Are whisky cask investment schemes really worth it?

Bedtime Story, a 1964 film that follows two conmen rinsing the Riviera for riches, starring Marlon Brandon and David Niven, was a film so good it’s been remade twice since. There was 2019’s Hustle with Rebel Wilson and Anne Hathaway, but more memorable was the fantastic 1980s version. In Dirty Rotten Scoundrels, the suave and sophisticated character of Lawrence Jamieson was played by Michael Caine – a figure who immediately came to mind when reading about a recent heist a little closer to home…

Casey Alexander, 25, from north London’s Stoke Newington was arrested by the FBI on suspicion of his role in a multimillion-dollar fraudulent scheme, selling casks of vintage whisky to elderly Americans. Part of his selling technique – just like Jamieson – was leveraging a posh British accent and wrapping up his businesses in English-sounding names like ‘Windsor Jones’. Despite the obvious links between this real-life American hustle and the slapstick scams in Dirty Rotten Scoundrels, there is little comedy to be found in this case in the States; some investors are reported to have lost up to $300,000. Instead, it’s a sure-fire sign that the hot topic of investing in casks of whisky is only getting hotter.

ardbeg distillery — Ardbeg's headline-grabbing cask will yield its new owner 440 bottles of the Islay whisky

I’m sure it is not just my social media feed that is littered with adverts from cask investment companies promising inflation-busting returns and actual alchemy, as they turn water, barley and yeast into glittering gold. There was a time when I would get calls from friends, family and associates asking about investing in bottles of Scotch. Now I field calls about advice on investing in casks of whisky, such is the reach of these adverts and the attraction of their claims.

And why not? Just this month, the esteemed Islay distillery Ardbeg announced it had sold a vatting of two casks, both filled on the same day in 1975 and which had, after 38 years, been combined into one individual cask. This liquid, now at 46 years old, will yield its new owner 88 bottles of whisky a year for the next five years. The price paid by the customer for this privilege is a headline-grabbing £16m, supplying a vertical of vintage 1975 Ardbeg aged at each year from 46 years old to 50 years old.

Casks of whisky are like avocados, their state hidden by a never-changing exterior of thick skin

To put the price of this privilege into context, the nearest comparison was a cask of 1988 vintage Macallan, sold in April of this year for $1.295m. Its initial purchase price: just £5,000. It all seems too good to be true, but the return on the investment for the owner of the Macallan cask was very real indeed. And the Ardbeg vintage? Well, something is worth what someone is willing to pay for it (just look at house prices on Rightmove in certain parts of London for proof).

When I’m asked, I always tell anyone who might be interested in buying a cask for investment purposes (or even, heaven forbid, to eventually drink its contents) to simply think of two pieces of fruit: a banana and an avocado. Often you buy a banana when it is turning from green to a mellow yellow, to eat at a later date. There is a sweet spot with a banana, when the fruit is not too hard, and not too soft; full of flavour yet still with some bite. Leave it too long, and it goes mottled brown, soft and sloppy; good only for banana bread or the bin. The same is true with an avocado. There is a point where this fruit is just soft enough to eat, and timing is crucial. The advantage the banana has over the avocado, however, is that you can watch the banana ripen in a fruit bowl and see when it is ready to eat. But the state of the avocado is hidden by a never-changing exterior of thick skin.

whisky tasting — 'If your cask value is linked to the quality of the contents inside (as it always should be), then you need to keep a keen eye on the liquid'

Casks of whisky are like avocados. There is a large amount of time when the liquid inside isn’t ready. There is a window when it is excellent, and then a point of no return, with the drink simply becoming too woody and oaky, or falling below 40% abv. If your cask value is linked to the quality of the contents inside (as it always should be), then you need to keep a keen eye (or nose and tongue) on the liquid and act quickly to bottle it – or sell it – as soon as it is ready.

It is this ABC (Avocado, Banana, Cask) principal that is often left out of the sales and marketing of cask investment companies; the idea that, far from becoming more valuable with time, your cask can end up with little or no worth if left for too long. Couple this with the extreme growth in the capacity of whisky production in Scotland over the last decade (up nearly 30 per cent in the last seven years), and you might find yourself not with an asset as rare as hen’s teeth, but one as common as chicken in a Nando’s.

whisky cask assessing — Harrison suggests you seek out schemes that ensure the liquid's quality is under constant scrutiny by those in the know [Photo: Diageo]

It is why I always advocate buying whisky in bottle, either as official bottlings from the distillers themselves, or from established and respected independent bottlers such as Gordon & MacPhail, Single Malts of Scotland, or The Scotch Malt Whisky Society. These businesses keep a diligent eye on their maturing casks, choosing to bottle them at the very peak of their powers, often in highly limited batches.

Layer onto this the ability for these releases to be reviewed by some of the leading palates in the business, be it established scribes such as Serge Valentine at WhiskyFun.com or via awards like the IWSC, and you’ll find yourself with an asset that has been assessed by some of the very best, giving you peace of mind that the liquid inside is indeed of excellent quality.

If you are keen to own your own cask, and have it bottled for your enjoyment, then take professional advice on when the cask might be ready to drink – and understand the often-vast costs (and currently, huge wait times) of bottling and shipping. There are some programmes out there which allow you to purchase by the cask, the chosen stocks for sale all deemed ready for consumption, and with the whisky on a journey to be bottled within a specific time frame from purchase to ensure it is still in tip-top condition. Diageo’s Cask of Distinction programme is an excellent example of this way to purchase casks and bottles.

Sales of casks and the nefarious activities around them are nothing new; in fact, fraudulent schemes such as the one seen in the USA have been around almost as long as whisky itself. The key is to not be caught up by the rascals whose schemes seem to offer ridiculous rewards. My advice: stick to bottles of whisky – which you can always open and drink – or you may ultimately find yourself slipping up on a rotten banana skin.

What Joel’s been drinking…

Goodness me, it has been hot. And in the seriously hot weather, I crave a nice, crisp cider. The best ones are a great alternative to sparkling wine, and famed cider house (or ‘cyder’, in their case) Aspall has produced a high-end ‘1728’ limited-edition bottling (£35, Harrods). At 11% it competes with sparkling wine, and is matured in a bottle to achieve a creamier mousse-like texture with a toasty flavour drawn from a blend of culinary and bittersweet apples. Move over, Champagne – there’s a new celebratory drink in town.
Gin is a drink which tends to be consumed at some pace in my house this time of year. But never has a bottle disappeared so quickly as the new offering from Selfridges, called Earthly Spirits Gin, which is distilled exclusively for the department story by Cooper King. Made entirely using renewable energy – which means that each bottle removes a kilo more of carbon dioxide from the atmosphere than it emits – it’s a fresh, vibrant, citrus-led spirit that has fast become the gin of choice in the Harrison household.
There is little room for innovation in the world of Cognac, but when it arrives it should be applauded. Courvoisier, a house famed for a lighter and floral style, has matured one single cask of Grand Cognac eau-de-vie in a rare Japanese oak cask. Only around 200 Mizunara casks are produced a year, and the result is a spicy, rye-style spirit with a bit more backbone than the usual delicate notes for which this house is so well known. 500 bottles available globally, with a limited number in the UK at £2,000 a go.