Controversy Over Tennessee Whiskey

“… and to petition the Government for a redress of grievances.”

In case you missed it, there is a big legislative slap fight going on in Tennessee right now between corporate distilling giants Brown-Forman and Diageo. Diageo makes George Dickel brand whiskey, and Brown-Forman runs a little micro-distillery called Jack Daniels. (Disclaimer: I happily own a chunk of Diageo stock.) The dust-up is over a new bill currently pending in Tennessee that would remove all restrictions on how distillers make whiskey that will be labeled as “Tennessee Whiskey”.

Diageo is pushing the new law, and while their motives are murky (Dickel is already made in compliance with the current standards), please don’t think that this is some corporate ninja assault by Diageo on long-time tradition. It is a corporate ninja assault by Diageo on a very new law, which was itself a corporate ninja attack by Brown-Forman to begin with.

Estimable whiskeyblogger Chuck Cowdery has posted both company’s press releases on this pissing match, and a bigger pack of disingenuous corporate posturing you will not see this side of the insurance industry or government labor unions. Cowdery explicitly refrains from commenting on the debate (though his post titles reveal his leanings rather amusingly), so I will jam my oar in here.
Chuck’s post of the Brown-Foreman press release: Diageo’s Latest Mischief: Screwing Up Tennessee Whiskey
Chuck’s post of Diageo’s reply: Diageo Says It Supports “Return to Flexibility, Innovation and Entrepreneurship in American Whiskey”

First off, in a remarkably amateur mistake, Brown-Forman lists the wrong house and senate bill numbers! The listed legislation is about liquor licenses and repeat offenders. Blame the PR firm here. I can’t find the germane bill myself, but it appears to be a simple removal of any restriction on what can call itself Tennessee Whiskey. (Correction: See update below)

The Brown-Forman release glosses the current restrictions, but here they are in detail:

  1. Manufactured in Tennessee
  2. Made of a grain mixture that is at least fifty-one percent (51%) corn
  3. Distilled to no more than 160 proof or eighty percent (80%) alcohol by volume
  4. Aged in new, charred oak barrels in Tennessee
  5. Filtered through maple charcoal prior to aging
  6. Placed in the barrel at no more than 125 proof or sixty-two and one-half percent (62.5 %) alcohol by volume
  7. Bottled at not less than 80 proof or forty percent (40%) alcohol by volume

On the merits, this mostly makes sense. Without the charcoal filtration, you essentially have bourbon, for instance.
But as for being aged (and manufactured) in Tennessee, I don’t see it. A rick house being located in Tennessee, as opposed to North Carolina for example, imparts no unique flavor or character to the product. It is at best pointless state pride used to help pass the designation, and at worst it is protectionism.

Designations, like Trademarks, are often misunderstood. They are not created in order to provide special rights to makers of products, though they do provide those rights. They are in fact a form of consumer protection, designed to eliminate confusion in the marketplace by ensuring that certain words and phrases, and images, always something specific. In this case, adding restrictions which do not affect the end product weakens the usefulness of the designation. It also in some ways ghettoizes the designation. Bourbon does not have to be made in Kentucky, which makes that designation more robust. But whatever problem I or anyone else may have with items One and especially Four, remember the debate here is whether to have any required characteristics or not.

Important Update: The debate may have already advanced beyond where I thought it was this AM. I was wrong that Brown-Forman’s PR department got the wrong bill number. It is in fact SB2441. It was the right one in that it simply showed the proposed Chapter and Section of existing law, with all the language reserving the label for certain manufacturing processes stripped out. But now Chuck Cowdery has posted a new version of the bill that puts back all the restrictions with the critical omission of the word “new” in the barrel clause. This newer version does not, as of right now, appear on either the State of Tennessee’s legislative website or LegiScan. This probably just means that they haven’t updated the sites yet, or the amendment has not been approved. In any case, the overwhelming majority of the important stuff and the snark in this post stand. I do apologize to the PR firm in question for mocking their numeric acumen.

Brown-Forman goes on to don its tinfoil hat and describe Diageo as a bunch of scurrilous furriners who are out to destroy Tennessee Whiskey’s good name so they can sell more bourbon and scotch instead. Personally, I doubt this. Remember, Dickel is Diageo’s brand, and one they have invested heavily in making into a legit competitor to Jack Daniels, to some extent successfully. They may have decided to give up this effort and Seagrams-ize Dickel as a product. I hope not. I suspect that Diageo has other motives.

Whatever Diageo’s motives are, they do not include a sincere love for the tradition of craft whiskey distilling in Tennessee. Giant British conglomerates do not spend good money to buy, er, lobby state legislators on behalf of small-batch distillers it does not own. (Lobbying is really more of a rental operation, isn’t it?)

Diageo’s response leads with an example of political chutzpah worthy of David Axelrod with a blank check from George Soros or Karl Rove on a Koch binge. In reply to Brown-Forman’s contention that new oak barrels (expensive items, these) make Tennessee Whiskey a premium product, they say

Interestingly, according to the website of Brown-Forman owned Early Times whiskey, the brand is aged and barreled in “used oak barrels”. Therefore, by their logic, Brown-Forman has deemed its own product inferior.

They go on to add

Despite being a competitor to Early Times, Diageo has rushed to Early Times’ defense.
(emphasis mine)

Lee Atwater just called from the Great Beyond to say, “Oh well done, y’all!”

A further disclaimer: My father drank Early Times. A lot. Too much, in fact. Any attempt to call Early Times an “inferior whiskey” around these parts is fightin’ words.

That said, Early Times is inferior whiskey. Dad knew it, too. Everybody knows Early Times is an inferior whiskey. But Brown-Forman (who knows this better than anyone) does not want, under any circumstances, to call Early Times a bourbon. This is because it would be illegal, but more importantly because doing so would dilute the premium reputation of every real bourbon Brown-Forman (and everyone else) makes. Incidentally, BF does make an Early Times straight bourbon whiskey. I’ve tasted it. It does enough on its own to damage the reputation of bourbon all by itself, thanks.

Diageo’s second, less ballsy but just as immaterial, major point in their release is, to paraphrase, “hey, Scotch is aged in used ‘rejuvenated’ barrels, and no one would argue scotch is inferior!” Again, in the same vein as anything James Carville says, this sounds extremely fair to the uninformed.

Scotch is not Tennessee Whiskey. Besides the fact that it stays in the barrel for at least twice as long, if you laid up your scotch in new oak barrels, it would taste nothing like scotch when you took it out. Chemistry tells political and economic desires alike to piss off with the same breezy ease that Math told the Indiana legislature it could not make Pi equal 3.2 just because they wanted to. Macallan’s use of used barrels has as much to do with Tennessee Whiskey as nixtamalization has to do with Creme of Wheat.

Look, both companies, tumescent prose of their PR firms aside, have some good points, and both certainly know how to make good, even great booze. Likewise, both have screwed with consumers and with their own products on multiple occasions. Whether Diageo is trying to destroy the Tennessee liquor industry to save the scotch and bourbon varieties from the Tennessee Whiskey juggernaut (spoiler: This is not the reason), or wants the chance to ruin its own George Dickel Tennessee Whiskey (again, I doubt this), or if they just have plans to manufacture an Early Times analogue in Tennessee (this is my guess), it is immaterial to whether this existing law, and ones like it, are good government or not.

I happen to think such laws are good government, absent immaterial restrictions like the Tennessee aging provision that isn’t even the controversial element here (I think).

But Doug, many of your friends and readers are now scoffing at you, saying “You are Mr. Free Market! How can you justify restricting innovation and speech like this!”

I expect they are. But this law does not stifle innovation. It does not, despite the words put in the mouth of Dickel’s master distiller, restrict in any way the manner in which you can make whiskey in Tennessee. It merely restricts how you must make whiskey that you wish to call Tennessee Whiskey. And yes, that is an imposition upon a maker’s language choices, but words are powerful things, in sales and in politics. Both sellers, and especially buyers, are best served in a marketplace that ensures that words mean what they say.

About the author

Doug

I am 48 years old, married with two young daughters. My interests are tennis, reading, computers, politics, and of course cocktails. I run a murder mystery party business that caters to both corporate and private events, Killing Time, murder consultants.

6 Comments

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  • Doug,

    Chuck posted the existing and proposed bills at http://cowdery.home.ix.netcom.com/~mbky/TNWhsky.pdf.

    Big change is from “Aged in new, charred oak barrels in Tennessee” to “Aged in charred oak barrels”. The rest of Jack’s traditional recipe would stand as law.

    That said, local climate of aging *is* a huge factor, as least in terms of relative age. Caribbean rum producers, for instance, claim their aging takes place twice as fast as Scotland. TN vs KY presumably isn’t so great a difference; biggest difference might be KY’s per barrel tax!

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    • That is why I specified a state like North Carolina. (Kentucky was too easy). The point is that while Tennessee’s climate isn’t Saudi Arabia, it is functionally identical to many other areas in the US and around the world.

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  • They would be better off creating something along the lines of “Tennessee-Style Whisky”. Otherwise, what do you end up calling a whisky made in Tennessee that doesn’t meet the new specs?

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    • That’s also my thought. The law has some very confusing, full-employment-for-lawyers language about being allowed to use Sour Mash in there if you want. But regardless, that leaves “Tennessee Whiskey” sounding like the equivalent of “Kentucky Whiskey” which is what you find on that bottle of Early Times…

      And then, yes, what do you call your Early Times variant made in Tennessee?

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    • Well, Felix, I quoted from various press releases and (in my update) a legislative draft that Chuck posted. I deliberately did not go searching for his actual words on the subject until after I’d written my own. So aside from ad hominem attacks on Chuck for reasons unknown, and ad hominem attacks against me for reasons invalid, how about you come back with what your actual position is on the subject, and why I’m wrong.

      Actually, I am seriously interested in other opinions on this, so do reply.

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