The KOTQ

Hmmm….the only thing that would confirm that this is NOT a scam at this point would be for at least one cast syndicate to sucessfully bottle and receive their whisky. And this hasn’t happened yet. So I can only tell you that I don’t THINK scotchwhisky.com’s Case-In-Cask (CIC) is scam. Recently several shareholders of our CIC syndicate paid to have a sample of our cask “professionally” tasted. I considered this to be mostly useless but since enough members wanted it and were willing to pay for it, it was done and results were privately sent to the sponsors. This took a good part of 6 months. After which, someone in the our syndicate inadvertently published the private notes which I got my hands on and have made available to you here:

http://www.peterlitton.com/TastingNotesMacallan8271.pdf

As I thought, nothing insightful here. The only benefit is more time on wood. Our Macallan cask has been aging about 16 years at the Distillery. Earlier this year our syndicate took an informal poll (via email) and significantly more than the majority (needed) voted for bottling now. The lone director (employee of distiller.com) conducted a formal online vote mid April (2005) and is now “collecting the votes”. If you are interested here’s the main page for all the private casks. And the forum for the Macallan 8271 (our syndicate).

http://www.forums.scotchwhisky.com/privateforums/
http://www.forums.scotchwhisky.com/privateforums/list.php?f=5

As you can see our syndicate has more posting activity than any other (by over 100%). And there’s been email too. The activity seems to go in waves.

The process is a bit of a mess, wrought with increadibly poor communication and communication tools.

If this ever finishes up (ie we get our stuff) we’ll get 12 bottles (1 case, 9000cl) MINUS angels share. Figuring a 2% loss/year at the Macallan Distillery this nets out to about 8+ bottles. For the 5 particpating KOTQ members that’s almost 2 bottles each. We’ll figure out the logistics at some futire point. When we get to bottling, there will be a bottling/labeling fee, shipping fee and taxes. Costs TBD–so save up a few bucks.

For now, sit back and enjoy the ride. Some day, I’m confident, we’ll have a nice story to tell over our drams.

Viceroy Irving

OK, CIC participants, no sooner did I post the update to kearn that the votes have been tallied and we got the green light to bottle! Now, don’t get too excited. There’s still several steps to go but it appears we are making progress. Here’s the email I got from the CIC manager at distillers.com:

“From: “cask@scotchwhisky.com”
To: “Keepers of the Quaich Chicago”
Subject: Case in Cask – bottling vote result (Macallan 8271)
Date: Fri, 27 May 2005 12:02:59 +0100

Dear Keepers of the Quaich Chicago

We have now received enough votes from the syndicate’s official
bottling vote to make a majority decision on the bottling of the cask.

The majority was FOR bottling the cask and as per the syndicate’s rules
we will now take the necessary steps towards bottling the cask.

The process from here on involves the following:
– Move of cask from warehouse to bottling plant
– Cask joins queue to be bottled at bottling plant
– Bottling of the cask takes place

Due to the industrial high volume of bottling plants, small cask
bottlings like this one will be slotted in between the larger bottling runs
for the multi-national companies. This process may take several weeks
after the cask has arrived at the bottling plant. We will, of course,
keep you updated on the progress the cask is making. The long process at
this stage is due to the very seldom single cask bottling process and
other services involved (e.g. cleaning of bottling equipment etc).

In a few weeks, we will send you more information on the next steps.
These will include final payment of the warehousing costs,
bottling/labeling costs, packaging and other dues such as duty etc. As this process
veries from cask to cask we will need to wait until we are advised
directly by the warehousing agent of the exact amont of some of the costs
involved.

Please note that due to the industrial processes involved, syndicate
members should not attempt to contact the warehouses or bottling plants
direct. This will lead to confusion and possible delays.

Kind regards

Lev Cribb for Case in Cask”

Not much progress on the Cask. In fact it appears we are at a complete standstill. I have suggested to our syndicate owners that we start a message board for ALL CIC owners to post their gripes about ScotchWhisky.com. There’s others in our situation but ownership is literally worldwide and fragmented. Also ScotchWhisky.com continues to sell shares in other casks so lost ownership of future offers may be effective leverage for action. Here’s a recent email sent by our appointed spokesman Jim Copley to Jim Thompson the Editor of ScotchWhisk.com:

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Mr. Thomson,

Please allow me a moment to introduce myself. I am Jim Copley, a member of the Macallan 8271 cask ownership. I have ( as several other syndicate members ) tried in vain to reach Lev Cribb to get information as to where the process of bottling is. I have sent 3 emails to Lev in the past 6 months with no return emails from him. Our syndicate majority voted to bottle our cask in May 05. As a spokesperson for our syndicate, I have been attempting to get information that I could pass on to our fellow cask owners concerning our specific cask. This disturbs me that the professionalish has dropped off so much that the company administration is not returning any requests for information. Many of my fellow cask owners are very frustrated with the non-communication involving our progress. We have been promised information since May 05, yet have received nothing. Other syndicates are having similar problems.

As a participant of the ” Whiskies of the World ” annually held in San Francisco, I have met representatives selling CIC ownerships. I have always felt the company was represented well enough to be trusted. Yet this non-communication has erroded this trust. I have also seen advertisments in whisky related magazines regarding ownership of casks. Along with whisky schools, Lady bank and Islay Whisky Society associated with scotchwhisky.com. The trust lost in any of the ventures, such as the cask ownership/syndicates, could flow to other avenues associated with scotchwhisky.com. I trust that you would not want this negative black mark within any of the products you develop and market. I also have spoken with Michael Jackson at several scotch conventions/shows and will discuss this frustration with him soon.

I have over 700 single malts within my collection, own a cask in Islay, have a ownership in the Macallan cask, and have traveled to several distilleries in Scotland over several visits to a wonderful country. I have had the opportunity to meet with many distillery managers, writers, and others within the industry. Just a little background. I am very involved in the scotch collecting ownership and a hobbist and have always respected everyone involved within the Scotch making industry. So, I am also frustrated with the processes, progress, and lack of communication to owners. All these owners have invested in a product with good faith and expect the processes to progress along with some communication from the source.

Any assistance you can render would be greatly appreciated. Thank you for your valued support towards making the processes better for both parties ( scotch whisky and cask owners ).

Jim Copley

jimcopley@comcast.net

And here is Jim Thompson’s response. I’m glad to see he responded so quickly. But his rant misses the mark. It’s defensive and full of “you don’t understand this complex process”. He should have simply responded, “You’re right. There’s been a shortage of communication and that it will get better. Sorry.”

I’m not sure I feel any more confident that someday we will get our whisky.

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Jim

thank you for your email.

you are correct in writing and expressing your concerns and views.

the process for handling a cask owned by 20 odd people, over a period of time, within the trade area of the SW industry is much more burdensome than most would imagine – especially as from the outset I wanted to have an independent ‘controller’ in whose name the casks where held. The was fundementally because of the cask scam history that predated the CinC launch.

while running scotchwhisky.com we got a lot of people interested in buying casks – but finding really good ones was difficult and I came up with the idea of (1) reducing the period of waiting by buying the best partly matured ones as they came up (rather than reacting to sporadic requests
from potential whole cask enquirers) and (2) reducing the financial commitment between 20+ people. Naturally the interest was good. The mistake I made was (3) grossly underestimating the adminstration, especially if anything in the long communication/management line between
cask and consumer went badly at any time.

the burden we are all faced with within the actuality of cask and cask
bottling management can be divided up as follows.

a – 60% – bringing together consumers, and their consumer scale interests, with a non-consumer industrial scale process
b – 20% – syndicate is never homogenous, especially a globally distributed
one, in terms of interests, motivations and delay in administering all
syndicate votes, comments and communications relevant to each member.
c – 10% – whisky industry scams that get projected on to us and the
presumption that we might be illegal or cannot be trusted
d – 10% – remaining unease within the syndicate because of previous
mismanagement.

dealing with consumers if you are a distillery scale business, open to the
public like Bruichladdich and filling and holding the casks at your own
premises is totally different. It also has the benefit of giving the
distillery a tell-your-friends type investor who may operate as an unpaid
brand ambassador for 10 years. so their model stacks up nicely.

the reason Lev has had to reduce how and when he communicates is down to point (b) – an explanation to members from him about progress and expected timings will be 100% accepted by 70-90% of any of the 15 syndicates, but wholly misunderstood by a minority who became, quite frankly, unreasonable to deal with in a positive way after each and every communication.

the solution would have been to charge twice, or three times, as much to
cover the heavyweight hand-holding that some enthusiasts require. I do
not, in anyway, put you in this category. Your points and your email are
entirely reasonable and balanced. But should I have charged the majority
to cover the antics of the minority – that is the question ???

having worked very closely with the whisky industry for over 10 years now
here in Scotland and got to know most of the players at all management
levels, beside the retired distillery production staff who are unfettered
by corporate correctness, wise in their years and have no longer to keep
their jobs, I will share with you also how, broadly, the whisky industry
compares with the wine industry. The wine industry is based on fact and
the whisky industry in based on fiction. For the general consumer this
industry has almost become a cartel based on marketing spin. Only the most avid whisky consumer starts to get beneath this.

I don’t like half-truths, I like to respect consumers in being the people
that pay the wages and have their own ability to make decisions. With the
CinC programme my only conclusion I can offer you is you will have to
trust me to look after your interests in the most sustainable way open to
me.

I would very much welcome your feedback on any of my points – and I can assure you that Lev will be providing a positive update at the most
appropriate time.

Lev informs me that you syndicate voted with an overwhelming majority for bottling (in April) and it took us till October to get acceptable bottling
and delivery rates from the cask managing agent.

We would not have been able to process bottling and delivery during the
busy build up to christmas when the bottling facilities are under strain,
and with 10% of most syndicates not paying thier storage dues we expect
15%+ to not pay bottling, duty and delivery costs; so we have an
interesting communication to prepare in how we assist each syndicate in
funding the final process.

The trauma is not over yet!

With best wishes

James

And Jim Copley’s response, dead on–though I would have been a little more heavy handed. We’ll see if communication improves. There’s certainly plenty of existing means of doing so (email, CiC forums on ScotchWisky.com).:

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Mr. Thomson,

On behalf of myself and the Macallan 8271 Syndicate members, thank you very much for the rapid and timely reply to my concerns.

I, also, have been a business owner for over 30 years dealing with a diverse customer base within several industries and fully understand your comments concerning the majority and the minority. I commend you for your forthsight to bring this concept together of selling interests in high quality casks and meeting the scotch consumers needs with a special ( privately owned ) product. I was not aware of past “Scam” histories within this concept and have always mentioned within our Syndicate to trust the process and the CinC. It was the lack of communication that seems to be the underlying erosion of the trust issue within the membership. This is not unique to our syndicate only. Simply put, the CinC ( specifically Lev, as the appointed contact ) needs to be informative to the syndicate as to where the progress of process to bottling and delivery is. I am sure he has a data base concerning email addresses and we have a syndicate forum, as avenues of communication, to accomplish this task. I would suggest that a simple update to those avenues of owner contact be done at least once a month. This would ease the concerns of the owners and the trust level would raise dramatically. It is not the ” Good News – Bad News ” communication that is the problem, it is the ” NO NEWS ” that seems to bring the majority of concern.

As far as your comments concerning the minority of owners that will be dissatisfied with any communication and progress, this is the penality we pay for trying to please a world-wide diverse ownership. It happens in all businesses that reach this type of customer base. Please, consider working with the majority though and gain their trust back. We can assist, within our own sydicate forum, to explain processes and patience to those members that are unreasonable ( which usually, as you mention, comes with misunderstanding the original message ) when and if we receive constructive information from the CinC ( Lev ).

Mr. Thomson, I am asking for your valued assistance towards gaining the trust of our cask owners once again. They purchased their ownership with good faith and trust in the company you represent. I fully trust that the product is indeed in good hands and will someday be presented at our doorsteps. We are not asking for ” Hand-Holding “, simply an information highway to the owners that insures us that progress is being made. This information resource will bring back the majority of owners trust. Your comparison between the wine and whisky industry is very true. The whisky trade is predicated mostly on marketing the product. How the advertisement and where it is presented usually is the base for success. This is also true to selling shares in ownership of full casks. But, repeat business is based on how the consummer is treated and what their experience with the process was from beginning to end. Food for thought !!!

I hope to be in Scotland next year. It would be an honor to meet you in person and further these discussions over a dram or two. THANK YOU for all your valued assistance and efforts.

Jim Copley

Member – Syndicate Macallan 8271

And my response to Jim Copley and the rest of our worlwide synidcate:

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Jim–Again, well said and tactful. I don’t think I could have been as gracious in responding :-). Hopefully Mr. Thompson will get the point that we are not really concerned (read: we don’t care) about how complicated his process is. Simply, he’s offered consumers a product and he’s responsible for delivering it. And part of the product we have bought is a little proactive communcation which will go a long way in satisfying the customers that are vital to his business. The whisky business being built on marketing is arguable (and I won’t do that here) but inherent in that premise are two things: 1) a promise (that’s the marketing) and 2) the fulfillment of the promise with the product. In Mr. Thompson’s case for CiC, the product is not just the whisky but the PROCESS for getting the whisky. Just focusing on the final deliverable (the whisky at our doorstep) only meets 50% of the brand proposition. Let’s face it, if we just wanted some special Macallan, we could have all gone to our neighborhood store or online and bought it. But we didn’t, we were excited about doing something different and participating in a process where we got to make decisions with other like-interested people from around the world. Mr. Thompson embraces the value of marketing but unfortunately doesn’t seem to recognize what his marketing brand is. Hopefully he can get us back on track by filling the information gap. Monthly, I agree, is appropriate.

Thanks again.

With hope,

Peter Litton

Well it’s been about a month and what felt like progress has turned into the same-old, same-old lack of communication and continued erosion of trust that we will someday get our whisky. Here’s Jim Copkley’s email to Jim Thompson, head of CiC.

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Mr. Thomson,

I sent an email to you on November 16th asking for an update concerning the Macallan 8271 Cask. Your email to me on November 10th stated that you would be arranging to have Lev provide an update to my fellow owners as to the bottling and delivery progress concerning our cask. My fellow syndicate members have voiced their concern for this lack of communication and their erroded trust in the CinC organization. I had faith that this would be accomplished upon your desire and our need to get updated information to us. I am disappointed that it has been going on a month later with no response from anyone connected with the CinC company. I believe the relationship between the CinC and the cask owners has declined to an unacceptable level. And any future cask offerings will probably not include any existing owners that have ventured through this process. Repeat business from satisfied customers is what makes most companies successful. Unfortunately, I do not believe very many of the many cask owners will participate in any future offerings from you and the CinC company. This sound harsh, but I am being honest and passing on messages from my fellow members of Cask 8271.

Customers concerns would be eased and the trust level would gain strength if ONLY some news were sent to my fellow members. I am sure Lev has a data base of all members and would simply need to compose an update as to where the process is for our bottling and shipping methods AND a approximate time line.

Please address these issues Mr. Thomson. My last email sent to you on Nov. 16th was not answered and that concerns me. Thank you for your time and understanding. I sincerely hope we can resolve this communication gap for everyone’s benefit. Have a great holiday season for you and your family.

Jim Copley