Tuesday, March 11, 2014

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.

11 comments:

Ralph Erenzo said...

It is a problem, as you know Chuck, when the non-distilling producer obfuscates when it comes to information about the spirit origin on the label. "Produced by" does not equal "Distilled and bottled by".

Lazer said...

I find that average American consumers have no idea why things are priced the way they are. They think that price is some function of cost or supply. They think that if something is expensive it's because it costs a lot to produce or is very rare, and also reflects the high quality of the product. What they don't realize is that the price is a piece of a complicated business strategy that is in place to make the most profit.

If a distiller overproduced his whiskey, he won't make a profit by bottling and selling it himself, he can do better by selling it as bulk whiskey. If American consumers hear about this they will feel cheated. "Why can't we have more woodford on the shelf for us?" If distillers don't make the profitable choice, the consumer can say goodbye to any of their whiskey on the shelf.

Brian Honaker said...

Chuck I have to disagree. It's whiskey as soon as it comes off the worm. It wasn't very long ago in the grand scheme of things that whiskey wasn't aged at all and still called whiskey.

Chuck Cowdery said...

With the sole exception of corn whiskey, the TTB agrees with me. For better or worse, federal law trumps common sense.

EllenJ said...


Sayeth Chuck: "... 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"
... and let me add (for those who are not already aware, as is Chuck and probably most of us) that would include Woodford Reserve (the brand), which remains 90% Shively-distilled spirit. There ARE claims that say that isn't the case "anymore", but the fact is that the only thing that's changed is that the spirit in WR is now BARRELED in Versailles, whereas it USED TO BE mostly aged in Shively along with the other Old Forester bourbon.

Chuck Cowdery said...

Ellenj, don't attribute to me knowledge that neither of us has. Your 90% is a guess and probably wrong. It's closer to 50/50 or perhaps 60/40, but 90/10 is almost certainly exaggerated.

Anonymous said...

What about Brown-Formans's Jack Daniel Rye Whiskey? It never touched a barrel and only BARELY touched any charcoal but yet they have no problem labeling it as whiskey. I think the bigger problem is that companies like Jack Daniels can set their own rules if they continue to maintain this much control over state laws and such. And what did they ever do with all of that Rye Whiskey that they mixed up with Jack Daniels Whiskey (contaminated about 5000 barrels worth I believe). Oh that's right, they sold it abroad because they have more "relaxed rules" on the definition of labeling for Tennessee Whiskey. It doesn't appear that they were concerned with making an "inferior product" at that time, were they?

Chuck Cowdery said...

The word 'whiskey' does not appear on the label of Jack Daniel's Tennessee Rye. They wanted to call it 'unaged whiskey' but the TTB said no.

Anonymous said...

What about selling the Jack Daniels whiskey that was contaminated with the rye "whiskey" (which has a completely different grain bill than regular). Doesn't that mean that it's not Tennessee Whiskey anymore according to their definition because it didn't have more than 51% corn. They sold it over seas. Australia to be exact.

Chuck Cowdery said...

I'm very liberal about posting comments but should note that this claim that a batch of JD was "contaminated" with JD rye and sold in Australia is an unsubstantiated rumor or, perhaps, a fantasy of the poster.

Chuck Cowdery said...

And since the anonymous poster has already posted this rumor twice to this thread, there won't be a third one.