Single-Malt Scotch Whisky Cask Investment
We have the cask offer below currently available!
As you know, the value of a cask comes from its rarity in the market. The rarer the cask, the higher the demand and the higher the price.
96% of all casks made every year are filled into standard ex-bourbon casks. Only 4% are filled into alternative casks such as sherry, port, rum, etc and it's these casks that are prized by independent bottlers which allows them to create limited edition, single cask bottlings which are different from the distilleries standard bottlings and why that enables them to charge a premium for their releases.
We currently have access to a small parcel of 2011 Balmenach casks. Balmenach casks are extremely rare in the marketplace, Balmenach casks that have already been finished off for a number of years in a non-standard wood type are even rarer.
On that basis, we have created an offer that creates added value to an already premium cask which includes: 1 x 2011 Balmenach Hogshead 250L standard ex-bourbon cask. Included in the price is a 250L Sherry Cask, re-racking costs into the Sherry cask along with storage and insurance for 5 years.
If held for the full 5-year term, these casks will be in demand from independent bottlers as they can essentially buy the cask and immediately release a Sherry finished single cask limited edition bottling. As such, the cask will command a premium future resale price.
**Price Per Cask includes:
1 X 2011 Balmenach 250L HHD
1 X Sherry HHD CASK ( Empty )
ReRack into Refill Sherry Cask within 3 months*
Regauged on rerack
5 years Storage
5 years Insurance
*Re-racking timeframes are subject to 3rd party deliveries. Timescales could be affected by eternal issues such as Covid Lockdowns Etc.
Make: BALMENACH Year: 2011 Vessel: HHD ABV: .80% RLA: 134.3 Price**: 13,000.00
Balmenach is regularly described as an 'old school' whisky. In terms of style, it is a very close cousin to fellow Speysiders Mortlach and Benrinnes, in that it is full-bodied, rich, and meaty. This Malt is so highly prized by the blenders that owners Inver House haven't released any official bottlings in their 24 years of ownership. For Single Malt enthusiasts, their only option is to find one of the relatively rare Independent Bottlings available. This now unusual style is created from long fermentation, with small stills that run quickly with the vapor condensing in the old traditional worm tubs. The result is a slow maturing new make that adds real character and substance to blends.
Fermentation is 56 to 100 hours with 3 pairs of stills operating and a production capacity of 2.9m litres.
This distillery dates way back to 1824 and the original owner James Macgregor took out one of the first legal distillery licenses in Scotland. He had been distilling illegally on his farm and was caught by a local exciseman, who rather than arresting him, kindly advised him to switch to the right side of the law.
James Macgregor is also the great-grandfather of famous Scottish writer and secret agent Sir Robert Hamilton Bruce Lockhart, who tried, but ultimately failed, to foil the Bolshevik Revolution by plotting to assassinate Lenin when he was based in Moscow. He was captured and faced certain death but fortunately, the British government arranged for him to be exchanged for a Russian spy held by our security services. Sir Robert in his later years authored the then-popular book 'Scotch' (1951), where he wrote extensively about the Balmenach distillery.
Although they do not release whisky under their own brand, they have been very successful in the Gin category with Caorunn Gin, famously served with a slice of red apple, and also distilled at Balmenach Distillery.
The potential for growth.
This old-fashioned single malt is one of Speyside's hidden gems. Our 2011 casks are exceptionally healthy, Reracked in premium finishing casks so would work equally well for a short, medium, or long-term hold.
Potential for growth
There is clearly a demand for the liquid with reputable independent bottlers like Cadenhead's, Signatory, Douglas Laing, and That Boutique-y Whisky Company bottling single casks ranging from 8 years old to 28 years old. Balmenach has a growing audience and its value will only increase in time as the whisky matures and increases in rarity even more.
There is clearly a demand at present that is being driven global economic uncertainty, which in turn is being driven by the pandemic and the impact it's having on traditional asset classes from clients seeking non-correlated asset-backed safer alternatives.
An opportunity exists for investors to purchase Single Malt Scotch Whisky casks to hold for the medium to long term to sell in the future for a profit and without any capital gains tax (CGT). I’m sure you’re well aware, whisky increases in value with age.
Rare Whisky Vault Ltd is fully licenced and authorized by HMRC to buy, store and sell casks as an investment. We have agreements in place with distilleries in Scotland to purchase a select number of casks on a wholesale basis. These sales offer the distillery an alternative income stream as they would usually have to wait many years to see a return on their own investment i.e., once they have bottled their casks and sold them on the retail market. This can be 15 years in most cases. Our option “helps keep the lights on” as they say.
The simple answer is that every client should hold a diverse range of products including non-correlated alternatives. These will help protect portfolios during turbulent times. This is especially relevant during the current crisis we find ourselves in at present.
There is a limited number of distilleries in Scotland. As such, supply simply can't keep up with the global demand. Scotch whisky exports grow consistently, year on year at an average of 5.8% with new emerging markets opening up all the time. The export value alone in 2019 was worth £4.8 billion pounds (GBP). We did however see a drop in exports in 2020 due to the impact of the restrictions and lockdowns from the pandemic, which was to be expected. The knock-on effect from this though has significantly benefitted whisky investors as during this time we saw production drop by up to 70% which has created an even bigger demand on a lower supply.
Scotch whisky has a proven track record of appreciating in value every year as it ages and this is there for anyone to see. You only have to walk down the drinks aisle in your local supermarket to see that a 25-year-old whisky costs more than a 3-year-old and the reason it costs more is, the older spirit costs the bottlers more to buy. This rise in value can increase exponentially after year 7 as only 15% of the 20 million casks currently laid down maturing in Scotland are over this age marker.
Cask owners benefit from full, outright ownership, unlike bonds, funds, or securities. Once purchased the ownership title is passed to the client. While maturing, casks are stored in secure, HMRC-approved bonded warehouses, fully insured against fire, theft, and damage. Insurance is adjusted annually to ensure the appropriate level of cover is always in place.
· Projected Returns - 8% - 12% PA
· Minimum Investment - £2,400 (GBP per cask)
· Non-correlated sector
· 100% full ownership
· Fully insured against loss, theft or damage
· CGT exempt
· Stored in HHRC approved bonded warehouses
· Multiple exit options
· Open to all investors. No, restrictions
When it comes to the time to sell casks, this could be in 3, 5, 7 or even 30 years’ time, we sit down with clients and discuss the various options available. We can, through a network of blenders and bottlers, broker a sale for a small 2% fee, or we can purchase the cask back from clients directly. Alternatively, clients can make their own arrangements either by, selling at auction or bottling the product, whichever option they decide best meets their needs, we will advise through the whole process.
Also, see here for a slightly humorous take on what we have on offer!