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.
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.