July 2003 Newsletter

William Beasley scores a double whammy with William Buchanan & Co in Scotland and Gleneagles Spirit Management Company in Australia

In our last issue we brought to your attention the demise of Gleneagles Spirit Management Company Limited in

Australia. The Company had been selling new fill casks of Speyside single malt for well over 1000 pounds sterling. At the time we did not realize that the MD of Gleneagles Bill Beasley was none other than William Beasley well known in this country as MD of William Buchanan & Co.

You may recall Stewart Dalby's infamous article in The Guardian' in 1996 which included an interview with William Beasley. According to the article "Whisky in the 1990's could become what good claret was in the 1980's: an investment vehicle offering either very high returns or the chance to drink yourself silly on quality liquor at virtually nil cost". It related that Beasley had set up a deal with Speyside Distillers and was offering hogsheads of newfill malt for 1279 pounds sterling and sherrybutts for 2430 pounds sterling. Beasley felt there was little downside and that prices would rise. Within a few months the scam was exposed and William Buchanan ceased trading leaving investors with

unsaleable casks of whisky which even six/seven years later are only worth a few hundred pounds.

Beasley fled to Australia setting up the same scam there and selling the same newfill Speyside single malt. As late as 1999 it would appear that Speyside were still supplying Beasley. MWBH have received numerous emails from Australia requesting more information about the scam from troubled investors.

As reported in our last issue the company having changed its name finally went into receivership. Our latest information is that Beasley is working for a company called WineOrb with a Michael Hennessey who is also known to investors in this country. He has filed for bankruptcy. Evidently Beasley's brother has fled to South Africa to escape Baseball

wheeling Aussies who are not too happy about their investment.


Serious Fraud Office - Press Release

relating to Goldman Williams, City Vintners and other associated companies

"The SFO in conjunction with the Metropolitan Police Service is carrying out an investigation into suspected investment frauds relating to wine and penny shares. The companies operating in London, Spain and the States of Grenada in the West Indies, targeted investors in the UK.

The allegations relate to two companies, Goldman Williams Ltd and City Vintners Ltd, offering fine Bordeaux wine from five Premier Crus Chateaux to members of the public on the basis that the purchase and retention of such wine constituted a sound and potentially rewarding form of investment.

In addition, it is alleged that Stanley Reibeck Corporation, Webster Cohen & Galombik Inc. Hopkin Pierce &Co. Limited, Reichman Advisory S.L, Goldberg Kravitz. S.L. (now Union Partners S.L) Chapman Foster Group S.L and the Salisbury Merchant Bank operated in Spain and Grenada offering low face-value shares which, in some cases, may have been virtually worthless or sold on the basis of misrepresentations.

The SFO is currently in the process of attempting to contact a large number of investors. This exercise is anticipated to take some months to complete. However since the commencement of enquiries some investors claim that they have been approached by individuals offering similar share investment opportunities. Persons intending to invest in alternative investments such as bonded alcohol or penny shares through off-shore brokers are strongly advised to seek the advice of an independent advisor before doing so. Particular caution should be exercised when dealing with companies not authorised in the UK as they may not have access to the Financial Services Compensation Scheme".



Bottling Your Own - is it an option?

Many investors are now holding casks that are 10 to 12 years old and are ready for bottling, but is it a worthwhile exercise. Well - first and foremost you need to like single malt whisky It is quite a costly exercise but you will end up with your own single malt with your own personal label - excellent for dinner parties and Christmas presents. Which whiskies are worth bottling - this is very much a personal opinion.

From the many I have sampled if you have an 1988 Benrinnes, 1988/1989/1990 Glenrothes, 1991 Bruichladdich, 1989 Linkwood, 1988 Aberlour, 1989/1990/1991 Bowmore, 1989 Blair Athol, 1988/1989 Strathmill, 1990 Littlemill or anything older then it is certainly worth considering.

The cost depends on exactly what you want, you can bottle at cask strength, at 46 at 40 or anything in between, you can choose an ordinary white flint bottle, a round dump bottle or a special fancy bottle. Labels can be simple or ornate, black and white or colour. You can't call your whisky "Benrinnes" or "Aberlour" these are trademark names but you can say "Pure single malt whisky from the Benrinnes Distillery" because that is what it is and you can prove it from your certificate of title.

Every cask is different and the costs are never exactly the same because every cask has a different quantity of whisky left in it after 10/12 years. You should think in terms of 2 pounds per bottle for bottling, between 8 and 9 pounds for duty and about 80 pounds for labels. If you don't want all the bottles then as we have already been doing for some investors we will sell the remainder.

If anyone is interested then please contact us on 01539 729555 or email us on mwbh@ukgateway.net

Blackwood Distillers Holdings PLC - The Shetland Distillery

Is this the latest whisky scam or is it just another dodgy investment. It sounds a great idea - a new distillery in the last remaining region of Scotland without one. Blackwood Distillers are raising 1.5 million sterling by the issue of 500,000 shares at 3 pounds per share to help finance the building of a distillery in Shetland.

There is a distinguished list of directors and funding is expected from Highlands and Islands Enterprise Board.

But reading the prospectus I find one or two worrying statements that don't quite add up.

"The Group is aiming for a 1 global market share of the premium single malt whisky market within 5 years of launch". "The Directors intend that the whisky brand will be available for sale from 2007". Now I thought following the Speyside and Tobermory saga that it took 8/10 years to create a new single malt. How do Blackwood intend to achieve this in 4 years when the distillery hasn't even been built. Evidently there is a market for 3 year old malt in Spain and Italy.

Another worrying development appears on their website, www.Shetlandwhisky.com--INVESTMENT OFFERS - Oh dear I think we've been here before. For 560 pounds sterling you can buy 24 bottles + 4 miniatures but this doesn't include vat or duty. Or a 500 litre cask for 8000 pounds sterling again this doesn't include vat or duty. It may be a fun offer

it's certainly not an investment.

How are Blackwood proposing to fund 10 years production to create this new single malt? I trust that once again the poor public will not be called upon to fund production through the long established route of selling casks to the public at double what they are worth and then charging them storage and insurance to keep their own whisky which they may or may not buy back at a fraction of the price investors paid.

Chief Executive Officer Caroline Whitfield was horrified at my suggestions. "We will certainly not be funding development from the sale of individual casks - you will note from our prospectus that we are in part funding the distillery through the sales of other white spirits. Past fraudulent activities of whisky companies have indeed been a major problem - one of the single most difficult impediments to starting a new whisky business" she said, STOP PRESS - We understand that Blackwood Distillers have withdrawn any reference to investment opportunities on their website and the cost of buying a 500 litre cask has been halved to 4000 pounds sterling. This is welcome and we wish them every success with this venture which will undoubtedly benefit the Shetland Islanders if it succeeds.