Unfortunately, it usually becomes very clear that the price paid bears no resemblance to the market value within the trade and that they will do well to break even over the medium term.
There are numerous factors that will influence the value of your cask and it is important not to get bamboozled by the sales pitch and always come back to two fundamental questions -
“What do you think a realistic price for a bottle of Scotch Whisky from your prized cask will be in future and how many bottles will you get from your cask?”
That question alone should tell you what the gross potential value of your cask might be but then you need to knock off a whole host of costs including:
Taking into consideration all of the above the value of your cask might be worth about 25% of the gross potential value. In bottle terms therefore, if you think the retail value of a bottle from your cask is £100 then the value of your cask might be £25 per bottle.
Of course, this is very simplistic and does not go into details such as the strength of the Scotch Whisky when bottled (the ABV), the effect of the angel’s share and specific circumstances of the owner but it is a good rule of thumb and sense check to undertake when considering a purchase.
Let’s take an example.
You are considering purchasing a newly filled sherry cask of malt for £3,500. You see this as a 10 year investment and think that the current price of a Single Cask release from this distillery is about £80 per bottle.
At filling you have 225 litres in the cask at 63.5% ABV. You factor in the “angel’s share” and you assume that you could realistically get 325 bottles at 46% ABV in 10 years time.
If inflation runs at 3.5% per annum, the current £80 price is likely to be approximately £112.50 at time of bottling. The gross potential value of your cask might therefore be £36,600 in 10 years and therefore the value of your cask might be £9,150.
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