Approach & Considerations
Selling a whisky cask involves finding a suitable buyer, agreeing a price and ensuring that the change of ownership is correctly documented and recorded.
Unlike shares or other exchange-traded assets, there is no central marketplace where every Scotch whisky cask can simply be listed and sold.
This makes the way you approach your eventual exit an important consideration from the point at which you first purchase a cask.
At Steadman-Chase, we plan for the exit from the beginning. Our casks are acquired on the basis of a minimum five-year holding period, giving the whisky time to mature and allowing the investment case to develop over a meaningful period rather than relying on short-term price movements.
Once that minimum holding period has been reached, we work with the client to assess the cask, current market conditions and the available routes to exit.
Is There a Marketplace for Selling Whisky Casks?
There is no single regulated public marketplace for Scotch whisky casks.
The Scotch Whisky Association explains that mature and maturing Scotch whisky casks are not regularly traded as commodities on an open market and that there is no established mechanism through which all casks are bought and sold.
Instead, transactions can take place privately through different parts of the whisky industry.
Potential buyers can include:
- whisky brokers
- independent bottlers
- whisky companies
- private buyers
- other industry participants looking for particular stocks
This is an important distinction.
Owning a valuable cask and being able to sell that cask immediately are not necessarily the same thing.
That’s why Steadman-Chase takes a long-term approach to cask ownership. Rather than positioning whisky casks as short-term assets, our strategy is based around a minimum five-year holding period before we begin the client’s planned exit process.
Why Does Steadman-Chase Use a Minimum Five-Year Holding Period?
Whisky is a maturing physical asset.
As it spends time in the cask, the spirit continues to interact with the wood and its age increases. At the same time, the market for different ages, distilleries and cask types can change.
For this reason, Steadman-Chase works on a minimum five-year holding strategy.
The purpose is to give the cask sufficient time to mature and allow its investment case to develop before considering an exit, rather than purchasing with the expectation of achieving a short-term resale.
This does not mean that five years guarantees a particular level of growth or return. The eventual value of a cask will depend on the individual asset and the market conditions that exist when it is offered for sale.
That’s why at Steadman-Chase we see five years as the beginning of the planned exit window, rather than a guaranteed maturity date or predetermined selling price.
What Happens After Five Years?
Once a client has completed the minimum five-year holding period, Steadman-Chase can begin the exit process with them.
The first step is to review the cask and establish its position at that point in time.
This can include looking at:
- the age of the whisky
- the distillery
- the cask type
- available volume and ABV information
- current market conditions
- comparable market information where available
- potential buyer demand
We can then discuss the available exit routes with the client.
The objective is not simply to sell because five years have passed. It is to consider whether the conditions at that point provide an appropriate opportunity to exit.
If the client and Steadman-Chase determine that continuing to hold the cask may be preferable, the client can choose to remain invested beyond the minimum five-year period.
This gives the exit process flexibility while maintaining the long-term approach on which the original acquisition was based.
How Is a Buyer Found?
The potential buyer will depend heavily on the whisky itself.
Different buyers may be looking for particular:
- distilleries
- ages
- cask types
- flavour profiles
- quantities
- alcohol strengths
- maturation histories
An independent bottler, for example, may have very different requirements from another private cask owner.
Before approaching potential buyers, it is therefore useful to establish exactly what is in the cask and its current condition.
This may involve obtaining updated information or a regauge to establish the amount of spirit remaining and its alcoholic strength.
At Steadman-Chase, our approach is to understand the asset first and then consider the most appropriate potential exit routes for that particular cask.
How Is the Selling Price Determined?
There is no official price list that determines what your whisky cask is worth.
The selling price will ultimately depend on what a buyer is prepared to pay at that point in time.
Factors can include:
- distillery
- age
- cask type
- remaining volume
- ABV
- provenance
- documentation
- current supply and demand
- restrictions attached to the cask
- the intended use of the whisky
This is why a valuation should not automatically be treated as a guaranteed selling price.
For a full explanation, see:
How Is a Whisky Cask Valued?
Read more: How Is a Whisky Cask Valued?
At Steadman-Chase, we believe clients should understand the difference between an estimated valuation and an actual executable offer from a buyer.
When the client reaches the exit stage, the important figure is ultimately the price that can be achieved in the market for that particular cask.
What Happens When a Buyer Is Found?
Once a buyer and seller agree terms, the ownership of the cask needs to be transferred correctly.
This is particularly important when the whisky remains in a bonded warehouse.
HMRC guidance states that owners of duty-suspended excise goods held in a warehouse may sell those goods while they remain in duty suspension.
The existing owner should inform the warehousekeeper that the goods are being sold and provide details of the new owner.
The warehousekeeper’s records should then accurately reflect the change of ownership.
In practical terms, the transaction therefore involves more than simply receiving payment from the buyer.
There should be a clear documentary trail showing that ownership has passed from one party to another.
At Steadman-Chase, we consider the administrative transfer to be an essential part of completing a client’s exit.
Does the Cask Have to Leave the Warehouse When It Is Sold?
No.
A cask can potentially change ownership while remaining within an approved excise warehouse.
This means the whisky does not necessarily have to be physically moved simply because it has been sold.
HMRC permits duty-suspended goods held in warehouse to be bought and sold while remaining under duty suspension.
The warehouse records should reflect the new owner.
This is one of the reasons the relationship between the owner, warehousekeeper and cask records is so important.
For more information, see:
What Is a Whisky Bonded Warehouse?
Read more in detail here: What Is a Whisky Bonded Warehouse?
Does Steadman-Chase Help Clients Sell Their Casks?
Yes.
Exit support forms part of the Steadman-Chase approach to cask ownership.
Our model is based around clients holding their casks for a minimum of five years. Once that period has been completed, we can work with the client to assess their cask and consider the available exit opportunities.
This can include reviewing the asset, considering its current market position and exploring suitable routes to potential buyers.
The exact route will depend on the cask and the market at the time.
The five-year point does not mean that a cask must automatically be sold. It means the client has reached the minimum holding period from which a planned exit can be considered.
If market conditions or the characteristics of the cask support continuing to hold it, that option can also be discussed with the client.
Can I Sell My Cask Back to Steadman-Chase?
Steadman-Chase’s exit support should not be confused with a guaranteed buy-back.
Unless expressly agreed otherwise, we do not represent that Steadman-Chase itself will purchase a client’s cask at a predetermined price.
Instead, our role is to support the client through the exit process and explore appropriate routes to market once the minimum holding period has been reached.
This distinction is important because whisky casks are not fixed-return products and future selling prices cannot be guaranteed.
Can I Sell My Cask to an Independent Bottler?
Potentially.
Independent bottlers are one possible source of demand for mature whisky stocks.
However, this does not mean that every independent bottler will want every cask.
A buyer may consider factors including the distillery, age, flavour profile, ABV, volume and price.
There may also be contractual restrictions affecting the use of a distillery’s name.
The Scotch Whisky Association specifically advises cask purchasers to establish whether restrictions apply to the use of the distillery name if the cask is eventually sold or bottled.
This is another reason why Steadman-Chase considers the terms attached to a cask as well as the whisky itself when assessing an acquisition.
Can I Bottle the Whisky Instead of Selling the Cask?
Potentially, yes.
Rather than selling the entire cask, an owner may consider bottling the whisky.
However, bottling creates a different set of considerations.
These can include:
- bottling costs
- excise duty
- VAT
- labelling requirements
- transportation
- packaging
- minimum bottling quantities
- trademark and naming restrictions
- distribution
The Scotch Whisky Association also points out that many bottling operations are designed for larger volumes, so finding a company prepared to bottle an individual cask may require additional work.
Bottling should therefore be considered as a separate exit route rather than assuming it will automatically be preferable to selling the cask.
How Long Does It Take to Sell a Whisky Cask?
There is no standard timeframe.
At Steadman-Chase, clients enter with a minimum five-year holding strategy, but this should not be confused with a promise that a sale will complete immediately at the five-year point.
Once the minimum holding period has been reached and the client wishes to exit, the time required to complete a sale can depend on the individual cask, asking price, available buyers and prevailing market conditions.
A particularly desirable cask offered at an attractive price may generate interest more quickly than a cask for which there is limited demand.
This is why whisky casks should generally be approached as a long-term and relatively illiquid asset rather than something that can necessarily be converted into cash immediately.
What Should I Have Before Trying to Sell My Cask?
Before approaching potential buyers, there should be clear information identifying the asset.
This could include:
- Distillery
- Year of distillation
- Cask number or reference
- Cask type
- Warehouse location
- Current volume where available
- Current ABV where available
- Ownership documentation
- Any restrictions applying to the cask
- Relevant storage or warehouse information
The stronger the documentary trail, the easier it can be for a prospective buyer to understand exactly what is being offered.
This connects directly with one of the most important principles throughout the Steadman-Chase Knowledge Centre:
You should be able to identify what you own.
For more information, see:
How Do I Know I Own My Whisky Cask?
Read more here >> How Do I Know I Own My Whisky Cask?
How Does Steadman-Chase Approach a Client’s Exit?
Our approach starts long before the client wants to sell.
When we source casks, we do so with a minimum five-year holding strategy in mind. The objective is to select casks that we believe have the characteristics to benefit from further maturation and potential future market demand.
During the ownership period, the whisky continues to mature.
Once the minimum five-year period has been completed, we can review the client’s cask and the market conditions at that time.
From there, we work with the client to consider the available options and, where an exit is appropriate, explore potential routes to market.
If continuing to hold the cask is considered more appropriate and fits the client’s objectives, the client can choose to remain invested for longer.
That’s why at Steadman-Chase we don’t view exit as a single date on a calendar. We view it as a planned process that begins after the minimum holding period and takes account of the individual cask and the market conditions at the time.
Key Takeaway
Selling a whisky cask is not the same as selling an exchange-traded investment.
There is no central marketplace, guaranteed buyer or universally published selling price.
At Steadman-Chase, our cask strategy is built around a minimum five-year holding period. This is intended to give the whisky time to mature and allow the investment case to develop over a meaningful period.
After that minimum period, we can work with the client to review the cask, assess the market and explore the available exit routes.
The client may choose to sell or, where appropriate, continue holding the cask.
That’s why at Steadman-Chase, the exit isn’t an afterthought. It’s something we consider from the point at which the cask is originally selected.
Sources
Scotch Whisky Association — Personal Investment in a Scotch Whisky Cask
HM Revenue & Customs — Receive goods into and remove goods from an excise warehouse (Excise Notice 197)
HM Revenue & Customs — Registration and approval of excise goods held in duty suspension (Excise Notice 196)
HM Revenue & Customs — Receiving, storing and moving excise goods
https://www.gov.uk/guidance/receiving-storing-and-moving-excise-goods
