Some whiskey distilleries allow individual customers to purchase casks of their product that will be stored at the distillery until the whiskey is mature and/or ready for sale. Whiskey cask investments fall into two categories: New Distilleries and Rare Casks. New distilleries are selling the casks of "fresh" whiskey before it ages so that the investors can sell the cask back to the distillery when it is mature in 10 to 12 years. Distilleries quote returns from 15 to 18 per cent per year (though those claims have not been independently verified).
- Skill level:
- Moderately Challenging
Research the whiskey distiller. Do not invest in unmarked, unbranded, or otherwise unknown casks. If you know that the distiller is a new start up, realise that you are risking losing any investment you may make if the distiller goes bankrupt. Look at the price of mature whiskey from that distillery compared to the cost for an immature cask. Only purchase from distillers who will provide a contract in writing.
Calculate the total cost of the whiskey barrel. In addition to the initial cost you must also include any charge for warehousing, insuring, and bottling the whiskey (if any exist). Also note that taxes are generally levied on bottled spirits and will not be charged until the liquor is in bottles. Some whiskey distilleries (especially the new distilleries) offer the option to buy the cask and then sell it back to the distillery before it is bottled, that way you avoid the taxes. Check the terms of your contract and legalities in your area regarding taxes and bottling.
Buy whiskey that you will want to drink. Arrange a tasting or purchase a bottle of the whiskey to sample. The Scotch Whiskey Association states that "Investment for resale is expensive and highly speculative and should not be entered into lightly." So if you are not prepared to lose all of the money you invested and then be the owner of 450 bottles of whiskey then you should not invest in whiskey casks.
Tips and warnings
- This article does not provide investment advice. Invest at your own risk.
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