Dip into the malt for rare returns: Investing in a cask of Scotch at source could prove very lucrative. Conal Gregory reports on two new schemes
Sunday 06 December 1992
It is rare to be able to invest in Scotch whisky at source by buying a whole cask or part of one, but two schemes have been launched to allow individuals to buy into the lucrative malt market.
Only Armagnac and Cognac rival fine Scotch in the quality spirit league table. A similar offer for a Cognac from a single house would cost almost seven times as much.
Taking a 12-year view and assuming current bulk prices stay at around the same level, a single malt such as Springbank would give an 18 per cent return per annum, according to Stephen Williams of JP Morgan.
Springbank, produced by the oldest independent family-run distillery, comes from Campbeltown, west of Glasgow. It is much sought after by blenders as it has a distinct quality not found in Islay, Highland or Lowland. It is popular with Italians and the Far East.
Despite the vast quantity of blended whisky on the market, the future for premium malts is very strong indeed. Springbank has been commercially available for only the last 10 years as a single malt. Experts praise its honeyed elegance.
Now investors can purchase a cask of 256 litres for pounds 850 under bond, which includes the cask. There is an annual combined storage and insurance charge of pounds 10.
You can drink it or sell it. But there are two other exit routes: the cask can be bottled in three tranches over a period of 40 years, each time the third that has been bottled can remain in bond and ordered when required, to spread the duty and VAT payments over several years; or the cask can be sold back to the distillery.
VAT is demanded only if and when the cask is removed from bond. If sold 'under bond', there is no liability.
Allowing for 2 per cent evaporation, expect to receive 310 bottles at 46 per cent alcohol by volume after 12 years or 285 at 20 years.
La Reserve (56 Walton Street, London, SW3 1RB) acts as agent for Springbank. Investors even have a choice of cask - rum, sherry, bourbon or remade.
Mark Reynier of La Reserve can also offer Longrow, the sister Scotch to Springbank but with a more heavily peated barley. Available at the same price, it has been on the market before only in 1973-74.
Limited stocks of Clynelish and Mortlach, both Highland malts, are available for investors from Tanners of Shrewsbury. They recommend storing Clynelish for 10 years until its fruity smoky quality is evident. Mortlach, a Speyside Scotch, would benefit from 14 years maturity.
Tanners' charges for Clynelish are pounds 903 per full cask (pounds 460 per half and pounds 235 per quarter) and for Mortlach pounds 928 (pounds 474 per half cask and pounds 242 per quarter).
Certificates of ownership will be issued, with storage and insurance invoiced annually at around pounds 24 per full cask.
As a Christmas bonus, one free bottle of mature stock will be issued for each full cask ordered from Tanners.
Details from La Reserve 071-589 2020; Tanners 0743 232400.
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