Hey Phil - hope you are well. Yes - it is a big issue in the industry - and you can't blame the wholesalers - why should the scammers make all the profit! A lot needs to change in this industry on that front...
Well said Mark. Allow me to blow my own trumpet too because I've been warning folk for, several years, about the pitfalls of whisky cask investment. It seems so obvious but folk who know almost nothing about whisky have been seduced by price increases in the last few years and the siren call of all that easy money. It can be really risky unless you have complete faith in a person with the knowledge to provide you with expert advice. You know all the pitfalls so there's no need to mention them. Whisky can, of course, be an investable product as you have so ably demonstrated recently but a cask is a completely different proposition to a bottle as you say. The business end of whisky is very serious. Jumping on the bandwagon with little prior knowledge (and I include people that like a dram or two) is highly speculative at best. Bravo for calling it out. Let's hope we see independent bottling prices return to some relative normality if this plays out. I'm not sure G&M or Berry Bros are going to do that in a hurry though. WT
Thanks for posting this Mark. I had a look into cask investments last year (as I imagine many did) and the thing that deterred me, besides the "too good to be true" percentage returns, was the SUPER aggressive tele-sales strategies from a few of these firms; daily calls, twice a day minimum and must pay-over-phone asap....all felt very, very uncomfortable so ended up sticking to bottles.
I will stick to playing it safe with the purchase of the odd older bottling when the chance arises and see how they are doing in 15 years or so. I do not see myself making a mint but a 30 year old Single Malt should not go down and if it does, I can always drink it 🥃
Mark. I am not sure how closely you follow the bourbon market in Kentucky, but there have been some big headlines lately here as far as corruption and illegal selling of bottles. A large vintage bourbon seller in Lexington were raided by the Feds after confirming the illegal transportation and selling of rare bourbon. Also in Pennsylvania, members of the Alcoholic Beverage Control Board was accused of illegally hoarding rare bourbon. Crazy times.
I work in financial services and this is a long line of scams of unregulated investments from car parking at airports, hotel rooms in as yet unbuilt buildings in Barbados that attempt to entice people in to invest. Hopefully they are chased out soon before fleecing anyone else.
It's incredible the lies that are told in order for some companies to make a quick profit. The sad thing is that its bringing our industry into disrepute and there are not enough people defending it and helping consumers.
yes ,, people are paying for too many fingers in the pie ,,, do you think the prices will come down to enable indy bottlers if the cask thing crashes a little ?
100% - the current prices are not sustainable for the industry - they only make sense for the dealers who rip the public off in a game of the greater fool theory.
You can from several distilleries and sometimes it is good value. For example, the cost price may be lower as well as the annual storage costs. However, this isn't always the case. A disadvantage might become obvious when you want to sell the cask. Some places might insist that you pay their associates to bottle your whisky so you can not get away with buying a cask and then selling it without paying any duty. Distilleries may also place other restrictions on you selling your/their whisky. A lot of cask investment companies will gladly provide you with an exit strategy if it involves them earning a commission selling to another one of their clients. Basically, you are paying them twice whilst shouldering all the risk, but it can turn out to be a very time efficient way of crystalising most of your assets' worth. This is in no way a suggestion, but when I buy casks nowadays I aim to buy from the COVID years when there was limited production. The intention is to keep them for at least 10-15 years.These are, obviously, rarely available directly from the producers. In my opinion, a lot of whisky distilleries will go bust, which leaves a lot of problems transferring whisky to bonded (as in no duty paid) storage facilities. That is why I presently use cask investment companies, although I didn't in the past.
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RADIO 4: www.bbc.co.uk/programmes/m001hdnl
THE TELEGRAPH: www.telegraph.co.uk/investing/news/whisky-prices-soar-investors-risk-vast-losses/
Fascinating video. I never thought about how cask investment companies can negatively affect the independent bottling companies.
Hey Phil - hope you are well.
Yes - it is a big issue in the industry - and you can't blame the wholesalers - why should the scammers make all the profit! A lot needs to change in this industry on that front...
Well said Mark. Allow me to blow my own trumpet too because I've been warning folk for, several years, about the pitfalls of whisky cask investment. It seems so obvious but folk who know almost nothing about whisky have been seduced by price increases in the last few years and the siren call of all that easy money. It can be really risky unless you have complete faith in a person with the knowledge to provide you with expert advice. You know all the pitfalls so there's no need to mention them. Whisky can, of course, be an investable product as you have so ably demonstrated recently but a cask is a completely different proposition to a bottle as you say. The business end of whisky is very serious. Jumping on the bandwagon with little prior knowledge (and I include people that like a dram or two) is highly speculative at best. Bravo for calling it out. Let's hope we see independent bottling prices return to some relative normality if this plays out. I'm not sure G&M or Berry Bros are going to do that in a hurry though. WT
Thanks for posting this Mark. I had a look into cask investments last year (as I imagine many did) and the thing that deterred me, besides the "too good to be true" percentage returns, was the SUPER aggressive tele-sales strategies from a few of these firms; daily calls, twice a day minimum and must pay-over-phone asap....all felt very, very uncomfortable so ended up sticking to bottles.
It's mad isn't it. The sales reps are sooooo desperate for their commission aren't they. They just hound people until they give in I think 🙈
I will stick to playing it safe with the purchase of the odd older bottling when the chance arises and see how they are doing in 15 years or so. I do not see myself making a mint but a 30 year old Single Malt should not go down and if it does, I can always drink it 🥃
Sounds like a very good approach!
I prefer to buy the bottle instead of the cask. At least it's in a glass bottle siting in a place wherr i can access it.
Mark. I am not sure how closely you follow the bourbon market in Kentucky, but there have been some big headlines lately here as far as corruption and illegal selling of bottles. A large vintage bourbon seller in Lexington were raided by the Feds after confirming the illegal transportation and selling of rare bourbon. Also in Pennsylvania, members of the Alcoholic Beverage Control Board was accused of illegally hoarding rare bourbon. Crazy times.
Oh wow - I didn't hear about this.
I'll certainly do some research though.
Nice bottle at the back round, bowmore 12 1980s ...❤❤❤
I work in financial services and this is a long line of scams of unregulated investments from car parking at airports, hotel rooms in as yet unbuilt buildings in Barbados that attempt to entice people in to invest. Hopefully they are chased out soon before fleecing anyone else.
It's incredible the lies that are told in order for some companies to make a quick profit. The sad thing is that its bringing our industry into disrepute and there are not enough people defending it and helping consumers.
yes ,, people are paying for too many fingers in the pie ,,, do you think the prices will come down to enable indy bottlers if the cask thing crashes a little ?
100% - the current prices are not sustainable for the industry - they only make sense for the dealers who rip the public off in a game of the greater fool theory.
Can you buy casks directly from the distillery?
You can from several distilleries and sometimes it is good value. For example, the cost price may be lower as well as the annual storage costs. However, this isn't always the case. A disadvantage might become obvious when you want to sell the cask. Some places might insist that you pay their associates to bottle your whisky so you can not get away with buying a cask and then selling it without paying any duty. Distilleries may also place other restrictions on you selling your/their whisky. A lot of cask investment companies will gladly provide you with an exit strategy if it involves them earning a commission selling to another one of their clients. Basically, you are paying them twice whilst shouldering all the risk, but it can turn out to be a very time efficient way of crystalising most of your assets' worth.
This is in no way a suggestion, but when I buy casks nowadays I aim to buy from the COVID years when there was limited production. The intention is to keep them for at least 10-15 years.These are, obviously, rarely available directly from the producers. In my opinion, a lot of whisky distilleries will go bust, which leaves a lot of problems transferring whisky to bonded (as in no duty paid) storage facilities. That is why I presently use cask investment companies, although I didn't in the past.
72👍