The Launch of the Cask Whisky Association: What Does it Mean for the Industry?
The recent news regarding the formation of the Cask Whisky Association (CWA) has been widely welcomed by many within the whisky industry.
With little or no regulations in place for the sale of whisky casks, be it for personal bottling or investment purposes, the sector has remained largely unchecked and open to exploitation from those looking to make a quick buck.
But now, the CWA promises to regulate, legislate, and educate. This can only be a good thing for the cask sales side of the industry with the aim to eradicate the unscrupulous companies that are giving the practise a bad name.
So why are some people unhappy about the news? What are the pros and cons?
The CWA has been launched with the mantra of protecting cask whisky customers and upholding the reputation of the Scotch whisky industry. Honourable and bold claims indeed. The new organisation aims to create a safer environment for whisky enthusiasts by setting guidelines and best practices for buying and selling whisky casks.
The CWA is made up of two boards – one of members and one of advisors. These include figures from the cask whisky industry, distilleries, independent bottling companies, legal and insurance professionals working within the cask sector, plus whisky experts, authors, and influencers. The association has also gained support from politicians including Wendy Chamberlain MP and Nickie Aiken MP.
The Advisory Board is made up of Graeme Dempster (Account Executive at insurance broker Bruce Stevenson) and George Frier (Partner at Shepherd & Wedderburn LLP), Patricia Dillon (Managing Director at Speyside Distillers Co.), John Laurie (MD of The Glenturret), Martin Purvis (Associate Director of Kelvin Cooperage) plus whisky writers Colin Hampden-White, Charles Maclean and Hans Offringa.
The Members Executive Board includes Simon Aron (MD of Cask Trade), Saul Kelly (MD of Fruitful Spirits), Keith Rennie (Director at Scotch Whisky International), Danny Saltman (Director of Malts at DS Tayman), Russell Spratley (Director at Spiritfilled), George Stewart (Director at Stewart Whisky Company) and Saul Taylor (MD of Dalkeith Brokerage).
But here lies the problem as some see it.
Since the announcement, several people within the Scotch whisky industry have expressed concerns about the legitimacy of the CWA. How can an organisation made up of so many with a vested interest in the cask whisky market remain unbiased? Will they just be looking out for their own companies, rather than the wider picture?
One unnamed whisky expert speaking to The Spirits Business magazine said that the CWA lacks transparency and accountability, and that it claims to be a self-regulatory body but has no real authority to enforce its own rules.
Another was quoted as saying that the CWA lacks established longstanding brokers among its self-appointed board, which has a “clear London bias” with a “lack of Scottish interests represented”.
Another raised the points that there should be wider consultation around the Scotch whisky industry and that the CWA as it stands seems insular and unhealthy. They also called for larger Scotch whisky producers, independent bottlers, and cask brokers to be involved or on the board.
Whisky writer George Koutsakis went one step further in a hard-hitting article on Forbes saying that the CWA was not the answer to protecting Scotch whisky investments and that most of the founding members either own or operate cask trading companies that also sell casks for investment.
Koutsakis wrote: “Much like a student does not grade their own paper, a criminal does not choose their own verdict, and an official does not elect themselves, cask brokering companies should not, in any scenario, be self-proclaiming themselves as protectors and advisors of the entire cask whisky industry and positioning themselves above all the other companies who are operating fairly and with integrity.”
He concluded his article by saying that “if this group is to exist it must have only impartial, unbiased members. No casks sellers, no brokers. The members cannot stand to profit from the association in any way and must be knowledgeable enough to go up against shady brokering companies and protect the industry.”
While there is a need for regulation in the whisky cask investment sector, only time will tell if the fledgling form of the Cask Whisky Association is the answer.
The concept is strong, but the association may need to evolve, be more inclusive and broaden its horizons before it is truly capable of doing what it is setting out to do. And to be accepted by much of the Scotch whisky industry that it is aiming to protect.
Aaron Damiano Sparkes, Founder and Managing Director of Whisky 1901 commented: “From a Whisky 1901 perspective, we’ve been calling for greater measures and regulations to improve the industry, including a regulatory board similar to the Financial Conduct Authority (FCA), and industry code of practice, as well as more stringent checks that brokers or ‘experts’ hold relevant qualifications from respected institutions.
“But while we’re pleased to see businesses from across the whisky industry come together to work towards making cask investment a safer place for consumers, we believe the long-established and respected Scotch Whisky Association would be best placed to head up the Cask Whisky Association.
“Not only would this ensure greater stringency and neutrality in the selection process of member businesses, ensuring fair accessibility and participation for and by all genuine cask investment companies, but also offer greater credibility and peace of mind for consumers.
The formation of a trade association is a positive step in the right direction to giving existing and future investors’ confidence that their investments are safe, but we hope to see further advocacy from the most trusted sources in the world of whisky to ensure this body truly delivers on its stated mission ‘to create a safe environment for whisky enthusiasts and customers to buy and sell casks’.”
You can read Aaron’s comments on the CWA in an article with Harpers Wine & Spirit magazine entitled Whisky Investment Company calls on SWA to ‘head up’ CWA.