Thursday, May 30, 2013

A Modest Proposal for Solving the NDP 'problem'

The quotes around 'problem' in the headline above are there to signify that there is nothing wrong with NDP whiskey per se. We've had a lively discussion beneath Sunday's post about non-distiller producer (NDP) whiskeys. Here's a recap, and a modest proposal.

As some of the comments note, NDPs have always been part of the business. In fact, they were the business before Prohibition. Prior to 1920, it was NDPs (then called rectifiers) who owned and marketed most whiskey brands, not the distilleries. Although this began to shift after Prohibition, NDP brands were still common in the modern era. Wild Turkey, which began in 1940, was originally an NDP brand. They only bought their distillery in 1971.

Today, most American-made whiskey is sold by the same company that distills, ages, and bottles it. All of the major brands you know and love -- Wild Turkey, Jack Daniel's, Jim Beam, Knob Creek, Woodford Reserve, Evan Williams, Four Roses, Maker's Mark -- are distillery-produced. Although you won't find the words 'Heaven Hill Distilleries' on a bottle of Evan Williams bourbon, it's well known that Heaven Hill is the producer. Distilleries using assumed business names aren't the problem.

The 'problem' comes when companies fudge about the source of their whiskey, or about how much of a hand they really had in making the product. Most won't tell a provable lie, but they will go to great lengths to create a false impression, with a goal of deceiving the consumer and appearing to be something they are not. Rather than quibble about who should or should not be on that list, because every faker fakes differently, let's just agree that many producers are coy about this subject, hence the high intensity of feeling in many of the comments about Sunday's post.

This problem is particularly acute among small producers, because it's a crime when people who work so hard to establish a distillery and make a good product have to compete against Potemkins. Some have proposed that the U.S. Treasury Department's Tax and Trade Bureau (TTB) should require distiller disclosure on product labels, but the TTB has a hard enough time doing the job it already has. More stringent source labeling would be opposed by almost everyone in the industry, for different reasons, and who really wants the Federal government all up in the liquor business any more than it already is?

Hence this modest proposal. The industry has several voluntary trade associations: the Distilled Spirits Council of the U.S. (DISCUS), the Kentucky Distillers' Association (KDA), the American Distilling Institute (ADI), and the newly formed American Craft Distillers Association (ACDA), to name a few. Several universities, such as Michigan State, have distilling programs. One of those entities, or a new one established for this purpose, could create a certification program. It would establish criteria, and a monitoring and enforcement system, and award certifications to producers who apply and meet the requirements. It would all be voluntary and funded by the participants. Then it is up to the participants to promote and support it, to imbue it with sufficient credibility so that concerned consumers will learn to look for and trust that designation.

This has worked for many product categories, from 'organic' to 'kosher,' with the consumer deciding how important the designation is, and with no role for the government whatsoever.

Somebody just needs to do it.


Anonymous said...

Agree With New Designation On Label.......

Kosher Bourbon

Anonymous said...

If Mexico of all places can enforce the placement of NOM statements on all tequilas, why can't the USA do it?


Alex said...

I believe "organic" is regulated by the government. It's just third-parties that do the testing and certification that a product meets the federal requirements. They provide a service of having the expertise to evaluate the product, compare it to the federal regulations, and maintain the necessary records. But the FDA and USDA regulate the food supply and the allowed categories and marketing terms.

I view assumed distillery names as contributing to the problem, even if not the main problem. If each bourbon didn't come out under a different assumed distillery name, it would be more obvious which products come from the big producers. By creating an illusion of tens or hundreds of distilleries, it's easier for the potemkin distillery names to blend-in as just one of the many.

I understand that it's a different kind of misleading, but it's still done for the purpose of misleading consumers and creating the illusion that a large producer's product is the product of a small distiller making only the single product.

Anonymous said...

Chuck (or anyone):
Can you make a list of NDP whiskey/bourbon so we can educate ourselves when we're out and about buying booze at the liquor store. I'm sure I own several bottles of NDP bourbon and don't even know it.

sku said...

Anon, I hope Chuck will forgive me the self-promotion, but I've got a list of distilleries and bottlers (NDPs):

Chuck Cowdery said...

Thanks, Sku. I was hoping one of the compulsive compilers would check in.

Shane Baker said...

To add from my last post.

I must make a stand on something..if you are a "Craft" operation.. shouldn't that be exactly what you are and not buying other peoples products and selling it as yours.. rather that be bourbon, rum or Vodka.. if youre not making it, then be honest as it is tarnishing the reputation of others who are trying to do it.

Shane Baker
Wilderness Trace Distillery

Anonymous said...

We are a vodka distillery and feel the same way. There are way too many fake distilleries out there buying NGS and then pretending it is some sort of crafted handmade product.

Heck, there is even a fake distillery in Texas making 600,000 cases per year and still pretending it is "handmade" in Austin Texas. Nothing is hand made at 600,000 cases per year unless you count somebody putting the bottles in the case being the handmade part.

risenc said...

I like this idea a lot, Chuck.

My only addition would be to note that the distinction isn't quite so black and white. What about Angel's Envy, which doesn't make its own whiskey but does its own finishing? Or High West, where the purported value is in the blending they do of NDPs?

In other words, you'd need a few other gradations to separate out the "value-added" NDPs from the ones that simply buy and bottle.

But as a general idea, you're absolutely right. For it's own good, it's high time the industry began policing itself.

Colin said...

Does the Bottled-in-Bond Act stipulate that any qualifying whiskey must be bottled at the same "bonded" premises as where the whiskey is aged and distilled? If so, that would be a pretty good measure that craft distillers could adopt when their whiskey reaches 4 years. It's anachronistic, but potentially a valuable tactic to fight this very problem, which was the impetus for the act over 100 years ago. And the Federal Government already recognizes it, even if consumers don't understand it anymore/yet. The only downside I can see is that 100 proof is predetermined, which is something I'd rather do to taste.

Anonymous said...

Interesting article related to all of this

Anonymous said...

Gary said;

To Alex's point on assumed distillery names; I don't think this is done for the purpose of misleading or trying to position the product as coming from a small distiller. I would bet that this is done for numerous reasons, including tax and liability purposes (for example - if someone wanted to sue Heaven Hill for a bad batch of Evan Williams - they would have to sue the "Old Evan Williams Distillery", which has far less assets than Heaven Hill). This is a common tactic among large corporations to protect their interests. There may also be tax purposes, or other drivers.

Distilling is one component, but some NDPs add other value by finishing, or how/where they age the product. Even with that though, I think Chuck's idea makes way too much sense (probably the fatal flaw it suffers from - no good idea goes unpunished!)

TimD said...

I think this approach is easy enough, and one I've privately advocated for over the past few years.

If The MPAA (movies), ESRB (video games) Comics (CCA - now defunct) and music industries (RIAA "advisory stickers") can agree on ratings and requirements for those respective industries, then why not booze in general, or at least Whiskey in specific?

Not one of those organizations is a branch of government - they are all industry run/managed/funded.

As the craft movement grows, and rectifiers multiply (given MGPs expansive efforts in mashbills and production), the major players and actual producers will only benefit from this.

Sure, there's lots of complications ranging from a mingled High West product to a "finished" Angels Envy offering - but I'm betting, just as the spirit categories themselves have only finite TTB label options, the participants could come up with 5-7 solid label types.

It would, as with movies, music, and games, be 100% voluntary. But as with the aforementioned offerings, where stores like Target, Wal-Mart, etc. won't carry non-labled merch, many larger distributors and retailers would take a pass on non-labeled booze.

It's time. The water is too cloudy, and given the already indefinable nature (from an FDA standpoint) of ingredients in this wonderful juice I pour almost daily into my body, I'd like more facts as my liver declines.

No reason for my Liver to hate me any more than it already does. Only the best "legit whiskey" for my little, over-worked friend.