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How Secure Are Private Cask Investments? - The Whisky Ardvark Opinion

Updated: Mar 4

Mystery Whisky Casks

Image by Irish Whiskey Magazine

Recently, we came across an incident where a person who had purchased a cask had been informed by the trustee years later that the cask was empty. Although both parties could be held responsible for the lack of communication, the buyer should be able to access their purchased item at any time after it has been placed in trust. The individual had intended to bottle or sell the contents of the cask in the future.

The prospect of purchasing your own private cask of whisky is an attractive idea. It offers a good long-term investment that has the potential to generate a pleasant return. You have the option to bottle or sell it for a nice profit. Many customers also view it as an inheritance for their offspring, who can choose to bottle or sell it for a nice nest egg when they come of age.

There are two ways to obtain private casks from a distillery: by contacting the distillery directly and inquiring about their availability for sale or by using a broker who can offer casks for purchase.

Which option should you select? Is one more reliable than the other?

whisky broker or a distillery

Original Image by All Star Funding Solutions

These are important questions to consider when making a significant investment in a product that will take at least three years to produce. It's worth noting that most distilleries prioritize blending and single malt contracts over selling directly to individuals. While using a broker may seem like a viable option, it can be riskier as the contract must be secure enough to prevent fraud, which unfortunately can happen. For example, there are known cases of brokers who have been fined for false advertising regarding end returns.

Looking back at the history of whisky, we can see the impact of opportunistic individuals like the Pattinson Brothers and the more recent Nant Distillery in Tasmania, who took advantage of a thriving market but ultimately failed to deliver. Unfortunately, the brothers' actions led to the downfall of many distilleries in the late 19th century, known as the Pattinson crash.

In the late 90's, distilleries such as Bruichladdich, Glengoyne, and Springbank openly offered the purchase of casks in various oak types and sizes. Many people trusted these distilleries and invested in the private cask scheme, as they have a reputation to maintain and generating income is crucial for their business. The concept of owning a cask is not a new idea, and it remains a popular option for those who wish to invest in the whisky industry.

When it comes to purchasing whisky, it can be likened to buying stocks and shares. The internet has opened up a global market for this product, making it easier to sell. Selling a private cask later on instead of having it bottled can lead to a good return, and sometimes, the distillery may even make an offer as outlined in the original contract.

It is common for private individuals to own casks purchased directly from the distillery, and many owners visit their casks regularly. If you have such a contract, it is expected that you will have access to your property, even if it is stored in a warehouse belonging to HM Customs and Excise.

It is important to be cautious when purchasing a private cask and to take measures to prevent fraud. While not all brokers are fraudulent, it is recommended to conduct thorough research to avoid potential problems.

In conclusion, owning a cask of whisky can be an attractive idea, provided that you take the necessary precautions and ensure that any third party involved has a good reputation. However, once you have decided to invest, you will face the challenge of bottling the whisky, paying taxes and duties, and finding a suitable place to store the significant amount of bottles you will receive from your purchase.

Which one would you use to purchase a private cask if possible?

  • A Broker

  • The Distillery

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