Nant Distillery battle takes another nasty turn

Concerns have escalated about the damage the Nant Distillery scandal is wreaking on the Tasmanian whisky industry.

It was revealed yesterday that more than 700 barrels sold to investors by Nant "have never been filled with whisky".

Australian Whiskey Holdings (AWH) conditionally agreed to buy Nant last year and take on its $5.5m worth of debts and liabilities.

Bankrupt former owner Keith Batt had used an unorthodox barrel investment scheme to fund the business. 

Batt offered investors the chance to buy two barrels of whisky for $25,000 with a guarantee to buy it back at maturation, for $36,007 (an attractive 9.55% return on investment). During the four years of maturation, the barrels were to be stored in Nant's bonded warehouse, with each barrel numbered for the investor. 

AWH undertook a forensic investigation of 1600 whisky barrels at the distillery and found "serious anomalies".

Australian Whisky CEO Chris Malcolm has written to investors saying: "There are a large quantity of barrels which have been decanted, bottled and the proceeds sold however the barrel investors have not been informed or paid.

"There is a large number of barrels that are filled with approximately 45% ABV [alcohol by volume] alcohol, new-make whisky, whereas the industry standard is usually 63.4%.

"There was a significant quantity of barrels that had the owners' names and barrel numbers sanded off the barrels (we do not understand the reason for this)."

Also, a number have been leaking and not repaired.

Malcolm said he had to tell one barrel owner that his barrels did not exist: “You can imagine how difficult this phone call was for both of us. There are many more of these conversations unfortunately yet to come.”

Nant Distillery sale falls through

AWH finalised the purchase of the Nant Estate in Tasmania's central highlands on February 17. However, a deal to buy the Nant distillery business fell through.

Malcolm states that, after more than five months of “complex and difficult negotiations and discussions” AWH terminated the Nant agreement.

Batt, on the other hand, claims he was the one who terminated the agreement to buy the distillery, Nant trademarks, intellectual property and barrels.

He has told investors Nant will relocate the distillery to a new warehouse.

The Nant Distilling Company Facebook page posted a letter to investors last week saying it had terminated the deal with AWH due to concerns Nant investors would not be prioritised.

"The Nant arrangement we entered with you, may not be as equal importance to AWH and the relationship they may have with you," the letter said. "It is our intention to recommence the redemption of barrels and our bottling and dispatch operations."

Most comments on the post have been deleted, but one simply saying "scumbag" remains. 

War of words spooks shareholders & industry

Nant shareholders have expressed concerns following outbursts on social media from Keith Batt. Barrel investor and Melbourne lawyer Alex Moores is part of a Facebook group of Nant barrel investors.

Mr Moores told The Hobart Mercury investors wary that the large amount of commentary on social media could tarnish the state’s whisky industry.

“It is my hope that one bad apple won’t spoil the Apple Isle’s whisky products,” Moores said.

Australian Distillers Association president Stuart Gregor added that the public nature of the dispute did not “enhance Australia’s reputation for quality and integrity”.