Monday, July 27, 2015

Templeton Rye Is Still Lying

Earlier this month, it was widely reported that Templeton Rye has settled the three class action lawsuits brought against it for deceptive marketing. If approved by the court, the settlement will entitle anyone who has purchased Templeton Rye since 2006 (about when the brand was launched) to up to $36 in compensation, depending on whether or not they have receipts, and other factors.

The Iowa-based non-distiller producer’s problem has always been that while its claims may be technically true, they have been deliberately framed to be misleading as hell. Templeton’s apologists have argued, “That’s just marketing,” which is true to an extent. Templeton’s sins have been of degree more than type.

In addition they broke a key federal labeling rule, essentially misleading the government along with everyone else. That's a problem. Misrepresentation on a label approval application can cost you your license.

In 2009, Templeton published this picture clearly showing that the barrel head was sanded to remove the name and DSP number of the Indiana distillery where Templeton is made. Then Templeton's name and DSP number were added. This was done for no purpose other than to create props for this deliberately deceptive photograph.
The whole, sorry Templeton saga has been covered in this space since 2008. You can use the search function to find those old posts, if you're interested.

When this story broke last year Templeton’s real owner, Vern Underwood, who also owns a large liquor distributorship called Young’s Market Company, emerged from the shadows and tried to contain the damage. He did joint interviews with Templeton president, co-founder, and usual front man, Scott Bush. Both men have now returned to the shadows, leaving co-founder Keith Kerkhoff to tidy up, a decision they may now regret.

As the settlement was being reported, Templeton released a statement. It begins: “After demonstrating to Plaintiffs that Templeton Rye Whiskey is not a ‘stock whiskey’ sourced from a third party…” That is just the first of many misrepresentations and outright lies in Templeton’s current campaign to rehabilitate its brand image.

Templeton Rye whiskey, as is now widely known, is distilled and aged at MGP of Indiana, a former Seagram’s-owned facility. It is made according to a recipe developed in the 1990s by then-master distiller Larry Ebersold. It is an unusual formula. The mash bill is 95 percent rye and five percent barley malt. It has, however, never been exclusive to Templeton. It was originally developed as a flavoring whiskey for Seagrams Seven Crown and other blends. You can buy the same whiskey as Bulleit Rye, George Dickel Rye, Redemption Rye, and many other brands.

What was unknown until last year, after the suits were filed, is that Templeton uses a little-known loophole in the Federal Standards of Identity for Distilled Spirits allowing Rye Whiskey (but not Straight Rye Whiskey) to contain “such harmless coloring, flavoring, or blending materials as are an essential component part of the particular class or type of distilled spirits to which added, and (ii) harmless coloring, flavoring, or blending materials such as caramel, straight malt or straight rye malt whiskies, fruit juices, sugar, infusion of oak chips when approved by the Director, or wine, which are not an essential component part of the particular distilled spirits to which added, but which are customarily employed therein in accordance with established trade usage, if such coloring, flavoring, or blending materials do not total more than 2 ½ percent by volume of the finished product."

Exactly what the flavoring additive in Templeton is has not been revealed but it is made by a company in Louisville. It is supposedly something “customarily employed in accordance with established trade usage,” but no one in the trade seems to know what it might be. That little bit of flavoring is the sole basis for the claim that Templeton Rye is not ‘stock whiskey,’ though to many consumers the revelation that the product is artificially flavored may be worse.

In the official statement, Kerkhoff is quoted as saying, "Though the relationship between Templeton Rye and our Indiana-based distillery partner is described on our website, we recognize that our marketing efforts should have provided more clarity about our production process." They refuse to admit that, from the beginning, Templeton has violated rule 5.36(d), which requires the state of distillation to be identified on the product label.

Kerkhoff and company would have you believe they have been upfront about buying, not making, their whiskey from the beginning. That is a lie. Although they never said ‘distilled in Iowa,’ they did say ‘made in Iowa,’ which really meant ‘bottled in Iowa’ and nothing else, but that was never made clear. They never mentioned that it was distilled in Indiana, as the labeling law requires. Their first web site even included a picture, under the headline ‘Our Still,’ that was clipped from the catalog of a still manufacturer in Germany. They had to use the catalog clipping because they owned no such still and the prop still they bought to show the rubes, I mean ‘fans,’ looked nothing like it. In his reply to my 2008 post, Bush merely conceded that “we make some of our product at another distillery.” Some? How about every single drop, from day one.

The Templeton label didn't come into legal compliance, finally revealing the whiskey’s Indiana origins, until this year, after they were forced to change it by the lawsuits. They also replaced the words "Small Batch" with "The Good Stuff," changed "Prohibition Era Recipe" to "Based on a Prohibition Era Recipe” and identified Alphonse Kerkhoff as the source of that recipe.

Although Keith Krekhoff sounds temperate in the company’s official statement, his tone was very different when he talked to Mark Gillespie a day or two later for WhiskyCast. In the interview, Kerkhoff condemned the settlement as "legalized stealing."

He also repeated the lie that he and Bush “had always been clear about the fact that their whiskey has been distilled and matured at MGP Ingredients in Lawrenceburg, Indiana, but was shipped to Templeton, Iowa for bottling.” No, they were not 'always' clear about that fact, only admitting it over time in dribs and drabs. Even as late as 2008, while they admitted that a ‘distillery partner’ existed, they would not reveal who it was and mocked inquirers who guessed wrong. All this, of course, was written in places where most consumers would never see it. The product label, where the state of distillation disclosure was legally required to appear, still didn't show it.

In the WhiskyCast interview, Kerkhoff also said that “Templeton Rye bottles have always carried the term ‘Produced & Bottled by Templeton Rye Spirits LLC, Templeton, Iowa’ - which complies with federal regulations for whiskies produced by so-called non-distiller producers such as Templeton.” It is true that the rules allow a bottler to use terms like ‘made’ and ‘produced,’ even though those words suggest a greater role in making the product itself. Templeton’s intention to deceive is demonstrated by their use of ‘Produced & Bottled’ since, in their case, ‘produced’ and ‘bottled’ mean exactly the same thing.

Kerkhoff also told Gillespie that the real victims are the poor people of tiny Templeton, since his company probably will not be able to afford the big parties they have thrown and the philanthropic donations they have made in the past to cement the town’s complicity in their ongoing fairy tale.

In January, Templeton's insurance company asked a court to rule that it had no duty to pay any claims resulting from the lawsuits. In April, Templeton agreed that no coverage existed and the suit was dropped, so Templeton itself is directly on the hook for all claims. Its insurance company won't help. Last week, the Des Moines Register reported that the claims will be capped at $2.5 million.

While it is always nice to see a couple of nasty con men brought to justice, the tragedy here is that they have a delicious product and even the story is kind of sweet. The whole thing might have worked just as well if they had not tried so hard to make people believe it was literally true.

In the WhiskyCast interview, Kerkhoff called the plaintiffs ‘greedy people,’ but the greed of Kerkhoff, et al, is what laid Templeton low.


Curt said...

"In the WhiskyCast interview, Kerkhoff called the plaintiffs ‘greedy people,"

I would turn that back on Kerkhoff and his cohorts by suggesting that it is the pinnacle of greed to enrich yourself or seek to enrich yourself in a manner that is dishonest and dishonorable. On the other hand, this dishonesty is so prevalent in today's marketing and advertising that I can understand why the Templeton gang may feel a bit singled out at this point.

Anonymous said...

How does Mr. Underwood get by the regulations that are supposed to prevent ownership in more than one level of the Three Tiered Distribution system?

Whiskeyman said...

RE: "the tragedy here is that they have a delicious product"

While I haven't tried Templeton Rye, this comment does sum up my thoughts on another NDP product, Rowan's Creek.

Rowan's Creek comes in a bottle with a folksy label, with faux hand-drawn typography, and the label tries very hard to make you think it's made by some folksy little distillery in the backwoods of Kentucky. They prominently say "hand bottled" on the label.

Of course, Rowan's Creek is a dba of Willet. It's fine bourbon and I've bought it more than once. Do I feel deceived? No, because I know how to find out some modicum of the truth about it and I can read a label more astutely than the average consumer. But I do think it's a shame that they resort to these calculated deceptions for a good product.

Kyle said...

I almost couldn't believe what I was hearing as I listened to Kerkhoff's statements on that episode of WhiskyCast - I say "almost" because it really isn't all that surprising given the way they've handled the situation as it played out. "Legalized stealing" seems like an awfully hypocritical way to describe the situation when they spent years utilizing a legal loophole that allowed them to deceive customers into buying a product that isn't really what the label leads you to believe it is. It blows my mind that they've been so obviously, intentionally deceptive, yet they still can't swallow their pride and admit it - even for the sake of salvaging what's left of their dignity (and consumer base) and moving forward - adding literal insult to injury strikes me as a really bad business move. Hopefully this is the last we ever hear of them.

whiskydaily said...

They were lying to me.
I remember that WhiskLive show in New York, they were showing pictures of their pot stills, inviting to their distillery, telling stories about adjustments they had to make for distiling second batch...

I agree with Mr. Kerkhoff that people of Iowa are victims here, I should be shame for them to be represented by bunch of crooks.

Chuck Cowdery said...

I can't explain how Vern Underwood can be both a distributor and a producer. You'll have to ask him.

Chuck Cowdery said...

It is usually done by putting the various assets in the names of different family members.

snakeman said...

I bough into the Templeton hype several years ago when the stuff was in allocation.
Binny's bourbon department head Joe fed me all the hype, and I bought it hook, line, and sinker.
But I can't blame Joe, as I'm sure he was duped too.

Sad thing is, I don't feel the juice is worth the price. I've only had 2 pours from the bottle. It's a true dusty on my back shelf.
More I've learned about Templeton the company, the more I dislike ever buying the bottle.
This is one of the reasons I don't buy much NDP stuff anymore is the lack of transparency. Lies, Lies Lies, that's all the know.
There is plenty of good bourbon from the major distillers to quench my thirst. And the prices are better too!

I do have a few bottles of Willet Family Reserve, but Drew himself told me it was sourced. Fair enough.

sku said...

Great post as always Chuck! I agree with everything except "delicious product."

Anonymous said...

This is a big problem for Orthodox Jewish bourbon drinkers, who are required to refrain from drinking non-kosher wine. Since wine is a flavoring, this whiskey is off limits. As a rule, bourbon needs no certification, but this kind of trickery makes it necessary.

Stick to the Kentucky stuff, people.

Craig Hochscheid said...

I no longer stock Templeton at my store as a result of that brand's outright deception.

Anonymous said...

The only company more deceitful than Tempelton is Tito. But sheeple keep bellying up to the bar to drink their "extra special" mass produced ethanol.

Erik Fish said...

"I agree with everything except "delicious product."
Actually, the MGP 95 rye is some of the best rye on the market, and whatever flavoring Tempelton purports to add doesn't seem to do much damage. I've only sampled it a few times, though, since I prefer to buy it regularly for $18 under the Dickel name (which refreshingly displays the 'distilled in Lawrenceburg IN' clearly on the label) and haven't felt any compulsion to spend $43 for a Tempelton bottle.

Jake said...

@anonymous as much bullshit exists in the bourbon market, it's nothing compared to vodka. Titos makes an acceptable product at an acceptable price and I'm much happier to pour it in the hundred vodka sodas I make each night than I would be to pour grey goose or whatever else.

AndrewBsupafly said...

Its a shame MGP and other producers get tied up in these stories as they are the only stand up part of the whiskey. I really enjoy a number of NDP products and in the end its whats in the bottle that counts. Unfortunately, for the money grubbers, the stories on the bottle can sour the juice inside. Stories can make & break peoples ideas of, as well as tastes for, items they spend their hard earned cash on. I'd love to see Templeton break. Really, they could have told all the lies in the world if they'd just printed one simple truth: "distilled in Indiana". I think the problem is that they've begun to believe their own lies.
Having said that, I just saw label approval for their 10 year whiskey. I can't wait to hear the stories behind this one.

Davindek said...

Hi Chuck,
Here's what I don't get about the Templeton controversy. It's producers make a big deal about Templeton being the favorite whisky of Al Capone. Capone was a rapist and a murderer who suffered from syphilitic dementia. If this is the demographic they are courting - demented rapists and murderers - why on earth are people so focussed on their creative labeling? I'm pretty sure Templeton's target clientele doesn't give a hoot, so why should we?

Erik Fish said...

" It's producers make a big deal about Templeton being the favorite whisky of Al Capone."

Capone is only important as the poster boy of the Prohibition era context (and had probably nothing to do with the real Templeton Rye). But that real Templeton Rye does have a fascinating real story connected to Prohibition which unfortunately has gotten buried and/or tainted by the company's antics. Read Bryce Bauer's "Gentlemen Bootleggers".

Chuck Cowdery said...

The Capone story is a perfect example of how Templeton went off the rails.

Every midwestern community that engaged in significant moonshining or bootlegging activity during Prohibition has a Capone story and it's always the same, the big black car arriving in the dead of night so Scarface can pick up his personal supply from his favorite source. Not one of those stories has been documented. Most likely none are true, Templeton's no more nor less than any other. It's authentic even though it didn't happen.

But that's not good enough for Templeton. They trot out another old faker, Deirdre Capone, and try to make you believe.

Zeech said...

PREACH! Great read. Thank you for this.

Anonymous said...

I don't like the deception. Why not be up front with the source? I really like smooth ambler and they make no secret that they are not the source of some of their whiskies. However, the deception is not what will keep me from EVER buying a bottle of Templeton Rye. I DO NOT BUY FLAVORED WHISKEY; particularly flavored whiskey that pretends it is not.

h4rr4r said...

I agree with legalized stealing. That is exactly what Templeton has been doing for years. At the very least fraud, if not theft by deception.

Alex Vinnitsky said...

In other countries (Russia; I'm sure others as well) there is a requirement to disclose all additives on the label, so all scotches etc. that do that do so.
One can actually pick up a bottle in a store and read that there is caramel (for example) added in a whiskey.
Has no one in USA thought of doing that?

David S said...

To be fair Chuck, you didn't even know LDI existed when you listed 5 distilleries as possible sources for their juice, and said it couldn't possibly come from anywhere else. I'm sure you admitted you were wrong and apologized for that at some point.

Chuck Cowdery said...

Apologize? For what? It's not supposed to be a guessing game. I should apologize because they successfully deceived me and everyone else? I knew LDI existed but I didn't know they were selling their flavoring whiskey in bulk, because they had never done that under Seagrams. I was trying to pin Templeton down and was mocked for my effort. Who's laughing now?

Anonymous said...

They are trying to make a buck and do something good for a small community. If you don't like the product or marketing don't buy it.
If you want to beat up someone over false advertising you should go after the federal government.