Cask Whisky Association launches to protect consumers

The Cask Whisky Association (CWA) has launched today (21 September) to establish a safe environment for whisky enthusiasts to buy and sell casks.

The CWA is made up of two boards of members and advisors, and includes cask whisky businesses, distilleries, independent bottlers, whisky experts and authors, as well as legal and insurance professionals working within the sector.

The Association aims to protect cask whisky customers and the wider whisky industry by setting best practices in cask ownership and sale.

Chairman of the advisory board and spokesman for the CWA Colin Hampden-White told The Spirits Business that the CWA’s goal is to uphold the overall reputation of the Scotch whisky industry, while protecting consumers.

“The main reason we have set up the CWA is to protect consumers, customers and independent bottlers from unscrupulous traders, and also from huge price hikes; the bottlers are feeling that they’re getting priced out of the market, and prices are being pushed up by companies selling casks at a far too high price, which generally then moves everything on at a far too fast rate,” he said.

Hampden-White confirmed that the CWA is working with organisations to ensure there is regulation around the advertising of cask investment, which is currently an unregulated market.

“Scotch is such a complicated product. We’re not really looking for a regulation like the Financial Conduct Authority, for example, but we do feel that there should be some regulation around advertising,” he said.

He confirmed that the association is trying to clarify whether the Digital Markets, Competitions and Consumers Bill that is currently being reviewed in the House of Lords includes Scotch, and if there is a possibility to make an amendment to the bill if it doesn’t.

Wendy Chamberlain MP, chair of the Scotch Whisky All Party Parliamentary Group (APPG), has today written to the business minister responsible for the bill, seeking clarification on whether the new consumer legislation will increase protections for investors in cask whisky.

Her letter reads: “Having met with the Cask Whisky Association, I am aware that there are many reputable organisations who want to provide good investment opportunities to enthusiasts and investors alike. The actions of bad actors in this field risk harming not only consumers, but the reputation of Scotch whisky and the long-term viability of the industry as a whole.”

The association has also met with Lord Richard Harrington, who is leading the government review of foreign direct investment (FDI).

Harrington said of the association: “This type of cross-industry collaboration is welcomed. Where blind spots in regulation exist, such as in the cask investment space, it is encouraging to see different parts of the industry coming together to address the issues that emerge. Scotch is a true British success story, so measures must be put in place to protect the integrity of the sector.”

Lack of understanding

Hampden-White noted that there is a lack of understanding of the “complex” whisky market by many of the cask investment companies operating, as well as the consumers.

He continued: “We found a few years ago that there were companies starting to trade casks, and they weren’t being fraudulent – they just didn’t know what they were doing. Many were in the Scotch industry, but they’d always dealt with bottles – or they hadn’t been in the Scotch industry before, they’d been dealing with wine. Suddenly they were trading casks, and there were things that they just simply didn’t know.

“There were big discrepancies in these companies’ operations and offerings that were really out of inexperience and naivety, and there was nowhere for these companies to go and get advice, to find out how to put best practice into their businesses. So, that was another reason we founded the CWA – to try and help companies that are relatively new in the industry to do it properly and then, hopefully, in time they can become members of the association.”

The CWA is a voluntary organisation open to all cask whisky companies. It welcomes membership applications from UK-based, financially stable companies who ‘uphold quality standards and retain all appropriate licences’, with applications reviewed semi-annually by the executive board and overseen by the independent advisory board.

The CWA website (www.caskwhiskyassociation.org) offers advice for investors and consumers that Hampden-White said would be added to as it gets more information from different parts of the cask trading industry. “The majority of the advice is all about due diligence,” he said. “If you get phoned up by somebody offering to sell you a cask, don’t do a deal on the phone. Get the information, do a bit of research, talk to other companies, see what their pricing is like for a similar thing and research what you’re buying.”

Hampden-White said that association members that have been vetted and approved by the CWA will bear a hallmark of its logo, allowing consumers and investors to know that they are “a trusted source”.

Whisky expert and author Hans Offringa, who sits on the CWA’s advisory board, added: “If you want to buy whisky, go to a trusted company and get some advice, that way you will avoid any pitfalls. That’s why I think certification and licensing is so important; the Cask Whisky Association provides a quality hallmark for people looking to buy and invest in whisky.”

The CWA executive board includes Keith Rennie, director at Scotch Whisky International; Simon Aron, managing director of Cask Trade; Saul Kelly, managing director of Fruitful Spirits; George Stewart, managing director of Stewart Whisky Company; Danny Saltman, director of malts at DS Tayman; Saul Taylor, managing director of Dalkeith Brokerage; and Russell Spratley, director of Spiritfilled.

Meanwhile, the advisory board comprises Colin Hampden-White, TV presenter and whisky journalist; Charles Maclean, author and whisky expert; Hans Offringa, author and whisky expert; George Frier, partner at Shepherd and Wedderburn LLP; Patricia Dillon, managing director of Speyside Distillers; John Laurie, managing director of The Glenturret; Graeme Dempster, account executive at insurance broker Bruce Stevenson; and Martin Purvis, associate director of Kelvin Cooperage.