Irish Whiskey Cask Programs
We are all familiar with the surge of interest in Irish whiskey over the last number of years. That interest has come from both new drinkers, many of a younger age, and those who have found the diversity and heritage within the category. And in some sense, the journey is just beginning as the intrigue in Irish whiskey is forecast to garner increased momentum. Fulfilling this consumer demand, the sector has seen an increase of new distilleries and brands entering the market, each trying to compete for a piece of this growing sector and each bringing their own unique approach, further increasing diversity, leading to more consumer interest and so the cycle continues.
There are now many cask programs from distilleries each providing various offerings. Aside from bringing in much needed cash flow, cask programs are a fantastic way to engage with customers, to build a relationship and form brand interest and loyalty. It also allows the distillery to identify what consumers are interested in.
Just why would you want to purchase a cask? There are those who may just have an interest in a brand or distillery, or may have a connection with the business, and may simply want to help support the business develop. There are the enthusiasts, even those perhaps with the dream of having their own distillery. They are enchanted with the entire process and being part of a cask program gives them the opportunity to be part of the process and seeing how the new make spirit develops and matures into Irish whiskey. Often a group of friends may get together, or a family may decide to celebrate significant shared milestone events such as anniversaries, birthdays, weddings or retirement. They will get to experience the journey and the bottling of their very own bespoke whiskey. They may even be looking to sell-on their bottles, perhaps even to turn a profit. Businesses may also purchase a cask to produce corporate gifts with their bottles being labelled with their own distinctive branding.
Then there are the investors. Those who see an opportunity and believe investing now in casks will bring a positive return in the future. They may decide to sell the casks, perhaps even back to the distillery. They may decide to bottle the contents and create their own brand. However, be aware any investment may or may not return a profit. The value of the cask could increase or decrease and there may or may not be buyers interested in purchasing the casks or bottles. You should be financially secure and willing to tie up your capital for many years.
Whatever the reason for engaging in a cask program there are many factors and costs you should be aware of. These include but are not limited to:
The style of whiskey
Grain, pot still or single malt
Amount of new make spirit being purchased
The number of litres of new make spirit are going into the cask.
Alcohol by Volume (ABV)
The ABV percentage of the liquid as it enters the cask. This is usually about 63% ABV for pot still and single malt, and about 69% ABV for grain.
Buy from a reputable source
Is the seller reputable and have they a proven record. Don’t be pressurised into making an immediate decision. Do your research thoroughly.
- The capacity of the cask.
- The type of wood. For example, this could be American oak, European oak, or some other type.
- Has the cask held spirit before? Is it a virgin cask or a refill cask?
- Is the cask charred or toasted and if so to what level?
- What has the cask held before? This could be bourbon, sherry, port, wine or other.
- Can the liquid be transferred to another type of cask for finishing and are there costs associated with doing so?
- Who owns the physical cask when you decide to remove it from bond?
- Do you own the cask or is it held for you in trust by the distillery?
- Where is cask stored? Usually this is in a bonded warehouse. This can be on-site in the distillery premises or a third-party bonded warehouse. Do they allow visits, sample draws, bottle draws and are there costs associated with this? Revenue want VAT and Excise Duty to be paid when the cask is removed from the bonded warehouse.
- Who is responsible for your cask? Normally this goes under care of duty representative. Usually the bonded warehouse representative.
- Is photography allowed?
- Is there a cost in moving cask to bottling facility?
- The cost of filling the bottles.
- The cost of the glass bottles.
- Cost of Labels.
- Label and box design costs.
- Any trademarking costs.
- Shipping bottles to you.
- Cost of cork or bottle top.
- Are you allowed mention or use the distillery name or brand on the bottle?
- There may be very small losses of liquid during the bottling process.
Other Costs and Considerations
- Insurance costs.
- What happens should the company close?
- The annual cost of warehousing the cask.
- The cost of extending the maturation term.
- Is there a buy-back agreement with the distillery at the end of the term and if so at what cost?
- Is there an early exit option and if so at what cost?
- Angel’s Share. How much liquid is lost due to evaporation? As a guide it is estimated that your cask will lose around 3-4% to the angels in the first year and around 2% per year after.
- Excise duty is currently €42.57 per litre of pure alcohol (LPA)
- VAT is currently 23%
An example of what the costs of bottling a cask may be. Thanks to Celtic Whiskey Shop for permission to use this example:
Total cost for a 15-year-old triple distilled single malt finished in a dessert wine cask
Initial cask investment is €2,550
Storage, yearly sample & insurance for 15 years is €1,440
Dessert Wine cask and transfer is €300 (estimate)
Disgorgement, bottling, dry goods is €1,232
Total cost excluding taxes €5,522.00
Approximately 272 bottles at 46%, would work out at €20.30 ex-vat, ex-duty per bottle.
At today’s duty rate of €42.57 LPA you would pay duty of €13.70 per bottle. A further €7.82 vat at today’s rate of 23% would also need to be paid.
Final price would be €41.82 per bottle
So what is out there on offer? We have looked at six different offerings.
Established in 2015 this family run distillery is located in Drogheda, Co. Meath in the heart of the Boyne Valley. It is distilling single malt and pot still whiskey, using locally sourced grain. Having won numerous awards for their The Whistler range of Irish whiskey, they also were awarded “World’s Best New Make” at the World Whiskies Awards 2021. Other notable features are that the line arms in their stills utilise nanotechnology which increases copper contact, and also they utilise a mash conversion vessel for fine control of temperatures during the mashing process.
Their private cask offering gives the client the choice of pot still Irish whiskey in twelve different cask types. They offer American and European Virgin oak casks, and also non-oak varieties of wood such as chestnut, wild cherry and others, although minimum quantities do apply. Prices excluding VAT and Duty range from €3,150 for a 200L Bourbon cask to €8,750 for a 500L Oloroso sherry cask. Prices are based on maturation in bond for five years.
Located in Clonakilty town, county Cork, the distillery opened in 2018. The building incorporates the distillery, visitor centre and store, and a restaurant. The distillery was founded by the Scully family who have farmed the coastal land for nine successive generations. They have won numerous awards for their Minke Gin and their whiskeys which have included some wonderful collaborations with American breweries. They were awarded “World’s Best New Make” at the World Whiskies Awards 2020.
Their maturation warehouse is perched on the edge of the Atlantic coast some 200m above sea level and having sampled some young spirit the sea air has certainly had an influence. It will be fascinating to see how the local barley, exposed to the mercy of the Atlantic Ocean, will impact the whiskey flavour profile.
Clonakilty Distillery have launched their Cask Keepers Club which is limited to just 200 casks, all of which will be matured in their Atlantic Ocean warehouse. The offering is for pot still Irish whiskey matured in a choice of different casks types including Oloroso sherry and port. There are a number of other benefits which include invitation to their annual club day, a first choice of exclusive new releases and permanent recognition at the distillery. The program also offers a buy-back option of the after ten years.
For pricing and further details email firstname.lastname@example.org
Dublin Liberties Distillery
Set in the heart of The Liberties in Dublin, The DLD was officially opened in February 2019. Their Dubliner and Liberties range of whiskeys crafted by Master Distiller Darryl McNally have won numerous awards. Their focus is producing triple distilled single malt. The distillery has the capacity to produce 700,000 Litres of pure alcohol per year. All malt is sourced from Irish farmers and they draw water from their own well within the distillery.
The working distillery hosts a visitor centre, a store and a restaurant. There is also a bar which can be hired for private functions.
Their Founders Cask program start at €5,000 for a 200L Bourbon cask. This cost covers storage at a third party bonded warehouse and insurance costs for ten years. The costs excludes Excise Duty and VAT which would be payable on removal of the cask from the bonded warehouse. They also offer a number of finishing options at additional cost. Owners can visit the warehouse once a year and a number of sampling options are available either by post or by organising a warehouse visit. Labelling and bottling options are available as well as a buy-back option.
More details on costs and bulk buying can be obtained by emailing email@example.com
Sliabh Liag Distillery
Set on the Wild Atlantic Way in County Donegal the founders of Sliabh Liag have captured the enthusiasm of both locals and those far further afield. Having successfully completed a crowd funding appeal, the next journey has begun with the construction of their new distillery in Ardara, a small Heritage Town situated on the northern coast of the Sliabh Liag peninsula, Co. Donegal. The town is famed for its tweed, knitwear, its festival welcome and fishing on the Owenea and Owentocker rivers. The town attracts visitors from across the world.
The distillery will be producing pot still and single malt whiskey. The big differentiator for Sliabh Liag is that they will exclusively produce only peated whiskey.
The cask program offering from Sliabh Liag is named Seanchaí (the Irish for storytellers). Seanchaí membership is limited to just 600 in number. Members can chose between pot still and single malt which will be aged in either first fill bourbon or first fill sherry casks. These casks hold approximately 190L of new make spirit.
The cost for an ex-bourbon pot still or single malt casks in €6,000 and the cost for the sherry casks is €6,300. This cost covers storage at their on-site maturation warehouse for 5 years and includes maintenance and insurance. Other benefits include your name engraved on the brass ring around the base of the intermediary still, membership certificate, free distillery tours, discounts in the distillery shop and invitations to the distillery for Seanchaí events. There is also a level of investment protection for members as Sliabh Liag offer a cash buy-back option at 3% annual compound interest.
More details can be obtained by emailing firstname.lastname@example.org
Celtic Whiskey Shop
A number of independent Cask program brokers have emerged over the last couple of years. Most of these brokers focus on the financial investment aspect and often oversell the expectation of financial gain for their clients.
We’ll take a look at one of the independents offering cask programs through their well-established contact network. Ireland’s most awarded whiskey store, Celtic Whiskey Shop has been at the heart of Irish whiskey for almost twenty years. Having worked with all the distilleries for sales they have also the experience of working with them for their Celtic Cask independent releases. They live and breathe whiskey, they have the knowledge and are highly regarded and trusted.
Although plans are in place to work with a number of distilleries, the initial cask offerings are for new make spirit from Great Northern Distillery in Dundalk, County Louth. At the time of writing the following cask offerings are available:
Single Grain 200 litre first fill bourbon cask 68.5% ABV, €985.00
Double Distilled Single Malt 200 litre first fill bourbon cask 63% ABV, €1,195.00
Triple Distilled Single Malt 200 litre first fill bourbon cask 63% ABV, €1,195.00
Triple Distilled Heavily Peated 200 litre first fill bourbon cask 63% ABV, €1,795.00
Single Pot Still 200 litre first fill bourbon cask 63% ABV, €1,795.00
These costs do not include taxes which would be applicable after removing cask from the bonded warehouse, nor do they include storage or insurance costs while in storage. The cask will matured in Staffords Bonded warehouse in County Wexford. The annual storage fee would be €95 which would include a yearly 20cl sample so you can track the progress of your purchase.
Celtic Whiskey Shop website has perhaps the most thorough detail and breakdown of costs involved and we would strongly encourage readers to visit https://www.celticwhiskeyshop.com/whiskey-casks/
Of course there are many other cask programs available and again this will increase over time. Our advice would be to do your research thoroughly, find a distillery you can relate to and believe in. A hard thing for whiskey enthusiasts but try not to let your heart rule your head, at least not too much. Enjoy the adventure, the journey, and ultimate destination!