More Thoughts On The Whole Glenora v SWA Thing.

What do scotch enthusiasts think about the Scotch Whiskey Association (SWA) and its nine-year campaign to prevent a small Canadian distillery from using the word "Glen" in its product name? I checked Kevin Erskine's The Scotch Blog, where Erskine offered his opinion, then turned the floor over to Mark Reynier of Scotland's Bruichladdich Distillery.

I agree with both of them. As Erskine says, "it's silly and was a dumb fight for the SWA to pick." As Reynier points out, Glenora's VP and chief spokesperson is named Bob Scott, so the SWA should be glad he used a local place name and not his own surname.

As anyone willing to look at the facts can see, Glenora actually went to great pains to make sure consumers understand that their whiskey is a product of Canada, not Scotland.

I suppose it makes sense for the SWA to test the limits, push the envelope, all that, in its efforts to protect the image of Scotland-produced whiskey; but they should have thought about this 200 years ago or so, when Scots started to settle in other parts of the world, scattering Scottish place names about in their new homes. They maybe should also have been a little more original about their own distillery and brand naming, and not have everything be Glen-this and Glen-that.

And the whole spelling thing--whiskey v whisky--has already been done to death.

The real target here is not Canada anyway, it's India, where so-called "Indian Whiskey," a spirit usually not even made from grain, is marketed with tartans and Scottish-sounding names and every other bit of Scottish imagery the producers can get away with. The SWA's goal, of course, is to vanquish the fake scotch so consumers in that booming economy will buy more real scotch.

What is Indian Whiskey?

The United States consumes a lot of whiskey. Know what country consumes more? If you said, “India,” you would be both right and wrong.

Probably you have heard about the booming Indian economy. Even in the current malaise, India is booming and creating unprecedented economic growth. That’s thirsty work. India has a domestic distilled spirits industry but her vast consumer markets are being eyed eagerly by the big international drinks companies like Diageo and Pernod Ricard too.

Whiskey is very popular there. Unfortunately, most of what they call whiskey is not the same as what we call whiskey.

Although a few snobs believe that only a distillate made from 100 percent malted barley should be called whiskey, most Americans and Europeans agree that whiskey is any spirit made from grain, distilled at a relatively low proof, and aged in wood. India prefers a more expansive definition. They recognize our kind of whiskey but they call un-aged spirits made mostly or entirely from sugarcane whiskey too.

Not only do they call it whiskey, they color and flavor it so it resembles scotch, which was introduced to India during the British colonial period. Many brands have Scottish-sounding names and use Scottish imagery in their packaging.

India has made distilled spirits from sugarcane for centuries, since even before the Raj.

Neither the European Union (EU) nor the United States will permit non-grain whiskey to be imported into our markets and sold here as whiskey. This is only a problem because it is getting in the way of our desire to sell our whiskey to them. EU regulations have become very influential internationally and other countries have adopted them too, creating a de facto world standard, with India on the wrong side of it.

In 2007, India’s UB Spirits Company bought Scotland’s Whyte & Mackay for $1.5 billion. The sale included 115 million liters (30.4 million gallons) of aging scotch whiskey. The Whyte & Mackay line was launched in India early this year and already has a 13 percent market share, according to the new CEO.

Not all domestic Indian ‘whiskey’ needs finger quotes. Amrut is made from malted barley grown in Punjab and Rajasthan. It is a two-million case brand, big by anybody’s standards. It is available in the United Kingdom, but I haven’t seen it here.

Like Day Follows Night

...price increases follow supply shortages.

Because of the whiskey aging cycle, sales increases can't always be matched by supply increases. It is a nice problem to have and American whiskey producers haven't had it for a long time, but they do now. More and more brands are on allocation and we're starting to see higher prices at retail.

Two things we probably need to get used to are: less availability of long-aged whiskey at bargain prices, and higher prices for American whiskey across the board.

One bright spot is that we probably can expect to see more frequent deals on mainstream premium brands such as Knob Creek. With Knob Creek especially, since that is how Beam operates.

What we are seeing now is cyclical, though that may be small comfort since this expansion could be a long one. If China, India and some other markets develop as they are expected to, there could be supply pressure on whiskey for the next decade.

Producers are moving cautiously, in terms of both price and production increases, so a major backlash seems unlikely. At least here in the USA, American whiskey remains a bargain compared to other aged spirits. Higher prices will have an effect but it is hard to predict what that effect will be.