A comprehensive guide to whisky cask investment: from how it works to storage methods.

Whisky cask investment has become a structured system with dedicated platforms emerging over the past few years, An investment method that is attracting a lot of attention among overseas investors However, awareness in Japan remains quite low. In this article, we will explore why whisky casks (barrels) have been turned into investment products through platforms, and how distilleries Why do we sell casks (barrels)? and the cask itself. From purchase to sale I will explain the main flow of.

We will also introduce how whisky casks are managed during the holding period, the issuance of certificates, and more, so that you can better appreciate the safety and asset value of whisky cask investment and find it even more appealing.

How Whisky Cask Investment Works

While we will cover the whisky production process in detail in a separate article, it can broadly be divided into the following six steps.
Among them, the one with the longest process period is " 5. Barrel aging Depending on the cask, the maturation period can vary from 3 to over 15 years, Ripens on average for about 9 years It will be a process to make it.

1. Barley making
2. Saccharification
3. Fermentation
4. Distillation
5. Barrel aging (average 9 years)
6. Bottling

However, the distillery Nine years after barrel filling Even before the whisky is sold, there are ongoing costs such as purchasing grains for new whisky production, cask management fees, equipment costs, insurance premiums, utilities, and labor expenses, Various expenses are required every year It will be.
The more it matures, the more Increased value Whisky casks, as they are called, incur increasing total costs for the distillery as the aging period lengthens, Deterioration of management I have been invited. In particular, small distilleries had no financial resources and limited bank loans, so they continued to be in a very difficult situation.

Why platforming?

This led to the idea of handling whisky casks during the maturation period, Sell to investors By doing the Distillery Funding as a way to improve financial difficulties through a dedicated platform. This is the reason why whisky cask ownership began.

With this system, distilleries are able to stabilize their cash flow, continue producing whisky casks, secure staff, and invest in equipment, even with limited financial resources, Stable management of the distillery making these possible. For investors, it also means they can acquire freshly casked new make whisky (unaged whisky) Buy at a discount It can be done, its value rises as it ages, and it is sold to bottlers, distilleries, various investors, etc. Plenty of exits As a result, it is attracting attention as an investment product.

Flow from purchase to sale

Casks filled with whisky at the distillery can be purchased through management companies known as suppliers. The inventory of whisky casks held by suppliers includes not only casks from several distilleries, but also casks previously owned by other investors and casks acquired through auctions, among others, gathered through various channels.

HM Revenue & Customs (the equivalent of Japan's National Tax Agency) By being assigned a registration number managed by the supplier, investors who purchase whisky casks can Cask owner The cask itself is not delivered to the investor’s home or similar location; instead, it is stored and managed by the supplier. stored and managed in a bonded warehouse is done. Then, when the seller is determined according to the investor's instructions, a profit is generated.

When it comes to selling whisky cask investments, Various exit strategies It is also one of the attractive features.

Casks are: The longer it is aged, the more valuable it is. the potential buyers include not only other investors, but also individual whisky collectors at auctions, and companies known as bottlers, who purchase whisky, blend or bottle it themselves, and sell it under their own labels, Independent bottling contractors (independent bottlers), among many other possible buyers.

After an investor expresses their intention to sell the cask, a buyer can be found. On average, 1 week ~ 3 months serves as a general guideline. Additionally, casks that have matured for a longer period and increased in value, High prices such as tens of millions of yen Therefore, the number of people who can purchase it will be limited.

Cask management and issuance of certificates

Whisky casks are stored in bonded warehouses until they are bottled and shipped as finished products.

A bonded warehouse is a facility where whisky casks are strictly monitored by HM Revenue & Customs (the equivalent of Japan's National Tax Agency) Tax-exempt storage locations This is because taxes on alcoholic beverages like whisky are extremely high. As a result, purchased casks are never delivered to your home. As mentioned earlier, all casks purchased from distilleries are stored in government-managed, bonded and insured warehouses (bonded warehouses) in the UK.

Additionally, when whisky is stored in these warehouses, Regularly checked barrels by experts Therefore, there is a sense of security as well as quality control. On top of that, bonded warehouses are subject to strict government surveillance, so casks are not a good place to store them. The safest place It can also be said.

Since whisky cask investment involves a tangible asset, proof of cask purchase Certificate of Ownership After a registration number is assigned by the UK government, it is sent to the purchaser through the supplier.

Risk & Insurance

Even if the management of casks in bonded warehouses is strict, the bonded warehouse itself may be affected by fire, theft, bankruptcy of the bonded warehouse operating company, etc. Risk Mitigation You may be wondering what is going on.

The UK government has established strict regulations for whisky cask storage in order to maintain the reliability of bonded warehouses. Even if a bonded warehouse were to go bankrupt, ownership of the whisky cask itself is managed through the UK government’s registration number, Without affecting your assets so in some cases, the cask can be transferred to another bonded warehouse for continued storage. If, despite this, your cask is damaged in any way, it may be exchanged for a whisky cask of equivalent value, Compensation by payment of non-life insurance claims, etc. Is.

to fire and theft Risk Insurance and such measures are in place. As for fire, there has only been one incident—a whisky warehouse fire in 1875—so the likelihood of occurrence is considered extremely low. Regarding theft, casks are recorded with HM Revenue and Customs, Track all casks which makes it impossible to resell them anywhere. Furthermore, whisky casks contain hundreds of liters of liquid and are extremely heavy, requiring trucks or machinery for removal, and are protected by 24-hour security, In the history of bonded warehouses, there has never been a report of theft I think this will be a reassuring factor for investors.

At Last

For distilleries, whisky cask investment serves as a crucial platform for stabilizing revenue. Investors can also take advantage of this system to invest at a relatively low cost, Build a win-win relationship I think you can do it.

Additionally, UK whisky casks are carefully stored under strict management, minimizing the risk of loss of asset value, theft, accidents, or incidents. The risk is also very low It can be said.
If the global economy trends toward inflation in the future, Expectations for a rise in the price of real assets If you are interested, please contact us.

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