Tuesday, March 18, 2014
Tempest in a Tennessee Teapot
There have been a lot of pixels spilled in the whiskey blogosphere lately about a new bill in Tennessee to amend the definition of Tennessee Whiskey. Most commentators have portrayed this as a cynical move by Diageo, owner of George Dickel, to undermine their big competitor Brown Forman, owner of Jack Daniel's. There are a lot of accusations flying on both sides, so I thought some background might be helpful.
Before May of last year, there was no legal definition of Tennessee Whiskey. None. While Dickel and Daniel's both made a spirit that complied with the federal definition of bourbon, there was nothing stopping anyone from marketing any other whiskey as Tennessee Whiskey.
What was it that necessitated a new law last year? Some speculated that it was the craft distillery movement and Popcorn Sutton in particular. Popcorn Sutton was a legendary Tennessee moonshiner, and the his namesake brand was making an unaged whiskey and marketing it as Popcorn Sutton's Tennessee White Whiskey. This may not have sat well with Brown Forman, who moved the bill to create a definition of Tennessee Whiskey based on how Jack Daniel's (and George Dickel) made it.
That law's definition mirrored the federal definition of bourbon except that the whiskey (1) had to be filtered through maple charcoal prior to aging; and (2) had to be manufactured and aged in Tennessee. When the law came up last year, Prichard's, a Tennessee craft distiller that does not use the Lincoln County process of sugar maple charcoal filtering, objected. As a result, a special clause was added to the bill exempting any distillery that was licensed in the year 2000, a very narrow bracket that included only Prichard's.
Now, Diageo has proposed an amendment to the law which makes several key changes, eliminating the requirements that Tennessee Whiskey must be: (1) aged in new barrels; (2) aged in Tennessee; and (3) filtered through maple charcoal, replacing that provision with a requirement that it be filtered through charcoal (i.e. not necessarilly maple charcoal). It also includes an exception for any whiskey that includes words between "Tennessee" and "Whiskey." This would make it clear that "Tennessee White Whiskey" is a permissible usage, but that merely codifies the interpretation given by the Tennessee ABC, which advised last year that it would allow the terms Tennessee White Whiskey, Tennessee Corn Whiskey and Tennessee Unaged Whiskey to be used without complying with the law's requirements for "Tennessee Whiskey."
It appears that the amendment hadn't even been formally introduced when Brown Forman fired the first shot, accusing Diageo of trying to weaken the standards of Tennessee Whiskey. Diageo responded saying that they were trying to maintain flexibility. Both Chuck Cowdery and Mark Gillespie of WhiskyCast have covered the back and forth extensively.
For my part, I think this is a much smaller deal than it's being made out to be. People have been quick to beat up on Diageo, and that's always fun, but I'm not sure I buy it. Chuck Cowdery opines that permitting aging in used barrels is an attempt by Diageo to weaken Jack Daniel's not because of Dickel but because Daniel's is challenging Diageo's flagship brand, Johnnie Walker.
The problem with this theory is that allowing some producers to reuse barrels doesn't hurt Daniel's at all. The amendment doesn't require Daniel's to age in reused barrels so nothing they do would have to change. And I don't see how other Tennessee Whiskeys aging in used barrels hurts Daniel's. Let's face it. For most of the world, Jack Daniel's is Tennessee Whiskey (and probably bourbon too). They don't know or care how it's made. No change in what the other, comparatively tiny brands do is going to hurt Daniel's or its giant slice of market share.
Second, as noted above, this law has been in place for less than a year. A year ago, nothing was stopping anyone from aging Tennessee Whiskey in used barrels, and no one seemed to think the sky was falling the way Brown Forman seems to think it is now. If this truly is an attack on Jack Daniel's, it's a weak and ham handed one.
Curiously, everyone is talking about used barrels, and almost no one is talking about the fact that this bill eliminates the requirement that Tennessee Whiskey use the Lincoln County Process, the thing that has been the single defining feature of Tennessee Whiskey. The new law substitutes "charcoal" filtering for "maple charcoal filtering." That's a small change with a big impact. Maple charcoal filtering is the Lincoln County Process traditionally used for Tennessee Whiskey. Charcoal filtering would include that but presumably would also include filtering through activated charcoal (think Brita), which is the chill filtering process used by many bourbons. From the perspective of the integrity of Tennessee Whiskey, I would be more worried about the elimination of the Lincoln County Process requirement than the used barrels.
While Diageo may be facing a barrel shortage that would make it beneficial to age in used casks, the real benefit for them could be aging whiskey out of state. On WhiskyCast, Brown Forman's spokesman noted that Diageo has been shifting some aging to the Stitzel-Weller site in Kentucky. Perhaps Diageo would like to shift some of its Dickel barrels to Kentucky and just threw in the used barrel and other provisions to try and secure allies among the craft distillers.
The other reason that this strikes me as silly on everyone's part is that none of this impacts what whiskey can be made, just what it can be called. Nothing is stopping Dickel from aging whiskey in used barrels or aging the whiskey out of state; they just couldn't call it "Tennessee Whiskey." Would anyone really notice if Dickel changed their label to say "Whisky Distilled in Tennessee" or something similar?
To summarize, Diageo's amendment is unnecessary and Brown Forman's reaction is overblown. Add to that the fact that it is very unlikely that a whiskey bill can pass the Tennessee legislature without Brown Forman's support, and I'd say this is the archetypal tempest in a teapot.