The Advertising Standards Authority (ASA) has issued an enforcement notice to whisky cask investment companies, demanding greater transparency in their advertising. This directive, effective from January 2, 2024, aims to ensure that consumers are not misled and are fully informed about the risks and details of such investments.
The notice requires that advertisements must clearly disclose the risks involved in investing, including the potential for fluctuating values and the fact that returns are not guaranteed. It also mandates that ads must contain “material information” necessary for consumers to make informed decisions. This includes the unregulated status of whisky cask investments, the variability of investment values, and applicable fees and conditions.
Following rulings against two companies for misleading adverts, the ASA has clarified that ads must also inform consumers about the maturation process of whisky, the expected evaporation loss known as the “angels’ share,” and the conditions for investment realization.
Ads must present claims of returns, such as percentages per annum, with supporting evidence and clear explanations of how these figures are calculated. Qualifications in ads should clarify but not contradict or mislead. Furthermore, endorsements or press features must be genuine, and any paid-for content should not be misrepresented as editorial coverage.
This enforcement notice is a response to past advertising practices and sets a precedent for responsible marketing. It highlights the ASA’s commitment to preventing the exploitation of consumers’ inexperience or credulity in the whisky investment market.
The ASA’s notice is a significant step towards consumer protection, ensuring that the complexities of whisky cask investment are communicated with clarity and accuracy. As the industry adapts to these standards, the integrity of whisky cask investment advertising is expected to improve, aligning with the values of transparency and responsibility.
Our Opinion
Mark Littler has been campaigning for years around the subject of the risky nature of whisky cask investment. In response to the new enforcement notice Mark states:
“As a huge advocate for greater transparency and consumer protection for whisky investors, I was delighted to see the decisive action taken by the Committee of Advertising Practice (CAP) earlier today.
The enforcement notice that they sent to those working in the sector this afternoon is a watershed moment for the industry and investors alike.
For too long the whisky investment landscape has resembled the Wild West – a place of impossible promises and undisclosed peril. Today’s intervention by CAP makes it clear that advertisements must not mislead by omission or misrepresentation and is a victory for consumers.
It is a change that is not just welcome but long overdue.
However, while we celebrate this progress, we must also acknowledge the journey ahead. Questions linger, particularly regarding the nature of ownership.
Investors often believe they own the casks that they invest in outright, when in reality they only hold rights to the contents, a distinction that is usually not made clear.
This nuance is more than a technicality. It is the difference between having the freedom to sell the cask however you like when you come to exit versus being beholden to the company it was first purchased from.
Let’s continue to call for transparency and integrity in the whisky investment sector.
Let’s work together to ensure that every investor can make fully informed decisions.
The CAP’s notice will hopefully only be the beginning. We must keep the momentum going to ensure that every facet of whisky investment is as clear as the spirit itself.”
