OUR SOMMERLIER: TERMS & CONDITIONS
BACKGROUND
This document describes the arrangement between the Investor, Our Sommerlier Ltd, and Distributor with regards to the purchase of the Casks described in the Investor’s invoice raised by Our Sommelier Ltd. It describes the terms and conditions by which the Distributor will arrange for casks to be sold, or bottled and distributed under Our Sommelier’s associated brand, on behalf of the Investor.
OPERATIVE PROVISIONS
- DEFINITIONS AND INTERPRETATION
- In these Terms, unless the context otherwise requires:
Wholesale Selling Price is an estimated price and means the estimated price at which the Distributor will put for sale the cask’s contents following bottling.
Sale of Cask(s) refers to the sale of an Investor’s Cask(s), in which the Distributor will either bottle and distribute the product owned by the Investor or sell such Cask(s) at wholesale to a suitable buyer (as determined by the Distributor).
Certificate of Title means proof of Right to all contents of the Casks of whisky satisfactory to the Distributor. Certificates will be issued by Our Sommelier Ltd to the Investor upon receiving full payment from the Investor, and confirmation of title has been sent to Our Sommelier Ltd by the Distributor. The Investor’s capital can be put towards the operational cost of the cask if funding is required. In this instance, the profit from the sale of the cask, as explained in the Terms of Sale will be proportionally split if additional funding is necessary at the bottling stage.
Storage and Insurance is included in the Purchase Price for the first 5 years of storage; insurance covers against fire and theft of the cask and covers the purchase price. Storage and Insurance after the first 5 years will be charged annually at the cost price at the time of renewal.
The Angel’s Share refers to the fact that maturing whisky naturally loses a small percentage in volume each year due to evaporation from the Cask (an average of 1%-2% per year). This is taken into consideration and is reflected in the estimated returns table at a rate of 2% per year. Losses in excess of these rates may occur.
Bottling and Labelling costs for a premium whisky brand is estimated at 80-120 GBP per bottle; this is an estimate based on today’s costs but may change from time to time as notified by the Distributor. Ultra-premium bottles or crystal decanters are considerably more.
Working Capital costs are necessary to facilitate the operational costs to bring the bottled whisky to the marketplace. This includes, but not limited to, the cost of re-casking into smaller 50L firkins or other casks, supply of whisky bottles, labels, packaging, warehouse bottling costs, warehouse & office administration fees, logistics, whisky consultancy & marketing fees.
- CONDITIONS PRECEDENT
This agreement shall only come into effect upon the transfer of title for the Casks of whisky specified on the Certificate of Title. A Certificate of Title will be provided to the Investor within 30 days of the investor’s cleared funds of the purchase invoice. The Investor’s funds could also be contributed to the working capital of the cask in getting it to market.
Upon failure to deliver the Certificate of Title, the parties herein shall be deemed released from further performance of their respective obligations under these Terms save those monies paid by the Investor pursuant to these Terms shall be refunded by Our Sommelier Ltd, without any interest or any other charges thereon, within 14 days from receipt of notice requesting such refund.
The Distributor maintains a right of first refusal should the Investor wish to sell the Title to their Cask(s). The Distributor guarantees to make an offer to purchase any Cask(s) based on the agreed rate referred to at the time of sale.
Our Sommelier Ltd is an appointed agent between the Distributor and the Investor, and will give as much notice to the Investor when the Distributor is looking to procure each Cask(s) for sale. If Our Sommelier chooses to bottle the whisky themselves and act as the Distributor, Our Sommelier will advise the Investor when the cask is ready for bottling.
- SALE OF CASK(S)
The Distributor can arrange to sell a cask at any time by informing Our Sommelier Ltd.
The Distributor may partially bottle a Cask’s contents or sell the Cask in its entirety if a suitable wholesale offer is made.
Our Sommelier will mediate between the Distributor and the Investors to fulfil the Distributor’s orders.
Our Sommelier Ltd shall pay the final sum to the Investor, which will be based on the Investor’s price at the time of sale.
- SALE OF TITLE
The Investor may at any time opt to sell their right of Title (pursuant to any Cask(s).
The Distributor maintains the Right of First Refusal pursuant to Clause 2.iii) should the Investor opt to do so.
If the Right of First Refusal is not exercised, the Distributor will adhere to the terms of sale detailed in Item 1.
Our Sommelier Ltd reserves the right to sell casks on the Investor’s behalf, without prior warning or notice to the Investor to fulfil Distributor’s order(s). Details of the sale and payment will be sent to the Investor upon completion of the sale, or reinvested.
Cask Value Estimates
The returns payable to the Investor on this investment shall be calculated at the time of sale.
For the avoidance of any doubt, the cask values will be based on market value, wholesale prices, and incorporate a processing fee for Our Sommelier Ltd. Any prior estimate(s) will not be a guarantee of the performance of your No prior estimate should be viewed as a guarantee or predictor of future investment performance, but as a guide.
Payment to the Investor will be made when 60% of the bottle stock or full cask has been sold and payment collected.
Should the Investor opt to sell their right of Title of their cask before the cask is bottled, the market value of the cask will apply.
The percentage of the returns to the investor is calculated after the cask has been bottled and represented as an average over the term held (per annum).
Terms of Sale: The Net Sales Return (Gross Selling Price minus Working Capital Costs, Storage and Insurance) will depend on the age of the cask, market demand, the length of time the cask is held by the investor, and the sale price. Note The full cask could also be sold, ‘as-is’, by the distributor to brokers, other bottlers or blenders, the sale price would be agreed with the investor before the sale is confirmed.