Distillers or Non-Distillers, Everybody Wiggles Their Words

I've often said that whiskey producers will rarely lie to you but they will spin like dervishes. That's not fair to dervishes, whose spinning dance is part of their religious worship. Whiskey producers, on the other hand, spin to deceive.

Recently, Brown-Forman Master Distiller Chris Morris was quoted in Las Vegas Weekly as saying, “First off, we don’t buy or sell whiskey to anyone.” Since it is well known that the Brown-Forman Distillery has performed contract distilling for Heaven Hill, Diageo, and others, what's he talking about?

The fine point here is that distillate is not whiskey, as a spirit is not whiskey until it has touched wood. What Brown-Forman made for those other producers was distillate, not whiskey, it was spirit distilled from a whiskey mash, but technically not yet whiskey. (I asked the Brown-Forman PR department to confirm that's what Morris meant but they didn't get back to me.)

If this seems like a distinction worthy of Bill Clinton, it's not quite so bad. For one thing, I'm only singling Morris out because there's a recently published quote from him on point. He may have made a more nuanced statement than the publication reported or he may have been speaking just about the Woodford Reserve Distillery and not the Brown-Forman Distillery in Shively, where the contract distilling takes place. Also, you'll get a statement more-or-less like that from all of the big distilleries, because nobody wants to talk about either the contract (selling distillate) or bulk (selling whiskey) business.

One can even argue that the customer isn't buying distillate, they're buying distilling services.

So nobody sells whiskey, except we know the whiskey being sold by non-distiller producers (NDPs) didn't all come from MGP of Indiana, the only major distillery that will proudly admit to the practice.

Another distinction some distilleries make is between whiskey (i.e., aged whiskey) they sell in the normal course of business and whiskey they sell to make an inventory adjustment. Right now, all of the major distilleries are making so much that occasionally they over-produce, even though overall industry inventories are considered very tight. Since they're always projecting their future needs based on actual and projected sales, and adjusting those projections every few months, they can find themselves with a few hundred extra barrels here and there. Brokers buy those extras and sell them to non-distiller producers.

There may be some distillers -- Maker's Mark comes to mind -- who never do this. Most of them do, but none want to talk about it.

So nobody is lying, but in every case there is an attempt to create a false impression about how the industry really works. Distiller or NDP, there isn't a producer out there who doesn't have some happy fiction they'd prefer you believe instead of the unspun truth.