Each week, we bring you the latest whisky news on WhiskyCast, but a lot can happen during the week. Now, you can keep up with whisky news as it happens here on WhiskyCast.com!
April 18, 2014 – Three senior Beam, Inc. executives have announced their plans to step down after Suntory’s $16 billion acquisition of Beam is completed. In a regulatory filing today, Beam said North American President Bill Newlands (shown) will become a part-time strategic consultant for the company when his resignation takes effect on May 31. Newlands has been in charge of Beam’s entire North American operations since 2010, when he was promoted from his previous position heading US operations. He joined Beam in 2005 following the breakup of Allied Domecq, where he served as president of the company’s North American wine unit.
In addition, Chief Financial Officer Robert Probst and Corporate Controller Leo Mierzwcki will be resigning for personal reasons. The filing says both men chose to leave because of the “impact on their roles due to the impending acquisition.” Probst joined Beam in 2008 as senior vice president and CFO, according to his official biography on Beam’s web site. He previously headed up Baxter International’s mergers and acquisitions team, and spent 8 years at Diageo in key financial roles. His resignation will be effective on May 31.
Mierzwcki has been Beam’s chief accounting officer since 2009, and was part of the team that helped guide Beam’s transition to a standalone spirits company in the breakup of Fortune Brands. His resignation will be effective on July 10.
April 18, 2014 – Distillers have long been known for collaborating with each other on techniques, recipes, and even supplying spare parts or still time when needed. Rarely, though, do they join forces to blend their whiskies together…with the exception of special charity bottlings such as last year’s Master Distillers’ Unity Bourbon to raise money for the ALS Association’s “Parker Beam’s Promise of Hope Fund.” Now, four Midwestern craft distillers have joined forces to create the limited-edition “Four Kings Bourbon” that will go on sale in Chicago next week.
“Like many things in this business, it happened over a glass of whiskey,” Ryan Burchett of Iowa-based Mississippi River Distilling Company said. Burchett had been on a craft distilling panel with Bill Welter of Michigan’s Journeyman Distillery and Paul Hletko of Few Spirits during WhiskyFest Chicago last year, and were sitting at a bar with Andrew Webber of Corsair Artisan Distillery. “We talked about our different whiskies and talked about craft, and each distillery poured a sample. I said ‘boy, that would have been cool if we would have, like, had a blend or something and we could have poured that’ and we got to talking and said “we should do that for next year.” Their initial enthusiasm was tempered by the realization that each distiller had a different distributor, and getting the four distributors to cooperate could be difficult.
Listen to Mark Gillespie’s interview with Ryan Burchett:
Enter Brett Pontoni, whisky specialist for the Chicago-based Binny’s Beverage Depot chain. Pontoni helped solve the distribution problem by offering to take the entire production run. “I thought it was cool as hell that these guys wanted to get together and do this,” Pontoni told WhiskyCast’s Mark Gillespie in a telephone interview. “My only involvement was saying ‘guys, I can’t believe that this is gonna be anything but great, and I’m more than happy to guarantee that if necessary, I’ll take everything just to make sure the project launches and nobody’s hung with anything.” With that, the distributors agreed to work together, seeing the potential to help raise the profile of all four distilleries.
With that issue solved, the distillers went to work. Each distillery contributed 30 gallons of Bourbon, with Burchett, Welter, and Hletko using their standard Bourbon mashbills. “Our friends at Corsair in Nashville, they’re the experts on doing funky stuff,” Burchett said. “They threw in some bourbon that had some experimental grains in it, some smoke and things like that, and that gives it a unique finish too.” Corsair sent 15 gallons of its regular Bourbon and 15 gallons of Bourbon made with smoked wheat, which makes the final blend a four-grain Bourbon with corn, rye, wheat, and malted barley. Burchett blended the whiskey at his distillery on the banks of the Mississippi River in Le Claire, Iowa, and his marketing agency came up with the “Four Kings” name and label incorporating the logos of all four distillers.
“It’s cocky, we know that, but we all just kind of liked it and it gave it a brand all of its own even with our individual distilleries all labeled on the bottle. We just thought it was cool…it’s a first, so let’s do it and stake our claim to something unique.”
The final blend produced around 700 bottles, of which 600 will go on sale April 24 exclusively through Binny’s starting that night with the annual Binny’s World of Whiskies festival. There will also be a tasting party with the distillers that night at Delilah’s, which will be one of the four bars to carry Four Kings along with Fountainhead, Clark Street Ale House, and The Bar on Buena.
Burchett hopes to make the collaboration an annual event. “I think this hopefully opens Pandora’s Box for other producers to say ‘hey look, this can be done,’ and do this regionally, out east, out west, in the south, whatever. We certainly don’t claim to have staked our spot as the only ones who can do collaborations, so I’m hoping you’ll see more of it and certainly we want to do it again in Chicago next year.”
Editor’s note: This story was updated with additional information following an interview with Brett Pontoni.
April 17, 2014– Kentucky Gov. Steve Beshear has signed a bill that gives the Commonwealth’s whisky distillers a break from the so-called “barrel tax” imposed on every barrel of whiskey maturing in their warehouses. According to the Kentucky Distillers Association, distillers filled more than a million barrels with spirit for aging last year, and getting the tax changed has been the group’s top legislative priority for years.
“Kentucky is the only place in the world that actually taxes barrels of aging spirit,” KDA President Eric Gregory told WhiskyCast’s Mark Gillespie in an April 8 interview following the bill’s passage in the General Assembly. “This will give a corporate income tax credit against that tax. It keeps our local communities whole, which is very important to us, and it requires the distilleries to reinvest in their Kentucky operations.” The “ad valorem” tax taxes businesses on their inventories, with the proceeds going to local governments and school districts. Because of that and its special status in the state Constitution, eliminating the tax has never been a serious option. A special commission appointed by Gov. Beshear in 2012 recommended some form of relief for distilleries, since their barrel inventories must sit in storage for several years – and accrue taxes each year – while other businesses can turn over inventory on a regular basis.
The compromise worked out with legislative support allows distilleries to take a credit on their Kentucky corporate income taxes for each dollar paid in ad valorem taxes, but the money must be reinvested in a company’s Kentucky operations. “We’ll create more jobs and more investment, it’s really a win-win for the Commonwealth,” Gregory said.
By using the credits to increase production, distilleries may actually increase the amount of ad valorem tax revenue available to local governments. “In 1990, when Kentucky became a model for education reform, they tied the local property tax into barrel inventories and barrel taxes, so it’s a great funding resource and we don’t want to harm that,” Gregory said. “This way, the local communities will keep their money for education, health care, and other top priorities. We’ll get a corporate income tax credit, reinvest it, which will create more barrels to go for education and local input.”
The barrel tax generated around $14 million last year for the Commonwealth and local governments. The tax credits will be phased in at 20% annually over the next five years, with distillers required to use the credits on capital projects such as construction, renovation, and new equipment.
April 15, 2014 – Wild Turkey officially kicked off what is being called the “Year of Jimmy Russell” with a celebration today at the distillery in Lawrenceburg, Kentucky. The celebration also served as the grand opening for Wild Turkey’s new visitors center and caps off a massive development program that saw more than $100 million in new construction for the distillery, a bottling plant, and the new visitors center.
The new center replaces the tiny cabin that welcomed visitors to Wild Turkey for decades. Located across from the original distillery about a quarter-mile away from Wild Turkey’s new campus, it was one of Kentucky’s first distillery visitor centers and the final part of the original distillery (other than warehouses) to be replaced. In a news release, Campari America President Jean Jacques Dubau projected the new center will draw around 80,000 visitors during its first year.
“Last year, our Visitor Center was housed in a tiny 1,000-square-foot house from the 1800s and we still saw a 16 percent spike in visitors to Wild Turkey Hill. With our gleaming, new architectural masterpiece, we finally have a Visitor Center worthy of Wild Turkey’s legacy, as well as an outstanding calling card for Kentucky’s Bourbon industry.”
2014 marks Jimmy Russell’s 60th anniversary at Wild Turkey, dating back to when he joined the distillery as an apprentice in 1954. To mark the anniversary, Jimmy’s son Eddie created the limited-edition Wild Turkey Diamond Anniversary whiskey from a blend of 13 and 16-year-old whiskies. It will be on sale at the distillery from May through August, and will then be available through retailers this fall with a recommended price of $124.99 (750ml).
Editor’s note: This story was updated with photos supplied by Wild Turkey.
Links: Wild Turkey
April 15, 2014 – Heaven Hill’s Rittenhouse Rye has long been a favorite of bartenders and Rye whisky fans, but has also been in short supply for many years. When the resurgence in Rye whisky began in the mid-2000’s, Heaven Hill and other Kentucky distillers were only producing small amounts of Rye each year, but quickly ramped up production as it became clear that Rye’s popularity would be more than just a short-lived fad. Now, Heaven Hill’s stocks of Rittenhouse from those years are reaching maturity, and the distiller plans a major focus for the brand with increased distribution and a new bottle design.
The new packaging is a return to Rittenhouse’s early post-Prohibition years, when it was called Rittenhouse Square Rye and had an Art Deco-inspired label design. In a news release, Heaven Hill’s Susan Wahl said the past 8 to 10 years have seen more growth in Rye whiskey than the previous 70 years.
“There has been an amazing and truly unprecedented resurgence in straight rye, and for those few of us who have made it for decades in limited quantities, it is both an opportunity and a challenge to produce enough to meet sudden record demand. We are now starting to see our stocks come in line, so we can begin to more aggressively pursue new distribution, and this package redesign is the best evidence of that growth.”
The new packaging for what is officially termed Rittenhouse Bottled-In-Bond Straight Rye Whisky (without the “e”) will debut in June at retailers and bars, but pricing will remain the same at $24.99 per 750ml bottle.
Links: Heaven Hill
April 15, 2014 – Australia is the 12th largest market for Scotch whisky exports, with growth of 7% last year. It’s also one of the worst markets for counterfeit Scotch whiskies, according to the Scotch Whisky Association, which claims at least 40 brands of fake Scotch whiskies are being sold in Australia. Now, the SWA and its members will have greater power to get the impostors off the market — or at least get them rebranded as something other than Scotch whisky. Australian officials have granted the SWA a “certification trademark” for Scotch whisky, which will allow the trade body to take legal action to remove fakes from the market.
The problem dates back to 2000, when Australia revamped its food safety laws in coordination with New Zealand and removed specific protection for Scotch whisky. That, combined with a lack of enforcement, opened the floodgates for counterfeit whisky makers. According to the association, local companies have been diluting real Scotch whisky with other spirits and selling the adulterated product as Scotch. In a news release, SWA legal adviser Alan Park described the new trademark as a breakthrough for the industry.
“I have been involved in actions against many fake ‘Scotch Whisky’ products in Australia in recent years. Registration of Scotch Whisky as a certification trade mark is a major breakthrough and will make it easier to crack down on fakes and therefore protect consumers, although the onus to prevent the sale of fakes still rests on the industry. It has taken time and effort to achieve this result and we would like to thank the UK Government and European Commission for their support. Scotch Whisky exports are of immense value to the economy so overseas protection is vital. We will be monitoring the market and will use our new protection for Scotch Whisky to take decisive action against fakes.”
The Association’s team of lawyers has fought fake whiskies for decades, and former SWA chief executive Gavin Hewitt once called it the association’s most important function during a WhiskyCast interview.
Links: Scotch Whisky Association
April 14, 2014 – Woodford Reserve’s first national television campaign made its debut during the season premiere of “Mad Men” on AMC Sunday night, and the episode was barely over before critics started slamming the first commercial as “sexist.” The ad features a woman talking about the kind of man she imagines drinking Bourbon, and is the first of six commercials in the series created by Minneapolis-based advertising agency Fallon Worldwide.
Most of the criticism came via Twitter, with CNN.com’s Kat Kinsman providing some of the most vocal commentary:
Women were not the only ones who appear to be upset with the ad’s content:
Woodford Reserve spokeswoman Andrea Duvall described the campaign’s overall goal as one of celebrating the complexity and diversity of Bourbon drinkers. In a telephone interview, she told WhiskyCast’s Mark Gillespie that sexism never entered the discussion.
“We recognize that people are talking about it (the “Bookshelf” ad), and it was not our intent to offend. This is about celebrating the Bourbon drinker from a number of different contexts.”
The debate over gender roles and presentation in whisky advertising reached a new level in December, when a social media-led campaign forced Dewar’s to withdraw an online video because of its portrayal of women. The ad was later deemed to violate the Distilled Spirits Council’s Code of Responsible Practices by the trade body’s Code Review Board. However, the Canadian whisky blogger who helped lead that campaign doesn’t see any issues with the Woodford Reserve commercial. In an email, Johanne McInnis said she doesn’t view the Woodford commercial as sexist at all, with a woman narrator and no “half-naked” women in “hooker makeup and heels.”
“When she sees a guy drinking bourbon she sees someone who is smart, good with his hands & respects that she’s not “cute” because she doesn’t know how to use it. May not be the most brilliant marketing ad, but this is a great step in a gender neutral position.”
A second ad in the series tells a story from the man’s point of view, and four additional ads will be rolled out on broadcast and cable networks over the next several weeks. Duvall says at least one of the ads will run during NBC’s coverage of the Kentucky Derby on May 3. Woodford Reserve is the official Bourbon of the Kentucky Derby, and the controversy developed as the brand was announcing its annual Kentucky Derby $1,000 Mint Julep campaign to raise funds for the Old Friends Thoroughbred Retirement Center.
Editor’s note: This story was updated with comments from Woodford Reserve spokeswoman Andrea Duvall.
April 14, 2014 – With the 140th running of the Kentucky Derby less than three weeks away, Woodford Reserve has started taking bids for its annual $1,000 Mint Julep cocktails to be served at Churchill Downs on Derby Day. Proceeds from the 9th annual event will benefit the Old Friends Thoroughbred Retirement Center, which provides a safe home and medical care for retired race horses. The cups will be on sale online through May 1, but must be picked up at Churchill Downs on May 3.
This is the 89th year that the Derby has been known as the “Run for the Roses”, in honor of the rose garland traditionally placed around the winning horse’s neck. A total of 89 Mint Juleps will be available, with 79 to be served in a sterling silver “Kentucky Rose Cup” priced at $1,000 each. Ten gold-plated “Royal Rose Cups” will be available for $2,000 each. Both versions will contain the same cocktail, to be made this year with rose-themed ingredients including rose-infused ice, candied rose petals, and Woodford Reserve Distiller’s Select Bourbon. Each cup will come in a box made from the same American White Oak used for Woodford Reserve’s barrels, with a fabric liner specially designed by Vineyard Vines. The apparel company has also produced a special series of accessories to be sold only at the Woodford Reserve Distillery’s visitors center, with all proceeds to go to Old Friends as well.
Last week, Woodford Reserve held a grand opening for the newly-expanded visitors center at the distillery in Versailles, Kentucky. The $1.9 million dollar expansion project includes a new tasting room, expanded dining space, and facility upgrades. Brown-Forman is also investing an additional $35 million to expand production capacity at the distillery, which dates back more than 150 years and is listed on the National Register of Historic Places.
April 11, 2014 – As the Scotch Whisky Association released 2013 export data showing a second consecutive flat year, the trade body’s chief executive expressed concerns over September’s Scottish independence referendum and its potential impact on the Scotch whisky industry. David Frost, while not openly suggesting that Scots vote against seceding from the United Kingdom, suggested in a news release that Scotland’s foreign trade benefits from the governments in Edinburgh and London working together.
“As a former ambassador, I know that the industry also depends on strong political support from government, for example to influence European Union negotiations on our behalf or to press other countries to allow better access to their markets. Both the UK and Scottish Governments have played an important role in this so far. Whatever the outcome of the Scottish referendum, as an industry exporting to around 200 markets we will continue to need the backing of an effective diplomatic network with the necessary global reach, commercial expertise, and capacity to influence.”
It has been suggested that a “yes” vote on independence would force the future Scottish government to renegotiate the many trade treaties signed by the UK government in recent years that include specific protection for Scotch whisky against counterfeiting and punitive tariffs. Frost did not address that in the SWA’s news release, and the Scottish National Party-led pro-independence campaign has not addressed the issue directly.
Meanwhile, the overall value of Scotch whisky exports dipped slightly during 2013. According to HM Revenue & Customs data, the value of Scotch whisky exports for 2013 was £4.259 billion ($7.12 billion USD), down from £4.273 billion ($7.15 billion USD) during 2012. However, the volume of Scotch whisky exports rose by 3%, with single malt exports gaining 5%.
France remains the single largest market for Scotch whisky by volume with a 16% gain, following an off-year in 2012 linked to a tax increase at the beginning of 2012 that saw importers accelerate their orders during late 2011 to avoid the increase. The United States saw an 8% gain with a value of £819 million GBP ($1.37 billion USD), and remains the largest market by value. Exports to India grew by 12% despite no progress in trade talks between India and the European Union, and SWA officials are hopeful that negotiations will resume following the upcoming Indian elections.
The Asia-Pacific region suffered sharp declines, with double-digit drops in exports to China, Japan, Taiwan, and South Korea linked to slower regional economic growth and government austerity measures. Singapore, which serves as a regional shipping hub, showed a 3% decline. South Africa saw an 8% gain in volume (1% in value), while Brazil and Mexico led Latin America with volume increases of 26% in Brazil and 15% in Mexico – where Scotch whisky has become one of the UK’s fastest-growing exports according to the SWA.
Despite what would appear to be another flat year for the industry, Frost remains confident in the overall strength of Scotch whisky.
“The industry’s impressive performance makes a major contribution to the UK’s trade performance. The unprecedented investment programmes in Scotch Whisky by producers show that in the long term they are confident that demand will continue to grow. However, in the short run, there are some economic headwinds. Formal and informal barriers to trade remain. We should remember that the industry’s success does not come automatically but is based on hard work, investment and careful stewardship.”
According to HMRC data, Scotch whisky accounts for 85% of Scotland’s food and drink exports, and nearly 25% of the UK’s overall food and drink exports. SWA officials were unavailable for interviews today.
April 10, 2014 – After more than a year of fighting with Vermont state officials over its plans to build a farm distillery, WhistlePig Farm in Shoreham has finally received state approval to start construction on its distillery. WhistlePig founder Raj Bhakta told WhiskyCast Wednesday night at Whisky Live New York that the regional environmental commission’s permit was granted on Monday, and “the cranes are moving as of 8am this morning.”
Vermont Department of Natural Resources officials opposed WhistlePig’s plans to build a distillery at the farm on the grounds that WhistlePig’s whiskey could not be considered an agricultural product. That argument centered on the department’s opinion that water was the main ingredient in whiskey, not grain, and the state’s laws require that at least 50 percent of whatever a farm makes must come from that farm. Without the designation as a farm, WhistlePig would fall under more stringent “Act 250” rules for commercial developments. The objections also focused on WhistlePig’s current practice of importing bulk whiskey from Canada’s Alberta Distillers and using the farm for maturation and bottling. In a 2013 Vermont Public Radio interview, Natural Resources Board chairman Ron Shems noted that “WhistlePig right now is not growing anything that goes into its whiskey.”
Bhakta told WhiskyCast that the Vermont debate over whiskey as a farm product has not been resolved. “We have a commercial permit, not a farm-based permit, but a commercial permit to grow our own grain and to build a distillery and get that going,” he said. “That’s a legal question at the end of the day, but for us, most interestingly, is the actual realization of something truly unique that we’ve been working towards for years.” The former reality show contestant (“The Apprentice”) expects to begin distilling on the farm by the end of the year, assuming no major delays in construction. Veteran distiller Dave Pickerell is WhistlePig’s Master Distiller, and has been responsible for developing the distillery plans while selecting barrels from Alberta Distillers for the current WhistlePig expressions.
Listen to Mark Gillespie’s interview with Raj Bhakta:
The distillery also drew objections from neighboring farm owners worried about the potential impact on their crops from so-called “black mold” fungus caused by alcohol vapors. The environmental commission’s permit allows WhistlePig to store up to 6,000 barrels of whiskey on-site, and WCAX-TV reports that commission members do not expect any mold issues as long as the distillery stays within those limits. WhistlePig is currently maturing several hundred barrels on the farm. However, opponents have 30 days to appeal the commission’s ruling in court.