06 July 2023
Q&A with MacInnes Whisky Director & Founder, Jon Hook.
This week we sat down with MacInnes Whisky director and founder Jonathan Hook. Jon’s a philanthropist, qualified accountant and financial adviser with worldwide experience in the finance industry for the last 35 years. In this article he discusses navigating the challenges of the whisky cask market and growing a whisky investment business.
With there being some bad press around whisky cask investments over the last few years, what do you say to people who are perhaps apprehensive of investing in cask whisky, and what does MacInnes do to protect their customers and their customer’s investments?
JON: Well firstly, at MacInnes Whisky we own all our casks. That’s hugely important and we will never say we own a cask that we don’t hold an invoice for. Once the customer pays for their cask they will receive a certificate and that will represent ‘beneficial ownership’ of said cask. We hold onto the delivery order (although we can provide the customer with a copy) and we are the customers' nominees for that cask. We then store the casks in a WOWGR licensed bonded warehouse which is HMRC registered. By doing it this way, the customer can enjoy the tax free benefits that can make whisky investment so lucrative.
How safe is a cask whisky investment and why do you think so many people are googling ‘is whisky investment a scam’?
JON: At MacInnes Whisky we ensure every single warehouse in which our casks are stored is WOWGR registered with HMRC. There is also a nominal charge per annum for the casks to be insured against any perils that may threaten the cask.
In terms of whisky scams? Being a registered accountant and having my own firm, I have a reputation to uphold. Sounds crazy but there are sharks and charlatans out there that will sell you a cask that simply doesn’t exist, or at the very least isn’t what it says on the tin. That’s not how we operate and our reputation is paramount. We would much rather sell less and sell only the very best.
What are the exit options, should an investor need to free up their money?
At MacInnes we are happy to help facilitate the sale of your cask for a commission or put you in touch with others in the industry who might be interested in purchasing your cask. We have connections to private investors, bottlers, and even distilleries looking to buy back rare casks or casks of a particular vintage. Of course, it goes without saying that the older the cask, the better chance you have of selling it quickly.
A bit like classic cars, the market price for whisky can vary on any given day. What is the true value of your cask? Well, like all things, it’s whatever someone is willing to pay for it, but on average, branded single malt scotch has a much better return than other whiskies out there and that’s why we specialise in it. And as investment options go, whisky does continue to stand firm, even in the recent tumultuous economic climate. Even at our lower estimate of a 12% return, if you consider that that is tax free, then it’s already a better return than many investment options out there.
In general, whisky should be considered a long term investment. We don’t suggest customers put away more money than they can comfortably live without and of course, the longer the investment, the better chance there is for those more substantial returns.
How does an investor know their whisky cask exists?
JON: The delivery order is the unequivocal proof that the cask exists. That’s what we show the customer and present to the warehouse. As I mentioned before, as the ‘owners’ of the cask, we hold onto this as it’s only by doing so that our customers can enjoy the benefits of their whisky cask being excise free.
We have also been exploring the idea of having customers come and visit their casks and drawing some of the ‘angel share’ and taking it away with them to enjoy; creating that whole experience, if you will. It was tough to do this during Covid, but it’s definitely in our plans for the future.
What is a WOWGR licence and do I, the customer, need one?
JON: A WOWGR licence stands for ‘Warehousekeepers and Owners of Warehoused Goods Regulations’ and we hold a WOWGR licence so you don’t need to. This licence entitles MacInnes Whisky to hold spirituous liquids in duty suspension i.e. a bonded warehouse. It's not easy to obtain a WOWGR licence, so it’s important that you buy from a reputable company such as MacInnes Whisky that has one. Without the licence you will be highly unlikely to find a warehouse to hold your cask and if you were able, then you’d potentially be liable to criminal sanctions. It’s a heavily regulated business.
What made you, a qualified accountant of 35 years, choose to invest your own money in whisky over some of the other investment options out there?
I liked the fact that it was something different. Up until recently whisky investment has been a closed shop, exclusive to those with hedge funds and country club memberships. We wanted to make it more obtainable and a viable investment option for all.
During my many years as both an accountant and financial adviser, I’ve been helping my clients find ways to legally minimise their tax and enjoy tax free gains. Whisky has turned out to be a fantastic way of combining the passion I have for whisky with my knowledge of the financial industry. The combination of both is MacInnes’ USP and we’re proud of it.
What would you say to someone who is considering a whisky investment but just isn’t sure it’s the right option for them?
JON: The golden rule of financial advising is ‘don’t put all your eggs in one basket,’ as with any investment, your capital is at risk. I also never suggest anyone puts more money in than they can afford.
It’s all about integrity really. I would much rather see someone put away a lesser amount of money and really allow that investment to blossom over time, than investing more than they can afford and having to sell their cask in a year or two.
If you have been considering a whisky investment then I would urge you to get in touch with a member of the team and we can talk you through the process in more detail and start you on your journey.
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