Hi Mark, In an ideal world, this information would be great, but I believe it shows a lack of knowledge in the cask whisky logistics world. What you fail to tell people, is that there are only a handful of independent bonded warehouse in Scotland who store casks and the high majority will no longer open accounts for private individuals. Maybe this is because there is a severe lack of space in most warehouses for casks, which is slowly being addressed by the distilleries and independent warehouses. Maybe you could share with us the warehouses that are opening private accounts?? If private clients are unable to open a private account, what are the options? I have had it confirmed by a lawyer that an invoice, paid invoice receipt, certificate of ownership all including the cask's unique details (cask number, OLA/RLA, ABV, storage location, etc...) and proof of payment for the same amount from a personal bank account, make the buyer the legal owner. In the unlikely event that the seller went into liquidation, these corresponding documents would be shown to the liquidator and the purchased casks would not be included in the assets that are liquidated. Also, does Mark Littler have a WOWGR?
Hi Sam, glad you liked the video. Wow - lots to go at so let’s make a start. 1 - Do we have a WOWGR? No. We do not own any duty suspended goods. Therefore it is not applicable. Do you mind if I ask if you have a HGV license? I assume that if you do not drive a HGV you haven't been through the process of getting one? 2 - Yes - there is a real lack of storage in Scotland. The capacity for private accounts has been further reduced owing to the poor practices of some cask investment companies too. See the Whisky Brokers (a very big warehouse facility in Scotland) blog dated 25/11/2020 for more details. Note they state one of the main reasons for stopping new accounts was a result of “each owner [attempting] to sell the product on risk free for maximum profit, pushing the problem further down the chain.” This is the crux of the issue. Why should the warehouses be the ones responsible for tidying the mess caused by some companies? The fact that there are so few warehouses that will now open a private account should be seen as another red flag as to the poor behavior of some of these companies. 3 - What are the other options? This raises a wider issue. Should a company be selling to individuals if they cannot transfer the casks to the individual? Just because there is money to be made, it does not mean that it should be made by cutting corners at the expense of the customer. 4 - Your comments about legal ownership might be theoretically correct, but I have dealt with numerous customers over the years who HAD all of the paperwork you suggest, but the casks never existed in the first place. So how can you own something that never existed? This happened with Cavendish Wines customers, The Nant Distillery (in this case the distillery were selling casks that didn’t even exist), etc etc. This is just history repeating. This is why it is imperative that a customer seeks external verification of the existence of a cask outside of the paperwork provided by the company. Assuming all the processes have been correctly followed and the Warehousekeeper was informed of the sale, then there should be no problem with a client calling up a warehouse to check their casks exists. Indeed, there are some investment companies who operate in this way, and the distilleries and warehousekeepers are more than happy to confirm to that they were notified and the casks are held by XX company on behalf of YY. Again, this approach is further backed up by the SWA Guidance: “you should ensure that the transfer of ownership is properly recorded and acknowledged by the warehouse keeper…Before completing the purchase you should check with the warehouse keeper what documents they require and ensure that the seller can deliver them to you.”
@@MarkLittler Thanks for your reply. 1. Ok, so you're saying you don't need a WOWGR because you're not a revenue trader and you don't own the casks you sell to your customers? Is there not a contradiction to the crux of your argument here? At least the WOWGR registered companies can prove to their customers that they own the stock they are selling. Sending funds to a company for a cask, that owns no casks and isn't licensed to own any, is surely a higher risk? 2. I don't think anyone can deny there are rouge companies in all industries, but these are a small fraction of the market and if the warehouse owners do their job correctly (due diligence on WOWGR holders, not allowing private accounts to use their account as a trade account) I fail to see why and how this should effect the storage market. 3. You seem to be forgetting that there is money to be made on both sides and the purchaser wants a solution, not a constant negative response of 'what-ifs'. It seems the majority of buyers walk into these sales with their eyes wide open. There are risks with everything in life and without taking calculated risks, we'd achieve nothing. 4. For every negative story there are 100 positive stories of success, due diligence on the company you are dealing with is the key. How long have they been trading (less than 5 years = higher risk), are their accounts filed and up to date on Company House, Trustpilot reviews, etc, etc... So to sum up. It seems there may be a small case of the 'green-eyed monster' here. You are not authorised by HMRC to own whisky casks under bond and that may be the reason you don't have any to sell, just a waiting list. Either way, you seem to be constantly trying to put 'what-ifs' into peoples minds and some of the information you spout is not entirely correct, but more suited to feathering your own nest with duty-paid bottle and antique sales.
@@samsamthewhiskyman3253 Hope you are well. Sure, let me address your points 1 - I think you might have misunderstood what a revenue trader is and how you become one. HMRC does not ‘authorise’ you to become a revenue trader. As per Excise Notice 206 a revenue trader is, in short, “a trader involved in any way with goods or services liable to Excise Duty, whether or not the duty has been paid.” So if a business falls into the above category then you need to keep the appropriate records as laid out in Notice 206. Note that the remit of a revenue trader expands to other service industries who facilitate revenue traders activities such as “financiers and financial institutions, analysts, makers of scientific instruments, gaugers, computer consultants” etc. As a business we are revenue traders, and as such keep the appropriate records. However, Excise Notice 196 (i.e. WOWGR) is only applicable if the revenue trader wants to store duty suspended goods, which we do not. We have no need to own the casks we sell as our business model is as a broker (just like we do not own the art, bottles, jewellery etc that we also broker) and we work with delivery orders so the cask owners can verify the presence of their casks at the warehouse level. Furthermore I refute the point that owning a WOWGR means the company can prove they own the casks they are selling. Getting a WOWGR doesn’t prove you own anything, just that you have the legal framework to do so. This is why the Scotch Whisky Association advises that you always seek external verification of the goods by the warehousekeeper: “you should ensure that the transfer of ownership is properly recorded and acknowledged by the warehouse keeper…Before completing the purchase you should check with the warehouse keeper what documents they require and ensure that the seller can deliver them to you.” 2 - Of course, every industry has rogue traders. The main issue with casks is that modern companies who do not transfer ownership of casks and do not provide external proof of the casks existence are operating in exactly the same way as historic fraudsters did. Not all the modern companies are fraudsters, but it is important that potential buyers are aware of the risks inherent in buying casks in such a way. Unfortunately, on paper at least, there is nothing to distinguish the businesses of the companies with poor intentions and those with good intentions. This makes it very hard for a consumer to distinguish a scam from a genuine, very honest, company. Hence, we provide advice on doing due diligence. Also, let’s not forget that if any company who has a WOWGR and fails to tell the warehousekeeper each time a cask is sold then they would seemingly be breaking the WOWGR regs - see The Warehousekeepers and Owners of Warehoused Goods Regulations 1999, Section V, 9. (3): “(3) Relevant goods shall not be sold whilst they are being kept in an excise warehouse unless the seller, or if the seller has a duty representative that representative, gives notice of the sale to the authorised warehousekeeper.” Some brokers have agreements with the warehouses they work with to do this, but the potential buyer needs to know to follow up with this. 3 - Absolutely! I am not against cask ownership. Indeed, there are many brokers and dealers who WILL transfer ownership fully, and likewise there is an extensive list of distilleries who can buy cask from directly, and which we list on our website. Borders, Annandale, Arran, NcNean, Lindores Abbey, Raasay, Lagg, Ardnahoe, Inchdairnie and many others offer casks to the public. Historically even Macallan, Bruichladdich and Springbank offered casks direct to the public too. I feel there is a big difference between cask sellers who are informing their clients fully and those who are simply looking to make sales. Of course, any buyer fully aware of all the facts can make their own minds up. However, I do think you are making a big assumption that everyone who buys casks is fully aware of what they are doing; we get regular calls from people who get talked into buying casks by good sales teams and only afterwards think to do their due diligence. There is a lot of information out there giving contradictory information and incorrect advice. One video I saw recently on TH-cam by a cask investment company stated that “casks are free from inheritance tax”, which I am sure you will agree, is just wrong. Not to mention the companies suggesting 20% annual returns on casks without any supporting evidence. It is important for all to remember that the cask world is not regulated in any way. It is not like a financial investment, which is covered by the FCA. Also, the cask world has been mired with scams in the past. As such, are you against a more cautious counter narrative? Another great example of this is when cask companies talk about the returns of bottles of whisky and use it in relation to casks. This is simply misuse of data and has been strongly campaigned against by the people who put out the data about bottles. 4 - Absolutely - I am all for due diligence! But due diligence means having access to all the information so that people can make up their own mind. 5 - With regards to your closing remarks I have a couple of comments. First of all, nobody is ‘authorised’ by HMRC to be a revenue trader - your business actions either make you a revenue trader or not. Secondly, your comment “Possibly you applied and got rejected because you didn't meet HMRC's strict criteria, or they felt your business plan wasn't strong enough” is libellous and I suggest you edit your comment. Finally, it is important to note that it is not just me offering information and advice to cask buyers around this subject. There is lots of guidance issued to help people think about the issues of cask ownership, not limited to: HMRC: Excise Notice 196 and Statutory Notice 1999 No. 1278. Scotch Whisky Association: New Scotch Whisky Association Guidance, June 2020 Forbes: 4 Top Scotch Whisky Investment Tips To Avoid Cask Scammers, July 2021 Cask & Still Magazine: Fools Gold, July 2021 The Sunday Times: Warning Over Risky Investments, 11th July 2021 Whisky Magazine: When History Repeats Itself, July 2021 The Whisky Wash: 4 Top Tips To Help You Safely Buy A Scotch Whisky Cask, August 2021 The Daily Mail: Scam drams! Rare whisky is soaring in value but those tempted to invest should beware the fraudsters who are cashing in, September 2021 The Mirror: High pressure sales tactics from whiskey investment firm leaves a bad taste, May 2021 Whisky Magazine: False Profits, Volume 1 Issue 2
This communication thread between the two of you has been really informative and helpful. Thanks for replying to each other respectfully and with valuable sides the the debate/discussion.
Great video. All your videos and blogs are really great at demystifying the process. Like you, I went down a 6 month rabbit hole on the legal framework for buying, selling and storing cask and landed at a similar place regarding legal title vs bailment and beneficial ownership and that legal ownership is always preferable. The stumbling block I found was that it seems that a lot of warehouses don't want to open new accounts for private individuals and having an account with them seems to be a necessary pre-requisite to having them acknowledge the DO. Btw I currently own all my casks under the bailment framework and haven't had any issues to date and have sold 2 mature casks but have another 2 that are likely to be under management for 5-10 more years. Be interested in discussing work arounds to this, if possible.
Hey - glad you liked the video and thanks for your comment. Sorry about this comment too - it is quite a long one…and more for me to expand on some points I did not make in the video rather than aimed directly at you :) Yes - you make a good point. If the customer is happy with the arrangement, i.e. they only have beneficial title etc, and are happy to proceed, that is the customers prerogative. What I feel the issue is (and you infer to this in your comment) is how hard it is to get to the bottom of it all, even if you do a lot of your own DD! Quite often companies will deliberately try to deceive the customer (i.e. you need a WOWGR etc) in order to push them further into the sale, and this is what is most worrying. If you are comfortable with the bailment agreement, that is great. What is not great is if a customer is not even aware that they are in a bailment agreement. Again, let’s go back to the SWA guidance: “you should ensure that the transfer of ownership is properly recorded and acknowledged by the warehouse keeper…Before completing the purchase you should check with the warehouse keeper what documents they require and ensure that the seller can deliver them to you.” This is interesting as it raises another issue I did not mention in the video about bailment. Bailment is typically between two people, i.e. the owner of the bottle of whisky and the auction house who now has the bottle and is selling it for the customer. With casks it is slightly different as there are THREE people in the relationship: the warehouse, the seller and the buyer. I assume your bailment contract is between you and the seller. But what about the warehouse? Are they aware of this arrangement? Have you checked this is ok with them? Does the cask even exist? This is why the SWA state you need to get ultimate confirmation from the warehouse. Assuming that the warehousekeeper has been notified of the sale by the seller (as per The Warehousekeepers and Owners of Warehoused Goods Regulations 1999, Part V, 9. (3)) then they should be able to confirm this.
Hey - glad you like the video. Like you say - it's a very niche area of the industry and one which privates are now becoming part of. I hope I can be part of the wider education!
Hi Rui - glad you like the video :) Plenty more niche videos on the way soon - we have a good one lined up about sherry casks that will be quite eye opening I hope!
Hi Mark? I’m not interested in cask or bottle investment but I do like these videos explaining what’s going on in the whisky industry, nice one, was interesting, slàinte
Hey David. Glad you like the video. We've got some more like this coming up soon - if there are any subjects you want to know more about just let me know.
Okay, so this may not be the most positive video, but there is obviously a huge need for this information to be out there!!! I've seriously considered buying a cask from two different new distilleries in the past but have been hesitant to invest that kind of money in something I don't know much about. Here are my two experiences: 1) A couple of years back, when visiting Islay, I thought about investing in a cask from a brand-new distillery being built there, but when I started reading the fine print, I got an uncomfortable feeling about the terms and conditions, considering their almost 10,000 Pound asking price. Basically, the deal was you pony up the money and then they can move your cask around to wherever they want to age it and, if I recall correctly, I couldn't even go to the warehouse it was being stored in to see it. I'm not trying to start a debate about the merits of a cask being stored near the same location it originated from, but it just felt like the terms were basically "Give us your money, and we'll do with your cask whatever suits us best." 2) The other new distillery (not on Islay) that I looked into buying a cask from seemed to be more on the 'up and up,' but when Covid stopped international travel I decided to wait on purchasing, as I wanted to be there when my cask was filled. When I looked into the possibility of buying a cask from them just recently, I was less sure about them, as they are producing the first 'organically' made whisky and have seen their popularity soar. Now it seems they are now offering 'shares' in casks, which seems dubious to me, and I am no longer considering buying a cask from them. It seems that the saying attributed to P. T. Barnum is very much valid in this market: "A fool and his money are soon to part."
Hey Scott - sorry to haer your experiences have not been great so far. You are right too - a lot of the process is heavily focused on either the immediate 'lets get money' or the future 'think how much money we can make you'. There is very little inbetween - and that is the most important part! You are true about fools and their money too - although in this instance I think there are lots of very clever people putting a convincing case forward to customers, and without any form of clear guidance from the SWA/HMRC/higher power, then the customer has no hope!
@@MarkLittler I agree with you completely that cask ownership should be more about the experience than about the money, which is a lesson my dad did his best to instill (distill?) in me. Also, I didn't intend to put anyone down by quoting PT Barnum. I didn't do a good job of it, but it was meant more about an attitude that seems too common in the industry. I'm in complete agreement with you that there needs to be clearer ground rules, as it is almost impossible to know where one actually stands if the floor is either shaky or not where one thinks it is.
@@scottc1589 Hey Scott - sorry - I didn't mean to imply you were wrong. Part of the problem is that so many people see whisky casks as a get rich quick scheme - and part their money too quickly!!!! This nature is exploited by the companies selling to them and it makes for a perfect storm of scamming!
Hi Mark, In an ideal world, this information would be great, but I believe it shows a lack of knowledge in the cask whisky logistics world. What you fail to tell people, is that there are only a handful of independent bonded warehouse in Scotland who store casks and the high majority will no longer open accounts for private individuals. Maybe this is because there is a severe lack of space in most warehouses for casks, which is slowly being addressed by the distilleries and independent warehouses. Maybe you could share with us the warehouses that are opening private accounts?? If private clients are unable to open a private account, what are the options? I have had it confirmed by a lawyer that an invoice, paid invoice receipt, certificate of ownership all including the cask's unique details (cask number, OLA/RLA, ABV, storage location, etc...) and proof of payment for the same amount from a personal bank account, make the buyer the legal owner. In the unlikely event that the seller went into liquidation, these corresponding documents would be shown to the liquidator and the purchased casks would not be included in the assets that are liquidated. Also, does Mark Littler have a WOWGR?
Hi Sam, glad you liked the video.
Wow - lots to go at so let’s make a start.
1 - Do we have a WOWGR? No. We do not own any duty suspended goods. Therefore it is not applicable. Do you mind if I ask if you have a HGV license? I assume that if you do not drive a HGV you haven't been through the process of getting one?
2 - Yes - there is a real lack of storage in Scotland. The capacity for private accounts has been further reduced owing to the poor practices of some cask investment companies too. See the Whisky Brokers (a very big warehouse facility in Scotland) blog dated 25/11/2020 for more details. Note they state one of the main reasons for stopping new accounts was a result of “each owner [attempting] to sell the product on risk free for maximum profit, pushing the problem further down the chain.”
This is the crux of the issue. Why should the warehouses be the ones responsible for tidying the mess caused by some companies? The fact that there are so few warehouses that will now open a private account should be seen as another red flag as to the poor behavior of some of these companies.
3 - What are the other options? This raises a wider issue. Should a company be selling to individuals if they cannot transfer the casks to the individual? Just because there is money to be made, it does not mean that it should be made by cutting corners at the expense of the customer.
4 - Your comments about legal ownership might be theoretically correct, but I have dealt with numerous customers over the years who HAD all of the paperwork you suggest, but the casks never existed in the first place. So how can you own something that never existed? This happened with Cavendish Wines customers, The Nant Distillery (in this case the distillery were selling casks that didn’t even exist), etc etc. This is just history repeating.
This is why it is imperative that a customer seeks external verification of the existence of a cask outside of the paperwork provided by the company. Assuming all the processes have been correctly followed and the Warehousekeeper was informed of the sale, then there should be no problem with a client calling up a warehouse to check their casks exists. Indeed, there are some investment companies who operate in this way, and the distilleries and warehousekeepers are more than happy to confirm to that they were notified and the casks are held by XX company on behalf of YY.
Again, this approach is further backed up by the SWA Guidance:
“you should ensure that the transfer of ownership is properly recorded and acknowledged by the warehouse keeper…Before completing the purchase you should check with the warehouse keeper what documents they require and ensure that the seller can deliver them to you.”
@@MarkLittler Thanks for your reply.
1. Ok, so you're saying you don't need a WOWGR because you're not a revenue trader and you don't own the casks you sell to your customers? Is there not a contradiction to the crux of your argument here? At least the WOWGR registered companies can prove to their customers that they own the stock they are selling. Sending funds to a company for a cask, that owns no casks and isn't licensed to own any, is surely a higher risk?
2. I don't think anyone can deny there are rouge companies in all industries, but these are a small fraction of the market and if the warehouse owners do their job correctly (due diligence on WOWGR holders, not allowing private accounts to use their account as a trade account) I fail to see why and how this should effect the storage market.
3. You seem to be forgetting that there is money to be made on both sides and the purchaser wants a solution, not a constant negative response of 'what-ifs'. It seems the majority of buyers walk into these sales with their eyes wide open. There are risks with everything in life and without taking calculated risks, we'd achieve nothing.
4. For every negative story there are 100 positive stories of success, due diligence on the company you are dealing with is the key. How long have they been trading (less than 5 years = higher risk), are their accounts filed and up to date on Company House, Trustpilot reviews, etc, etc...
So to sum up. It seems there may be a small case of the 'green-eyed monster' here. You are not authorised by HMRC to own whisky casks under bond and that may be the reason you don't have any to sell, just a waiting list. Either way, you seem to be constantly trying to put 'what-ifs' into peoples minds and some of the information you spout is not entirely correct, but more suited to feathering your own nest with duty-paid bottle and antique sales.
@@samsamthewhiskyman3253 Hope you are well.
Sure, let me address your points
1 - I think you might have misunderstood what a revenue trader is and how you become one. HMRC does not ‘authorise’ you to become a revenue trader. As per Excise Notice 206 a revenue trader is, in short, “a trader involved in any way with goods or services liable to Excise Duty, whether or not the duty has been paid.” So if a business falls into the above category then you need to keep the appropriate records as laid out in Notice 206. Note that the remit of a revenue trader expands to other service industries who facilitate revenue traders activities such as “financiers and financial institutions, analysts, makers of scientific instruments, gaugers, computer consultants” etc.
As a business we are revenue traders, and as such keep the appropriate records. However, Excise Notice 196 (i.e. WOWGR) is only applicable if the revenue trader wants to store duty suspended goods, which we do not. We have no need to own the casks we sell as our business model is as a broker (just like we do not own the art, bottles, jewellery etc that we also broker) and we work with delivery orders so the cask owners can verify the presence of their casks at the warehouse level.
Furthermore I refute the point that owning a WOWGR means the company can prove they own the casks they are selling. Getting a WOWGR doesn’t prove you own anything, just that you have the legal framework to do so. This is why the Scotch Whisky Association advises that you always seek external verification of the goods by the warehousekeeper:
“you should ensure that the transfer of ownership is properly recorded and acknowledged by the warehouse keeper…Before completing the purchase you should check with the warehouse keeper what documents they require and ensure that the seller can deliver them to you.”
2 - Of course, every industry has rogue traders. The main issue with casks is that modern companies who do not transfer ownership of casks and do not provide external proof of the casks existence are operating in exactly the same way as historic fraudsters did. Not all the modern companies are fraudsters, but it is important that potential buyers are aware of the risks inherent in buying casks in such a way. Unfortunately, on paper at least, there is nothing to distinguish the businesses of the companies with poor intentions and those with good intentions. This makes it very hard for a consumer to distinguish a scam from a genuine, very honest, company. Hence, we provide advice on doing due diligence.
Also, let’s not forget that if any company who has a WOWGR and fails to tell the warehousekeeper each time a cask is sold then they would seemingly be breaking the WOWGR regs - see The Warehousekeepers and Owners of Warehoused Goods Regulations 1999, Section V, 9. (3):
“(3) Relevant goods shall not be sold whilst they are being kept in an excise warehouse unless the seller, or if the seller has a duty representative that representative, gives notice of the sale to the authorised warehousekeeper.”
Some brokers have agreements with the warehouses they work with to do this, but the potential buyer needs to know to follow up with this.
3 - Absolutely! I am not against cask ownership. Indeed, there are many brokers and dealers who WILL transfer ownership fully, and likewise there is an extensive list of distilleries who can buy cask from directly, and which we list on our website. Borders, Annandale, Arran, NcNean, Lindores Abbey, Raasay, Lagg, Ardnahoe, Inchdairnie and many others offer casks to the public. Historically even Macallan, Bruichladdich and Springbank offered casks direct to the public too.
I feel there is a big difference between cask sellers who are informing their clients fully and those who are simply looking to make sales. Of course, any buyer fully aware of all the facts can make their own minds up. However, I do think you are making a big assumption that everyone who buys casks is fully aware of what they are doing; we get regular calls from people who get talked into buying casks by good sales teams and only afterwards think to do their due diligence.
There is a lot of information out there giving contradictory information and incorrect advice. One video I saw recently on TH-cam by a cask investment company stated that “casks are free from inheritance tax”, which I am sure you will agree, is just wrong. Not to mention the companies suggesting 20% annual returns on casks without any supporting evidence.
It is important for all to remember that the cask world is not regulated in any way. It is not like a financial investment, which is covered by the FCA. Also, the cask world has been mired with scams in the past. As such, are you against a more cautious counter narrative? Another great example of this is when cask companies talk about the returns of bottles of whisky and use it in relation to casks. This is simply misuse of data and has been strongly campaigned against by the people who put out the data about bottles.
4 - Absolutely - I am all for due diligence! But due diligence means having access to all the information so that people can make up their own mind.
5 - With regards to your closing remarks I have a couple of comments.
First of all, nobody is ‘authorised’ by HMRC to be a revenue trader - your business actions either make you a revenue trader or not.
Secondly, your comment “Possibly you applied and got rejected because you didn't meet HMRC's strict criteria, or they felt your business plan wasn't strong enough” is libellous and I suggest you edit your comment.
Finally, it is important to note that it is not just me offering information and advice to cask buyers around this subject. There is lots of guidance issued to help people think about the issues of cask ownership, not limited to:
HMRC: Excise Notice 196 and Statutory Notice 1999 No. 1278.
Scotch Whisky Association: New Scotch Whisky Association Guidance, June 2020
Forbes: 4 Top Scotch Whisky Investment Tips To Avoid Cask Scammers, July 2021
Cask & Still Magazine: Fools Gold, July 2021
The Sunday Times: Warning Over Risky Investments, 11th July 2021
Whisky Magazine: When History Repeats Itself, July 2021
The Whisky Wash: 4 Top Tips To Help You Safely Buy A Scotch Whisky Cask, August 2021
The Daily Mail: Scam drams! Rare whisky is soaring in value but those tempted to invest should beware the fraudsters who are cashing in, September 2021
The Mirror: High pressure sales tactics from whiskey investment firm leaves a bad taste, May 2021
Whisky Magazine: False Profits, Volume 1 Issue 2
This communication thread between the two of you has been really informative and helpful. Thanks for replying to each other respectfully and with valuable sides the the debate/discussion.
Great video Mark, thank you. Learned a lot of new things for myself.
Hey. Glad you liked the video! Happy to help too!
Great video. All your videos and blogs are really great at demystifying the process. Like you, I went down a 6 month rabbit hole on the legal framework for buying, selling and storing cask and landed at a similar place regarding legal title vs bailment and beneficial ownership and that legal ownership is always preferable. The stumbling block I found was that it seems that a lot of warehouses don't want to open new accounts for private individuals and having an account with them seems to be a necessary pre-requisite to having them acknowledge the DO. Btw I currently own all my casks under the bailment framework and haven't had any issues to date and have sold 2 mature casks but have another 2 that are likely to be under management for 5-10 more years. Be interested in discussing work arounds to this, if possible.
Hey - glad you liked the video and thanks for your comment. Sorry about this comment too - it is quite a long one…and more for me to expand on some points I did not make in the video rather than aimed directly at you :)
Yes - you make a good point. If the customer is happy with the arrangement, i.e. they only have beneficial title etc, and are happy to proceed, that is the customers prerogative.
What I feel the issue is (and you infer to this in your comment) is how hard it is to get to the bottom of it all, even if you do a lot of your own DD! Quite often companies will deliberately try to deceive the customer (i.e. you need a WOWGR etc) in order to push them further into the sale, and this is what is most worrying.
If you are comfortable with the bailment agreement, that is great. What is not great is if a customer is not even aware that they are in a bailment agreement.
Again, let’s go back to the SWA guidance:
“you should ensure that the transfer of ownership is properly recorded and acknowledged by the warehouse keeper…Before completing the purchase you should check with the warehouse keeper what documents they require and ensure that the seller can deliver them to you.”
This is interesting as it raises another issue I did not mention in the video about bailment.
Bailment is typically between two people, i.e. the owner of the bottle of whisky and the auction house who now has the bottle and is selling it for the customer.
With casks it is slightly different as there are THREE people in the relationship: the warehouse, the seller and the buyer.
I assume your bailment contract is between you and the seller. But what about the warehouse? Are they aware of this arrangement? Have you checked this is ok with them? Does the cask even exist? This is why the SWA state you need to get ultimate confirmation from the warehouse. Assuming that the warehousekeeper has been notified of the sale by the seller (as per The Warehousekeepers and Owners of Warehoused Goods Regulations 1999, Part V, 9. (3)) then they should be able to confirm this.
Great video and information. We had a discussion about this topic a coupe of weeks ago. This is a great reference pint Well done
Hey - glad you like the video. Like you say - it's a very niche area of the industry and one which privates are now becoming part of. I hope I can be part of the wider education!
Cool video. As a whisky geek I love these unusual contents. 👍
Hi Rui - glad you like the video :) Plenty more niche videos on the way soon - we have a good one lined up about sherry casks that will be quite eye opening I hope!
Hi Mark? I’m not interested in cask or bottle investment but I do like these videos explaining what’s going on in the whisky industry, nice one, was interesting, slàinte
Hey David. Glad you like the video. We've got some more like this coming up soon - if there are any subjects you want to know more about just let me know.
Okay, so this may not be the most positive video, but there is obviously a huge need for this information to be out there!!!
I've seriously considered buying a cask from two different new distilleries in the past but have been hesitant to invest that kind of money in something I don't know much about. Here are my two experiences:
1) A couple of years back, when visiting Islay, I thought about investing in a cask from a brand-new distillery being built there, but when I started reading the fine print, I got an uncomfortable feeling about the terms and conditions, considering their almost 10,000 Pound asking price. Basically, the deal was you pony up the money and then they can move your cask around to wherever they want to age it and, if I recall correctly, I couldn't even go to the warehouse it was being stored in to see it. I'm not trying to start a debate about the merits of a cask being stored near the same location it originated from, but it just felt like the terms were basically "Give us your money, and we'll do with your cask whatever suits us best."
2) The other new distillery (not on Islay) that I looked into buying a cask from seemed to be more on the 'up and up,' but when Covid stopped international travel I decided to wait on purchasing, as I wanted to be there when my cask was filled. When I looked into the possibility of buying a cask from them just recently, I was less sure about them, as they are producing the first 'organically' made whisky and have seen their popularity soar. Now it seems they are now offering 'shares' in casks, which seems dubious to me, and I am no longer considering buying a cask from them.
It seems that the saying attributed to P. T. Barnum is very much valid in this market: "A fool and his money are soon to part."
Hey Scott - sorry to haer your experiences have not been great so far. You are right too - a lot of the process is heavily focused on either the immediate 'lets get money' or the future 'think how much money we can make you'. There is very little inbetween - and that is the most important part!
You are true about fools and their money too - although in this instance I think there are lots of very clever people putting a convincing case forward to customers, and without any form of clear guidance from the SWA/HMRC/higher power, then the customer has no hope!
@@MarkLittler I agree with you completely that cask ownership should be more about the experience than about the money, which is a lesson my dad did his best to instill (distill?) in me. Also, I didn't intend to put anyone down by quoting PT Barnum. I didn't do a good job of it, but it was meant more about an attitude that seems too common in the industry. I'm in complete agreement with you that there needs to be clearer ground rules, as it is almost impossible to know where one actually stands if the floor is either shaky or not where one thinks it is.
@@scottc1589 Hey Scott - sorry - I didn't mean to imply you were wrong. Part of the problem is that so many people see whisky casks as a get rich quick scheme - and part their money too quickly!!!! This nature is exploited by the companies selling to them and it makes for a perfect storm of scamming!
@@MarkLittler No worries, Mark. I didn't take offense!