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Brown-Forman: Diageo’s Attack Makes Our Case For Tennessee Whiskey Law

March 19, 2014 – With debate in the Tennessee General Assembly stalled until next Tuesday on proposed changes to the state’s law setting specific standards for “Tennessee Whiskey”, the debate outside of the Capitol building in Nashville is getting louder. Brown-Forman, the owner of Jack Daniel’s Tennessee Whiskey, plans to urge its employees, suppliers, and supporters to contact their legislators in Nashville to oppose changes in the law passed last year. That law, referred to by its critics as “the Jack Daniel’s law”, requires the use of new charred oak barrels and the “Lincoln County” charcoal-filtering process for any whiskey to be legally called “Tennessee Whiskey”. Those critics include Diageo, the owner of the George Dickel Distillery in Tullahoma, as well as a number of the state’s small-scale craft distillers who want the freedom to use rejuvenated casks to mature their whiskies. Brown-Forman executives insist that allowing the use of used barrels would lead to inferior whiskies that could hurt the global image of “Tennessee Whiskey”.

Monday, Diageo responded to Brown-Forman’s news release blasting the Diageo-led movement as an attempt to undermine the entire “Tennessee Whiskey” category. The Diageo news release defended the “honor and quality of Early Times Whiskey”, which is produced by Brown-Forman at its distillery in the Louisville suburb of Shively, Kentucky using used barrels. Early Times Kentucky Whisky (without the “e”) is only available in the US, while Early Times Bourbon is sold in Japan and other export markets. In 2010, Early Times 354 Bourbon was introduced in the US with plans to replace the export-only Bourbon over time. Both Early Times Bourbon and Early Times 354 are made using new charred oak barrels. In the release, Diageo defended the use of used and rejuvenated casks while criticizing Brown-Forman for trying to use its dominance in Tennessee to establish a standard for others to meet.

Therefore, by their logic, Brown-Forman has deemed its own product inferior.”

In a telephone interview with WhiskyCast’s Mark Gillespie, Brown-Forman spokesman Phil Lynch said what he described as “Diageo’s snarky press release” makes his company’s case for keeping the 2013 standards in place:

“We don’t consider it (Early Times) premium, and it’s not premium-priced, and one of the key reasons why is that we use used barrels instead of new barrels. Jack Daniel’s, on the other hand, is a very premium product, and we want to make sure that it maintains that premium image and premium reputation.”

Listen to the entire interview:

Lynch cited one legislator’s comments during Tuesday’s House committee debate as the key reason why the current law should not be changed.

“He said ‘I don’t care if they brew stuff in their bathtub, they still ought to be able to call it Tennessee Whiskey.’ That, therein, lies the problem, because the standards of identity need to be established, which they are, and enforced so that when people buy Tennessee Whiskey, they know they’re getting a high-quality premium product, not something that someone’s made in their bathtub.”

The Tennessee Alcoholic Beverage Commission has been interpreting the 2013 law to allow the use of adjectives such as “unaged,” “white,” and grain descriptors such as “corn” between the words “Tennessee” and “Whiskey” on labels. However, it should be noted that the law gave distillers 3 years to sell off existing stocks of whiskey that did not meet the standards, and no distiller has been sanctioned yet for failing to comply with the law.

Traditionally, so-called “standards of identity” are established by the US Treasury Department’s Tax & Trade Bureau, which regulates alcoholic beverage production and sales nationally. There is no TTB federal standard of identity for “Tennessee Whiskey”, other than the regulations requiring “straight whiskey” to be distilled and matured within the same state in order to be called a “(state name) Straight Whiskey”. However, the North American Free Trade Agreement (NAFTA) between the US, Canada, and Mexico defines “Tennessee Whiskey” as “a straight Bourbon Whiskey authorized to be produced only in the State of Tennessee.” This would appear to preclude Tennessee whiskey producers from maturing their whiskies outside of the state of Tennessee under federal law, even though one of the proposals being considered by state legislators would remove that requirement from the current state law.

This story will be updated as more details become available.

Links: Brown-Forman | Jack Daniel’s | Diageo | George Dickel | Tennessee General Assembly