One of Scotland’s oldest working distilleries, Glenturret has announced plans to phase out the use of peat in its whisky production, with a target to complete this transition as early as 2025.
As we approach Octobers Budget, the announcement most investors will fear on Wednesday maybe the speculation about changes to CGT, Capital Gains Tax.
There has been a flurry (and in a slump period) of secondary investor properties to the market in recent weeks, no doubt to avoid the anticipated increase that Starmer suggests could be present in this year’s ‘painful’ budget.
We know the Government have already mentioned a £22 Billion hole and this could be one way it’s seen as easy pickings to plug.
Capital gains tax is charged on the profit made from the sale of increasing assets, such as second homes or business shares or investments. This is usually fine in a business environment but what if your average retiree has invested his pension or hard-earned cash into a retirement second property or similar investment?
Years ago, Whisky investment was only available to those connected to the industry, distillery workers, bottlers and suppliers and re-sellers. Some distilleries operated an in-house whisky investment programme aimed at people within their own circles. At Whisky investment UK we have specialist brokers that now have access to some of Scotland’s best cask whisky through years of connections and know how.
Savvy investors already buying whisky will know that there is no Capital gains tax to be paid on whisky when left in Cask, and this is most certainly a very tax efficient investment in today’s market. The cask whisky whilst kept in a bonded warehouse and inspected regularly by HMRC remains VAT exempt or ‘duty free’
If you would like to discuss cask investment further, be added to our weekly mailer and cask list then please do not hesitate to get in touch:
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The Energy Centre, Basildon, Essex,
SS14 3BE (Head Office)
The Speyside Business Centre,
8 West St, Fochabers, Scotland IV32 7D
Head Office: 01268 204 142
Speyside: 01343 610 224
WOWGR: GBOG119867200
The reopening of The Port Ellen distillery on the 19th of March 2024 has caused quite a stir here at Whisky Investment UK, having been spruced up and opened after almost forty years since the distillery, located on the South coast closed.
Port Ellen was originally opened around 1825 and concentrated on blended and peated Scotch. For reasons unknown the distillery which had part fallen into disrepair became obsolete around 1983.15 or so years later, Diageo announced plans to bring the distillery back to life as part of an investment of £180 million into the Scotch category.
The re opened Port Ellen has been fully refurbished with its two giant Phoenix stills being exact replicas of the distillery’s original early still, alongside a further two experimental stills. The master distiller on site Alexander McDonald and his team have included methods to explore multiple smoky flavours in the onsite lab. Also, a six-part roller mill and are among the investments in equipment. But where this really excites us here at Whisky investment is that the distillery is also carbon neutral. That element is what brought our partner group into wholesale sales and storage of cask whisky and what drives us forward with our background firmly in the ethical production of whisky and the energy management work the distilleries undertake. This also shows the work that the distillery and its management are environmental conscious and secures the ongoing future of Islay.
The Port Ellen Distillery is now officially open for business on Islay, breathing new life back into an old legacy building. This content has been created by WIUK for the purposes of information only. The Port Ellen distillery, Diego and its products which may be trademarked are not connected to WIUK and we make no inference or connection to them.
Following the hugely successful run of 1st fill Brandy and the excellent 1st fill Château Margaux, our sourcing team here at Whisky Investment UK have been hard at it again and just obtained an excellent selection of casks now available from just £2695 with of course no vat.
It’s STRICTLY first come first served on this stock and an allocation of only one cask per client in order that our regular clients don’t miss out as is often when our larger investors move in.
At Whisky Investment UK we operate a small team of knowledgeable whisky brokers that offer expert advice. Importantly we do not operate a hard sell operation and if it’s not for you then there’s no obligation to purchase. methods, prioritizing quality over quantity.
Well, you would not be alone, but sadly many investors shy away from the unknown investment. But what if we could evidence that Cask whisky investment can be a fun, sociable and very safe investment would you give it a go?
At Whisky investment UK we operate a small team of knowledgeable whisky brokers that offer expert advice. Importantly we do not operate a hard sell operation and if it’s not for you then there’s no obligation to purchase.
Following a cask purchase we immediately send our client a delivery order and proof of purchase and arrange for the cask to be carefully moved to one of our associated HMRC trade facility warehouses such as Volpe & Castello.
Once stored in-bond your whisky purchase is ‘safe as houses’ due in part to regular visits by HMRC. After all, if it was easy to avoid duty then millions of pounds could be lost to the public purse. Therefore, checks are stringent, and we say “There’s no safer place to place your money”
At WIUK we regularly arrange whisky events. Usually these take place in either London or Edinburgh, but as our client list grows more venues are being found. There’s no cost to these, there’s no emphasis on purchasing anything, it’s a good quality evening of fine food and free whisky, beers & wine alongside a whisky professional offering samples of ours and our supplier’s cask whiskies.
If you are a whisky fan, then what could be more fun than drinking old and sometimes rare whisky sourced by experts alongside other whisky drinkers. Of course, if you choose to join our growing list of clients by purchasing a cask or two then that works too!
There are many reasons why owning cask whisky is good for your pocket. It’s true it’s always in demand, bought and sold for years on end and very nearly always growing in value. The key is to buy right, store it safely and either sell when the time is right or bottle. We can help with both options when you are ready to exit. You can order a sample of your cask, and we set you up a private account direct with the bonded warehouse and from there you can add to your whisky portfolio, bottle or sell without our ongoing assistance if that’s what you choose to do.
It is impossible to think of Scotland without thinking of Scotch Whisky. Its roots are firmly embedded in Scottish history and traditions but today it is found in the most stylish bars in the world’s biggest cities. For more than 500 years the Scots have successfully taken the natural ingredients which our country has been blessed with to create the world’s leading international spirit drink.
Distilled in over 150 distilleries dotted around Scotland from the Northern Isles to the Borders it is exported to around 180 markets across the globe – an unrivalled reach for the product of any one country.
Scotch Whisky makes up a quarter of the UK’s food and drink exports and the value of annual exports has grown consistently for more than a decade. All of this creates considerable interest in investing in Scotch Whisky, driven by a desire to share in its success.
Several companies promote individual ownership of a Scotch Whisky cask as worthwhile and potentially lucrative. Potential investors should carefully assess the sales offer, carry out due diligence and take appropriate advice. The Scotch Whisky Association is not able to offer advice on the purchase or sale of casks as an investment and is not responsible for regulating the whisky cask market. Nevertheless, we believe that potential investors should understand something of the structure and operating methods of the industry to assess the risk vs reward of cask investment proposals.
World exports of Scotch Whisky are currently worth in excess of £5.9 billion. Blended Scotch Whiskies, which contain spirit from many different distilleries make up the majority of sales.
To meet this demand, Scotch Whisky blenders, who need whiskies aged for different lengths of time, contract with individual distilleries for the supply of the spirit that they require, laying down their stocks several years in advance. This enables Scotch Whisky distilleries to plan and maintain production at appropriate levels.
As a result, there is no regulated market for mature or maturing casks of Scotch Whisky, no officially published list of buying and selling prices for casks from different distilleries or at different ages and no established mechanism for selling. Scotch Whisky casks are not a regularly traded commodity on an open market. It is traded within the industry, sometimes through Scotch Whisky brokers, but primarily by contract between blenders and distillers who will sometimes exchange casks with no money changing hands.
It is possible, subject to availability and willingness, to purchase casks of Scotch Whisky, either newly distilled or maturing, from distillers for personal use. Casks are sometimes also purchased from time to time as a form of speculation with the intention of re-selling them at a profit. However it must be emphasised that only a tiny proportion of the total amount of Scotch Whisky produced in Scotland is bought and sold in this way.
Opportunities to invest in casks sometimes include indications of the likely return that the investors might hope to make.
Scotch Whisky casks however are no different from other commodities, whose values rise and fall according to supply and demand. The only certainty about owning a cask is that it will lose roughly 2% of its contents through evaporation each year.
You are very likely to be charged for storage and insurance for the time the cask is in the warehouse. There may also be charges if your cask requires to be moved or its contents measured to check, for example, its alcoholic strength. Movement of the cask under bond is strictly controlled and can only be carried out by authorised operators.
You will need to factor in the cost of bottling (Single Malt Scotch Whisky must only be bottled in Scotland). If a private owner ultimately decides to bottle their cask, excise duty will normally be due when the bottles are dispatched to the owner. The duty due will be based on the rate of duty applicable at that point and not when the cask was purchased. Thus the purchase price of the cask is only the initial outlay.
In 2024 the rate of duty in the UK is £31.64 per litre of pure alcohol to which Value Added Tax at 20% must be added. This will require a further outlay of several thousand pounds on the average cask.
You should bear in mind that most bottlers are set up to bottle large volumes of spirits and it may take some effort to find one who is willing to bottle a single cask.
Non-UK investors should consider any duties and taxes due for importing bottled Scotch Whisky into another country.
“By law, Scotch Whisky may only be matured in an approved warehouse in Scotland which has been verified by His Majesty’s Revenue and Customs.”
Your contract of sale represents your legal title and is proof of purchase of your cask but ensuring your ownership of the cask is recognised, and understanding who has control over it, may require further action as set out below.
When purchasing a cask, you should be aware of the special nature of the trade in Scotch Whisky and the costs involved.
Investors should recognise that there are risks involved, both as regards the potential value of their investment and the opportunities to sell it on.
Nevertheless, purchasing a cask for your own personal use can give you great pleasure and enable you to create a unique Scotch Whisky to your own specifications.
In the heart of Scotland, where the rolling hills are adorned with amber hues and the air carries the distinct aroma of peat, lies an invaluable treasure trove – whisky casks. These barrels, filled with liquid gold, are not only a testament to Scotland’s rich distilling heritage but also a significant economic asset. Stored in His Majesty’s Revenue and Customs (HMRC) bonded warehouses, the security of these whisky casks becomes paramount. WIUK ® delve into the measures taken to safeguard these precious barrels.
HMRC bonded warehouses are high-security facilities designed to store goods that are subject to excise duties, such as alcohol. These warehouses play a crucial role in ensuring that taxes are paid on alcoholic beverages before they are released into the market. Whisky casks stored in these facilities benefit from the strict protocols and surveillance systems implemented to deter theft and maintain regulatory compliance.
State-of-the-art surveillance and monitoring systems are the backbone of whisky cask security. These systems employ a combination of CCTV cameras, motion sensors, and access control measures to monitor every corner of the warehouse. Any unauthorized access or suspicious activity triggers immediate alerts, allowing security personnel to respond swiftly and effectively.
Whisky, a delicate spirit, matures best under specific conditions. HMRC bonded warehouses are equipped with advanced climate control systems to maintain stable temperatures and humidity levels. This not only ensures the quality of the whisky but also acts as an additional layer of security, as any attempt to tamper with these conditions would be detected promptly.
Each whisky cask within the bonded warehouse is meticulously catalogued by a unique cask number and an AYS date and are tracked through a sophisticated inventory management system. This digital record-keeping enables warehouse managers to monitor the movement of each cask, making it nearly impossible for any cask to go missing without raising immediate alarms.
Beyond the digital realm, physical security measures are in place to safeguard the whisky casks. Fences, gates, and restricted access areas create a perimeter that is challenging to breach. Security personnel, trained to handle various situations, patrol the premises, ensuring a visible presence that acts as a deterrent against potential threats.
Opening a private account at an HMRC bonded warehouse in Scotland involves a series of steps and considerations, as these facilities are primarily designed for businesses engaged in the import, export, and storage of goods, that hold a WOWGR licence, WIUK ® are working with several independent bonded warehouse that will open private accounts for our clients without the need of having a WOWGR licence or having a WOWGR licence.
Be prepared to provide necessary documentation when opening an account, like when purchasing a cask from WIUK ® you will need to provide personal identification, proof of address, and any business-related documents if applicable.
Clearly communicate the purpose of the private account and the type of goods (e.g., whisky casks) you intend to store.
Ensure compliance with all relevant regulations and legal requirements. HMRC bonded warehouses are subject to strict regulations, and adherence is crucial to avoid legal issues.
Security Measures:
Understand the security measures implemented by the warehouse to safeguard stored goods. This may include surveillance systems, access controls, and physical security measures.
Inventory Management:
Inquire about the inventory management system in place. A robust system ensures accurate tracking and management of stored goods.
Discuss Terms and Conditions:
Review and discuss the terms and conditions associated with opening a private account. Clarify any doubts regarding responsibilities, liabilities, and access to stored goods.
Visit the Warehouse:
WIUK® can arrange a visit to the warehouse to personally assess the facilities and discuss your needs with the management.
Storage fees are typically charged based on the volume of whisky casks or pallets being stored and the duration of storage.
Warehouses may have different rates for short-term storage (e.g., a few months) versus long-term storage (several years).
Some warehouses offer tiered pricing based on the quantity of whisky being stored, with discounts for larger volumes.
Insurance fees cover the cost of insuring the stored whisky against various risks, such as theft, fire, natural disasters, and accidental damage.
Insurance fees are often calculated as a percentage of the declared value of the stored goods
WIUK® have spent over 2 years verting different bonded warehouse that provides transparent and detailed billing statements, outlining all charges associated with storage and insurance.
Regular communication with the warehouse regarding fees and any changes in rates is essential to avoid surprises.
WIUK® can arrange a visit to the warehouse to personally assess the facilities and discuss your needs with the management.
If you would like more information on which warehouses will open a private account, or you would like to discuss whisky cask ownership, please contact us at [email protected] or call 01343 610 224 to arrange a chat with one of our whisky experts.
“We have a duty of care to ensure our use of water is as efficient and responsible as possible.”
Ruth Piggin, SWA
Discussions over the UK and India’s forthcoming free trade agreement (FTA), which could remove the 150% import tax on whisky, are currently underway.
If approved, Chivas Brothers chairman and CEO Jean-Etienne Gourgues said the move could double the size of the Scotch whisky market in five years.
“More importantly in the long-term, there is a huge base of Indian whisky brands in the market, and that there is fantastic potential of innovation for prestige and luxury whiskies, where Scotch whisky is beautifully positioned,” he said.
Ballantine’s and Chivas Regal would be the focus for the business in India, with the first innovation to come from Ballantine’s Finest, followed by Chivas, and Royal Salute “down the road”, Gourgues explained. “We will really target more activities in the coming years for the two brands. The FTA will heavily support that.”
Last week, Pernod Ricard released its financial results for the first half of fiscal 2023, with organic sales up by 19%.
The firm’s Scotch whisky arm, Chivas Brothers, reported a 23% organic sales increase during the six-month period. Chivas Regal, Ballantine’s, Royal Salute and The Glenlivet each experienced double-digit growth, with increases of 34%, 17%, 37% and 12% respectively.
Gourgues said the results were higher than pre-Covid levels, with “very broad-based growth”.
“It’s a good mix between mature markets, which are growing at 22% and emerging markets which are growing at 24%,” he said. “The quality of growth is very value driven, led by premiumisation, and the prestige part of the range is growing at 28%.”
The firm’s North American business saw a 6% sales increase. Gourgues said the US market is “normalising” after growing strongly over the last three years. “The US is growing at plus-6%, in line with the average growth of the market (3% to 5%), which is almost entirely value driven.”
Gourgues also highlighted a number of emerging markets for the business, including Brazil, which rose by 40%, and Mexico (up 21%).
He pointed to India – “the largest whisky market in the world, which is growing strong and has been plus-25%”.
Gourgues also cited Korea, where there is “real growth in the luxury part of the market”.
He added: “We have enjoyed very, very high growth of almost 60% to 90% in those markets.”
The Glenlivet has “historically been strong in the US, but is now growing at a very fast pace in Asia, in particular Taiwan and China,” he added.
The brand will celebrate its 200th birthday next year and Gourges hinted there will be several announcements planned for the coming year.
Gourgues also said the company is “globalising” the Aberlour whisky brand, citing markets such as the US and Asia.
Scotland’s consultation on restricting alcohol advertising and promotion is also due to close on 9 March.
“I think the fundamentals are right, the desire to have responsible consumption, not to target young people, pregnant women, etc. I mean, it’s absolutely right.”
However, he warned that the consultation could deter the industry of two things.
“The first one is to support our local communities,” Gourgues explained. “We have distilleries in many villages and small cities, and we have been providing local support to them for decades. We wouldn’t be able to do that.
“And the second thing is investment in tourism in Scotland. In pre-Covid times, there have been around two million visitors coming to Scotland for the whisky trade. Other industry players are heavily invested in tourism facilities and brand homes. So this [proposal] will prevent us from advertising anything to foreign visitors.”
Gourgues noted that supply chain disruption has been the biggest challenge over the last year. He added: “The implication of the cost of the energy crisis and the necessity to move into very tangible action with short-term concrete results on the decarbonisation roadmap. These two elements are linked together.”
He also cited the “tremendous” cost of freight, which has impacted the company’s exports to markets such as the US, Southeast Asia, Australia and South Africa.
The firm is looking at how it can reduce the amount of energy it needs across its distilleries, including using MDR technology to lower energy by 50% to 80%.
Gourgues said the company will “fast track a number of initiatives” and aims to reach carbon neutrality by 2026.
https://sme-news.co.uk/issues/uk-enterprise-awards-2023/38/
