How to Invest in Whisky Casks: Thinking About Costs
What costs do you need to consider?
The most obvious cost is buying the cask in the first place. You can start investing in whisky casks for as little as £1,000. And, you can go up to hundreds of thousands of pounds. But beyond the cost of a cask, here are five things to consider, if you're thinking about how to invest in whisky casks. There are no right or wrong answers to these questions, everyone's situation will vary.
1. How much can you readily afford to lock away for a period of five years or more?
You should only use funds you won't need for a good few years. And, always make sure your overall funds are sensibly diversified.
2. What kind of whisky cask portfolio do you want?
The price of whisky casks varies depending on: how desirable the distillery is; how old the spirit is; and the size and style of the cask. So for example, you may be able to get three lower value casks for the same price as one higher value cask. There'll be advantages to either approach, and many people who hold several casks like to have a mixture.
3. Have you factored in storage and insurance costs?
You have to hold your whisky casks in a bonded warehouse. There will be an annual cost for this. The exact cost will vary from warehouse to warehouse, from cask to cask. And, it's typically small. But, it's important to factor in. Insurance is a sensible way to protect your casks. Again, a relatively small sum, but one well worth considering.
4. How 'hands on' will you be in managing your cask?
The answer to this will likely depend on the age of the cask you buy, and the length of time you intend on holding the cask. For example, a young whisky can likely be left to sleep for a good number of years. While older whisky casks benefit from closer attention, as they reach peak flavour. You can request re-gauge reports to measure volume and proof. You can draw samples to taste your whisky. You could even explore re-racking into a new cask for a finishing period. All these will have some costs associated with them. They won't break the bank, but again they are worth considering so that you have a complete picture of costs.
5. Will Duty, VAT and bottling costs be relevant for you?
If you intend to sell your cask as a cask, this consideration won't be relevant. But, if your goal is to eventually bottle the cask yourself, then you should consider Duty, VAT and bottling costs. The good news is that these will not be due until you bottle the whisky cask.
Get help understanding costs in more detail
If you'd like a hand with the detail behind these considerations, Spiritfilled can help. Spiritfilled are whisky cask experts. We can explain how to invest in whisky casks, put together your ideal cask portfolio, and even help with the management of the cask once you've bought it. To top it off, we offer free storage and insurance on casks for the first year. Contact Spiritfilled here today.
