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!
March 18, 2015 – The “Drop the Duty” campaign led by the Scotch Whisky Association and other UK spirits industry leaders has claimed a victory, as Chancellor of the Exchequer George Osborne announced plans to cut duties on spirits by two percent in the next fiscal year. Osborne told Parliament today that the British economy is “walking tall again” after five years of austerity measures forced by the global economic crunch in recent years. His budget also freezes wine duties for the second straight year, cuts beer taxes by one percent for the third consecutive year, and also freezes taxes on fuel and tobacco in what observers see as a paean to voters ahead of Parliamentary elections May 7.
The tax cut on Scotch whisky and other spirits is only the fourth in the last century, and SWA spokeswoman Rosemary Gallagher praised the move. “We’ve been campaigning for that now for the last few months, and it’s good that we’ve been listened to,” she said in a telephone interview with WhiskyCast’s Mark Gillespie following the budget address. “There’s been quite a lot of media coverage that a cut was coming, but until the Chancellor actually stood up and spoke today in the House of Commons, we had no guarantee that it was actually going to happen.” Gallagher termed the cut a “good start” and said the industry will keep pushing for additional cuts in future years.
Listen to Mark Gillespie’s interview with Rosemary Gallagher:
During his address, Osborne cited the importance of Scotch Whisky exports to the UK economy in justifying his decision to lower the duty. Last month, the SWA released a study showing the whisky industry generates £5 billion ($7.3 billion USD) in economic impact annually for the UK and predicted that a two percent cut would increase that impact by up to £1.5 billion per year. Before the cut, taxes made up 78% of the price of an average bottle of whisky sold in the UK, and the cut only reduces that to 77%. However, Gallagher noted that the cut should help increase consumer confidence and result in more sales.
The push for a duty cut was criticized by health groups, who told British news organizations before the budget announcement that lowering the tax rate on alcoholic beverages would only increase the nation’s problems with alcohol abuse. Opposition party leaders also criticized the overall budget plan, including the Scottish National Party, which is upset over more cuts in public spending and a continued focus on austerity measures. SNP officials did not mention the cut in whisky taxes in their response to the budget address. The Liberal Democrats, which are coalition partners in the Conservative-led government, will present their own budget plan tomorrow. Observers expect that if the May 7 election produces a change in government, a new budget will be presented that could reverse the whisky and spirits tax cut as part of a much larger package of changes to Osborne’s budget package.
Links: Scotch Whisky Association
March 16, 2015 – In a move that may be a sign of things to come, former George Dickel Master Distiller John Lunn turned up today as the new Master Distiller at the Popcorn Sutton Distillery in Newport, Tennessee. Lunn’s last day at Dickel and Diageo was Friday, following 14 years with the world’s largest distiller as both Master Distiller and manager at George Dickel and Southern Hub director overseeing operations at the Stitzel-Weller site in the Louisville suburb of Shively, Kentucky. Lunn had not disclosed his new employer publicly until today.
“It’s the complete opposite end of the spectrum, going from the world’s largest to a really small craft, true craft distillery,” Lunn said in a telephone interview with WhiskyCast’s Mark Gillespie at the end of his first day on the job. “I think for me, it’s a great chance to learn the other side of the business…but what really appealed to me was the great story, a real authentic story that we’ve got all the proof to back it up, so there’s none of that ‘is it true, is it not true’ and a great product to go along with it.” He is the latest in what may become a growing number of distillers to leave multinational companies for smaller-scale whisky makers. Last month, Brown-Forman master blender Marianne Barnes left the Louisville-based giant to join Peristyle LLC’s craft distillery project on the site of the historic Old Taylor Distillery near Versailles, Kentucky.
Listen to Mark Gillespie’s interview with John Lunn:
Lunn said he had plenty of opportunities within Diageo, but his priority was to remain in his home state of Tennessee where his family still lives. Lunn and his family will relocate from their home near the Dickel distillery in Tullahoma to Newport, which is located about 30 miles east of Knoxville. “Newport’s pretty close to Gatlinburg, where we’ve taken a lot of vacations in the past, and it’s pretty much right on the doorstep of where Popcorn was moving and making his moonshine,” Lunn said.
Popcorn Sutton remains a polarizing figure in the whisky business, nearly five years after he committed suicide rather than report to prison following his conviction on several moonshine-related charges. His fans regard him as a legendary bootlegger producing moonshine from his family’s 100-year-old recipe in Cocke County and challenging authority figures throughout his life, while his critics consider him to be a criminal who could have produced legal whiskey had he chosen to. Before his death, he passed along the family recipe and distilling methods to Jamey Grosser, who founded the legal Popcorn Sutton Distillery in Nashville in 2010. The company’s new distillery opened last year in Newport following Cocke County’s decision to legalize microdistilleries.
The distillery produces Popcorn Sutton’s Tennessee White Whiskey, along with the “Mrs. Sutton’s” line of flavored liqueurs named for Sutton’s widow Pam. The company recently updated its packaging to clear “Mason Jar” style bottles after settling a trademark lawsuit with Brown-Forman over its original bottle design, a squared-off black bottle that Brown-Forman claimed was too similar to its packaging for Jack Daniel’s. The white whiskey is now available in 20 US states, with plans to add an additional five states by the end of 2015. Lunn hinted that his experience with aged whiskey may come in handy as the company looks at new product ideas. “You never know what we might try up here now,” he laughed.
Editor’s note: This story was updated following a telephone interview with John Lunn.
Links: Popcorn Sutton’s Whiskey
March 13, 2015 – With Chancellor of the Exchequer George Osborne’s UK budget announcement less than a week away, Scotch Whisky Association leaders are turning up the pressure on calls for a cut in taxes and duties on whisky and other spirits. The SWA released data from HM Revenue & Customs today showing a 4.78% decline in domestic Scotch Whisky sales during 2014, based on a drop in the number of 70cl bottles sold to 83.3 million during the year. In 2013, the equivalent number was 87.5 million, and the drop has been steady since 2009 when 92 million bottles of Scotch were sold in the UK.
According to the SWA, 78% of the retail price of an average bottle of Scotch sold in the UK goes directly to the government in taxes and duties. In the 2014 budget, Osborne froze taxes on whisky and other spirits while also scrapping the so-called “duty escalator” that automatically raised duties 2% above the annual rate of inflation each year. In a news release, SWA Chief Executive David Frost called for a 2% cut in spirits taxes in this year’s budget, which is scheduled to be released on Wednesday (March 18).
“Scotch Whisky is a massive export success for the UK so it’s obviously disappointing to see this decline in volumes in our domestic market. In next week’s Budget the Chancellor has the perfect opportunity to support an important UK industry. He should cut spirits duty by 2%. This move would also benefit consumers and public finances. In last year’s Budget, the Chancellor highlighted Scotch Whisky as a ‘huge British success story’. We hope this year too he will show his support for this world-class manufacturing industry.”
Frost noted that the UK has only cut spirits duties three times in the last 100 years, and UK residents pay the largest share of spirits duties within the European Union. According to the association, UK residents pay 25% percent of all spirits duties collected within the EU, compared to 15% by the French, 14% by the Germans, and 5% by Spanish residents.
Last month, a senior Treasury official told Parliament that the coalition government recognizes the economic value of the Scotch Whisky industry and its impact on rural areas, while not committing to a cut in duties.
Links: Scotch Whisky Association
March 12, 2015 – Irish Distillers is adding a new “bottle your own” feature at its visitors centers in Dublin and Midleton, just in time for St. Patrick’s Day. Visitors to the Old Jameson Distillery in Dublin and the Jameson Experience at the Old Midleton Distillery will be able to fill their own bottle of an exclusive Jameson Irish Whiskey straight from the barrel.
Jameson Select Reserve Cask Strength Black Barrel is a new expression produced just for the two visitors centers, and is based on the Select Reserve Black Barrel introduced several years ago. The whiskey is blended from single pot still whiskey and a small batch grain whiskey distilled at Midleton Distillery in County Cork, and is only produced once a year. While the retail version is bottled at 40% ABV, the “bottle your own” version’s strength will depend upon the individual cask being emptied. Visitors will fill out individual labels for their bottles with the ABV, cask number, date, and their name – along with entering the data in the center’s ledger. The price for the unique 70l bottles is €100 ($106 USD).
March 12, 2015 – The mysterious reappearance of Johnnie Walker Green Label at North American retailers in recent weeks has been solved. Sharp-eyed whisky lovers in the US and Canada noticed new stocks of Green Label appearing at retailers starting in mid-February, but no one at Diageo was able (or willing) to explain at the time whether the bottles were new or previously unsold stocks that had been sitting in a warehouse.
Diageo has started responding to inquiries through the official Johnnie Walker US Twitter account, and posted this notice in response to our tweets trying to answer questions from listeners.
A Diageo North America spokesman says Green Label is not returning permanently to the Johnnie Walker range, but is also not a limited-edition release. It will be available through 2015, with a decision to be made on future availability later this year based on sales. While Diageo executives had said in 2012 that Green Label production was to be discontinued, it apparently has still been produced for sale in Taiwan and a small number of other markets. The decision to bring it back in North America was based on an allocation of Green Label becoming available, along with consumer and trade demand as well as the brand’s 10th anniversary.
The 15-year-old blended malt has been the only one of its kind in Diageo’s Scotch Whisky portfolio since its introduction in 2005. Speculation over the reappearance was rampant on social media in recent weeks, with some retailers telling us they had been advised that the new stocks had been “found”, while others questioned whether the new stocks had been previously for sale elsewhere and relabeled for sale in North America. That option was highly unlikely since Green Label bottled for sale outside of North America was packaged in 700ml bottles, while the US market requires 750ml bottles and Canada allows either size.
Editor’s note: This story was updated on March 21 with additional information.
Links: Johnnie Walker
March 4, 2015 – Adm. Peter Cressy has announced his plans to step aside as CEO of the Distilled Spirits Council of the United States at the end of the year, following nearly 16 years at the trade group’s helm. The 73-year-old retired US Navy Rear Admiral plans to return to the University of Massachusetts at Dartmouth, where he previously served as Chancellor and remains a tenured professor in the University’s business school.
In a news release, Cressy was quoted as telling DISCUS directors last week that the time has come for a transition to new leadership, given that the association’s new strategic plan has been completed. The association will begin a nationwide search for a new CEO, and plans to hire an executive search firm to help with the process. Möet Hennessy USA CEO and DISCUS Vice Chairman Jim Clerkin will head the search committee. “We are particularly pleased that Dr. Cressy has promised to stay on as long as necessary to ensure a smooth transition to a new CEO,” Clerkin said in the news release. “In the meantime, we are confident that Dr. Cressy’s strong leadership and our outstanding staff will ensure another strong year for the DISCUS team and the spirits industry.”
Under Cressy’s leadership, the association was successful in modernizing liquor laws and regulations at the federal, state, and local level. He was also instrumental in expanding the industry’s international reach with the creation of an export promotion program, and spearheaded the project to restore the historic distillery at George Washington’s Mount Vernon estate in Virginia.
March 2, 2015 – A hearing originally scheduled for today in the proposed class-action lawsuit against Maker’s Mark has been cancelled. U.S. District Court Judge John Houston issued an order canceling the hearing on a motion by attorneys for Maker’s Mark to dismiss the lawsuit accusing the Bourbon brand of misleading California consumers with claims that it is “hand-made” at the Maker’s Mark Distillery in Loretto, Kentucky. Judge Houston’s order states that the court has enough information from both sides to issue his ruling on the order without oral arguments, with a ruling expected “in due course.”
The lawsuit was filed in December by lawyers representing plaintiffs Safora Nowruzi and Travis Williams, with a request to expand the plaintiff class to include all California residents who purchased Maker’s Mark within the past four years. The suit claims that Maker’s Mark labeling violates California’s false advertising and consumer protection laws by billing the Bourbon as “hand-made,” when it comes from a distillery using extensive amounts of machinery. The lawsuit seeks at least $5 million in damages, along with punitive damages and attorneys’ fees.
In its motion to dismiss the lawsuit filed January 16, attorneys for Maker’s Mark and brand owner Beam Suntory argued that the complaint falls within California’s “safe harbor” doctrine protecting businesses from claims, since all of the brand’s labels with the “hand-made” language have been reviewed and approved by the US Treasury Department’s Tax & Trade Bureau. In addition, the motion argued that a reasonable consumer would not be misled by the labeling.
“The reasonable consumer analysis starts, of course, with common sense. And common sense dictates that “handmade” bourbon does not mean, as Plaintiffs would have it, that every step of the process—from grinding the grain to affixing the label on the bottle—was done by hand and without the use of any machinery. Moreover, as evident from Plaintiffs’ own allegations and information referenced in their Complaint, the Maker’s Mark label could not have misled a reasonable consumer to believe that the entire process for making the bourbon was done by hand, because Maker’s Mark publicly discloses its process for making bourbon. Indeed, as Plaintiffs allege in their Complaint, Maker’s Mark’s public website contains detailed information about the production process. What’s more, the Maker’s Mark label expressly invites consumers to visit its website and contains the website address. Given these facts, a reasonable consumer could not plausibly believe that the bourbon is literally made entirely by hand and without the use of any machinery.”
In their response, attorneys Abbas Kazerouni, Mona Amini, and Joshua Swigart argued that the “safe harbor” defense does not apply in this case, since it is intended to cover laws and regulations, not agency actions such as a TTB label approval process.
“It would contravene public policy and reason in general to immunize an alcohol manufacturer from consumer fraud suits because the labels of its products had been approved by the TTB. Unlike, for example, the FDA’s “rigorous” pre-approval process for drugs, the TTB’s approval of alcohol labels hinges on self-reporting. 2 Thus, the TTB’s approval of Defendant’s label demonstrates nothing more than that Defendant repeatedly affirmed to the TTB that its product is truly handmade. It does not suggest that if the TTB had known the true process by which Maker’s Mark was actually made, it would have concluded that Defendant’s label complied with federal law.”
The two firms have also filed a similar lawsuit against Beam Suntory’s Jim Beam brand based on similar claims. Beam Suntory spokesmen have declined to comment on either case, citing a company policy against commenting on pending litigation.
Editor’s note: We have provided links in this story to the actual court filings in the lawsuit. Note that in civil cases, the arguments made by either side are not considered to be proven as fact until argued in open court.
March 1, 2015 – For Bourbon lovers, it seems like the “Bourbon Boom” has been going on forever. Not true, according to Chris Bauder, general manager of Whiskies and Cognacs for Beam Suntory. During his keynote address at last Tuesday’s Whiskies & Spirits Conference in New York City, Bauder pointed out that US whiskey sales have only risen in three of the last 25 years — the last three. By comparison, vodka sales have risen in 23 of the last 25 years and tequila sales have risen for 23 consecutive years. “When people ask if this is a trend that is going to continue, we think it has a very long runway,” he said, citing recent sales figures showing growth among all sectors of the whisky industry.
Bauder points to several key factors for the “Bourbon Boom.” Whisky’s recent return to relevance as a cultural touchpoint through references on popular television shows such as “Mad Men” and “Boardwalk Empire” helped draw attention back to brown spirits, leading to the often-cited growth in interest among women. Bauer cited a demographic shift showing that more women now drink spirits in general than men, with a relatively even split between the genders in whisky consumption. He also referred to the emphasis on innovation and new product development, with the recent trend in flavored whiskies and the growth of craft distillers opening up the flavor profile of whisky to new consumers. At the other end, the boom in premium and unique expressions are bringing connoisseurs back to the Bourbon sector.
Listen to Mark Gillespie’s interview with Chris Bauder:
Before joining Beam in 2011, Bauder was a senior marketing executive at consumer goods giant S.C. Johnson & Co., and learned quickly that solving the perceived shortage of whisky isn’t as simple as that for other products. “If you want more Windex, you put more chemicals and water together and you get more Windex,” he said in an interview following his speech. “That was a revelation…wait a minute, how can this allocation be what it is,” referring to small supplies of whiskies from Beam Suntory’s distilleries and the need to balance global demand with short supply.
Bauder said Beam Suntory will invest hundreds of millions of dollars over the next several years to expand whisky production at all of its facilities worldwide, but cautioned consumers to expect more whiskies without age statements. “Everybody…Scotland, Japan, and the US are struggling with this, and one of the things that’s been encouraging is brands like (The) Macallan which first did it have actually been quite successful because the liquid’s good and the way they blend has actually given them a good taste, plus the concept around the naming has been really interesting to consumers.”
“I think talking people away from age statements is helpful…it’s an easy way to think older is better, but brands like Maker’s Mark or Woodford Reserve haven’t traded in age statements and they’re doing just fine.”
In 2014, Beam Suntory removed the 8-year-old age statement from its Jim Beam Black Bourbon and introduced the no-age-statement Laphroaig Select, and Bauder said that practice will be extended to Beam Suntory’s Hibiki range this year. “You’re going to see your first one coming in July of this year in the US, and they’re going to be launching in April in Japan.” Bauder also confirmed that Beam Suntory plans to expand its Japanese whisky portfolio across the US. In the past, Suntory and its US importers focused on a handful of major cities, but part of the reason for Suntory’s $16 billion acquisition of Beam in 2014 was to expand the footprint for its Japanese whiskies as well as acquire new brands for global distribution.
Editor’s note: This story has been updated to remove Chris Bauder’s reference to a Yamazaki Sherry Cask bottling being planned for a US release in 2015. According to a company spokesman, Bauder misspoke, and there are no plans to release one this year.
Links: Beam Suntory
February 28, 2015 – Whistlepig Rye will be releasing the first in its “Old World Series” of three wine cask-finished expressions in the coming days leading up to a new permanent expression this summer. The first release will be a 12-year-old Sauternes cask finish, with a 12-year-old Madeira finish and a 12-year-old Port finish to follow.
“By June, we’re going to release the first real line extension, and that line extension will be a married finish that combines the best of the Sauternes, Port, and Madeira,” said Master Distiller Dave Pickerell during an interview at Whisky Live New York Wednesday night. “I can’t tell you the percentages, because the percentages will be at least in part determined by the feedback from consumers and bartenders that taste the products.” While the final version will be widely available, the three individual finishes will only be available in New York, Chicago, San Francisco, and other major US markets.
Listen to Mark Gillespie’s entire interview with Dave Pickerell:
Pricing for the three individual finishes was not immediately available.
Pickerell said construction work continues on the WhistlePig Farm Distillery in Vermont following final environmental approvals from the state. The stills are scheduled to be installed in June, and Pickerell hopes to begin distilling around July 4th. “I intend to celebrate with a marching band and fireworks,” he said.
WhistlePig is also updating its labels to reflect the whisky’s current Canadian origin at the request of the US Treasury Department’s Tax & Trade Bureau. Ironically, the TTB had earlier insisted that the Canadian origin be removed from WhistlePig labels once Pickerell’s team started doing secondary maturation at the farm in Vermont. “The government came back and said wait a minute, it’s not a product of Canada any more because the Canadian juice is now an ingredient, so take ‘Product of Canada’ off the label,” Pickerell said. “With all the fluff that’s been going on recently, the government came back and said, yeah, can you put Canada back on the label again…so it makes us look stupid.”
Pickerell is also working with Hillrock Estate Distillery in New York on a peated single malt that will be released later this year, and is also working with the J. Reiger & Co. Distillery in Kansas City. In addition, he will be making whiskey at George Washington’s Distillery at Mount Vernon in Virginia later this month.
February 26, 2015 – Duncan Elphick’s retirement plans are on hold for at least a month. The owner of the Highlander Inn and its renowned whisky bar had planned to close on a sale to longtime colleague Tatsuya Minagawa this weekend. However, paperwork snags have delayed the closing until at least the end of March.
“I’m wanting to get out and enjoy some time for myself, and Tatsuya’s wanting to buy it,” Elphick told WhiskyCast’s Mark Gillespie in a telephone interview today. “We’re going through the process at the moment…it’s been a bit delayed because of lawyers, but we’re now looking at the 30th of March as being the handover date.” Elphick said health issues a couple of years ago prompted him to start looking for a buyer to continue the tradition he started when he left the Craigellachie Inn across the street in 2005 to buy the hotel. “I want some time for me before the Grim Reaper decides that he wants to call me.”
Minagawa was Elphick’s bar manager and right-hand man from 2005 until three years ago, when he left to work as a European brand ambassador for Suntory. He continued to live in Craigellachie, though, and expressed an interest in taking over the inn as soon as he heard Elphick was thinking of selling. “He’s the ideal purchaser for the property, because he knows the business, he knows these whiskies, he knows what we’ve been doing before, and he wants to take it and build it further,” Elphick said.
Elphick hasn’t decided on what he will do after his retirement, noting that “I’m not one of these people that likes to count eggs until they’re hatched.”
Links: Highlander Inn