Liquid gold? Here’s the sobering truth about investing in whisky
A t first glance, it’s an attractive prospect for young investors: buy a cask of whisky and enjoy double-digit returns in the process. Ads for schemes to buy some of Scotland’s finest are constant features on social media – but the perils and pitfalls are not.
Young investors are increasingly being targeted on Instagram with schemes to buy their own whisky casks, but the unregulated area has become awash with misunderstanding, misconception and occasionally fraud. “It leaves room for unscrupulous people to take advantage. Some may offer what they claim to be rare and expensive whisky but is in fact nothing of the sort,” says Sarah Coles at investment platform Hargreaves Lansdown.
“Others will claim to be able to offer guaranteed returns in order to get people to part with their cash, but you can never guarantee a sale price upfront. Some will even be offering you the chance to buy casks that don’t exist.”
With the growth of alternative investments, such as art or fine wine, has come fresh interest in buying whisky casks: barrels of different sizes, which typically start at between £2,500 and £5,000. The simple idea is that the cask is held in storage for what can be decades, by which time it has matured into something that will have much greater value when it is ready to be bottled.
The companies that have popped up to help people invest their money are quick to point out the successes – such as when a cask of 1988 Macallan was sold for £1m at auction, having originally been bought for just £5,000.
What they don’t often highlight are the problems. Last year a British man was arrested by the FBI in the US in connection with an alleged whisky cask investment scam.
Theodora Lee Joseph of Finimize, a financial analysis company,
Read more on theguardian.com
