INVESTING IN WHISKY CASKS VERSUS SHARES OR PROPERTY
Whisky Casks can be a solid asset, but they are a few key differences compared to traditional investments which you should be aware of before you decide to buy a cask.
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How an Investment in Whisky Casks Differs From Traditional Investments
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Investing in whisky casks is now widespread as an alternative investment. We have seen alternative sources of information directly comparing the returns seen on whisky casks to those seen on shares and property over the same time. This direct comparison is often used to positively portray whisky compared to those other assets. However, investments in whisky casks, property and shares all differ in important ways that mean each asset is suited to different types of investment needs.
How A Cask Investment Differ from Property & Shares
For many it may seem like an obvious statement but for the avoidance of doubt:
- The whisky cask investment industry is unregulated
- You won’t receive any annual income from your cask
- The cask market has little to no opacity, so it can be difficult to verify what you are buying has been valued correctly
- There is limited liquidity in casks; you cannot sell part of your cask
- You cannot actively trade in casks (this will change in March 2025).
We will go into more detail for each point below.
The Whisky Cask industry is unregulated
The whisky cask investment industry is unregulated by the FCA or any equivalent body. There is regulation of warehouses, warehousekeepers and until March 2025 owners of warehoused goods that are revenue traders (i.e. businesses, dealers and brokers who own casks) but this is for tax purposes and not for protection of private individuals. If you are buying casks as a private individual it is down to you to do your own due diligence.
Annual income
Casks don’t provide you an annual income and unlike property (which can provide rent), and shares (which can give annual dividends), you will not receive any income from your cask until you sell the cask. This needs to be considered when comparing the returns seen on casks to those seen on investments that provide a regular income. It means that when you buy a cask you will see no returns on your asset until you sell that cask, which ideally will be 10 to 30 years after you bought it.
Limited opacity
Investment in whisky casks is still an opaque market and little information is released to the public in terms of how value is calculated. With property you can research the house prices in your area and see what rent you can expect to receive, with shares you can research the history of the fund, see the performance of the manager and more.
As there is little to no information available to the public for you to be able to verify price or value yourself, you must rely on trusting the price you are asked to pay. If you are using a broker you must rely completely on that broker, and trust that they are not using you to take a large profit themselves. In this way whisky casks differ hugely from property and shares which are very tightly regulated and thus must be more transparently run.
Limited liquidity
Casks are a long-term investment and if you are considering buying a cask you should be prepared to have your capital tied up for at least 10-15 years to see the best returns on your money. If you need to release part of that capital beforehand you will need to sell your entire cask, as you cannot sell part of a cask. When you do decide to sell your cask, releasing your capital can take time in order to get you the best price and that should be taken into consideration as well.
You cannot activity trade in casks
This will change in March 2025. Unless you go through the lengthy process of becoming WOWGR certified private individuals cannot regularly trade in casks. You can buy a cask, or several casks, for personal use and then sell those for a profit, however the regular buying and selling of casks requires the proper licences.
If you want to find out more about investing in casks of whisky you can sign up to receive our Whisky Cask Buying Guide; a free 52-page PDF that outlines everything you need to know about becoming a whisky cask owner. You can also email [email protected] for more information on buying a scotch whisky cask through us.
Advice You Can Trust
Since 2016 our aim has been simple – to provide a trustworthy source of information to help people make sound decisions when they are selling their items. To date we have sold millions of pounds worth of antiques and whisky (both casks and bottles) for our clients.
We’re now applying this same logic to help people invest in casks of whisky. Rather than providing sales pitches disguised as educational material, it’s our mission to become the ultimate source of open and honest cask investment guidance.
The information you will find in our cask investment guide, cask guides, and Cask Calculator is all designed to help you make a balanced decision. We would rather you knew all the facts and didn’t buy a cask than buy one based on ‘fake news’.
