DO THE DEFENCE FORCES RUN INDIAN DEMOCRACY?

 SOLDIERS TO THE RESCUE

Response of Mr Sugandha Thakran to an article in the Print Media.

Mr Hansraj Bhat remarked recently in the Economic Times of Mumbai that India is probably the first nation to be democratically run by an army. This was no satirical or spoof piece. “This army has taken over the nation without a coup” he says, “They ensure that elections are held without fear. They are fighting on the borders, fighting insurgency (police work) within the borders, handling floods, earthquakes, tsunamis (all civil work), finishing stadiums and even winning medals. They run some of the best schools, and medical and engineering colleges.” He adds, “Indian troops are always in demand for UN operations. Their cantonments are like Singapore and Shanghai. Last but not least, their ‘betis’ dominate Bollywood and beauty contests.” This gush of adulation is not an isolated instance. In the recent past, the Indian citizen has awoken anew to the realisation of the worth of its Armed Forces. The triggering factor this time was the ‘dance of death’ of the river Mandakini at Kedarnath.

With graphic images flashing horror from every media, it is out there to see how much soldiers on foot and the angels of mercy from the skies are doing to alleviate the suffering of the distressed people of Kedarnath. Strong men in olive green fashion bridges and pulleys and stretchers from available resources and carry victims to safer ground, where other teams in the same uniform perform first aid and more, under makeshift tents. Constant sorties by the men in blue bring in vital supplies and carry out evacuation of the critically injured and deceased. Several pictures brought out of the calamity-struck region show army men carrying out two or even three survivors on their shoulders and in their arms. The common feature in each of these pictures is the expression of utter gratitude in the faces of those being rescued. It is an infectious gratitude which transmits through the media to every man in every part of the country…….for each of them shudders to think of a time when he might need the help of these heroes. But then the boss calls or the child’s teacher sends a note and the daily mundane pushes out thoughts of the troubles and bravery of fellow men hundreds of kilometers away.

“I have participated in three rescue operations in my service career” says a young army major, “but the limelight goes off like a fused bulb the moment the crisis is over. I feel like a fool quoting any of those missions to anyone outside the establishment. Civilians think I’m trying to curry favours by telling them what a hero I am. So we just keep our stories to ourselves to swap over drinks some evening.” While the more vulnerable states in the north of the country seem more sensitive to the value of the defense services, there does seem to be a more cool reaction in the south. “I was on temporary duty in Bangalore” says an officer posted in the city, “and I got lost in their infernal one ways. When I was stopped by a policeman and told him that I’m from the army and on TD, he fined me anyway saying I should be an example to the civilians. That would never have happened in any city in the north. Not that I’m asking for any rules to be broken for me, but it’s just the attitude which conveys so much.”

This mood swing of the common man does not seem to dampen the zeal of these men and women in uniform, though. A lady doctor in the army revealed, “It’s not practical to expect undying gratitude from everyone we serve. The career I have chosen is a demanding one on many levels. I’m a doctor, which in itself is a calling of a lifetime. To top it, I’m in the military, which has its own demands and pressures. If I torture myself over why everyone doesn’t extend constant affirmation to me, I’ll go over the edge. I do my little bit in my own little way and carry on. I’m just a speck in a giant structure which does more good than anyone realises.” Her sentiments are echoed by a senior officer in the Air Force. He says “We have carried out countless rescue and relief operations in the years since India’s independence. Unlike the Army, the Air Force does not have much direct contact with civilians during operations. Yet we are aware that it is for the man in the streets that we exist. We are here to keep them safe, in peace time as well as in war. That they don’t give two hoots doesn’t change our job or our passion for it. That’s what makes being in the military so noble….almost religious.”

So does the common man really care about the men in uniform in times of peace? Or is he more influenced by the many allegations and taints that have marred the image of the defense services recently? Does he think (heroic rescues aside) that he is entitled to the ‘truth’? In response to that quest, the words of Col. Nathan R. Jessup from the movie ‘A Few Good Men’ seem apt… “We live in a world that has walls and those walls have to be guarded by men with guns. Who’s gonna do it? You?!.....I have a greater responsibility than you can possibly fathom…..You curse the Army. You have that luxury. You have the luxury of not knowing what I know. That a man in my command’s death, while tragic, probably saved lives, and my existence, while grotesque and incomprehensible to you, saves lives……You don’t want the truth because deep down in places you don’t talk about in parties, you want me on that wall. You NEED me on that wall. We use words like honour, code, loyalty. We use these words as the backbone of a life spent defending something. You use them as a punch-line. I have neither the time nor the inclination to explain myself to a man who rises and sleeps under the blanket of the very freedom that I provide and then questions the manner in which I provide it. I would rather you just said ‘Thank you’ and went on your way. Otherwise I suggest you pick up a weapon and stand a post. Either way, I don’t give a damn what you think you are entitled to.”

 

INDIAN AIR FORCE TO THE FORE AGAIN: OPERATION KABUL

SUPERB EVACUATION PROCESS FROM AFGHANISTAN:
BOUQUETS FOR THE IAF

THE TALE OF SHIRIN PATHARE, AGM SECURITY, AIR INDIA KABUL, EVACUEE

'When I stepped on Indian soil, I lay down on the ground and kissed my homeland.'

PRELUDE

For the last one week since 18 August, we are seeing the Indian Air Force planes bringing Indians out from Kabul, stranded in Afghanistan.  It sounds very easy to see people arriving in India and hear stories, but we should also understand how much hard work is done by the IAF and the diplomacy of the Indian government that is going into this task. 

We do not have any direct air-route to go to Afghanistan. The shortest route is through Pakistan, but, as always, Pakistan is a big hurdle in this.  That's why Indian planes have to take a longer route and go via Iran and one has pay heavy costs for flying over any country and using their Airport. Each sortie runs into lakhs of rupees.

For this, GoI first obtained approval from Iran for using its airspace for IAF aircraft.  Getting this approval was not such an easy task because no country allows its airspace to another country and that too for a military aircraft.  But the Indian government was successful in getting this permission from Iran at very steep charges. Even after obtaining this permission, there was another issue that Indian planes could not land directly at  Kabul Airport.  This is because India's relations with Taliban have never been good. Therefore, the Indian government could not rely on the Taliban enough to keep the IAF plane safe while parked there for a long time.  Moreover, in view of the chaos and huge crowds at Kabul Airport, it was not possible for Indian planes to remain there for long.  To solve this problem, the Government of India found another way.  For this, it made arrangements with the airport of Kazakhstan, Afghanistan’s neighbour on its north-east.  Once again Indian diplomacy was successful and the IAF got permission to use Kazakhstan airport, again involving huge costs.

GOI also had another problem at hand, of how to transport Indians to Kabul airport because after its capture by the Taliban fighters, they had set up numerous check posts & barricades at many places and they not only searched every person minutely but also harassed them on the way to  Kabul airport. It was not possible for Indians officials to gather evacuees at Kabul airport for long duration due to the chaos at Kabul airport.

Eventually the Indian authorities found a solution for this too.  They arranged a large garage near the Kabul airport, where they could assemble and house around 150-200 Indians at one time.

Now, Indians are first gathered in the garage everyday and this work of gathering Indians goes on day and night.  For this, the Indian officers themselves take their cars and reach the place where the Indians are staying and bring the evacuees along with them to the garage adjacent to the Kabul airport, while struggling & bearing the heckling of the Talibanis at the numerous check posts on the way.  When enough Indians have been gathered in the garage, the information is passed on to the Indian Air Force officers stationed in Kazakhstan and the US officials stationed at Kabul Airport.  It is noteworthy that the ATS control and security control of Kabul Airport is still in the hands of the US Army. After this, clearance is given by the US Army to land the IAF aircraft at Kabul; it flies from Kazakhstan to Kabul Airport. By the time IAF plane reaches Kabul, all the Indians from the garage reach inside the airport in the US Army vehicles. They are immediately taken into the IAF plane and within 15 minutes, the aircraft starts its journey back to India, again via Iran with the rescued Indians onboard.

The IAF has once again come to the rescue of stranded Indian people as well as those of numerous countries in an exemplary manner. It has shown the world why it is so highly rated. It is terrifying to think of what could have happened in Taliban controlled Afghanistan had they not evacuated people amidst extraordinary hostility. We salute them!

THE STORY

On August 15, when Kabul fell to the Taliban, Shirin Pathare was on the tarmac of the airport seeing off an Air India flight to India. Little did he know what was to follow. In his own words:

I reached Kabul for the first time in October 2020. It was chilly weather and I could see icy mountains. People were very nice and everything was so good for me because I was the security head for Air India's Kabul flights. It was a very important posting for me.

A month after my reaching Kabul the peace talks between the Afghan government, the Taliban, the US, Turkey and Qatar got derailed. Around that time news came in that all American forces will withdraw from Afghanistan from May 2021. There was not much violence in Afghanistan then except sporadic incidents. The only incident of violence I recall was when Pakistan Prime Minister Imran Khan came to Kabul in the last week of November. After he left, there were explosions in Kabul. I was traveling on a tricycle rickshaw at that time and saw rocket launchers being used openly. I saw 24 rockets launched in front of me. I could not believe the daring of the attackers.

By February the Indian embassy in Kabul issued a no-go alert to Indians living in Afghanistan -- asking us not to travel at night or travel to unsafe locations -- due to an increase in kidnapping incidents.

The Biden administration's announcement that the US forces would leave Afghanistan by August 31, 2021 aggravated the violence from the Taliban side. The violence started in March and it was brutal. In May, the Taliban surrounded Kandahar. They surrounded the city from all sides and cut off the supply routes by road. This led to food shortages, leading to the Afghan forces' surrender.

The Taliban followed this up in Kunduz and Mazar-e-Sharif. When they captured Mazar-e-Sharif we realised that Kabul would be next as it is only 425 km away. On Eid I saw rocket launchers being aimed at the location where President Ashraf Ghani was attending prayers.

On July 29, I lost my father in Mumbai. After the last rites, I went back to Kabul on August 12. When I arrived in Kabul, my friends asked why I had returned. I said it was my duty to come back. If I didn't return, who would operate the Air India flights in Kabul? On August 13 and 14, the Air India flights were full. On August 15, I called my wife and children and wished them Happy Independence Day.

At 11 am, a colleague came rushing in. He said the Taliban were only 11 km away from Kabul airport. I was leaving home and till this day I wonder why I did not take my passport with me to work that day. If I had taken it along, I would have been in India on August 15 itself.

On August 15, AI 244 -- the Air India flight from Kabul to New Delhi -- had a full load of 160 passengers. I realised only 35 passengers had checked in. Slowly, more passengers started coming in and soon there were 100 more passengers. One of my colleagues showed me a video on his phone. In the video, I could see the building where I stayed under attack. The Taliban had surrounded the building.

I knew I could not show my distress to the passengers. I am the security chief and I had to put up a brave front. I asked all my staff not to see videos on their mobiles. All mobiles were to be switch off. 31 passengers could not reach Kabul airport for the flight. I told the flight commander about the situation. He told me to leave Afghanistan without my passport. I said, 'No.'

He asked, 'Why not?' I told him I had seen Kaala Pathar in my childhood. In the movie there is a scene where Amitabh Bachchan, the captain of his ship, abandons it to reach safety. When he gets up the next morning, he sees the ship is intact. He is dismissed from service and lives all his life in guilt. I told the Air India captain that I do not want to live in guilt. I told him I don't want to be called a bhagoda (coward) all my life.

'Aagey aap ki marzi (as you wish),' the flight commander said. If there is a God, I responded, then he will save me.

Qatar Airways, Pakistan International Airlines, another small PIA plane were all on the tarmac, but were not taking off as they had not got the green light. Qatar Air was a full flight and was waiting for three hours on the tarmac with 300 passengers inside the plane. I wondered what was wrong, why were these flights not taking off? Luckily, by 4.30 pm, the Air India flight got the chance to take off from Kabul airport. And this was the last flight to take off that time.

I did not leave the airport till I saw the Air India flight up in the air over Kabul. Within minutes of the Air India flight taking off, Taliban fighters reached Kabul airport. Firing started. At 5 pm, the message came that nobody could leave the airport. Worse, our driver abandoned the car and fled. All our friends at the airport too disappeared within minutes.

Luckily, I met a protocol officer of the Indian embassy at the airport. He too was stuck in the melee. He called the embassy. We managed to arrange a bullet-proof car. I told the driver not to stop anywhere and drive to the Indian embassy which was only five km from the airport. When we reached the Green Zone, which is always heavily guarded as most embassies of the world are located in Kabul, it had no guards. There was no one. It was 6.30 pm. I decided to go back home in Kabul and pick up my passport. I wanted my passport because it had American, Canadian and UK visas. To get those visas again would be a big problem. I arranged for another car with the help of an Indian friend. He arranged for a car with three Afghan locals. One was from Jalalabad and Mazar-e-Sharif.

At 7.30 pm, I entered my building. The owner of the flat told me the Taliban would enter any moment and I would have to vacate immediately. He gave me 15 minutes time to pack up and leave. I left most of my luggage behind and exited. At that time, the coordination between my heart and mind had stopped functioning. I was numb. I could see Taliban on the streets. People were running on the roads with household supplies. I asked my driver what are they taking. The Afghans told me to keep shut and not open my mouth till we reached the Indian embassy.

I prayed to God, my mother and my kuldevi. My blood pressure started shooting up. Our car was stopped by the Taliban outside the Canadian embassy. There were 15 of them. They had guns and rocket launchers. It was 8.30 pm. I took my wife and children's photograph out of my pocket. I felt perhaps this would be the last time I would see them. I was not scared of the Taliban, I was more worried about the ISI. I felt what happened to Reuters photographer Danish Siddiqui could happen to me. The three Afghans whom my Indian friend had sent along with me were messengers of God for me.

They spoke to the Taliban and did some smooth talking. It was dark so the Taliban could not see our faces.Since it was dark the Taliban soldiers did not find out I was Indian. The car halted for 20 minutes and every second was a matter of life and death for all of us. I sat still. I thought each breath would be my last breath.

While talking to the Afghans, a Taliban fired in the air. I thought this is it, my life is over. The driver then got out and started speaking to the Taliban. Luckily, at that very moment, a top Taliban commander's convoy was approaching the area. All of a sudden, the Taliban uttered one word in Pashto, which I will remember all my life: 'Burro'. It means 'go away.' Without wasting a second, we left for the Indian embassy.

I ate dinner at the embassy and tried to sleep, but could not sleep. I didn't know at that time that one more huge hurdle was left for me before reaching India. On August 16, we stayed in the embassy. The Taliban created a hostage kind of situation where no one could enter the embassy and no one could leave the embassy. We thought we were going to be stuck in the embassy and there was no way we would leave Kabul until a new government was formed.

I called my family on August 16 and told them that I was alive and not to worry. There were roughly 150 Indians in the embassy on August 16. At 9.30 pm on August 16, the embassy got a message from the Taliban that they would let us travel to Kabul airport. By 10 pm, we got ready to leave. The Taliban looked at us as if we were specimens from another planet. Four vehicles with Taliban escorted us. One was a pilot vehicle, another vehicle was in between, the others were behind our convoy.

There were 20 Land Cruisers and 150 Indians had to fit in them. It is a 20 minute drive from the Indian embassy to Kabul airport, but it took us five hours to reach that night.It was the worst journey of my life. Every now and then, Afghans used to jump on our convoy and the Taliban escorting us started firing in the air to disperse the crowds. I have no idea whether they were good Taliban or bad Taliban, but they were very nice to us.

After 2 am, we reached Kabul airport. We entered through the Turkish gate and not through the normal gate where Afghans were gathered in huge numbers. They wanted to escape Kabul, but could not do so because the airport was closed. The Taliban escort handed us over to the Turkish soldiers guarding the Kabul airport. The Turks screened us and handed us over to the Americans. The Americans again screened us and took us to the tarmac. Around 3.30 am we reached the US air force base within Kabul airport.

The Indian ambassador to Afghanistan had a meeting with American military officers. The Indian Air Force plane landed at 4 am in Kabul. We started boarding the flight. The Americans told us that all Indians must leave Kabul airport by 6 am. Hats off to the Indian government and its planning on how they evacuated us from Kabul. Everything was planned to precision.

When our flight took off from Kabul, there were moist eyes all around. Everybody was very emotional because they had lived to see another day. The flight flew over Tajikistan, over Iran, before arriving at Jamnagar in Gujarat. We took off from Kabul at 5.50 am and reached Jamnagar at 11.30 am IST.

When the IAF pilot told us that we were going to land at Jamnagar, the first thought that came to my mind was astronaut Rakesh Sharma's reply to Indira Gandhi from space: 'Saare Jahan Se Accha, Hindustan Hamara'. When I stepped on Indian soil, I lay down on the ground and kissed my homeland.

'My country, my India,' I said.

CALLING ALL INDIANS: IMMEDIATE REFUNDS FOR REFUNDABLE AIR-TICKET CANCELLATIONS

 JUST REACH THIS WEBSITE

We had booked a REFUNDABLE Kuwait Airways flight Mumbai-Milan-Mumbai from the Make My Trip website in December 2019 for a conference. Our visit dates were from 11th October 2020 to 18th October 2020. But due to COVID, we had to cancel the tickets from the MakeMyTrip app in August 2020. Make sure you book REFUNDABLE TICKETS at the outset. You have this option on most sites.

Kuwait Airways deducted a nominal amount and returned a large amount of our refund to MakeMyTrip in September 2020 itself. But, since then, we had to run from pillar to post between MakeMyTrip and Citibank since our Refund amount never got credited to the credit card account as promised. There was no response to numerous phone calls and mails sent to MakeMyTrip. Citibank was not involved in the delay.

Then, on 09th July 2021, I discovered the CPGRAMS site. CPGRAMS stands for Centralized Public Grievance Redress & Monitoring System. From that I got Direct PMO - Prime Minister's Office site - https://www.pmindia.gov.in/en/main/

From the site given above, in a few words, I wrote my Grievance to the PMO office, attached the relevant documents (there is such a facility on the site) and a miracle happened:

1. I immediately received a registration no. in my email with all details of my complaint.
2. I got the name, email ID and direct phone number of the officer to whom my complaint has been forwarded. It all happened in 1-2 days.
3. On 13th July I received an email from MakeMyTrip (on instructions of the Ministry of Tourism) asking for a few details.
4. Everyday, I could track the progress of my complaint myself by entering the registration number-complete Transparency!!

And then, another MIRACLE happened on 19th July 2021. The refund amount was CREDITED to the bank account by NEFT from Make My Trip!!

Really COMMENDABLE!! No words to praise this fantastic initiative by the government- and it REALLY WORKS!!

It just shows the efforts of the government towards bringing full transparency in their working and their genuine concern for their citizens and their grievances! Even foreigners who book through this site are welcomed freely.

I’m putting up this post so that it can help genuinely aggrieved citizens!!

CPGRAMS stands for *Centralised Public Grievance Redress & Monitoring System.

PMO site- https: //www.pmindia.gov.in/en/main/

Don't lose time or money-just use this tip. It is free of cost.

FOR ALL INDIANS: OUR HUMOUR ON THE NET

 ANSWERS CAN BE FUNNY

This was taken from a tourism blog where people could post queries if they were planning on making a trip to India. The answers are the actual responses by the website officials, who demonstrate tolerance and an excellent sense of humour.

Q: Does it ever get windy in India? I have never seen it rain on TV, how do the plants grow? (UK).
A: We import all plants fully grown and then just sit around watching them die.

Q: Will I be able to see elephants in the street? (USA)
A: Depends how much you’ve been drinking.

Q: I want to walk from Delhi to Goa – can I follow the railroad tracks? (Sweden)
A: Sure, it’s only three thousand kms, take lots of water.

Q: Are there any ATMs in India? Can you send me a list of them in Delhi, Chennai, Calcutta and Bangalore?(UK)
A: What did your last slave die of?

Q: Which direction is North in India? (USA)
A: Face south and then turn 180 degrees. Contact us when you get here and we’ll send the rest of the directions.

Q: Can I bring cutlery into India? (UK)
A: Why? Just use your fingers like we do.

Q: Can you send me the Indiana Pacers matches schedule? (France)
A: Indiana is a state in the United States of…oh forget it. Sure, the Indiana Pacers matches are played every Tuesday night in Goa; Come naked.

Q: Can I wear high heels in India? (UK)
A: You’re a British politician, right?

Q: Are there supermarkets in Bangalore, and is milk available all year round? (Germany)
A: No, we are a peaceful civilisation of vegan hunter/gatherers. Milk is illegal.

Q: Please send a list of all doctors in India who can dispense rattlesnake serum. (USA)
A: Rattlesnakes live in A-meri-ca which is where YOU come from. All Indian snakes are perfectly harmless, can be safely handled and make good pets.

Q: Do you have perfume in India? (France)
A: No, WE don’t stink in India.

Q: I have developed a new product that is the fountain of youth. Can you tell me where I can sell it in India? (USA)
A: Anywhere significant numbers of Americans gather.

Q: Do you celebrate Christmas in India? (France)
A: Only during Christmas.

Q: Will I be able to speak English most places I go? (USA)
A: Yes, but you will have to learn it first.

Q: Can I see Taj Mahal anytime? (Italy)
A: As long as you are not blind, you can see it anytime day and night

Q: Do you have Toilet paper? (USA)
A: No, we use sand paper. We have different grades

NOW FOR SOME RUSSIAN JESTS IN GOOD HUMOUR

Just as we have Ajit and Rajnikant jokes, in Russia they have Putin jokes.....

When Putin was late for school, the teacher punished the whole class for being early.

When Putin's phone rings in the theater, they pause the movie.

Doctor: "You have Cancer".
Putin: "Tell it, it has two weeks to live".

When Putin looks in the mirror, there's no reflection because there is only 1 Putin.

When Putin was born, he named his parents.

Russia didn't choose him, he chose Russia.

Putin Arriving at Foreign Country's Airport:
Customs Officer: "Occupation?"
Putin: "No, just visiting."

Putin calls 911 to ask what is their emergency.

Putin built the hospital in which he was born.

Putin never flushes the toilet, he just scares the shit out of it.

When Putin was born, he slapped the doctor for not crying.

When Putin didn't go to school, the school declared it a Holiday.

Stop calling him the Russian James Bond. James Bond is British Vladimir Putin.

When Putin creates an account, the terms and conditions agree with him.

When Putin coughs, Covid wears a mask.

INVESTING IN WHISKY A PATHWAY TO PROFIT? PART II

 ALL THAT GLITTERS MAY NOT BE GOLD: STAY AWARE

In continuation of my previous post on the same subject, imagine your very own cask of whisky….it’s the ultimate indulgence, isn’t it? When you love whisky this much, owning your cask – or investing in one – is the icing on the cake, yes?  But icing can go off if you’re not careful….

There’s no denying that there’s a degree of romance involved.  It’s like owning your own little piece of Scotland, not to mention that it affords great bragging rights with your mates on WhatsApp and Signal. And, if you buy a cask when it first gets filled, you also get the enjoyment of watching it mature and tasting it at various intervals along its maturation journey – almost like watching your kids grow up!

It all sounds great on the surface, and plenty of people pay for and acquire a cask with the expectation that nothing could possibly go wrong.  After all, what’s the worst that could happen?  In ten years’ time, you’ve got 200-350 bottles of your own whisky to drink, sell, or give away!  But, for many people, it seems this end outcome causes more problems than joys. “How?  Why?”

Diehards in the Scotch Malt Whisky Society regularly get emails from people who are trying to sell and off-load their cask.  The circumstances are invariably the same each time:  They purchased a cask 8 to 12 years ago, but found that the additional costs and expenses involved to bring their bounty home were prohibitive, and they can no longer afford (or risk) to complete the deal.

In the period from 2008 to 2014 or so, such experts were getting at least two to three emails each month from people around the world who were trying to offload their cask.  Several distilleries – Springbank and Bruichladdich being two good examples – had cask purchase schemes in place for the general public in the late 1990’s and early 2000’s, and when these casks reached maturity at around 10 years of age, the purchasers discovered all the additional costs that weren’t instantly evident at the start of the process 10 years earlier. We’ll see what these costs and risks are in just a moment….

There’s a difference between owning or buying a cask of whisky and investing in one.  The former implies that you’re doing it for a bit of fun, and you plan on drinking, enjoying, and sharing your spoils when you eventually decide to bottle it.  Investing in a cask, on the other hand, suggests that the exercise is purely a financial affair, and you’re hoping to make a few bucks out of the deal.  Both alternatives are very different prospects, so let’s look at them separately:

BUYING A CASK

As explained in Part I, if you were tempted to buy your own cask of whisky as a means to “cut out the middle man” and to obtain some bottles of whisky cheaply, stop reading here and head down to your local liquor outlet instead.   Commercially available whiskies that you find in these outlets or in the online stores enjoy economies of scale that are beyond the humble cask-buyer, and the journey of buying, maturing, and bottling your own cask is not a path to cheap whisky.  Get back to mother earth now.

Several Scottish distilleries offer cask purchase schemes and, in fact, with the huge number of new distilleries establishing and opening in the last few years, the opportunities to buy your own cask are better than they’ve been for a long time.  Ardnamurchan, Glasgow, Ballindalloch, Lagg, Annandale, Lindores Abbey, Kingsbarns, and Ardnahoe are all just some examples of Scottish distilleries that have (or had) private cask purchase offerings in place for individuals. 

The schemes vary from distillery to distillery but, in most cases, your original buy-in purchase price will afford you somewhere between five and ten years of warehousing and a sample sent out to you once a year.  Additional fees and costs apply if you want to mature the cask and keep it warehoused beyond the initial allowance, or to obtain extra samples.

HIDDEN COSTS

The “hidden” or extra costs – and what catch so many people out – are the costs involved once the whisky is matured and deemed ready for bottling.  Nine times out of ten, the purchase price you pay at the start covers only the cask and spirit up until it’s deemed ready to bottle.   For whatever happens after that, the ball is in your court, as are the expenses. This aspect has been dealt with at length in the earlier article.

But if you’re flying this exercise solo, there are also some practical issues to deal with.  It all sounds fun at the start, but it’s a very different prospect when 250 bottles suddenly lob up on your doorstep.  How much of this do you really expect you’ll be able to consume yourself?  How much can you afford to give away to family and friends?  If you want to sell a few bottles (or a few hundred bottles) to re-coup some of your costs, how can you realistically and legally move that stock?  Your close friends or the colleagues you know through your whisky circles might drop around to your house and exchange cash for a bottle, but that might account for just 30 or 40 bottles if you’re lucky.  If you want (or need) to move 100, or even 200 or more bottles, then the complications and costs of acquiring a liquor licence come into the mix, and you’ve STILL got to find your market and buyers…and all at a price where you at least break even on your costs.

Some readers will be familiar with Facebook whisky groups like Dram Full ex-Australia, and plenty of other similar country-centric groups on Facebook and other Social Media forums.  With Social Media forums having a combined Facebook group membership of over 100,000 people, did you think a simple ad or announcement on Facebook would easily find your market and help you shift your bottles?  But joining a Facebook group and being willing to spend $200 or more on a bottle of whisky are two very different things and it seems a large proportion of those group’s members baulk at paying more than $100 for a bottle of malt when it’s sight unseen.  Experience has shown that social media groups will only help one move 30-50% of your cask, if one is lucky.  And they’ll want or expect discounts or other incentives, too, so the revenue you get might not be what you banked on.  Moreover, if you’re inviting people from other cities and states to buy your bottles, you’ll also need to organise and handle all the packaging and posting – no small or convenient task.

So, after all that, is it really worth it?  Is the work, cost, effort and expense rewarded?  I guess that depends on whether you find your cask tasty and how much you’re prepared to drink or give away.  But it certainly is nice to see your name on your own label.

INVESTING IN A CASK

Most of the pitfalls and additional expenses associated with investing in a cask are the same as what we’ve already outlined above. The key difference here is that the ultimate objective is to make money. That means divorcing yourself from the romance and fun of the affair, and focussing purely on ensuring every last drop of spirit is sold.

In such an instance, the easiest – and recommended – path is to simply sell the cask off once it’s reached maturity, i.e. let someone else take on the risk and hassle of bottling the spirit and selling it as a labelled product.  A cask of 10 years old matured whisky is worth more than a cask of freshly-filled newmake spirit, and so the exercise simply becomes an 8 to 12 year long-term investment that relies on the capital growth of your asset.  Of course, like every long-term investment, there are risks involved, and you need to consider these:

Will the whisky industry still be buoyant in 10 years’ time and will there be demand for your cask? If a bust follows the current boom, your cask might not attract the same interest or price-tag you anticipated when you first invested.

You may be obliged to pay UK duties and taxes, depending on how the transfer of ownership takes place and how the deal is negotiated. Bear in mind that excise, duty, and VAT generally increase over time, and so the taxes due in 10 years’ time will undoubtedly be more than what you can currently calculate.

Casks can get damaged. Leaks are not uncommon, and whilst it’s been a long time since a fire ripped through a Scottish warehouse, fire and loss of your cask is also an ever-present risk.  Or, as many distilleries found out in 2010, so is collapse and damage of a warehouse under extreme snow!  Most cask investment schemes offer insurance against such losses, up to an extent, but you’d want to check the fine print for yourself.

This is only applicable in the case of a sherried cask, but what if your cask is tainted with sulphur? If the sale of your cask at the end of its maturation relies on sending samples out to prospective buyers, you might be in trouble if those doing the sampling hold an anti-sulphur sentiment.

How reliable is the investment scheme and the distillery? Some distilleries offer schemes whereby the distillery buys the cask back from you once it’s matured, and the terms and prices of that buy-back are written into the initial contract.  Beware of any investment scheme that sounds too good to be true.  Remember that the end buyer of your cask – whether it’s the distillery, or a cask broker, or a whisky club such as the SMWS – has to meet all the costs associated with bottling, labelling, transporting, and selling the whisky, and it’s they that capitalise on the real or retail price of the whisky.  You are effectively just a wholesaler and must accept the smaller margins.   As investors in the infamous Nant Distillery found in Australia, not every investment scheme returns the dollars it originally promised. Matthew Hayden was among the losers.

Like any investment, consider what the return is and whether your money would be better placed somewhere else? You’re looking at least an 8 to 10 year wait for your return, and it’s not unreasonable to ask if your money would perform better if invested in some other fund or scheme for that same period.

Regardless of which of the above two routes you go down, remember that 10 years is a relatively long time into the future, and our crystal balls can get a bit cloudy when looking that far down the track.  Your health may be a different prospect in 10 years’ time, as might your circumstances and address.  If all the distillery knows about you is an email address, it’s easy for either party to lose track of one another if you re-locate or change your internet service provider.  And, whilst it’s a morbid thought, if you were to accidentally die at some point, make sure someone in your family knows that a cask in a foreign land forms part of your estate!

This is what WhiskyInvestDirect posted about their Investment Scheme:

Good returns from whisky maturation have been achieved over many years, but historically only distillers and blenders could benefit. Until now, that is.

                  

Launched in 2015, WhiskyInvestDirect changed that, by allowing private investors to buy quality whiskies at wholesale prices. Already some 3,500 users own enough to fill over 70,000 casks, that's the equivalent of 29 million bottles of maturing Scotch. Accounts range in size from £700 to £750,000. 

Economies of scale mean your whisky will be stored — still in the barrel — at exceptionally low cost, in the original distiller's bonded warehouse. Its safe storage there is evidenced every month by our published audit.

You will own the whisky as it matures, and when you decide to sell, via our trading exchange, you'll receive a transparently competitive price from other users and industry bidders. To date, mature whisky bought back by the trade has realised an average annualised return of over 10% for private investors — after all costs.

Together we profit through tackling this industry's greatest problem — the large working capital requirement of financing maturing stock.

On the other hand, investment specialists at Rare Whisky 101 (RW101) have expressed “worry” over the increased number of inexperienced investors buying new make spirit.

RW101, a rare whisky indexing, valuation and brokerage firm, recently released its review, outlining performance of rare whisky on the secondary market last year.

RW101 said it has brokered a number of sales of “exceptional” casks containing old liquid, including Ardbeg, Laphroaig, The Macallan, Highland Park and Springbank. However, the company said these sales were made by “sophisticated buyers with a wealth of experience in maturing stocks”, adding that it would not advise inexperienced investors or buyers to purchase “even the most sought after of casks” due knowledge about the loss of liquid in the maturation process.

In addition, the increased incidence of inexperienced investors looking at buying into new make spirit, that is, whisky that has not aged in the barrel, is “worrying” to RW101. “Malt and grain production is at an all-time high with distilleries being worked 24/7 to get more out of every last cell of years,” the group said. “Should the current negative trend for global sales of big brand blends continue, it would not be beyond the realms of possibility that there could be a whisky loch in a few years’ time.”

In order to generate funding to increase capacity, a number of whisky distilleries offer cask investment schemes to consumers, who can purchase either entire casks or shares in casks at a time before the liquid has aged.

While RW101 concedes that buying new make spirit from distilleries where it’s not usually obtainable “may not be disastrous”, the firm said such investments “might not yield the expected results”.

“The market for older casks of quality liquid from renowned top-tier distilleries, in our opinion, will continue to go from strength to strength,” RW101 said. “However, we’re strongly advising our customers against buying new make from less desirable single malt distilleries or new make single grain. Rarity, singularity and quality, again in our opinion, are crucial factors when looking at casks.”

HIGHER GLOBAL PROFILE FOR SCOTCH

The profile of this market, in recent years, has only been raised. And for investment, the opportunities have only grown with prices collectors are willing to pay exponentially increasing. Andy Simpson of RW101 (rare whisky 101) says:”One person’s investment or collection today can be another’s drink tomorrow. Stick to limited editions, single casks, discontinued bottles and older rarities from the iconic collector’s distilleries.”

TIPS THAT WILL STAND THE TEST OF TIME

TASTE TEST

In order to understand an investment, it’s imperative that investors get to experience it for themselves. Due to the pure nature of the commodity, this is possible by conducting educational virtual tastings. Not only does this give investors the chance to understand their investment from a different perspective, it also allows them to feel part of the investment they are making – something very unique in the general investment markets, as well as in the whisky sector.

KNOW WHAT TO LOOK FOR

It is important to look for a high alcohol by volume, which means you will get longevity in the spirit so that if you do intend on ageing it, whether it be anywhere from five to 50 years, a high ABV at any stage of investment will give you the maximum opportunity for growth in the investment.

UNDERSTAND THE BRANDS

It is essential to invest in a recognised brand name that you would see in the supermarket, on a recognised website like The Whisky Exchange or Master of Malt, or that you would see in duty-free. If you are buying or investing in a recognised name, you will be able to track the growth across the years by observing the year-on-year price and inflation increases.

If you are able to get hold of a name-brand whisky from 2020 or 2021, it will probably grow quicker than other whiskies distilled the previous year due to the lack of ability and increased demand, making it highly investable whisky.”

KNOWLEDGE IS THE KEY

When choosing your investment, make sure to investigate the distillery financial reports to see how well the company is performing, and look at future plans. Something small, such as a potential rebrand, could greatly increase the cask value.

KNOW WHERE TO FIND VALUE

With increased worldwide demand for whisky, including in America where tariffs have been reduced by President Joe Biden, the value of whisky in casks will only increase; in particular, more aged whisky, along with the value of that produced in 2020 and 2021 during the global pandemic due to the closures of distilleries, which meant that there was reduced supply.

LOOK FOR SPECIAL DROPS

The growth will definitely continue and cask values will keep on increasing, especially aged, rare and unique whisky, which will continue to outperform the standard single malts and keep meeting market expectations, with 2020 and 2021 casks likely to outperform them all.

 

A fair portion of the article quoted below has been used by me in my post. https://www.whiskyandwisdom.com/should-you-buy-or-invest-in-a-cask-of-whisky/

INVESTING IN WHISKY A PATHWAY TO PROFIT-PART I

Whisky: Investing in Liquid Gold

In a world fraught with economic uncertainty, investors are looking for ways to diversify their investments as a hedge against inflationary shifts. Bitcoin has skyrocketed, tech stocks have soared, housing prices are up and down depending on your location and now whisky is seeing a spike in investor interest.

Scotch whisky remains the global whisky superstar, putting all others in the shade. It is a drinks behemoth — the single most traded spirit on the planet and accounting for 75% of Scotland’s entire food and drink export revenue. The secret to Scotland’s success is its adaptability and today it is leading a move to premium whiskies. The global palate is becoming more refined and the value of the high quality Scotch single malt market is set to grow by over 11% a year to 2023.

Investing in Cask Whisky

When it comes to investing, time is your ally. This is as true of whisky as any quality stock. But when it comes to whisky investment, it may be the most important factor of all. In general, The longer you can leave it to mature, the richer you will be.

Producing whisky costs a lot, but one way distilleries capitalise on their efforts is to allow private investment. By investing in newly created whisky, the private investor can leave it to mature for as long as they like, making annual profits of 10% to 30% depending on how and where they market/sell it. Meanwhile, the distillery generates cash-flow to keep things ticking over.

Buying A Cask

If you were tempted to buy your own cask of whisky as a means to “cut out the middle man” and to obtain some bottles of whisky cheaply, stop reading here and head down to your local liquor outlet instead. Commercially available whiskies that you find in these outlets or in the online stores enjoy economies of scale that are beyond the humble cask-buyer, and the journey of buying, maturing, and bottling your own cask is not a path to cheap whisky. So now that you’re considering this for the right reasons…

Several Scottish distilleries offer cask purchase schemes and, in fact, with the huge number of new distilleries establishing and opening in the last few years, the opportunities to buy your own cask are better than they’ve been for a long time.  Ardnamurchan, Glasgow, Ballindalloch, Lagg, Annandale, Lindores Abbey, Kingsbarns, and Ardnahoe are all just some examples of Scottish distilleries that have (or had) private cask purchase offerings in place for individuals.  These smaller, privately owned distilleries need cash and investment up front, and so offering casks as fresh fillings to the public is a nice way for them to get the early injections of revenue they need.  However, the cost and value varies tremendously.  For example, both Ardnamurchan and Glasgow offered 200 litre ex-bourbon barrels for around £2,500, whereas Lagg and Ardnahoe are currently charging £6,000 for the same size barrel.

The schemes vary from distillery to distillery but, in most cases, your original buy-in purchase price will afford you somewhere between five and ten years of warehousing and a sample sent out to you once a year. Additional fees and costs apply if you want to mature the cask and keep it warehoused beyond the initial allowance, or to obtain extra samples.

According to The Whisky & Wealth Club, an organisation set up to connect investors with suitable whisky investments, investors purchased record palettes of the liquid gold in September. This boom at The Whisky & Wealth Club came as it sold 111.2 palettes of a new-make premium spirit for a total investment of over £1.8 million. This was nearly a 54% rise on its August sales.

Founded by Jay Bradley, owner of The Craft Irish Whiskey Co, The Whisky & Wealth Club is a specialised cask whisky wholesaler breaking down the barriers to entry in this ancient industry. Although it’s technically called a club, the private investors are not joining what has traditionally been an exclusive club for industry insiders. Instead, The Whisky & Wealth Club pairs private investors up with wealth advisors as a guide to suitable investment opportunities in the whisky space. Much in the same way that a financial advisor guides a retail investor on suitable investments for their SIPs. They can then choose to buy, hold, bottle or sell their premium cask whisky as an investment vehicle that suits their personal circumstances and whims.

Another reason whisky cask investing is popular is it doesn’t incur VAT or Capital Gains Tax.

How Much Does a Whisky Cask Cost?

The investment club or broker strikes a deal with the distillery for a limited edition run at a discounted price. The investor then buys a cask outright via the club. This is then stored in a secure warehouse and insured. The investor patiently waits, and when it’s time to profit from the deal, the investor should expect to enjoy returns of up to 20%.

The cost of buying a cask varies. Factors affecting price include brand, variety of cask used, distillery location, and many more. The cheapest cask you may find could be around $2000, but they can go upwards of $10,000.

One unique factor affecting taste, and thus price, is the variety of casks being used. Scotch whisky likes hand-me-downs and doesn’t respond well to being put in a brand new wooden cask. So the most common and cheapest option is for it to be birthed in a bourbon cask, often shipped from America to Scotland. A first fill is when a cask, previously used to store Bourbon, is first filled up with whisky. A refill is when that same cask is filled with whisky for a second or subsequent time. Prices for these casks tend to start around the £2,500+ ($3,350) price point. Of course, that’s not the only consideration, so prices vary wildly. A cask that has previously contained sherry may well be double that and red wine, dearer still. Then there’s the option for it to be peated, or unpeated, single, double or even triple distilled.

So many options can be overwhelming and that’s why an investment broker can keep you right. The Irish Whiskey & Wealth Club and HMRC approved Whisky Investment Partners are just two of many to choose from.

There are several exit strategies available to the investor. Whether opting to sell to a whisky brand, bottle under your own label, sell at auction, directly sell to a broker network or consider alternatives provided by the broker.

A Malt or a Blend? Exclusivity Equals Profitability

Whiskies are not created equal, the cheaper ones are blends, containing only 10% to 20% of malt. True malt whiskies are a higher class and more appealing to investors. A unique brand expression, that’s not mass-produced, gives whisky its prestige and desirability. But the true value of a whisky comes from a selection of factors; age, quality, taste, brand, rarity and exclusivity all contribute to its worth.

That doesn’t mean all blends are bad, though. Jack Daniels and Johnnie Walker are blends, but retail investors can still buy exclusive bottles from these brands that hold their value.

The Whisky & Wealth Club’s unique selling point is its access to exclusive runs from top-notch distilleries in Scotland and Ireland. An example of these exclusive runs is its release of Bunnahabhain Staoisha in September. This hailed from an esteemed Islay distillery and was limited to an undeclared number of casks. An average whisky cask has a volume of 250 litres. This produces around 385 75cl bottles. The pitch was perfectly curated and highlighted the reasons Islay whiskies in particular are set to be a very valuable commodity in the future.

Whisky Investing Algorithm

In response to this newfound demand for whisky investment options, financial analysts have gone so far as to develop the very first data modelling algorithm. This is specifically designed for investors in the whisky cask market. These analysts hail from specialist whisky investment firms where they have the knowhow and experience to make clear judgements on the market. The purpose of this algorithm is to furnish prospective investors with a set of metrics that give them unique insight into the industry.

Braeburn Whisky is another Whisky Cask Investment Specialist promising investors a fun, profitable and fulfilling ride to investing in this intrinsically appreciating asset. It has teamed up with Cask 88 to create its BC20 Whisky Cask Index. So far, this index shows the whisky cask market to have a steady annual growth of around 13%. Their recent research shows that whisky investment returns have surpassed that of the S&P 500, Bitcoin (this may now be debatable) and Gold. Despite the raging pandemic, this index continued to rise during the first six-months of 2020. Its data also shows that casks from the top three whisky distilleries offer projected returns close to 20%. Islay whiskies showed a growth rate of 16.3% YOY.

According to its data, Scotland has 22 million casks of whisky maturing in storage, giving it confidence that trades will grow in quantity and cost. Gracing the top of the Distillery Cask League Table is Laphroaig approaching 20% projected annual capital growth. This is closely followed by Bunnahabhain, Staoisha and Macallan. Malt whisky must mature for a minimum of 3 years to be called whisky, but maturation periods can run upwards of 20 years. Due to the costs to store the whisky, the more mature the product, the more expensive it will be.

In recent years the casks that have aged for over 20 years are achieving remarkable valuations. Casks aged over 45 years have sold for over £600,000. But it’s newly casked whisky (aka New Make Spirit) that younger investors are after because with time on their side, they can afford to reap big returns in the future.

The whisky maturing process takes place in the cask. Once it’s been bottled it stops maturing and that’s the age appearing on the label. This is why casked whisky over 20 years old is considered rare and the older it is, the more valuable it becomes. In 2019 a rare bottle of Macallan 1926 sold for an extravagant $1.5 million!

None of the distilleries followed by the BC20 Whisky Cask Index have shown negative returns. This is because it’s a booming and lucrative area of investment to be in.

Irish Whiskey vs Scotch Whisky

The Irish whiskey market is rebounding and is projected to grow for the next two to three decades. Scotch whisky is more established than the Irish whiskey market, with Scotch whisky being a major contributor to Scotland’s food and drink exports, accounting for 70% of them. This has a value of £4.7 billion annually to Scotland. In fact 41 bottles a second leave Scotland’s shores, making their way to 175 global markets.

Demand is growing and new brands are entering the space. In recent years (prior to the pandemic) gin popularity was exploding with new distilleries popping up all over the place. Many of these make gin because production is quick. But a lot of them will also branch into whisky production as a future income stream. So we can expect those brands to come online in the years to come.

An example of this is Greenwood Distillers, a boutique distillery hidden in a misty valley in the Scottish Highlands. This arm is called Ardross Distillery and it’s only begun producing its stylishly packaged ‘Theodore, Pictish Gin’ this year, but has big plans to branch into creating rare, exquisite and aged whiskies. It now owns some of the most unique single malts Scotland can offer and has further plans to expand through Japan, the US, France and Mexico.

Whisky: A Luxury Investment

Whisky investing is taking on a life of its own and very much up there with other favoured alternative investments such as art, rare coins and fine wine. There are a number of cask investment houses now making it easier for retail investors to jump on the whisky bandwagon, but it’s important to avoid pitfalls too. While the middlemen make the process easier, they can also cut into the profits. Nevertheless, these cask wholesalers offer discounts to limited batches and exclusive runs.

This prospering industry is not yet regulated, so it’s important to do your homework. There are trade associations that legitimate investment firms can join to protect the industry’s reputation. The Whiskey & Wealth Club works with a compliance officer to ensure that its compliance-ready for when the Financial Conduct Authority makes its mark.

Another risk is whisky going out of fashion, but as it’s so ingrained in Scottish and Irish heritage, which is spread throughout the world, that doesn’t look to be an imminent concern.

When it comes to launching a new whisky, an alternative route to branding is for the company to buy mature whisky from investors, which it then brands as its own. This is one reason for the increasing popularity of cask investing as it leads both parties to cash in on the rising demand for these new and exciting brands.

Haig Club is a single grain Scotch Whisky popularised by David Beckham in partnership with Diageo (LON:DGE) and British entrepreneur Simon Fuller. Several other celebrity endorsements quickly followed Beckham’s step into the whisky arena. Conor McGregor has his own Irish Whiskey named Proper No. Twelve, after the area of Dublin he comes from. Bob Dylan brought out a trio of whiskey blends, Metallica have their own American Bourbon named Blackened, and Matthew McConaughey also has a Bourbon called Longbranch.

In a 2020 report rare whisky surpassed classic cars on the Knight Frank luxury investments index, achieving its very own Knight Frank Rare Whisky 100 Index in the process. In the luxury investments index, whisky has risen by 564% in value during the past ten years.

Investing in Luxury Liquor Brands

For investors looking to diversify, it’s not just whisky that offers potential gains. The liquor market is taking on a life of its own.

LVMH Moet Hennessy Louis Vuitton SE, is a luxury goods conglomerate, headquartered in Paris and distributed to every corner of the planet. Its share price has grown phenomenally in the past decade generating spectacular shareholder returns.

Bernard Arnault, chairman and CEO of $LVMH is now one of only five centibillionaires in the world. (A centibillionaire is someone who has personal wealth of more than $100 billion.) He joins ranks with Elon Musk, Jeff Bezos, Mark Zuckerberg and Bill Gates. 

LVMH whisky brands include Glenmorangie and Ardbeg, while some of the other luxury goods under its label include Tag Heuer, Moët & Chandon, Sephora, Louis Vuitton, Hennessy (cognac) and more recently it acquired Tiffany.

If you’d prefer to spread your investment in luxury goods, across a selection of them, you could opt for a luxury goods ETF. One such ETF is The GLUX – Amundi S&P Global Luxury UCITS ETF – this tracks the S&P Global Luxury Index’s performance. Along with LVMH, this includes Pernod Ricard SA (EPA: RI) a French drinks giant with whisky brands that include Chivas Regal, The Glenlivet, Jameson and luxury Scotch Whisky Royal Salute, it also owns many other alcoholic beverages.

Hollywood actor Ryan Reynolds recently sold his premium gin brand to Diageo plc (LON: DGE) for $610m (£460m). In striking the deal he agrees to be the face of Aviation American gin for the next decade. Diageo is a fan of the celebrity endorsement, having previously collaborated with George Clooney and David Beckham.

Diageo is another stock that has rocketed over the past ten years. Its share price faltered in 2019 but has been gaining ground during November. Whisky is such an important part of Diageo’s portfolio, it’s committed to investing £185 million to revamp its Scotch whisky visitor offerings at distilleries around Scotland.The highlight of this is an immersive visitor experience at its Johnnie Walker, Princess Street in Edinburgh, which tells the story of the brand.

Remy Cointreau SA (EPA: RCO) creates premium spirits such as its opulent champagne cognacs. Its whisky portfolio includes Bruichladdich single malts, Port Charlotte and Octomore, as well as Westland American whiskey and Domaine des Hautes Glaces French whisky. Remy’s share price rise has been more volatile over the past decade than LVMH and Diageo, but long-term holders will still be sitting on a significant profit.

Hidden Costs

The “hidden” or extra costs – and what catch so many people out – are the costs involved once the whisky is matured and deemed ready for bottling. Nine times out of ten, the purchase price you pay at the start covers only the cask and spirit up until it’s deemed ready to bottle. For whatever happens after that, the ball is in your court, as are the expenses. In the case of Scotch, the whisky must be bottled in Scotland, and so not only do you have to pay for bottling costs (in Great British Pounds, mind you, which is unlikely to favour your particular exchange rate), you also have to ship those bottles and all that extra weight of glass. Freight costs are determined by weight, and so in the case of a cask that yields, say, 250 x 700ml bottles, you’re paying to ship roughly 330kg of goods – of which 45% is just the weight of the glass! Printing and labelling costs also have to be paid for at the Scottish end (again, in pounds), and we haven’t even come to transport costs yet.

Then, there’s the biggie of them all – the cost of the duties, excise, taxes, and import costs to bring your whisky home to your own country. Take the case of Australia. Those that forked out, say, £2,500 to buy the cask at the start (roughly $4,600AUD) will be up for an additional $11,600 in local taxes (approx), depending on the bottling ABV! (The rough indication given here was based on 250 x 700ml bottles at a strength of 58% ABV). If you don’t have access to a genuine exporter who’s registered for UK VAT and Duty and can’t export under bond, then it’s likely you’ll also be up for the costs of all the UK excise and taxes (about an extra $6,400 based on the same assumptions as above), as well as those at your local end. And the costs of engaging a Customs broker to handle your Customs clearance still haven’t added in; the cost of freight itself (varies, but can be anywhere between $3 to $7 per bottle for sea-freight, depending on your carrier and what rate you can negotiate as a small, one-off player). Next, the additional costs of having to obtain a liquor licence (for importing a commercial quantity of alcohol) and – once it arrives here – space to hoard 250 bottles! And so, as many people have found to their surprise and dismay, what started out as a fun, sentimental venture ends up being an exercise that has become unaffordable. As a single player, doing a one-off exercise with a single bottling, the economies of scale simply do not exist.

Of course, many of these issues can be ameliorated by forming a syndicate and going in as a group. One person may struggle to deal with and pay for everything, but splitting a cask and its costs between, say, 20 or 30 people is a far more manageable affair.

Conclusion

Investing in whisky and luxury liquor appears to be an interesting and potentially lucrative space to be diversifying your financial investments. Just don’t be tempted to drink away your profits!

Part 2 of this article follows.

A major portion of this post is a reprint of an article by Kirsteen Mackay on Value The Markets
https://www.valuethemarkets.com/2020/11/20/whisky-investing-in-liquid-gold