A new association is being established in the UK to advise those selling, purchasing, and investing in cask whisky, with the aim to protect consumers and promote best practice among cask sales and investment companies.
The Cask Whisky Association will provide a one-stop shop for both those looking to invest in cask whisky and those who sell it, as well as lobbying the UK government for better regulation of the whisky cask investment industry.
With no formal regulations currently in place in the UK for whisky cask investment, some consumers have fallen prey to unscrupulous tactics and misinformation. Two companies, Whisky Investment Partners and London Cask Co, were recently subject to rulings by the Advertising Standards Authority (ASA), which judged that advertising material produced by the companies had misled consumers with claims of inflated returns and a lack of clarity over the risks attached to financial investment.
It was (unrelated) advertisements from two cask investment companies in a national newspaper that spawned the idea to start the Cask Whisky Association. That first conversation took place between Colin Hampden-White, whisky journalist and TV presenter, and Simon Aron, founder of whisky cask sales and investment company Cask Trade. They debated a need for an association that represented and supported those trading casks and marketing their services responsibly.
“The idea of what we are trying to do is protect consumers, protect independent bottlers, and protect the reputation of Scotch whisky,” Hampden-White said.
The Cask Whisky Association is taking a four-pronged approach to its task. The first will be its function as a membership organisation, which any company or individual who trades cask whisky will be free to apply to join. Membership applications will be assessed semi-annually by the association's executive board, which includes members from its seven founding companies: Dutch asset management firm Scotch Whisky Investments, Dalkeith Brokerage, Cask Trade, independent trader George Stewart, and independent bottlers DS Tayman, Fruitful Spirits, and Spiritfilled.
It also has an independent advisory panel which will assess all applications among other functions. Hampden-White currently chairs the advisory panel, with other members including whisky experts Charles MacLean and Hans Offringa, Speyside Distillers managing director Patricia Dillon, The Glenturret managing director John Laurie, Kelvin Cooperage associate director Martin Purvis, and senior executives from law firm Shepherd and Wedderburn and insurance broker Bruce Stevenson which both deal frequently with the Scotch whisky industry.
Secondly, it will provide a resource for private individuals who are considering investing, or have already invested, in cask whisky. To date, there have been few dedicated (and impartial) consumer resources for this sector. “At the moment there is nowhere for them [the public] to go if they think they are paying too much for a cask, but also if they get into trouble. We want to provide a place for them to go,” Hampden-White explains. “There will be an advice and articles page on the website, and they can email and call us if they want anything further.”
He stresses that the association will not provide anything that constitutes financial advice, for example advising on individual cask purchases, but it “can give good advice on the dos and don’ts of buying a cask of whisky”.
Thirdly, the association aims to provide advice to businesses that are trading casks in a bid to quash malpractice. Hampden-White says, “There are companies that have started up a few years ago and they didn’t know a huge amount about whisky trading, so when they started, they were making mistakes – they were doing simple things like selling a cask at OLA [original litres of alcohol] when it should have been RLA [re-gauged litres of alcohol]. There was nowhere for them to go to seek advice and create better practices in their own businesses.
“It also gives companies who wanted to behave well a place to go. We will be there to be able to help them on that, so the bad practice does not leak out into the wider industry... Not all companies will have someone to hold their hand and take them through the process.”
Fourthly and finally, the association will lobby politicians for better regulation of the cask investment sector and protection for investors. For example, the association has met with the MP for Fife Wendy Chamberlain, who took over as chairman of the All-Party Parliamentary Group on Scotch Whisky in May of this year. After discussions with the association, she is seeking confirmation that the Digital Markets, Competition and Consumers Bill that is currently being examined by the House of Commons will include protection for cask whisky investors. The association has also met with Lord Richard Harrington, who is leading a government review of foreign direct investment.
It is also seeking support from the Scotch Whisky Association (which, as a trade body, is not in a position to enact any regulatory change itself), the Bonded Warehouse Keepers' Association, the Worshipful Company of Distillers, and the ASA. “Everyone sees this as a good thing – it needed someone to do something,” Hampden-White adds.
For more information on the Cask Whisky Association, please visit caskwhiskyassociation.org.