1. Do your homework
When considering whisky investment, it’s important to do your research to find a reputable whisky broker to help you understand how to invest in whisky. A knowledgeable consultant should be able to guide you through the entire process of purchasing, owning, managing, and eventually realising your whisky cask investment. So it’s important that you have full confidence in the company and trust their expertise.
We recommend checking that the company’s consultants have the appropriate qualifications and accreditations. For example, that they are Wine & Spirit Education Trust (WSET) and/or Edinburgh Whisky Academy certified.
You should only work with a company that has a WOWGR licence – this confirms that they have been approved and audited by HMRC to own, buy and sell goods in duty suspension in a bonded warehouse. It’s also worth checking whether the company has a lawyer or legal partner that can advise you along the way, as well administrating legal transfer of ownership should you choose to proceed with purchasing a cask.
2. Have a clear goal in mind
Think about why you are investing. Are you saving for a deposit on a home, retirement or to leave a legacy for future generations? What’s your budget and investment timeline? What’s your appetite for risk?
Although whisky casks start at around £5,000, investments typically range between £30,000 to £50,000 and we recommend a minimum five-to-10-year investment. Generally, the longer you hold a cask the more the whisky in it improves and the greater the return.
At Whisky 1901, we make it our mission to connect investors with the right whisky cask based on their unique set of circumstances so it’s important to consider your goal, seeking independent financial advice if necessary.
3. Understand the process
If you decide to invest in a cask, you’ll need to provide identification and proof of UK residence to carry out Anti Money Laundering (AML) checks. If you work with Whisky 1901, on completion of these checks, you’ll receive a Certificate of Purchase to sign and our bank account details. Once this is signed and payment is made in full, the legal and beneficial entitlement to your cask passes to you.
We’ll issue a legal document called a Bailment Contract confirming your cask’s transfer of ownership to you. This includes a Unique Cask Number, a Delivery Order and the signatures of both parties. This common law agreement certifies that you are the legal owner of the cask.
4. Choose the right cask
As and when you decide to proceed with an investment, you’ll need to pick a cask that aligns with your investment goal. With 148 Scotch whisky distilleries operating across six regions in Scotland: Campbeltown, Highlands, Islay, Lowlands, Speyside and Islands, choosing the right cask can be challenging for a beginner so it’s worth getting expert advice.
It’s important to select distilleries based on merit, history and worldwide demand. At Whisky 1901, we only work with the top 20-40 distilleries in Scotland, owned by brands Diageo, Suntory Holdings and Edrington Group, i.e. those that invest their money back into marketing and tourism which, in turn, increases the brand value and credibility.
5. Track the performance of your investment
Naturally, you’ll want to monitor performance. Our investors receive quarterly updates on current whisky market performance.
Every two years, you’ll receive analysis of your specific investment with projected ROI based on market prices. Quarterly investment updates from our consultants also provide information on current whisky market performance.
Our investors can also access details of their investment portfolio via an online dashboard.
6. How to exit the market
When it comes to selling or realising your investment, there are various options available to you. You may wish to sell on the open market or, if you work with us, sell to our existing client base.
We have investors interested in both new and mature casks and/or we can help source potential buyers from a broad professional network of brokers and collectors to make sure your cask goes for a healthy price.
Alternatively, you can choose to sell at auction. This has become a popular way of selling cask whisky as the process requires minimal effort. It’s also possible to sell back to whisky brands as distillers often ‘run short’ of stock. Or you may even wish to bottle and brand your whisky to sell to the retail market, or simply enjoy the product yourself. Here at Whisky 1901 we recently launched our own bottling service for cask investors looking to exit the market in this way.
We not only advise on how to invest in whisky but how to realise your investment when the time is right.
