Decision Time for Diageo On Stitzel-Weller

September 29, 2013 – Diageo has reportedly been working on a plan for reopening the long-closed Stitzel-Weller Distillery in Louisville, Kentucky. Now, WhiskyCast has learned that those plans may need to be accelerated in order to provide a source of whiskey for the company’s Bulleit Bourbon brand.

Bulleit Bourbon has been distilled at Four Roses Distillery in Lawrenceburg, Kentucky, on a long-term supply contract first negotiated when Tom Bulleit founded the brand in 1987 using a recipe handed down by his great-great-grandfather. Diageo inherited that supply contract when it acquired the brand from Bulleit, and has continued to source its whiskey for Bulleit from Four Roses ever since. However, reliable sources indicate that Four Roses has exercised a six-month notice clause to end the supply contract at the end of March, 2014.

Four Roses master distiller Jim Rutledge declined to comment on the report Wednesday at Whisky Magazine’s Icons of Whisky luncheon in Louisville, but acknowledged that his team is working on plans for an expansion of the distillery’s capacity to meet the long-term needs for Four Roses. When the original contract was negotiated, Four Roses was still under Seagram ownership and only sold in export markets. The brand’s current owners reintroduced Four Roses into the U.S. market starting in 2006, and sales have grown at double-digit rates over the last three years.

Two years ago, Diageo invested in the Bulleit Experience education center at the Stitzel-Weller complex, turning the distillery’s main office building into a showcase for the brand. While currently used only for trade education, Tom Bulleit has said that the facility was designed so that it could eventually be open to the public at some point. Diageo matures the whiskey it sources from Four Roses at the Stitzel-Weller warehouses, but the distillery itself has been closed because of asbestos contamination and other environmental issues. Sources have indicated that there are plans in the works to resolve those issues and reopen the distillery, but Diageo spokesmen have declined to comment on those reports.

The company has no other distilleries in Kentucky, and with all of the other major distilleries in the state running at capacity, it’s not clear where Diageo would be able to source whiskey within the state and still be able to call the final product a “Kentucky Straight Bourbon.” U.S. law requires that whiskey be distilled and matured entirely within a single state to be allowed to carry the name of that state on its label. In fact, Bulleit Rye  does not carry the name of a state for that reason — it is produced at the MGP-I (formerly LDI) distillery in Lawrenceburg, Indiana.

Our attempts to reach Tom Bulleit, who remains the key spokesman for Bulleit Bourbon, have been unsuccessful. This story will be updated as more information becomes available.

Links: Bulleit | Diageo | Four Roses