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Thursday, June 12, 2014

Fight rages over whiskey

NASHVILLE, Tenn. – To many, Tennessee means whiskey. But inside the state, the question is: What does Tennessee whiskey mean?

A battle between two worldwide liquor companies – owners of rival brands Jack Daniel’s and the smaller George Dickel – is being waged over who has the right to label their drink as following authentic Tennessee style. ...

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NASHVILLE, Tenn. – To many, Tennessee means whiskey. But inside the state, the question is: What does Tennessee whiskey mean?

A battle between two worldwide liquor companies – owners of rival brands Jack Daniel’s and the smaller George Dickel – is being waged over who has the right to label their drink as following authentic Tennessee style.

London-based liquor conglomerate Diageo PLC opened a heated legislative fight earlier this year seeking to overturn the state’s newly established legal definition for Tennessee whiskey that has been championed by Jack Daniel’s, which is owned by Louisville, Ky.-based Brown-Forman Corp. Among the new rules are requirements that whiskey must be aged in new, charred oak barrels in Tennessee and filtered through maple charcoal before aging.

George Dickel’s owners say they conform with the traditional methods laid out in the state law, but they have cited several reasons for challenging the statute. They include that a potential shortage of new American oak barrels could threaten production and that future products made by George Dickel and the growing number of craft distillers in the state shouldn’t be bound by law to follow the old ways.

Some advocates feared a successful challenge by George Dickel of the storage statute could give way to a legal challenge of the overall Tennessee whiskey law.

On Tuesday in a separate but related case, the Diageo subsidiary George Dickel came out on top when state attorneys in Nashville abruptly dropped a complaint that George Dickel had violated a state statute prohibiting the aging of Tennessee-made whiskey outside its boundaries. George Dickel had challenged the statute in federal court, claiming it violated laws on free interstate commerce.

The calm is likely to be short-lived, however. State lawmakers this summer are expected to return to the struggle of crafting the legal definition of Tennessee whiskey, whose history and lore is entwined in the state’s identity as much as lobsters in Maine and crab cakes in Maryland.

The two distilleries located just 15 miles apart in southern Tennessee are hardly equals in the marketplace, with Jack Daniel’s outselling George Dickel by a ratio of 88 cases to one.

Jack Daniel’s argues that the state laws governing which products can be labeled Tennessee whiskey will protect the category against low-quality knockoffs. They say Diageo’s motivation is to undercut Jack Daniel’s global growth while its own flagship brand, Johnnie Walker scotch, stagnates.

George Dickel’s owners say they conform with the traditional methods laid out in the state law, but argue that new distillers in the state shouldn’t be bound by state law to follow the old ways. Some observers believe a successful challenge of the storage statute could give way to a legal challenge of the overall Tennessee whiskey law.

Adam Levy, a blogger on liquor trends and organizer of spirits competitions, said the production and storage requirements aren’t arbitrary.

“If you want to be considered a Tennessee whiskey, then you have to make it in Tennessee and store it in Tennessee,” he said. “It is fundamental to what the result is.”

The fight over labels on whiskey bottles comes amid a global drive to seek labeling protections by a smorgasbord of regional foods such as cheeses, hams and wines.

While the U.S. has resisted claims to items like parmesan and feta cheeses by their Italian and Greek countries of origin, wine makers have succeeded in introducing standards for products labeled for regions such as California’s Napa Valley.

“In America, everything is up in the air and new traditions are invented all the time,” said Ken Albala, a history professor and director of food studies at the University of the Pacific in Stockton, Calif. “And so I think we’re edging toward some sort of appellation system here, and whiskey would make perfect sense.”

Albala said the boom in American whiskeys has led to quality concerns.

“Distillers in every state are jumping on the whiskey bandwagon now, and the companies are worrying that they need to be able to distinguish their product and keep competitors out,” he said.

Unlike for bourbon, federal law is silent on what constitutes Tennessee whiskey. But the North American Free Trade Agreement of 1994 includes provisions under which Canada and Mexico agreed to recognize Tennessee whiskey as “a straight Bourbon Whiskey authorized to be produced only in the State of Tennessee.”

In return, the U.S. recognized tequila and mescal as unique to Mexico, and Canadian whiskey as a distinctive product that can be sold elsewhere in North America only if it is made in Canada.