For the average investor, casks are a relatively new way to put your money in whisky. Traditionally, the main distillers would keep hold of their own casks, meaning only industry insiders could purchase one.
But now brokers such as London Cask Traders, one of the leading sellers of whisky casks, are making it easier for anyone to profit from this great market.
Mark Biss, Director and Founder of London Cask Traders, is in no doubt of the benefits of casks as an investment. He says: “Because casks of whisky were not traditionally sold on the open market, their emergence has meant they can increase in value very quickly. The secondary market means buying a cask can result in a good return reasonably soon, and it’s been proven throughout history that the value of casks increases with age.”
Another advantage of casks over bottles is that there is no need to find a way of storing them as they remain in HMRC government bonded warehouses, safe and well looked after at the right temperature, with full insurance.
And, there is less chance of finding yourself owning a fake whisky, something bottles can be suspect to, although thankfully very rarely. It does, however, mean you are guaranteed authenticity.
Bottles can make a speedy return for investors, allowing them to trade almost like stocks and shares.
But Mark adds: “With casks, over time they naturally increase in value. There are two main reasons for this, firstly, the flavour matures as the spirit absorbs the flavours of the oak barrel. Secondly, year on year we can expect the supply to diminish as more casks get bottled and consumed, meaning every year your cask gets more scarce and therefore more valuable. And even though fashions change they tend to be circular, meaning that if you have a cask of a particular distiller, you can always expect it to be in high demand.”
It is widely accepted that a cask can give a return of between 10 and 25 per cent a year but what sort of cask should you invest in?
A newly filled cask will need to be left to mature for at least three years before it can be classed as Scotch. After it is five years old a cask tends to increase further in value, and after 15 years even more so. Because rare whisky is so sought after, if you can look long term, a 20 year old cask is likely to give an even better return.
Mark adds: “Whisky is a great investment, in whatever way it is held. We are finding more and more people are looking to the security you get from the amazing Scotch spirit.”
To discover more of what London Cask Traders can offer, go to londoncasktraders.com