As one of the world’s most beloved alcoholic beverages, whiskey has a habit of rising in value.
According to one measure, the value of rare and vintage whiskeys has increased by more than 500% in a decade.
Export markets are also booming, with the Scotch Whiskey Association estimating that 36 bottles of spirits are exported every second.
Liquid active: Rare and vintage whiskeys have valued more than 500% in a decade
Thousands of Britons collect and sell rare whiskeys, but Money Mail has spoken to experts who fear unscrupulous companies are using the buzz around the mind to provide low-quality investment opportunities to savers with no money. mistrust.
In recent years there have been stories of collectors making large profits selling whiskeys bought years earlier.
The specialized nature of collectibles markets makes them perfect for those who know what they’re doing. But they’re also great for crooks.
In 2016, the Financial Conduct Authority (FCA) warned of an increase in fine wine scams – where savers have been tricked into buying overpriced or non-existent wine.
How to spot a scammer
Most experts agree that one of the favorite tactics of crooks is the use of high pressure phone calls.
By putting pressure on potential victims to make a decision, scammers increase their chances of making a sale.
Among the whiskey websites advertised on Google, several offered a free investment guide in exchange for your contact details.
After putting my contact details on three websites, I received over 14 calls and four emails in one afternoon.
When I answered the call, a sympathetic salesman made a point of talking about a seemingly rare investment opportunity: to buy casks of a new whiskey for £ 2,000 each.
“We say on the website that you can expect to make around 10pc per year,” he said. “But I personally think that’s a conservative estimate.”
An independent whiskey expert pointed out that an almost identical cask – from the same mundane distillery – was auctioned earlier this summer: for the princely sum of £ 900.
These scams are thriving on the Internet, with data showing that 96% of investment frauds start online, often through search engine and social media ads.
Anti-scam activist Mark Taber says he has seen an increase in online advertisements touting investments in whiskey barrels.
He says many of them share the characteristics of classic investing scams, including offering guaranteed returns and asking visitors for their phone number.
He also believes crooks could use the whiskey to stay ahead of regulators.
The Google search engine, for example, has introduced stricter rules requiring anyone advertising financial products to UK users to be registered with the FCA. However, since whiskey is a luxury rather than a financial product, it falls outside the FCA’s mandate and is not subject to these new rules.
Mr Taber said: “A red flag for me is that these ads are deliberately targeting anyone looking for investment advice, rather than people looking to buy whiskey.
“There is also a danger that companies will sell the details of potential victims, who will then be targeted by more typical investment scams.”
Another telltale sign of an investment scam is the promise of high returns without mentioning the risks.
Money Mail visited the websites of four companies announcing the opportunity to invest in whiskey.
All four offered the option of purchasing casks of “new make spirit” – a clear alcoholic liquid that eventually matures into whiskey.
According to the company’s websites, buyers could expect to sell their casks at a healthy profit – around 10% per year – once their spirits had matured.
In addition, since whiskey on tap is classified as a “wasted asset” (ie something that degrades over time), profits would not be subject to capital gains tax. You can see why such an offer might sound tempting. But whiskey experts are more careful about the quality of these opportunities.
They say that while it is true that the kegs are exempt from capital gains tax, the returns are far from guaranteed.
Andrew Laing is co-owner of Ardnahoe, the newest distillery to open on Islay, the Scottish island loved by many whiskey fans.
Experts have warned of online ads offering the option to purchase maturing whiskey casks and claiming highly questionable yields of around 10% per year.
It is one of the many distilleries that sell casks of whiskey to private investors – with prices ranging from £ 2,000 to £ 12,000.
“We will never tell anyone that they should expect a certain price or a certain return,” he said. “It’s a lot about the experience of owning your own whiskey, rather than a typical investment. Whiskey auctioneer turned expert Mark Littler believes some of the companies advertising online are also misleading investors.
He says, “Drums can be a good investment. But if you expect a return of 10% per year, you will probably be disappointed.
“The value of whiskey doesn’t always increase in a linear fashion and you won’t make any money until you sell your cask completely. “
He advises anyone who purchases whiskey directly to know exactly what they are getting and to seek an independent appraisal where possible.
They should also keep in mind the potential additional costs, such as bottling the whiskey when it reaches maturity. If you are looking for less sophisticated ways to invest in increasing the demand for whiskey, there are alternatives.
Beverage giant FTSE Diageo owns several premium whiskey brands, including Lagavulin and Talisker, and has developed its export markets in recent years.
Its shares have risen 56% in five years, making a £ 10,000 investment in July 2016 worth £ 15,600 today.
It also paid at least 2 percent dividends each year.
The company has been a long-standing choice of fund manager Nick Train and represents 10 percent of his LF Lindsell Train UK Equity fund.
The FTSE-focused fund has performed well in recent years, making a £ 10,000 investment five years ago worth £ 15,300.
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