Revised TTB Rules? Be Careful What You Wish For.

Some craft distillers are frustrated by the Standards of Identity for Distilled Spirits, a set of labeling rules enforced by the Tax and Trade Bureau (TTB) of the Treasury Department. They think the rules squelch creativity and should be changed.

This is a story about an effort more than 40 years ago to do exactly that. It was supported by some of the largest and most powerful companies in the distilled spirits business. There were no micro-distilleries then, but those arguing against the proposals were the relatively smaller, family-owned distilleries that specialized in straight bourbon, straight rye, and Tennessee whiskey.

It was a battle between modernizers and traditionalists, and the traditionalists won.

The changes were proposed in response to foreign competition. The argument was that the whiskeys of Scotland, Ireland, and Canada had significant cost advantages because they were generally distilled at much higher proof (ABV), entered into barrels at higher proof (ABV), and aged in used barrels.

American producers could make a similar product, but the rules required them to label it in ways that diminished its marketability. There were certain terms they were not allowed to use in regard to such a product, such as ‘straight bourbon whiskey’ and ‘straight rye whiskey;’ and certain terms they were required to use, such as ‘aged in used cooperage.’ The imports merely had to be labeled here the same way they are labeled in their home countries.

So the big companies tried to get the Federal government to change the rules, so they could make American whiskey more in the foreign style, but still label it ‘straight bourbon,’ etc.

They wanted the top distillation proof raised from 80% ABV to 95% ABV, and the rules regarding maximum barrel entry proof and new charred oak barrels eliminated altogether. They wanted to relax the standard for straight whiskey to permit blends of straight whisky, even of different types, to be labeled as straight whiskey without the words ‘blend’ or ‘blended.’ One petitioner wanted a new rule requiring a minimum aging period of two years, another proposed a four-year minimum.

In January, 1968, the agency rejected most of the proposals and explained its reasoning in a nine page Industry Circular (No. 68-03).

It said that spirits made in the proposed way would “generally lack the distinguishing characteristics of such whiskies.” To call these products ‘straight bourbon’ or ‘straight rye’ would be misleading and not “in the interests of the consumer.”

The agency found that higher distillation proof “produces a distillate containing less pronounced natural flavoring components (both desirable and undesirable ones).”

On the minimum age requirement proposals the agency observed that, “there are no appreciable amounts of immature whiskies currently being sold,” a statement that is not true today. They did note, however, that “the present regulations protect the consumer by requiring all whiskies less than four years old to bear a true age statement.”

The most surprising fact about the 1968 circular is the extent to which the agency concerned itself with the balance and flavor of American whiskey. Although the regulators usually insist that their sole interest is truth-in-labeling, not quality per se, that does not appear to be the case here.

Perhaps there was some tasting involved.