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Increased cask valuations aren’t everything – there is now alarming potential that investors will be caught out by highly organised scammers Written by Blair Bowman
train crash is waiting to happen in the world of whisky cask investments. With moribund stock exchanges and negative interest rates fuelling a boom in alternative investments, whisky cask investment has experienced explosive growth, but has also attracted a whole slew of slick new brokers keen to sell casks to the growing number of enthusiastic investors. Yet even the most cursory investigation of these new cask brokers reveals a succession of red flags. As cask valuations have sky-rocketed over the past year, I’ve become increasingly concerned by a market that appears to be out of control and in which the potential for investors to be ripped off is alarmingly high. THE FABLED 582% Many fancy social media adverts claim that whisky
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can offer returns of up to 582% over ten years. This figure has its basis in a reputable report by Knight Frank Luxury Investments Index collated by the knowledgeable team at Rare Whisky 101, who explicitly link this figure to an index tracking 100 bottles of the most desirable and rare Scotch whiskies. Unfortunately the 582% figure is being regurgitated by cask investment companies to suggest such returns are on offer for those investing in casks from distilleries rather than incredibly rare bottles. While maturing casks are typically increasing in value, I’m not aware of any coming close to 582%. Also, significant growth in the value of casks is only possible if bought at a competitive price, while many of the newcomers are offering casks at inflated prices which make a profit unlikely and a stratospheric increase of 582% almost impossible. Remember the golden rule – if something seems too good to be true...
11/06/2021 14:36:12