With the growth of alternative investments, has come interest in buying whisky casks: the simple idea being that the cask is held in storage, for what can be decades, by which time it has matured into something that will have much greater value when it is ready to be bottled.
Consumers are unlikely to have experience of understanding whisky cask investments, and because the whisky cask investment market is not regulated in the UK, consumers will not be afforded the same financial protections compared to a regulated financial product.
Ads should therefore not irresponsibly take advantage of a consumer’s lack of experience or credulity, or mislead them by omitting material information so they’re unable to make an informed decision about the investment.
Following two ASA rulings on Blackford Casks Ltd and London Cask Co Ltd, we have issued an Enforcement Notice to ensure ads for whisky cask investments comply with the ad rules.
What do I need to do?
- Ads should state that whisky cask investments are unregulated in the UK and the value of investments can go down as well as up. This is material information which should be presented prominently and be sufficiently clear in an ad.
- If any fees apply, such as the cost to store or insure the whisky cask, or if there are any terms and conditions for the service, these should also be explained.
- It should also be clear that the volume of spirit will decrease over time, commonly known as ‘the Angels’ share’, and the ad should explain how any investment is realised. For any returns rates claims, advertisers should remember those need to be representative and supported by documentary evidence. How the rate is calculated should also be explained.
- It’s important to remember that any qualifications must be presented clearly, and although they may be used to clarify claims, they must not contradict those claims.
- The overall impression of an ad is similarly important so present the financial product in a way that’s easily understood by consumers, and don’t suggest it’s a safe or reliable way to make money.
What happens next?
The Compliance team will start targeted monitoring from 2 January 2023, which may result in sanctions for any non-compliant ads, to ensure a level playing field.
If you would like further guidance on how to make sure your ads comply with both the spirit and letter of the Codes, read our Enforcement Notice, and for bespoke advice on non-broadcast ads, speak to our Copy Advice Team.
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