Annandale – The Million Pound Cask – The Ultimate Investment?

In April 2004 Stephen Jupe was found guilty of fraud. In May 2004 Jupe was sentenced, at Soutwark Crown Court, to five years behind bars.

This was to be the fitting closure of a lengthy investigation into the Marshall Wineries/Grandtully Distillery whisky (and wine) investment fraud in the mid/late 1990’s.

Full details can be read on the Serious Fraud Office’s website here.

Company fraud was High on the list of convictions but alongside that was clear reference to overpricing of casks of new-make spirit sold specifically as an investment. Hogsheads were being sold for £930 – £980 per cask, way over their market value at the time. Wind the clock forward a few years and we have the first cask of new-make spirit being offered for sale for £1,000,000.

That’s right, newcomer, Annandale distillery is offering its cask number 1 for a cool one million pounds.

The million pound cask
The million pound cask

Asking any amount of money for something is fine in my book. In a free market anyone can ask any sum of money for anything they want. Ferrari’s new “La Ferrari” is £1,000,000, there are plenty of houses for sale for well over that amount, paintings, jewellery, land…. Almost as many things as I can think of.

This issue I have with this particular ‘ask’ is that it’s also being offered as an investment. “For the ultimate collector, investor or whisky connoisseur. There is a once in a lifetime opportunity to own cask number 1 which was filled with great ceremony on November 15th 2014. This is offered for sale at a price of £1million” and “Even if you are no whisky connoisseur, you may choose to purchase a cask as a shrewd investment” claims Annandale’s website. A claim I find quite frankly frightening.

It doesn’t stop there either. Highlighting just two more of their cask offers – Cask number 40 is £800,000 and Cask number 47 (that well known lucky number!!) is £300,000.

The £800,000 Cask #40 being filled at Annandale Distillery
The £800,000 Cask #40 being filled at Annandale Distillery

Usually, when something is offered as an investment it’s backed up with historical figures, charts, background and (however spurious it may seem) the reason why the commodity is considered an investment. All with a clear overarching principle statement that past performance is no guarantee of future growth.

As far as I’m aware, this is the first ever cask to be offered for sale for this amount of cash with no past performance at all. The only real gauge for high value casks was a cask of 1991 Macallan which sold for just shy of $2m HK (around £160k) at auction last year. £160,000 is a massive amount of money for one cask and that was relatively well aged Scotch from the hugely desirable Macallan distillery. I genuinely don’t understand how this can be advertised as an investment? It’s a cask of high strength distilled spirit which, if it’s left long enough, will officially become Scotch whisky in November 2017.

Okay, so this cask is indeed a one off then. Surely the best Scotch distilled in Scotland EVER? Bearing in mind it’s actually not Scotch for another few years who knows? It might be brilliant but equally, it might fail. A buyer is being asked to ‘invest’ in something which has no provable quality. Be it good, bad or indifferent, nobody can be sure what it will be like in three, ten, twenty or even forty years.

With all the best known premium distilleries there’s a history of production and an in depth understanding of maturation, usually backed up by a vastly experienced, respected master distiller/master blender (Richard Paterson, Bob Dalgarno, David Stewart and Jim Beveridge to name four such icons). Maybe the distillery simply don’t want to sell these casks? I would understand that – The owners want to hang onto their first few babies so much that an ‘offer they can’t refuse’ would be required to make them part with their casked offspring. But I don’t get that feeling here.

One of the distilleries founders, David Thomson, said to The Scotsman “The price tag is high, reflecting that this is a once in a lifetime opportunity for someone to become a part of Scottish history and to own the Scottish whisky industry’s most valuable cask”…. The Scottish whisky industry’s most valuable cask? A bold claim indeed. Most expensive cask? Undoubtedly! As we all know, simply being expensive is no guarantee of either quality or future increases in value.

I would have said that particular badge of honour would go to something being lovingly stroked by The Macallan, Dalmore, Balvenie, Port Ellen, Brora… or something in the ‘intensive care’ area of Gordon & MacPhail’s extensive portfolio…. Apparently these are all second fiddle. It’s official then… the most valuable cask of Scotch is actually new-make from a new distillery…. Really!? Put aside the fact that this cask boils down to – c200 bulk litres of some stuff distilled from some malted barley and put in some wood for a bit – and it still comes down to it being marketed as an investment that’s the issue for me.

For a collector… I get that (if you collect number one casks from new distilleries). For a connoisseur… I even get that (it better be the best ever, ever, ever). But as an investment?

I could say caveat emptor here… buyer beware… but I’d rather just say in my opinion this is the single most risky investment I’ve ever seen. Taking a punt on a bottle of Macallan’s one thing but a million pounds for just one cask seems to stretch the meaning of speculative.

Annandale very kindly informed me (following an enquiry to make sure the numbers were correct & I wasn’t misreading the price in any way) that the prices are correct; however, 2015 production is for sale for £2,100 for a cask of un-peated and £2,300 for a cask of peated new-make which in the current market actually looks good value in comparison with other new distilleries cask prices… an additional £997,700 buys you a stencilled ‘number 1’ and some Chinese dual branding… What the hell am I complaining about!

I say let the open market decide what this cask is worth. If it were put to auction it would fetch its true value, we would really find out if Annandale’s cask number 1 is the “Scottish whisky industry’s most valuable cask”.

£1,000,000?

I think not.

4 thoughts on “Annandale – The Million Pound Cask – The Ultimate Investment?”

  1. Investment debate aside (and I whole-heartedly agree with you), I suspect that this ‘opportunity’ was nothing more than a remarkably inexpensive marketing campaign to get people talking about Annandale. If so, they did a good job!

  2. Love the blog. Lots of good info here. I’m a big fan of whiskey as well as coffee. So I started sourcing and aging beans in whiskey barrels. Now I can get the nice finish of whiskey anytime! Would you be interesting in reviewing our coffee beans for your readers? I can get some free samples out to you. Let me know. Great site!
    -John

  3. Makes my 18 year old Springbank Butts at £15 – 20K a real bargain.. Is this new distillery related to Kofi Anan – seems they are less diplomatic. Could we also explain to Mr Speights that proper whisky is spelt without an ‘E’.

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