Tennessee Whiskey War Begins; Brown-Forman: Diageo wants to age George Dickel In Ky

The Tennessee General Assembly is considering a new law that allows used barrels in Tennessee Whiskey production.

Current Tennessee law (passed last year) states Tennessee Whiskey is made from fermented mash of at least 51 percent corn, aged in new oak barrels, charcoal mellowed and stored in the state.

Brown-Forman issued a press release this morning blaming Diageo for the effort, saying the law will produce an inferior product and that Diageo is trying to protect its foreign interest by weakening Tennessee Whiskey.

In an email interview, Brown-Forman spokesperson Phil Lynch told me Diageo wants to undermine the Tennessee Whiskey designation because Jack Daniel’s is making serious progress against Johnny Walker in global markets.  “Johnny Walker was flat in 2013 compared to 2013 while Jack Daniel’s grew 5% globally,” Lynch says. “Also, we believe Diageo wants to age its George Dickel TN whiskey in Kentucky, so they are also trying to change the provision of the law that states that for a whiskey to be defined as Tennessee Whiskey, it must be aged in NEW charred oak barrels in Tennessee.”

Diageo owns the famous Stitzel-Weller Distillery in Shively, Ky., and has used the facility to age whiskey. (DISCLOSURE: I recently spoke about SW history at two Diageo Orphan Barrel release parties.) In February, the company announced a $2 million restoration project for its visitor center.

I’ve yet to receive comment from Diageo, but Diageo’s Guy Smith told the Tennessean that the company supports efforts to protect the interest of all Tennessee Whiskey distillers.

As Diageo and Brown-Forman wage war, likely driving to more speculation about who’s buying whom after the $16-billion Jim Beam-Suntory deal, let me theorize as to why this is happening in the first place.

There’s a barrel shortage. Heavy 2013 rains kept timber crews from harvesting  and rough winters have yielded inferior oak.

The barrel shortage was so significant that Four Roses master distiller Jim Rutledge said they had to scale back operations after considering a temporary layoff. This is happening at the smaller distilleries, too.

Micro distiller Phil Brandon, who operates Rock Town Distillery in Arkansas, was told he could no longer receive specialty bourbon barrels from his cooper. “A cooperage shortage is underway and only going to get worse before it gets better,” Brandon told me.

So, that’s the production side of why the Tennessee law is likely happening now. The other aspect is the law.

The 2013 Tennessee law is weak compared to the 1964 federal statute that defined Bourbon.

Nonetheless, State Representative Ryan Haynes (R-Knoxville) told the Tennessean that the current law is like Anheuser-Busch defining the American beer recipe. “I don’t think it’s right that we put something in our law that is basically protectionism,” Haynes said.

But, with all due respect to Haynes, state laws don’t carry as much weight as a federal ones, and this debate should be taking place at the U.S. federal level. After all, the Office of U.S. Trade Representative and the North American Free Trade Agreement defined Tennessee whiskey as “straight bourbon whiskey authorized to be produced only in the State of Tennessee,” giving ammo to a time-honored bar fight–“Jack Daniel’s isn’t a bourbon!” “Yes, it is!”

That’s one thing this Tennessee law will do: Put an end to the Tennessee whiskey-bourbon debate. Because, bourbon would never be caught in a used barrel.

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6 Replies to “Tennessee Whiskey War Begins; Brown-Forman: Diageo wants to age George Dickel In Ky”

  1. I think you are spot on regarding the reuse of barrels helping to further define the difference between Tennessee whiskey and Kentucky Bourbon. Such a change in Tennessee law can only elevate Kentucky bourbon. By the way , has there been any research regarding enhancement or degradation of sour mash whiskeys through the reuse of barrels?

  2. Prichard is allowed to call their whiskey tennessee. Without the maple charcoal filtering. Are theh also except from the new barrel rule ?

    Back to subject. If the rules are laid out in Diageo’s favor, what limits Brown-Forman from marketing JD as “The real stuff”?. BF may not be disadvantaged by a new set of rules.

    Steffen

  3. Fred, you raised some pertinent points on regulations, definitions and jurisdictions.

    As I understand it the only legal protection afforded to Jack Daniel’s (sour mash) as a Tennessee whiskey came in last year’s State legislation.

    Bourbon as whiskey style was first regulated June 30th 1906 under the Pure Food & Drug Act and through the Taft Decision on December 27th 1909. After Prohibition there was an immediate explosion in light whiskey resulting in a twelvefold increase from 1934 to 1935 with 2.52 million gallons using second use barrels to meet American demand. Not to be confused with the latter 1970 light/white whiskey regulation to allow whiskey compete against vodka and white rum. Whereas regular whiskey (single use barrel) only increased by 70%. Distillers, coopers and the timber industries shared the common goal to protect quality straight whiskeys and their jobs by lobbying their Congressmen to introduce the bill. This resulted in the FAA mandating whiskey produced after July 1st 1936 Act to be straight bourbon or rye had to be matured at least 2 years in charred, new oak containers (there being no standardised cask size). So bourbon must be at least 2 years in charred new oak casks. Sour mash fermentation method has never been part of the regulations either.

    The other points, never enshrined in Federal legislation was when the Treasury department overseeing liquor nomenclature in March 28th 1941 permitted Jack Daniel’s to be labelled ‘Tennessee whiskey’ due to their distinctive claim using the charcoal filtering process made and measurable in ‘analytical and organoleptic tests’; and when Congress May 1st 1964 recognised ‘bourbon as a distinctive native spirit’. Recent Federal bilateral trade agreements have given Tennessee whiskey geographic index protection in these contracts.

    Whilst I can see both sides of the story I do sympathise with Jack Daniel’s on the historical convention, quality whiskey and the fact they have singlehandedly built the reputation of the Tennessee whiskey category in America and worldwide. Throughout the second half of the 20th century when Jack Daniel’s rose to be America’s greatest whiskey brand the Lynchburg distillery produced well over 90% of Tennessee whiskey. Still does. George Dickel’s Cascade distillery produced the balance. Prichard’ the first craft whiskey distillery in the State did not start until 1997, and I believe last year’s law gives their Tennessee whiskey a charcoal filtering exemption. If that’s the case it’s already looking confusing. Both Jack Daniel’s and George Dickel have always subscribed to the convention and standard of using the bourbon formula, plus charcoal filtering to produce bona fide Tennessee whiskey.

    If this is a legal issue between Tennessee whiskey (a distinctive method and style of whiskey) and whiskey in made in Tennessee (corn, malt, rye & no charcoal) then legal clarity is needed as new craft whiskey distilleries are starting to populate the State with their own claims of being Tennessean and what is Tennessee whiskey. The industry and regulators should call back to the wisdom of President William Taft when he was asked ‘What is whiskey?’

  4. Hi there,

    from far outside it would seem that maturing bourbon or Tennessee whisk(e)y in used barrels is not that problematical – it just costs the “straight” denomination, doesn’t it?

    So if Diageo wants to age George Dickel in used barrels there is no problem at all. Just stop calling it straight – if it ever was called that? – and introduce a new expression. Question is if it still is Tennessee whisky …

    Maturing whisky in Kentucky e.g. spending more time abroad than at home would hardly qualify such a whisk(e)y as Tennesseeian any more, would it?

    Diageo once again is after getting rid of all rules there are to maximise profits and the usage of facilities.
    The Assembly should step onto the break very hard in that case.

    Greetings
    kallaskander

    1. Hi kallaskander

      Neither JD nor Dickel uses the term “straight” as far as I know.

      If a bourbon decides to use used barrels, it will not only mean they can’t call “straight”, It’s not even bourbon, but just “whiskey”. An example of this has allready happened. Check out “Early Times”, which produces a “Kentucky Whisky”

      (Early Times also makes a bourbon named 354

      Which is ironically owned by Brown-Forman

      Kind regards
      Steffen

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