Conference to urge cation in cask trading

Whisky investors are being cautioned about the increasing number of cask whisky investment companies who may be trying to make fast money out of the growing demand for premium Scotch Whisky. 

A panel of whisky experts will take to the stage this week in Glasgow at the inaugural Scottish Distillers Conference to debate the current lack of regulation in the market and air concerns about certain traders exploiting loopholes.

Currently, cask whisky trading, where brokers source and sell casks from distilleries and blenders, is unregulated.  

There is no official or published record of the buying and selling of whisky casks and no established legal process for the trade.   

According to the Scotch Whisky Association, Scotch whisky exports in 2022 grew by 37% by value to £6.2bn.   

The membership organization, regarded for its work representing the Scotch whisky sector, does not offer advice to private investors.     

On Friday 3 November, the Advertising Standards Authority issued a new enforcement which strengthened the rules on the advertising of whisky cask investments.  

Vikki Bruce, the founder and director of CaskNet Ltd, a technology start-up company, is building software, founded on block chain technology, to solve the problem. 

‘I first discovered this alarming situation when I was asked to investigate a parcel of whisky casks valued at over £20m,’ she said.

‘The buyer had no ability to verify the casks’ ownership or existence, never mind whether the whisky inside the casks was the real deal. 

‘My experience is that there are unscrupulous brokers around the world who are capitalizing on the complete lack of regulation or accountability, and consumers are getting scammed. 

‘While HMRC is gathering duty and the Scotch Whisky Association represents its affiliate membership (distilleries), there is no regulation to protect the consumer in this relatively newly developed marketplace.  

‘With assets ranging in value up to multi millions of pounds, the opportunity for fraud is rife.  

‘We know a major problem exists; we don’t know yet how deep it goes. Almost certainly, what we have seen reported in the press is the tip of the iceberg.’

Blair Bowman, a whisky broker, and adviser to the whisky industry, has been an outspoken critic of many new whisky cask investment companies.  

Unfortunately, there are numerous so-called whisky cask investment companies in the market who are exploiting the lack of regulation and are joining the whisky industry from other luxury and lucrative markets such as wine and art,’ he said.

‘Something needs to be done to eradicate those traders who don’t care about customers, much less protecting the reputation of Scotch whisky.  They are in it simply to make money quickly.’

150 guests from across the distilling sector are expected at The Scottish Distillers Conference which takes place Wednesday in Glasgow. 

Tickets can be reserved at https://www.scottishdistillers.co.uk/sdc/book-tickets

Read more news and reviews on Scottish Field’s food and drink pages.

Plus, don’t miss the November’s issue of Scottish Field magazine.

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