Whisky cask farce as distillery tells investor that his £150k barrel is empty
The Facebook algorithm is convinced that I want to invest in cask whisky.
“Consistent 10-15% annual return,” promises one advert that appears in my timeline.
The advert for another company beats that, claiming: “Value up 19.1% last year”.
A third goes further still, insisting: “Investing in whisky is safe and secure, with appreciation of 15-20%.”
Safe and secure? The tale of one whisky investor might be enough to put off anyone from ever moving their savings into the stuff.
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Back in 1996 Ian, who has asked me not to use his surname, paid £3,950 for a hogshead of the highly sought after single malt Springbank from Campbeltown on the Kintyre Peninsula.
A hogshead contains 250 litres and even after accounting for evaporation, usually estimated by the whisky industry at around 2% a year, its value today would be £150,000 to £200,000.
But there’s a problem. The Springbank distillery says that his cask had a leak and not a dram is left.
The business that operates the distillery, J & A Mitchell and Company, wrote to Ian to say that he had not kept up with his insurance and storage fees or given them his current address, meaning they were unable to contact him sooner.
“In the years since your cover lapsed our warehouse team have found a number of such casks to be totally empty or very low in content,” it wrote to him in an undated and unsigned letter after he contacted them last year for an update.
“This means, with you having failed to keep these storage and insurance charges up to date, that your cask is not covered and if it was one of the empty ones you would be due no payment.”
It went on to say that “in the interests of fairness” investors with empty or almost empty casks would receive a goodwill gesture, which in Ian’s case amounts to just £5,264 - barely 3% of the cask’s value if full.
Springbank distillery in Campbeltown (Tony Nicoletti for the Mirror)“Whisky is marketed as a sound long-term investment, that’s how it was sold to me and I entrusted them to look after it,” says 77-year-old Ian.
“For a couple of hundred pounds they could have had the barrel repaired – if it was indeed leaking.
“I want proof of that, but they say it was leaking and destroyed in 2014 and that they no longer have the records.”
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Ian says that the claimed lack of records is particularly odd because bonded warehouses storing whisky must document any wasteage, otherwise HMRC can hold them liable for the duty on the now non-existent spirits.
He does admit that he failed to give Springbank his new address when he moved home – an easy oversight considering that the investment did not require regular correspondence - but he did pay for the Royal Mail postal redirection service and the new owners of his house forwarded mail, but he never received anything from Springbank.
Even if it could not contact him about the lapsed insurance and storage fees – which were only a peppercorn £12 or so a year – Ian argues that the distillery could have later recovered the money from him.
“The overdue fees are only a few hundred pounds and I could only get my whisky after I paid them," he says. "It’s not as though I could run away with it."
“With a long-term investment like this, losing contact with the owners must happen all the time and they haven’t shown me any evidence that they tried to make contact with me.”
He also claims that the company never sent him any terms and conditions setting out what might happen if his storage and insurance payments lapsed.
J & A Mitchell and Company is a long-standing company, incorporated in 1897.
It made a £3.3million profit last financial year after tax, and the reputation of its whisky is second to none, so I’ve been surprised that it has ignored my emails and I’ve got no more answers than Ian did.
“They’re just saying sorry, your cask is empty. Tough luck,” he says.
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