, no.

Personally I think the boat has sailed on this and too many dubious middle men offering unbelievable returns.

If I did buy again it would be direct from a distillery which is how I got the last one. We sold it after 17 years via a broker but drew off 24 bottles prior to sale. Even then the first broker I spoke with was offering a fixed price that was over 50% less than the final sale price. The second was about 20% less than the final price achieved by the broker we used. What I'm saying is unless you really know what you are doing and how the industry works you can lose money at every stage.

ThePirates

I actually filled a cask today! 
Would dream of buying one though. 
There is no profit to be made, it's all a con. 
Upfront costs c£5k and then the same again in duty and bottling fees when you decide to bottle it, say 10 years. You'll then get c250 bottles of the same whisky. You may be able to sell some or sell the cask on at some stage but there's been horror stories lately of people turning up to view their casks and they don't exist or no one knows where they are. 
Whisky is for drinking not investing in!

ThePirates

Filling a cask!

pecunianonolet

Recommend to give this a read https://protectyourcask.com/

As others said, simply don't invest in casks.

If you buy one, be prepared to end up with nothing or a lot that is undrinkable. Consider that buying the cask under bond is the cheapest part, bottling and duty is when you get hit. New distilleries often need a good amount of time to get the parameters right so the spirit in the first 100 casks is rather unpredictable of how it turns out. Many casks leak so you can end up with much less or nothing at all. 

Never buy a cask from a distillery that only exists on paper! Some reading on the below.

https://www.thespiritsbusiness.com/2023/05/council-refuses-wolfcraig-distillery-plans/
https://www.bbc.co.uk/news/uk-scotland-scotland-business-65710282
https://www.thecourier.co.uk/fp/news/5108398/wolfcraig-distillers-stirling-casks/

Lastly, consider also the tax implications. CGT is not an issue on the cask itself but think about if you want to drink, potentially, a lot of bottles, or sell some. 

https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg76901

The big players are nowadays all in Asia and a LOT of luxury whisky doesn't see the light as it disappears in private sales channels. Believe me, I know what I am talking about 

If you want to invest, invest in memories! Travel to the distilleries, explore the land and surroundings, the people who make it and pour it in the distilleries and in good whisky bars. Buy some special bottles during the trip.