Spirited
tl:dr
When buying a cask of whisky, the main areas to conduct due diligence are:
- Cost – Understand how cost is derived and how to appraise a cask value to ensure you’re getting a fair deal;
- Brokerage – Get to know who you’re buying from and the services they offer;
- Insurance – Know the different types of insurance that are offered on your cask and what is covered;
- Storage – Know the conditions of storage including cost and insurance and the facilities and services offered at the bonded warehouse where your cask is stored.
Full article
In our previous article, we talked about the reasons why it’s important to have a Delivery Order (DO) but what’s exactly contained within a DO and how does it operate?
Here are three things to look out for with your Delivery Order:
Cask Information
This should include information like the distillery name, age, ABV, and the cask number. It’s common for distilleries to fill multiple similar casks at one time so a cask number helps differentiate one cask from another. Think of this as sort of a serial number for your cask.
Seller and Buyer Signatures
This helps outline the current owner of the cask and who is going to be the new owner of the cask. This info should be date stamped and signatures obtained.
Warehouse Acknowledgement
Warehouses have an obligation to report changes in cask ownership to the HM Revenue and Customs Department (HMRC).
In many cases, the warehouse will require the new owner of the cask to have a current storage account within the warehouse’s systems. After all, the warehouse will need an account to manage all things related to your cask (e.g. regauges, samples, billing) and to help maintain a cask audit.
But as a cask owner, what happens if you don’t have a warehouse account?
As a cask owner, you have two options with cask management and that include having a Custodial Account (typically through an intermediary such as Spirited) or, for self-managed accounts, opening your own warehouse account. There are pros and cons for both options and we cover some of these in our next article, The Pros and Cons of having your own Cask Warehouse Account.
Drop us a line here if you want to learn more about the transfer of casks and how to be protected.
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