This may seem like an obvious one, but it is actually quite a common problem. Many distilleries have hidden clauses in their contracts that restrict what the owner can do with their cask during and after maturation. These constraints are called restrictive covenants. Another common inclusion that is often skimmed over is what is called profit share. This is when a cask dealer adds a clause to the contract that entitles them to a share of any future profits.
Restrictive Covenants
Restrictive covenants are clauses in a contract that limit how a cask owner may use their cask in the future. These restrictions include things like not being able to use the distillery’s name on bottlings of the cask. Another common restriction is to do with bottling itself. For example, if you are one of the lucky few to enter the Macallan cask buying scheme, you can only bottle the cask for private consumption.
Also in most cask buying contracts will be the terms of the bonded warehouse in which your cask will lie. Do they let you visit your cask? Can you draw samples from your cask? If this is something that is important to you then it is important that you check your contract thoroughly.
Profit Shares
Profit shares are clauses in the contract that state that a dealer or distillery is entitled to a certain percentage of the cask owner’s profit when they eventually come to sell the cask. This percentage is usually somewhere around 10-20% which is a large percentage of any potential profit.
Reading and understanding the contract and how it will affect your buying, owning, and selling experience is vital so that you can avoid any surprises when it comes to your whisky cask.
