August 2003 Newsletter

Welcome to the seventh issue of the Malt Whisky Buyers Newsletter.

Once again I must apologise for the late arrival of this issue - this time my reliable and helpful printer has had a heart attack and I have reluctantly had to find a replacement printer. Get well soon Steve. By now everyone will have had a letter from Burn Stewart Distillers increasing the storage fees on their cask by 100%. The phrase "Like lambs to the slaughter" springs to mind. For the past two years whisky brokers have told me that nobody wants Tobermory single malt but strangely since the increase they now have a market for it. The price is pretty terrible 2/2.25 per original litre but I know many investors have taken up the offer. Now Burn Stewart have recently been taken over by an overseas company - C.L Financial and I suspect may need some stock back, investors having already kindly funded the
production of their new single malt. I spoke to the Company Secretary Campbell Stirrat but he would not be drawn on whether Burn Stewart were buying back casks from Brokers - "I cannot disclose such confidential information - it is a private commercial matter between the parties involved". He added that he understood investors concern but "the whisky industry as a whole has seen unprecedently low level of prices over the past few years and this reflects through to individual cask owners."

Burn Stewart consider the increase, "entirely justified reflecting increases in insurance charges and health and safety requirements. Storage charges have not been increased for the last 6 or more years and our charges are inline with
industry trends".

As one investor put it - "I feel I have been defrauded twice by the Scotch Whisky industry once on the sale by Hamilton Spirit Company and then again on the buy back".

Speyside Distillers - Innocent or Implicated?

In 2001 Speyside Distillers launched their new 10 year old single malt - "The Speyside Single Malt". According to its creator George Christie "Excellence is always worth waiting for" - but at whose expense? Certainly not Speyside's as thousands of investors have discovered to their cost.

The distillery is situated at the foot of Glentromie by the River Tromie where it enters the Spey. George Christie's vision

was to create a brand new single malt and in 1990 he started production. There were many problems but one of the major obstacles to overcome was how to finance a new single malt when 10 years production is needed. During the 10 years there would be no income from the thousands of hogsheads and sherrybutts produced. There was only one

solution - as Ricky Christie Head of Sales at Speyside admits, "Sell the casks as newfill and charge storage and

insurance - this is the time honoured way in Scotland the way many of the now long established distilleries started. The way Burn Stewart, Bruichladdich, Isle of Arran set up recently". But who in their right mind would want to buy a cask of an unknown brand of whisky. Then just at the right logistical moment along comes Marshall Wineries, William

Buchanan, Ewart Mclaren and a host of other companies advising the nation that investing in casks of whisky was a great opportunity. Backed by the 'quality press' with headlines like 'Dip into malts for rare returns' the game was on. Marshall Wineries pretended to own a distillery called Grandtully and called their whisky "The Grandtully Single Malt" even providing clients with bottles of 17 year old Grandtully. It was all an illusion - Grandtully whisky was in fact

Speyside single malt purchased from Speyside Distillery and lying at Number 14 Bond Speyside Bonding Company Duchess Road Rutherglen Glasgow. Investors were now paying Speyside to store their own whisky.

But how well is the new malt doing. According to Ricky Christie very well, "We anticipated sales of 10,000 bottles in the first year but achieved 15,000 - moving them off the shelves is another matter. We are now concentrating on launching the 12 year old later this year in the States" What about the investors don't you feel some obligation to them, "Yes, they have invested in our future, we want them to be part of our success, we will buy back casks on a commercial

basis at the market price. We already have bought stock back from investors in exceptional circumstances."

How was it that Speyside was still supplying single malt casks to Gleneagles Spirit Management Company in 1999 long

after the scam was exposed in Britain. Ricky was defiant, "We never sold direct to Gleneagles, we did sell direct to

William Beasley when he was running William Buchanan & Co. but that was in the normal course of business we had no control over what price he sold the casks for. Gleneagles purchased their casks through a third party we didn't know they would end up being sold in Australia. It was out of our control."

So what advice can you give to your long suffering investors, "I believe there will be an uplift in prices over the coming

years. I would tell investors to hang in there. It was never our intention to dupe investors, investing in whisky has

always been a speculative venture but the longer investors hold on the more likely they are of getting their money back" thought Ricky.

Antony Evans - Glennstewart International - LMDV

The Consumate Fraudster?

We have received numerous emails from all over the world complaining about the antics of Antony Evans and his
associated companies selling whisky, cognac and wine. This story from an investor in Australia is typical. "My dealings with Glennstewart International commenced after regular receipt of a Wine and Spirit Digest'. After much discussion with a Patrick Adams of Glennstewart I purchased a 350 litre cask of 1 year old cognac for 1800 English pounds.
Mr Adams left Glennstewart and my contact became Antony Evans.

In August 1999 he persuaded me to buy casks of 5.5 year old cognac because it was part of an Asian customer's
holding and was going cheap. He said I could expect to sell in a year's time and make a substantial profit. There were 10 casks available. It so happened that I had some spare cash available and so I purchased 2 casks for 7,796 English pounds.


After following up on many occasions with Antony Evans and hearing all sorts of excuses, unfavourable rates, am going to France, have been ill, not a good time to sell, etc in early 2000 I asked for a price to sell and he offered just 3000 pounds. Further discussions took place and he offered to exchange my casks for a 20 year old cask. According to Evans this would sell quicker and the gross return would be 22,000 pounds. The exchange took place in November 2001.

Bottling would take place in July 2002. A year has passed and nothing has happened.

A couple of months ago I managed to speak to Evans at the store in Berlin. He said that he had converted several of his clients into whisky because it was easier to sell. He said he would prepare a quote for me but told me that the

Berlin store was closing so it was no surprise when I tried to phone him and got no answer. I have emailed him on three occasions but have received no response.

Any ideas where I should go from here?"


Anyone else with a similar story should contact their local government department that deals with international fraud. It's time Evans was stopped and his web of deception destroyed.

LMDV appears to be trading once more from Prince Consort House 109-111 Farringdon Road, London

EC1 R 3BW. Telephone number 0207 504 8355.

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