ASA issues enforcement notice for whisky cask investment

The Advertising Standards Authority (ASA) has published an enforcement notice to clamp down on ‘misleading’ whisky cask investment ads.

The advertising rules will be enforced from 2 January 2024 and have been set by the Committee of Advertising Practice (CAP) and are enforced by the ASA, the UK’s independent advertising regulator.

The ASA has previously published two rulings about the advertising of whisky cask investments, after concluding the adverts were ‘misleading and socially irresponsible’.

The enforcement notice applies to adverts in all media for whisky cask investments targeted towards UK consumers. It includes paid-for ads and non-paid-for online advertising, including websites, email marketing and social media. The notice does not apply to the rules around the investment itself.

Guidance is clearly outlined in the enforcement notice; it advises whisky cask investment firms to be clear in their ads that the value of investments can go down and up.

Ads should not state or imply that results can be guaranteed and warn about the risks involved.

“The presentation of omission of information can easily take advantage of consumers’ inexperience and credulity and affect their understanding of an offer; care must be taken to ensure consumers are not misled,” the enforcement notice states.

Further advice includes ensuring ads ‘expressly and prominently’ state material information. For example, ads must make known that whisky cask investments are unregulated in the UK, fees apply and there are terms and conditions for the service.

Clear terms and conditions

The terms and conditions should inform consumers clearly that the volume of spirit will decrease over time due to evaporation (the angels’ share), their rights to cancel and the costs involved in doing so, and that new-make spirit must be aged for three years, during which time its alcoholic strength could reduce but, to be classed as whisky, it must be at least 40% ABV.

Any claims for rates of return must be representative and supported by documentary evidence, making clear to consumers how the rate is calculated.

Furthermore, the enforcement notice states ads should be socially responsible. As well as warning that the value of investments can go down and up, ads should not suggest outcomes are guaranteed.

Earlier this year, spirits industry professionals raised concerns about the risks of an unregulated whisky cask investment sector.

In September this year, the Cask Whisky Association (CWA) launched to establish a ‘safe environment’ for whisky fans to buy and sell casks, but was met with some scepticism from the whisky industry. The CWA responded to concerns raised by members of the trade in a letter to The Spirits Business.