Monday, March 31, 2014

The Real Augustus Bulleit Revealed

"Hi," said the voice on the phone. "I am the great great grandson of Augustus Bulleit." No, it was not someone who promotes Bulleit whiskeys for Diageo. This descendant wanted to explain why no one can find a record of Augustus Bulleit in Louisville.

He wasn't in Louisville.

Except for a brief transition period after he arrived from France in 1836, Augustus never lived in Louisville. He never distilled there, nor ran a bar, nor did any of the other things Diageo claims about him. "My grandmother never said anything about a secret bourbon recipe," said the caller, laughing.

The caller's information is supported by sources readily found online, although the sources don't always agree. All seem to agree on the year Augustus was born, 1806, but not on the place. It's either Belgium, Alsace-Lorraine, or France. My caller says France and explains the confusion. Augustus married a Belgian girl. (More on her later.) Alsace-Lorraine may also be correct, since it was still controlled by France when Augustus lived there. My caller also mentioned an earlier spelling of the name, Boilliat.

Augustus made his way to America at age 25 or maybe 30. He stayed briefly in Louisville but soon moved west, across the Ohio River to Harrison County, Indiana, where he married and settled down. His bride, Mary Julia Dulieu, was from Lanesville and they settled on a farm on Buck Creek near Dogwood. (See, this is already better than the made-up stuff.) They were married on April 29, 1841. She was 21, he was 35. In that same year, he became a naturalized American citizen.

They had nine children.

Augustus and Mary Julia appear in census records for both 1850 and 1860. In 1850, his occupation is given as 'miller.' In 1860 it's 'farmer.'

That he was a miller makes it probable he was a distiller too, at least on a small scale. Millers were typically paid in grain. Whatever they were given to mill, they would keep 5 to 7 percent of it in payment. In a community where everyone grew grain, no one needed to buy it, so a miller would either raise livestock and use his grain as feed, or distill it into whiskey for sale. Whiskey was desirable because it didn't spoil and always sold.

From family lore, my caller said Augustus may have operated a tavern at one time and may also have been in the lumber business, but both of those enterprises failed.

Mary Julia Dulieu Bulleit is buried in the Catholic cemetery in New Middletown. No one knows where Augustus is buried or even when he died. In 1860, at the age of 54, he got on a flatboat with some goods he intended to sell in New Orleans and was never seen nor heard from again.

While we may never know exactly how or where Augustus Bulleit died, just as we may never know where Bulleit Bourbon is made, at least now we know who Augustus Bulleit really was.

On a Personal Note: Today is the last day of the month and I just want to thank Diageo for making March so much fun.

Sunday, March 30, 2014

Diageo Sues Tennessee, Claims 77-Year-Old Law Is Unconstitutional

On Friday, Diageo filed suit against the director of Tennessee's Alcoholic Beverage Commission (TABC), challenging a 1937 Tennessee law that says distilled spirits manufactured in Tennessee must be stored in Tennessee, either in the county where manufactured or an adjacent county.

Contrary to some inaccurate earlier reporting, Diageo has not and does not intend to store (i.e., age) George Dickel Tennessee Whiskey outside of Tennessee. It has, however, stored some other products (presumably whiskeys) manufactured at the George Dickel Distillery outside of Tennessee at the Stitzel-Weller Distillery in Louisville. On March 20, Dickel was cited by the TABC for violating the 1937 law.

Although the law is 77-years-old, Diageo says this is the first time anyone has been cited for violating it.

Diageo claims the law is unconstitutional under the Commerce Clause. Ordinarily, the Commerce Clause says states cannot favor in-state producers over out-of-state producers who are similarly situated, but the 21st Amendment tends to trump the Commerce Clause when the state can show a compelling interest in orderly commerce in alcohol.

The suit complains that if it is obliged to follow the law, Diageo will have to either build additional storage capacity or move that manufacturing elsewhere, which will cost Tennessee jobs. It would also incur considerable cost moving the removed goods back to Tennessee.

It doesn't say what is being stored at Stitzel but goes to great pains to say it is not George Dickel Tennessee Whiskey. Diageo wants to be clear that it is not aging Dickel outside of Coffee County nor does it intend to.

Insiders say that if Diageo had let it be known this was its real concern before the whole Tennessee Whiskey standards kerfluffle, Tennessee's other distillers -- including Jack Daniel's -- would have been happy to support such a change in the law. Instead Diageo made everybody mad and is now suing to get its way, a harder path that could have been avoided.

Recently, jurisprudence in this area has changed a little bit so Diageo may have a chance of prevailing that it would not have had a few years ago. Even the District Court might find in Diageo's favor if the TABC can't credibly justify the requirement.

Wednesday, March 26, 2014

The ACDA Gives Its First Awards

What follows this short introduction is the press release from the American Craft Distillers Association (ACDA), announcing the results of its spirits competition. At least that's what it says it is, but rather than announcing the results, the release is a lot of words about how the entries were judged, with just the Best in Class and Best in Show winners listed at the end, followed by a link to the full list.

They got it backwards. I think I would have joyfully trumpeted the heroes and provided a link to the back room details. The paragraph just before the winners list is particularly self-conscious. Follow the link and you'll see what they may be trying to hide. This awards program suffers from the same sin as most. Too damn many awards given.

Despite the wordy process explanation, questions abound. Why are brandy and liqueurs lumped together in the same category? How can moonshine be a category when moonshine isn't a type?

Trade associations serve least when they succumb to the worst tendencies of their membership.

This whole thing rubbed me the wrong way, see how it rubs you.

The American Craft Distillers Association (ACDA) announces today the results of its inaugural spirits competition. The inaugural American Craft Spirits Association spirits competition was held February 5th and 6th at Huber's Plantation Hall in Starlight, Indiana. Over 300 spirits were entered.

The Judging Board, consisting of Ted Huber and David Pickerell, established five head judges in each of the competition categories: Whiskey, Gin, Rum, Brandy/Liqueur and Moonshine. Judges included distillers, spirits journalists, mixologists, and consultants to the trade.

The judging was conducted 'blind.'  None of the judges was allowed to observe the spirits prior to their being brought to them by stewards in flights. In some cases a spirit was submitted twice, to ensure that the determinations remained consistent from flight to flight.

A hundred-point numerical system was employed: 20 pts. - Color (appearance) 30 pts. - Nose (aroma) 30 pts. - Taste (flavor) 20 pts. - Finish (balance). Points alone were not used to determine the medalists. A subjective element was also considered: Bronze: "Is this a spirit you would buy?" Silver: "Is this a spirit you would seriously recommend to a friend?" Gold: "Is this a spirit you would buy for yourself as a special addition to your collection?"

The Best in Class determinations were made by re-judging the gold medalists in each category.

The Best of Show was chosen by a separate judging of the Best in Class winners. The medals were awarded on the merits determined by the judges. If they felt that no category merited a gold medal winner, no gold was granted. In the same manner, if they felt that multiple gold medals (or silver or bronze medals) were appropriate, they were awarded.

As a not-for-profit Trade Association, directed by licensed distillers for the benefit of licensed distillers, our greatest ambition is for the winners within the ACDA craft spirits competition to appreciate that they have achieved a great distinction for the quality of their products, and can assert with authority that, by jury of experts, they have merited awards of unqualified excellence.

Best In Class: 

Whiskey: Balcones Distilling, Cask Strength True Blue Corn Whiskey
Gin: Captive Spirits Distillery, Bourbon Barreled Big Gin
Rum: Louisiana Spirits, Spiced Bayou Rum
Brandy: San Juan Island Distillery, Apple Brandy
Moonshine: Dark Corner Distillery, Moonshine

Best In Show: 

Balcones Distilling, Cask Strength True Blue Corn Whiskey

A list of all the winners can be found [here] on the ACDA Website

Tuesday, March 25, 2014

Tennessee Whiskey Is Safe for Now

Earlier today, Tennessee lawmakers decided not to rewrite the law that defines Tennessee whiskey, at least not during their current session. This means the one-year-old law will remain in force for another year at least.

The proposal to change or repeal the law has been moved to summer study panels that will convene after this legislative session ends.

If you're just hearing about all this now, go here, here, and here for the background.

"We stand behind last year's law, we truly believe it's best for Tennessee whiskey all over the world," said Jeff Arnett, master distiller at Jack Daniel's. "For the players who've located in the state of Tennessee, we need to uphold these quality standards."

Brown-Forman, the company that owns Jack Daniel's, asked for last year's law to prevent new producers from interpreting the term 'Tennessee whiskey' as being any whiskey made in Tennessee. Currently, 99 percent of all Tennessee whiskey sold is Jack Daniel's.

Under last year's law, a Tennessee whiskey must meet the same standards that federal law requires for straight bourbon whiskey, with the additional requirement of filtering through sugar maple charcoal, a traditional Tennessee practice.

The effort to change the law was led by Diageo, the world's largest drinks company, which also declared victory.

"The Tennessee legislature has done the right thing and now, rather than having one company dictate for everyone, we can do this the right way and come together in an open forum to discuss how to create the best standards for Tennessee whiskey," said Guy L. Smith IV, Executive Vice President, Diageo North America. "In the meantime, we will continue to make George Dickel the same way we always have."

"This is a good day for Tennessee, for distillers big and small, and for consumers of Tennessee whiskey," said Smith.

On that we agree.

How Are You Paying For Your Craft Distillery?

Some people fund their craft distillery by sourcing and selling whiskey made by somebody else. Others do it with white spirits. Cardinal Spirits, in Bloomington, Indiana, is doing it by selling a proprietary whiskey glass.

As you can see, it's pretty similar to a Glencairn and works pretty much the same way too. They have some sciencey-sounding stuff you can read here, but really it's just a nice alternative to the Glencairn if you feel like trying something different. It's not as radical as the Neat glass, which may be a good thing. I like the Neat glass and it works well, but it somehow doesn't seem like a glass, more like something you float tea candles in. I rarely grab for it. The Blasadh (yes, that's what it's called) is different but not too different.

Blasadh, the literature says, is Scots Gaelic for "to taste."

There isn't much else going on at Cardinal, as they're just getting started, but they intend to make whiskey, gin, liqueurs, cordials, and vodka. I guess Cardinal's motto is, "Buy the glass so we can make something to put in it."

This is not aimed at Cardinal but at all craft distilleries. Don't make vodka. Really. And if you want to make gin, cordials, liqueurs, flavored vodka, 'moonshine,' or what have you, buy the GNS, don't make it. Why? Because GNS is the one thing a big industrial distillery can make better. It's not worth knocking yourself out for. There's really no point. There's no creativity involved, no real craft. There's craft in flavoring GNS, or there can be, but not in making it. You're just pulling out as much water as you can. That's an industrial process, not a craft.

I expect to hear a lot of hooey about artisan vodka and I'm not buying any of it. Vodka is flavorless. If it's not, it's not vodka and that's good, because not vodka is what we're looking for, not vodka.

Sunday, March 23, 2014

A Tennessee Craft Distiller Speaks Out For High Standards

Diageo claims it is attacking the Tennessee whiskey standards law on behalf of 'the little guys,' Tennessee's emerging craft distilling community. Unfortunately for Diageo, the craft distillers aren't cooperating. Last week, the board of the Tennessee Distillers Guild, a group of 11 small distilleries, voted to support the current regulations.

Charlie and Andy Nelson, scions of a historic Tennessee distillery, Nelson's Greenbrier, also favor the high standards of the current rules. The Nelsons have been selling a sourced whiskey, called Belle Meade, while building their own distillery, which is being installed now. Their statement follows.

We are the Nelson Brothers, and here's our position on Tennessee Whiskey: Tennessee Whiskey must be made from a fermented mash of at least 51 percent corn, aged in new, charred oak barrels, charcoal mellowed, and stored in Tennessee. Otherwise, it's just not Tennessee Whiskey.

For well over a century, Tennessee Whiskey has been produced with these traditional methods that have become increasingly respected and revered as an industry standard. Last year, that standard was codified and signed into law at the Tennessee State House, protecting one of the state's most valuable signature products.

As descendants of Charles Nelson, arguably the biggest name in the formative decades of Tennessee's commercial distilling industry, we hold a strong conviction that the standards governing the production of Tennessee Whiskey must be maintained. To relax even one of the defining regulations that make it a distinct product weakens the brand, and dilutes its value, changing a respected philosophy.

Our great-great-great grandfather understood this passionately and professionally. He produced other spirits using other methods under other labels, just as we are all still welcome to do. But in the late 1880s, he went to the State House to seek an official distinction for the product known as Tennessee Whiskey. Ironically, he was accompanied in his efforts by George Dickel, founder of the distillery now owned by Diageo, the international corporation now attempting to undo all these lengthy years of brand history and quality control. Both men, though competitors, understood the value of keeping the process pure in Tennessee, to them as businessmen, and presumably, to the economy of the state.

Generations later, we Nelsons no longer dominate the market -- not by a long shot! -- but we vehemently reject the notion that allowing Tennessee Whiskey to be produced in barrels that are not new will help craft distillers and the so-called "little guys." We are the little guys. We are craft distillers. It is in our best interests to produce and compete within our long-established guidelines. There still remains room for extraordinary creativity within these guidelines. We resent and oppose this attempt by an international corporation based far away from Tennessee to discredit and degrade the process of our state's beloved product and valued brand.

Saturday, March 22, 2014

First President's Distillery Releases First Brandy

Spirits aficionados and history buffs gathered at New York City’s NoMad hotel Wednesday to enjoy a sip of history, as the presidents of George Washington’s Mount Vernon and the Distilled Spirits Council unveiled the first peach brandy distilled at George Washington’s Distillery in more than 200 years.

George Washington erected his 2,250-square-foot distillery in 1797, making it among the largest whiskey distilleries in early America. It was restored (2000-2007) with financial assistance from the beverage alcohol industry. The sale of spirits made at Washington's Distillery supports Mount Vernon, Washington's home and farm. A popular visitor destination, Mount Vernon is owned and operated by a private foundation, not the government. For visitors, Washington’s Distillery opens for the season on April 1st.

Four hundred bottles of Washington's peach brandy will go on sale at the Distillery & Gristmill Gift Shop on Tuesday, April 1. Vouchers needed to buy the brandy go on sale at 8 AM. It will cost $150 per 375ml bottle.

Why so much? Only a small amount was produced and, remember, it's partially a donation to help fund the work of Mount Vernon.

This unique peach brandy was recreated at the distillery in 2010 by a team of Distilled Spirits Council small distillers using 18th century techniques. It was double-distilled in copper pot stills heated by wood fires and aged for two years in toasted oak barrels. The team of master distillers, from some of America’s leading small distilleries, was led by Ted Huber, Huber’s Starlight Distillery (IN); Brian McKenzie, Finger Lakes Distilling (NY); Lance Winters, St. George Spirits (CA); Dave Pickerell, WhistlePig Whiskey (VT) and Hillrock Estate Distillery (NY); Joe Dangler, A. Smith Bowman Distillery (VA) and Scott Harris, Catoctin Creek Distilling Company (VA).

“There’s no better place to learn about George Washington’s entrepreneurial genius than at his whiskey distillery. Washington started the distillery in order to capitalize on the growing demand for rye whiskey, but he also used it to make liquors to serve to his guests,” said Curt Viebranz, President of George Washington's Mount Vernon. According to Washington’s records, peach brandy was distilled in limited quantities but was very popular for entertaining at the Mount Vernon mansion. 

Washington’s ledgers reveal that he sold only eight gallons of peach brandy in 1798, and a distillery ledger entry from 1799 shows 60 gallons of peach brandy  sent to the “Mount Vernon house” for entertaining.

“The reconstruction of George Washington’s Distillery has shone a bright light on America’s fascinating distilling heritage,” said Peter Cressy, President of the Distilled Spirits Council, which organized the New York tasting event. “It has captivated the public and helped energize the American whiskey renaissance. Further, Washington continues to be a role model for the entire industry with his lifelong personal commitment to moderation and responsibility.”

At the event Derek Brown, renowned drinks historian and owner of The Passenger and Columbia Room in Washington, D.C., created a colonial-style punch using Washington’s peach brandy. Brown’s well-researched recipe was similar to what Martha Washington might have served at her table at Mount Vernon. He also led a discussion on the history of brandy distilling and consumption in 18th century America.

Mount Vernon’s Manager of Historic Trades, Steve Bashore, offered tastings of the inaugural peach brandy as well as Washington’s rye whiskey, which was also produced at the reconstructed distillery. 

Two of the original distilling team members, Ted Huber of Huber’s Starlight Distillery (IN) and Brian McKenzie of Finger Lakes Distilling (NY), also participated in the event by showcasing some of their modern fruit brandies.

Also at the event, participants were able to preview a rare original piece of Washington’s correspondence about the distillery that will go on exhibit March 24th, at Mount Vernon’s Donald W. Reynolds Museum and Education Center. Just prior to his death in 1799, Washington wrote a letter to his nephew, Col. William A. Washington, discussing his successful distillery operation. In the letter, Washington described the “demand” for his whiskey in the region as “brisk” and requested his nephew’s assistance in procuring additional grain for the distillery.

The Distilled Spirits Council acquired the historic document for $18,800 at Christie’s New York auction house.

The reconstructed distillery is the only historic site in the country capable of showing the early American distilling process from seed to barrel. From April through October, visitors can see costumed distillers demonstrating the distillation process on a daily basis.

Friday, March 21, 2014

Elijah Craig Descendant Will Open Craft Distillery at Old Crow

Earlier this month the Woodford Sun reported that Neil Craig, a descendant of whiskey pioneer Elijah Craig, has acquired the former Old Crow Distillery near Frankfort. He and a partner intend to install a micro-distillery there in the old bottling house.

Old Crow was a large distillery operated by National Distillers until 1987, when National was acquired by Fortune Brands and merged with Jim Beam Brands. The distillery was immediately closed. Beam and other distillers continued to use the warehouses for several years thereafter. Rev Heart Pine LLC bought it from Beam in 2007. They demolished several buildings, selling the heart pine lumber and vintage bricks. Craig and company bought the 16 acre site in December.

According to the Sun article, they plan to make bourbon, rye, 'moonshine' and spiced rum, producing about 60 gallons of spirit per day. They will have a gift shop and hope to join the Kentucky Bourbon Trail.

Craig grew up in Midway and "cherishes his family's roots to Elijah Craig, who has been credited with inventing bourbon whiskey."

So far, all they have is a name and a slogan: "Deviant Distillers, a Little Different, a Lot Better."

Thursday, March 20, 2014

Rogue to Make Barrels in Oregon

The boom in American whiskey and American microdistilleries has led to new business for other industries, such as cooperages (i.e., barrel makers).

There are two major cooperages that serve whiskey producers, Brown-Forman and Independent Stave (ISC). Although Brown-Forman used to sell barrels to other whiskey producers, the demand for barrels has grown to the point where they now only have enough capacity to meet their own needs, which leaves ISC as the sole provider for everyone else.

Brown-Forman is currently building another cooperage close to Jack Daniel's. When that opens they may resume selling barrels to other producers. In the meantime, the boom has also induced companies to get into barrel making. In some cases, those companies previously operated stave mills (e.g., Minnesota's Barrel Mill), or were refurbishers of barrels for export to Scotland and other markets (e.g., Kelvin).

But Brown-Forman has long been the only distiller that also owns a cooperage. Last week, Oregon's Rogue Ales & Spirits announced that it is joining that exclusive club with the creation of Rolling Thunder Barrel Works, a tree to table outfit that will bring the old-world tradition of barrel cooperage to the Rogue World Headquarters in Newport, Oregon.

Instead of whining about the current, temporary 'barrel shortage' like some micros, Rogue is doing something about it.

"We are thrilled about Rolling Thunder Barrel Works," says Rogue President Brett Joyce. "Making our own Oregon Oak Barrels will provide us with endless possibilities for aging our ales, porters, stouts, lagers, braggots, meads, gins, vodka, rums, and whiskies. Coopering is a time-honored tradition and highly skilled craft that will have a great home in Newport. This adventure will be full of learning and discovery and while we're not exactly sure what the final products will look like, we are certain that it's going to be a lot of fun along the way."

The white oak will be hand-selected from the centuries-old oak groves of the Oregon Coast Range, less than 100 miles from Newport. Using Oregon White Oak furthers Rogue's commitment to brewing and distilling with a proprietary palate of flavors; all of Rogue's world-class beers and spirits are crafted with Rogue Farms ingredients grown on its two farms in Independence and Tygh Valley, Oregon.

Wednesday, March 19, 2014

Let's Be Clear About This Tennessee Whiskey Thing

On one level, this fight about codifying the standards for Tennessee whiskey is just two big companies butting heads together and trying to gain advantage. Diageo's reply is just another salvo. Except in this case Brown-Forman is right.

Brown-Forman has every reason to be protective of the term 'Tennessee whiskey.' It is a valuable term due almost 100 percent to what Brown-Forman has invested in it over the past half-century. Brown-Forman has invested millions of dollars to make 'Tennessee whiskey' mean something, and what it means is a product that meets the same very high standards as bourbon whiskey.

Recently, many small producers have complained about how 'limiting' the bourbon rules are. They want to be able to produce any damn thing and call it 'bourbon whiskey.'

In other words, they want to steal bourbon's good name. Now there are people in Tennessee, whose strings are being pulled in London, who want to steal Tennessee whiskey's good name.

Since the only Tennessee whiskeys for the past 50 years, Jack Daniel's and George Dickel, voluntarily follow the bourbon standards, a whiskey of that style is what consumers expect from a 'Tennessee whiskey.' They don't expect some felon's fake moonshine, or some watery brew aged in used barrels. And since George Dickel only sells one bottle for every 100 Jack sells, what consumers expect 'Tennessee whiskey' to be is something very much like Jack Daniel's Old No. 7. (Although George Dickel is a very fine product too and also meets the bourbon standards.)

Yes, Brown-Forman was behind last year's successful effort to codify in Tennessee law those well-established standards. They did it because a couple of new producers, including one dedicated to the memory of a convicted felon, want to misappropriate the term 'Tennessee whiskey' by attaching it to a wholly different kind of product. They argue that if it's whiskey (presumably according to U.S. law) and made in Tennessee (without defining 'made' too closely), it's Tennessee whiskey.

The Tennessee lawmaker who introduced the new rule admits it was Diageo's idea. Diageo's motive has nothing to do with switching to used barrels at George Dickel, and surely no one seriously believes Diageo cares about "flexibility, innovation, and entrepreneurship in American whiskey." Diageo's purpose is to undermine consumer confidence in the term 'Tennessee whiskey' by gutting the established standards, after which the marketplace will be swamped with liquid garbage that can legally call itself 'Tennessee whiskey.' Diageo hopes this will slow Jack Daniel's growth enough to prevent it from overtaking Johnnie Walker as the world's #1 whiskey.

Diageo has been very artful in its arguments. Its master distiller paints it as an anti-big government issue, a good tack in conservative Tennessee. "We don’t think there should be a law that says this is how we, or anyone else, have to make whiskey."

Except there already is a law, a federal law, that says how you have to make whiskey, and how you have to make bourbon whiskey, and rye whiskey, and corn whiskey, and several others. Tennessee whiskey isn't mentioned in that law, but there are standards for whiskey, and the law says statements of origin have to be true. That's a standard, but it's a very low standard compared to the standard for bourbon whiskey. The existing law Diageo wants to change is exactly the same as the federal bourbon standard Jack and George have followed voluntarily for more than 50 years, plus the charcoal filtering stuff they have also both followed.

That law, the Standards of Identity for Distilled Spirits, is a consumer protection law that has served consumers well. It has its flaws, and its critics, but is usually not considered a threat to liberty.

But back to the heart of this, the #1 ranking. It's not trivial. It's not just about bragging rights. If Jack Daniel's becomes #1, it could change the dynamic in critical growth markets such as China and India. When newly affluent people gain access to luxury imported goods they immediately want to know what's the best. They'll inevitably start by looking at what's #1. It has never been more important to be #1 and if recent trends continue, Jack Daniel's will pass Johnnie Walker the next time rankings are calculated.

Diageo is desperate.

By the way, Jack Daniel's is big, and it's the biggest thing at Brown-Forman, which is a big company, but Diageo is several times bigger, yet in American whiskey terms Diageo is a pipsqueak. It's trying to turn that weakness into an asset by identifying itself with the micros. Cute.

And, oh the misinformation. New whiskey barrels do not cost $600 each, as one legislator told the Associated Press. More like $175, a lot less if you're buying a lot of them. Used barrels cost about $100.

That's not what this is about.

Most people today, including most people in developing markets, know brands. They don't know types. They don't know Jack Daniel's and Johnnie Walker represent two very different styles of whiskey. The hallmark of the American style is the unique flavor profile you can only get with new, charred oak barrels. If the Chinese try Jack Daniel's and like it, that will naturally align them with the American style.

The tide could turn.

In the world today, scotch outsells bourbon five to one, but China and India don't know that. India knows scotch because of the Raj, China doesn't have an inherent favorite. If American whiskey, not scotch, becomes China's choice, that could change everything.


So with everything at stake, Diageo will do anything. If it succeeds in Tennessee (probably a long shot), it will hurt its own Tennessee whiskey, George Dickel. It doesn't care. It will gladly kick George Dickel to the curb to protect Johnnie Walker. Not just Tennessee whiskey, but bourbon and rye too, where The Big Galoot is also a pipsqueak. It likes Bulleit better than Dickel, but not at the expense of Walker. Diageo's big dog in North America is Crown Royal, a Canadian whisky aged in used barrels. The way Diageo sees it, anything that hurts bourbon, rye, and Tennessee, the 'new barrel boys,' helps them.

Ultimately, this fight will be between Big Scotch and Big Bourbon. This is just the opening round.

Tuesday, March 18, 2014

Diageo Says It Supports "Return to Flexibility, Innovation and Entrepreneurship in American Whiskey"

Since I reproduced Brown-Forman's press release last Friday, verbatim and without (much) comment, I'll give Diageo the same courtesy and refrain from commenting until a later date.

Claiming the integrity of Tennessee whiskey is “under attack” Brown-Forman’s Jack Daniel's asserts the only way for Tennessee whiskey to be a “premium product representing a world-class standard and utmost quality” is for it to be aged in new oak barrels.  Interestingly, according to the website of Brown-Forman owned Early Times whiskey, the brand is aged and barreled in “used oak barrels”.  Therefore, by their logic, Brown-Forman has deemed its own product inferior.

Despite being a competitor to Early Times, Diageo has rushed to Early Times’ defense. George Dickel Master Distiller John Lunn provided perspective on the issue. “At George Dickel we use new oak barrels, but that is because we choose to make whiskey that way. We don’t think there should be a law that says this is how we, or anyone else, have to make whiskey,” explained Lunn.

Diageo firmly believes a single company should not be able to unilaterally determine the definition of an entire category. At its base, it is anti-competitive and protectionist. Diageo supports a return to the flexibility that Tennessee whiskey distillers have had for the past 125 years, up until last year when Brown-Forman convinced the Tennessee legislature to define Tennessee whiskey as the Jack Daniel’s recipe. 

Guy L. Smith, IV, Executive Vice President, Diageo North America, and a former resident of Tennessee said, “Brown-Forman’s sleight of hand legislation they managed to get passed last year, which many refer to as simply ‘The Jack Daniel's recipe law,’ creates an anti-competitive situation that will stifle innovation from skilled Tennessean distillers, both large and small.”

Brown-Forman’s assertion that rejuvenated barrels produce a lower quality product is false and the billions of dollars that consumers spend across the world on scotch and other whiskeys that are commonly aged in rejuvenated barrels is a testament to that. The process of rejuvenating barrels is a technical and sophisticated practice and years of wood industry science have shown the maturation of whiskey in rejuvenated barrels produces the highest quality liquid. 

Continued Smith, “We feel that allowing distillers flexibility within a general set of guidelines helps create a thriving and competitive Tennessee whiskey industry. And that is in the best interest of all distillers, large and small, as well as the state of Tennessee.”

Monday, March 17, 2014

More About Tennessee Whiskey, From Down Under

Chris Middleton is a former Jack Daniel's executive who lives in Australia, where he writes and teaches about whiskey history. He has an amazing stock of knowledge and continues to teach me a lot. He intended the following as a comment to the recent posts here about Diageo's efforts to gut the Tennessee whiskey standards adopted last year at the behest of Jack Daniel's, but had technical difficulties so he just emailed his observations to me directly. As always, his insights are illuminating.

I was tempted to cite the Early Times case study of what happens to a leading bourbon brand that turns to second-use barrels. The irony is that the demand for ex-bourbon barrels by Scottish and Irish distillers, rum and others will soon start outstripping supply. Over 95 percent of Scotch first fill is now ex-bourbon and with the new distilleries and increased capacity by the existing ones (Diageo alone is investing $2.5 billion over the next 3 years in Scottish plant, you’d think they would be sucking Cascade dry), so bourbon wood is going to get expensive (COGs impact) and distilleries without contracts will find it difficult to guarantee supply, let alone the quality.

Lem Motlow’s first legal run-in with Schenley was 1931 when they attempted to claim usage of the Jack Daniel’s trademark. Although 892 barrels of the Jack Daniel’s whiskey were illegally siphoned off from a bond store in St Louis for George Remus’ illicit trade in 1923, there was considerable remaining stock left to be sold under medical prescription. I believe Schenley Products was contracted by Lem Motlow to sell some of this stock from his closed distilleries in Birmingham, AL (1915) and St Louis, MO (1917). The whiskey was sold under the Jack Daniel’s label during the Prohibition years.

Your recent post noted six of the ten Government licenses were used, Schenley with 25 percent of stored whiskey inventory was the largest business dedicated to supplying whiskey ‘For Medical Purposes Only’ (6 million gallons were prescribed during Prohibition). With Prohibition’s repeal in sight, Schenley attempted to seize the trademark in 1931. The brand must have been well received when they distributed to doctors (16,000) and druggists (57,000) through the 1920s.

Lem Motlow fought back and secured his trademark rights, which he claimed were never surrendered under the bottling agreement and were also kept in a legal coma under his Lynchburg mule business.

After Prohibition, Motlow raised the finance to invest in rebuilding the distillery and forced Moore County to hold a referendum to permit distilling in the Lynchburg Hollow, which restarted October 1938.

During the capital raising period he allegedly wrote to Schenley to enquire whether they would be interested in becoming shareholders in the new distillery. They declined; however in 1936 he negotiated royalty fees from Schenley to sell Jack Daniel’s whiskey under his license, using his remaining whiskey stock, now at least nineteen years old. I do not know if this transpired.

Diageo’s alleged attempt to amend the bill I too find perplexing. Diageo, like B-F is a responsible liquor company so I am yet to understand their motive, given Dickel is their only operating whiskey distillery in the US.

Sunday, March 16, 2014

What Would Ralph Say?

Schenley was one of the 'Big 4 'post-Prohibition liquor companies. In 1956, founder Lew Rosenstiel had his eye on a little Tennessee distillery that was doing well and needed money to expand. The Motlow family rejected Rostenstiel, turned to Kentucky's Brown family instead, and Brown-Forman bought Jack Daniel's.

In response, Rosentiel reached into his portfolio and found Cascade Hollow Bourbon, which he had acquired in 1933 from George Dickel's heirs. He'd show the Motlows. He'd send Cascade Hollow Bourbon, renamed George Dickel Tennessee Whiskey, back to Tennessee. He would make it in a brand new distillery he would build as close to the original as possible.

The man he chose for the job was Ralph Dupps, a mechanical engineer by training, who was then running the company's Bernheim Distillery in Louisville. Dupps moved his family to Tennessee and began building. He stayed on to run the new distillery and in 1958, they started distilling. They brought the first bottle of George Dickel Tennessee Whiskey to market in 1964.

Like Jack Daniel's, George Dickel Tennessee Whiskey followed all of the specifications for bourbon, including aging in new, charred oak barrels. They also charcoal filtered their product before aging. Most bourbon-makers charcoal filter too, but in a different way.

Dupps retired in 1977 and lived another 30 years. John Lunn, George Dickel's current master distiller, spoke to Dupps before he died. "Don't change a damn thing" was Dupps' advice.

George Dickel Tennessee Whiskey became part of what is now Diageo in 1987. The George Dickel Tennessee Whiskey you buy today is made exactly the same way as that bottle from 1964, but all of a sudden Diageo doesn't think new charred oak barrels are all that important. Used barrels will do just fine.

What's that you said, Ralph?

In Friday's press release from Jack Daniel’s, Master Distiller Jeff Arnett was the spokesperson. Lunn has been silent. He knows he can't make the same product with used barrels. Everybody knows that.

Diageo knows that.

So what is Diageo up to? Diageo and its predecessors have tried to take Jack Daniel's down since 1956. Diageo has failed in the marketplace. Jack is about to surpass Johnnie Walker, Diageo's flagship. Diageo can't beat Jack fair and square so it wants the Tennessee Legislature to gut the legal standards for Tennessee whiskey that Tennessee put in place a year ago, the exact same standards both Jack Daniel's and George Dickel have been following voluntarily for more than 50 years.

This, they believe, will weaken Jack Daniel's, and they'll gladly sacrifice George Dickel (and you too, Tom Bulleit) if it will save Mr. Walker.

I know, Ralph. I know. I feel the same way.

Friday, March 14, 2014

Diageo's Latest Mischief: Screwing Up Tennessee Whiskey

This blog rarely has anything good to say about drinks giant Diageo, aka 'The Big Galoot,' and here is a good example of why. This blog also rarely prints press releases verbatim but this one, from Jack Daniel's, is a doozy. One thing it does not mention but should is that George Dickel, the #2 Tennessee Whiskey, is a Diageo product.

Saying that Tennessee Whiskey is “under attack,” the Jack Daniel Distillery today forcefully denounced legislation pending in the Tennessee General Assembly allowing for the reuse of barrels that its Master Distiller says will dramatically diminish the quality and integrity of the whiskey.

Current law passed by the General Assembly last year and signed by the Governor created a designation of “Tennessee Whiskey” as being made from a fermented mash of at least 51 percent corn, aged in new oak barrels, charcoal mellowed and stored in the state. The effort was a natural progression to help grow the Tennessee Whiskey designation, and similar to what the bourbon industry did in the past to codify the definition of “bourbon.”

“When consumers around the world see ‘Tennessee Whiskey,’ they expect it is a premium product representing a world-class standard and utmost quality,” said Jack Daniel’s Master Distiller Jeff Arnett. “What we have here is nothing more than an effort to allow manufacturers to deviate from that standard, produce a product that’s inferior to bourbon and label it ‘Tennessee Whiskey’ while undermining the process we’ve worked for nearly 150 years to protect.”

Arnett continued, “This is not about the interests of micro distillers in our state. We support micro distillers. This is about Diageo, a large foreign company with more interest in scotch and bourbon, trying to weaken what Tennessee Whiskey is and we simply shouldn’t allow it.”

Arnett said that Jack Daniel’s – and the bourbon industry - have always used new toasted and charred barrels only once for the color, flavor and character they impart upon the whiskey. Reusing a barrel would likely require the use of artificial colorings and flavorings which in the end would produce a product inferior to bourbon, he noted.

“Using quality grains, quality water, quality barrels and other natural ingredients has been the backbone of Tennessee Whiskey and, frankly, the bourbon industry for decades. Why in the world would we want to change that now by inserting artificial ingredients into our processes? And why in Tennessee would we willingly give the bourbon industry the upper hand in quality by cheapening the process we use to make our whiskey,” Arnett said.

Arnett noted that exports of Tennessee Whiskey and bourbon eclipsed $1 billion for the first time in 2013 and Tennessee Whiskey, led by Jack Daniel’s, is one of the top ten exports for the state.

"American whiskey is booming and Tennessee can take pride that we have the leader of American whiskey recognized around the world," he said. “We have only scratched the surface of what Tennessee Whiskey can be in the future, but to do that we need to ensure it remains a quality designation. No one is saying that companies can’t make their product however they want – whether that’s by not charcoal mellowing it or even using old barrels. They just shouldn’t be able to label it ‘Tennessee Whiskey.’ It’s a real head scratcher why anyone would support legislation classifying our product as inferior to bourbon,” Arnett added.

HB2330 and SB2441 are currently being considered before the Tennessee House State Government Committee and Senate State and Local Government Committee.

Wednesday, March 12, 2014

John Hall's Big Payday

For the last dozen years or so, John Hall has been trudging to every liquor store and whiskey show that would have him, always in his trademark denim shirt, to promote his Forty Creek Canadian Whisky. Hall is a genuinely nice guy and passionate about his whisky. Thanks to all his hard work, Forty Creek is now the fastest growing Canadian whisky in Canada.

Today he got his just reward.

Gruppo Campari has signed an agreement to acquire 100 percent of Forty Creek Distillery Ltd. ('FCD'). Total purchase price is CAD$ 185.6 million. This is Campari's first Canadian whisky brand.

John Hall will remain Chairman of the company and Whisky Maker at Forty Creek Distillery.

"Today's deal represents a milestone for myself and the entire Forty Creek team," said Hall. "I believe this opportunity will further support Forty Creek's vision to produce unique, quality, handcrafted, Canadian-made spirits. Campari has the global ability to take Forty Creek to the next level. Introducing customers around the world to my whisky is a dream come true. I am very excited to continue to devote my time to whisky making at Forty Creek distillery, continuing my whisky journey and exploring my passion for additional Forty Creek whisky expressions."

Now he probably can afford a nicer shirt.

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.

Monday, March 10, 2014

Where Is the Michter's Distillery?

Bulleit Distilling Company, which we hunted for last Thursday, is hardly the only phantom bourbon distillery. The Old Evan Williams Distillery doesn't exist either, except as an assumed business name for Heaven Hill.

Each phantom distillery is different. In the case of Evan Williams, we know exactly where each phase of the production process takes place despite the fanciful name. We don't know that with Bulleit Bourbon. That's the difference.

Which brings us to Michter's. Like Bulleit, they are a non-distiller producer (NDP). The identity of their distiller or distillers is a secret, at the insistence of said distiller or distillers, which we can't confirm because we don't know who they are. NDPs either buy whiskey when it's distilled (contract), which gives them the opportunity to customize it, or they buy it fully aged and ready to sell (bulk). Michter's gets most of its whiskey via contract, although its older expressions are bulk.

Lots of bloggers write about Michter's. Two I can point you to are The Coppered Tot and What Tastes Good. They recently received virtually the same presentation from Michter's that I did. I also toured Michter's work-in-progress facility in Shively, Kentucky. We may not know where Michter's is distilled or aged, but we know where it is dumped, processed, and bottled. That is now taking place in Shively.

Michter's has appeared in this space before, most notably in 2012 when Wine Enthusiast Magazine named them Distiller of the Year. Then as now, Michter's is not a distiller. As noted above, Michter's gets most of its whiskey via contract.

With contract distilling, an NDP has significantly more control than when buying bulk product but that doesn't make them a distiller. The 'cooking in someone else's kitchen' metaphor is valid to a point but a distiller has a distillery at which it mashes, ferments, and distills alcohol. An NDP does not. Calling someone an NDP is not derogatory, it's a statement of fact. Distiller/Non-Distiller is a clear, unambiguous, and useful distinction. Let's not screw with it.

If you want to know more about Michter's, "Michter's: From Way Back When, to Not Long Ago and Today" is one of the front page stories in the new issue of The Bourbon Country Reader.

Happily, a subscription to The Bourbon Country Reader is still just $20 per year (six issues) for addresses in the USA, $25 for everyone else. The Bourbon Country Reader is always independent and idiosyncratic and has no distillery affiliation. It is published six times a year, or thereabouts.

Click here to subscribe with PayPal or any major credit card, or for more information. Click here for a free sample issue (in PDF format). Click here to open or download the free PDF document, "The Bourbon Country Reader Issue Contents in Chronological Order." (It's like an index.)

If you prefer to pay by check, make it payable to Made and Bottled in Kentucky, and mail it to Made and Bottled in Kentucky, 3712 N. Broadway, PMB 298, Chicago, IL 60613-4198. Checks drawn on U.S. banks only, please.

Saturday, March 8, 2014

A Helpful Tip from TTB

This helpful tip came yesterday from the U.S. Treasury Department's Alcohol and Tobacco Tax and Trade Bureau (TTB). "Persons wishing to distill spirits legally are encouraged to visit the TTB distilled spirits homepage at for guidance and to apply for a permit."

That helpful tip came at the end of this news release.

"This week. Alcohol and Tobacco Tax and Trade Bureau (TTB) investigators conducted a joint operation with special agents from the Florida Division of Alcoholic Beverages and Tobacco targeting illegal possession of stills and illegal production of distilled spirits.

"The joint operation resulted in 8 arrests and seizure of 46 stills by Florida authorities.

"The possession of unregistered stills and the production of distilled spirits without a Federal permit and without payment of tax are Federal felony offenses which may result in the seizure and forfeiture of land and other property associated with the illegal activity."

Friday, March 7, 2014

Who Had Medicinal Whiskey Licenses During Prohibition?

Prohibition-era prescription for whiskey.
This year is the centennial of the start of World War I. Also at war during that period were the drys and wets, in the run-up to National Prohibition.

The Prohibition movement was largely a religious movement, spearheaded by Protestant Christians. There were medical authorities on both sides. While Prohibitionist doctors said whiskey was poison, other doctors said it was a useful tonic that they often recommended to their patients.

So strong was the pro-whiskey position among doctors that an exception was written into the Prohibition law. Within certain limitations, doctors were permitted to write prescriptions for whiskey which patients had filled at a pharmacy just like any other medicine. Today, while most doctors are not hostile to alcohol, and many scientists say moderate consumption is healthier than abstinence, officially whiskey has no medicinal value. That wasn't the case a century ago.

Ten medicinal licenses were authorized but only six entities applied for and received them. They were Brown-Forman, Glenmore (now part of Diageo), Frankfort Distilleries (Four Roses now), Schenley (also part of Diageo), American Medicinal Spirits (AMS, which became National Distillers, now part of Beam) and A. Ph. Stitzel Distillery (predecessor to Stitzel-Weller, also now Diageo).

Of the six, Brown-Forman is the only company that still exists, with the founding Brown family still at its helm.

Brown-Forman had been a distiller before 1920 and had its own whiskey to sell medicinally. So did the others except AMS. It had been formed after Prohibition began as a consolidation warehouse in Louisville, which the government mandated because it was so hard to secure whiskey stored in rural warehouses. The license AMS had came via one of the companies it bought to get whiskey stocks, Pennsylvania's Old Overholt. Treasury Secretary Andrew Mellon, who gave out the licenses, gave that one to himself as the owner of Old Overholt.

A medicinal license entitled you to sell whiskey made before Prohibition went into effect, which you could legally buy from the whiskey's producer. The license did not entitle you to distill until 1929, when the government allowed three million gallons of spirit per year to be produced by the medicinal license holders. A. Ph. Stitzel, by then under the control of Pappy Van Winkle, was the first distillery to take advantage of that opportunity. Since Prohibition was repealed four years later, little if any of that post-1929 distillate was sold until after repeal, but it gave Stitzel and others a nice head start.

The whiskey sold during Prohibition 'for medicinal purposes only' was very standardized. It always came in a one-pint bottle, in a box of either cardboard or metal.

While whiskey bottled before 1920 is very rare, Prohibition medicinal whiskey is surprisingly common. A bottle of it is a nice historical artifact but little else. The whiskey inside is generally awful.

UPDATE: (3/15/23) Something I have learned subsequent to this posting is that at least some of the six had consolidation warehouses at multiple locations. Schenley was using its distilleries in Frankfort, Kentucky, and Lawrenceburg-Greendale, Indiana. AMS was mostly in Louisville but they also had whiskey at the Pogue Distillery in Maysville, Kentucky. I imagine some, maybe all, of the others had multiple locations too, I'm just not sure where, but consolidation didn't mean all in one warehouse at one location. It is entirely possible the Overholt whiskey stayed in Pennsylvania under the control of AMS, for example.

Thursday, March 6, 2014

Where Is the Bulleit Distilling Company?

As you can see, the label for Diageo's Bulleit Bourbon says the product is "distilled, aged and bottled by the Bulleit Distilling Co." It further states that the product is "distilled by the Bulleit Distilling Co. in Lawrenceburg, Kentucky." The 2013 Kentucky Bourbon Festival directory of participating bourbons gives the address of the Bulleit Distilling Co. as P. O. Box 136, Lawrenceburg, KY 40342. It also gives a phone number of 1-866-251-7200, which is answered "Bulleit Distilling Company Customer Care Center."

In light of what was reported here on February 26, you might want to call that number and ask them for the street address of the Bulleit Distilling Company in Lawrenceburg, Kentucky, so you can visit the Bulleit Distilling Company's distillery. They will tell you, of course, that they can't give out that information because, unfortunately, they are unable to offer tours.

Diageo wants to have it both ways. The "distilled, aged and bottled" statement is not required by regulators. Diageo chooses to put it there because they think it is wording the consumer wants to see. Likewise the second statement. Although they are required to put on the label a city/state in which the company has a place of business, the "distilled by" part is not required. Again, Diageo presumably likes the way it looks.

Yet Diageo continues to be secretive about where Bulleit bourbon is actually distilled, aged, and bottled. We believe it is aged at Stitzel-Weller in Louisville and bottled at Diageo's facility in Plainfield, Illinois, but Diageo won't confirm. Where is it distilled? Who knows? We know it has been distilled at Four Roses in Lawrenceburg in the past.

Diageo used to confirm that but no longer will. This sudden change is strong evidence that Four Roses is no longer selling distillate to Diageo.

This doesn't mean the label is wrong, since it reflects the truth of the whiskey in the bottle, which was distilled in 2010 or earlier. What we don't know is where it is being distilled today.

The Bulleit web site says nothing about production. It does, however, offer a new story about Augustus Bulleit, who in earlier iterations was a French brandy maker who immigrated to Kentucky, where he applied brandy-making principles to bourbon-making. In the new version he is a tavern keeper in 1830s Louisville, Kentucky, "dedicated to a single goal: the creation of a bourbon unique in flavor. After experimenting with countless varieties in small-batch trials, he finally came upon a bourbon with the character he had long sought after."

That doesn't sound like a distiller. That sounds like a rectifier. No matter, because there is no evidence that Augustus Bulleit even existed. Most property owners in Louisville in the 1830s show up in some official records. Not Augustus Bulleit. Everything about him is attributed to 'family stories.'

Comments to posts like this one often run along the lines of "what does is matter if the whiskey is good?" And the whiskey is good. It matters because Diageo obviously thinks it matters to consumers, because they put the information on the label, but while Diageo carefully stays within the letter of the law it is just as carefully hiding the product's true origins. Do you like to do business with companies that mislead you? Are you suspicious when a company won't even tell you where their products are made? Does that make you feel appreciated and respected as a customer?

Furthermore, the history matters because the bourbon industry is graced with several centuries of actual, fascinating history, some of it at the very heart of the republic's own story. Making stuff up and passing it off as history dishonors the real history and tends to confuse students of it. Again, Diageo disrespects its customers.

Unfortunately, it needs to be said again. There is no shame in being a non-distiller producer and if the actual producer won't let you reveal their identity, that's understandable too.

The shame is in not being honest about it.

Wednesday, March 5, 2014

Court Rules that Sidney Frank's Suit Against Beam Can Proceed

As we learned last Wednesday, distilleries often produce spirit for customers who are also their competitors. Most businesses have no trouble competing on one level and cooperating on another.

But sometimes, for one reason or another, a deal can go bad. When Beam Inc. bought Ireland's Cooley Distillery in 2012, it decided to stop producing for other companies to concentrate on its own portfolio. One of the losers was Sidney Frank Importing Company (SFIC), which used Cooley whiskey for its Michael Collins Irish Whiskey brand.

In March of 2013, SFIC filed a lawsuit against Beam, Inc. alleging that Beam improperly sought to destroy the Collins brand and seeking $100 million in damages. Last week, the judge in that case ruled that SFIC's suit can continue.

In response, SFIC released the following statement by its Chief Executive Officer, Lee Einsidler: "We are pleased by the Court’s ruling although not surprised, as the facts are known and they will speak loudly for themselves. The fact that the Court ruled completely and entirely in our favor on all three causes of action clearly shows that, given our day in Court, we will establish that our long-term contract with Cooley Distillery was in full force and effect, and that Beam wrongfully terminated the contract by unilaterally cutting off the whiskey supply at the source.”

According to SFIC's statement, the judge denied Beam’s motion to dismiss, rejecting Beam’s argument that no long-term contract existed between the parties as a matter of law. The judge further rejected Beam’s bid to dismiss claims for unfair competition and tortious interference, stating that SFIC sufficiently alleged quantifiable economic injury caused by Beam’s actions. He also ruled that the complaint alleges valid claims that Beam “unilaterally and wholly without justification abandoned its supply contract with SFIC,” and that Beam monopolized its distillery production capacity for the benefit of its newly acquired portfolio of Irish Whiskey brands.

Finally, SFIC sufficiently alleged that Beam launched a campaign to undermine SFIC’s wholesale and retail distribution networks by telling key wholesalers and retailers that “[t]here is no doubt Michael Collins is going away.”

SFIC's statement goes on and on about how wonderful SFIC is and how badly Beam has behaved. All that has really happened here is that the judge ruled there is enough substance for the case to go to trial. Nothing was decided.

Beam's retort is short and to the point: "This claim is without merit. We will defend this case vigorously and we are confident that we will prevail."

Normally, when you buy a business, any existing contracts that business has come with it. They aren't cancelled by the sale. SFIC says there was a contract, Beam says there wasn't. Unless the parties settle, that's what the trial will decide.

Tuesday, March 4, 2014

New E Commerce Paradigm Is Bad for Business

(Warning, no bourbon content.)

So I'm browsing a popular social media site and, of course, it is peppered with advertising. I see a small ad for a furniture manufacturer. I like the design of the furniture in the small ad and would like to see more, so I click on it.

What I have done, of course, is normally considered marketing gold. After viewing a small sample of the company's wares, I have elected to voluntarily look at more of their advertising material. In any normal world and in any normal advertising medium, the advertiser would move heaven and earth to put nothing between me and the further consumption of their advertising.

But not this advertiser, and not in this medium.

The advertiser actually blocked the content and demanded my email address first.

Are they insane?

This is not the first time this has happened to me on this particular site and I'm sure people are doing it elsewhere too. It appears to be the new paradigm. Too bad it is fundamentally wrong.

I certainly understand the value of capturing email addresses. When people buy from me I like to capture their email addresses so I can, as they say, inform them of additional products and service they may find interesting. But requiring an email address just to look through the window? That is the stupidest business model ever.

Businesses large and small generally go wrong when they put what they want over what the prospective customer wants. I always tell my marketing clients, don't think about what you want to tell the customer, think about what the customer wants to know. Anticipate and answer the customer's questions and you'll get the sale, whether or not you ever get a chance to make your 'pitch.'

That wisdom is as old as the hills and nothing about all this new technology has changed that or any of the other basic principles of selling. Shame on whoever thought of this and shame on the advertisers who accept it. Sure, I could give them a gmail address I never use, but if their business instincts are so poor, I have no interest in doing business with them.

Looking at it that way, maybe they did me a favor. I'm sure it wasn't on purpose. If you believe you know the rationale for this, please feel free to share it, but I doubt you'll convince me it's a good idea.

Monday, March 3, 2014

New Chuck Cowdery Tour Dates Are June 11-13, 2014

The inaugural Chuck Cowdery Tour of Bourbon Country kicks off in less than two weeks, and I'm excited to announce that we've scheduled another one for June 11-13.

As with the original tour, space is limited, so get your tickets now.

The other half of that 'we' is Mint Julep Tours. They are still finalizing the details of the June tour, but here is a link to the March details. The June details will be up soon. We also expect to make improvements based on the first tour and feedback from the guests, so we can keep getting better.

You might be surprised that we aren't going to more distilleries but you don't need me for that. The distilleries do a great job with their tours and I encourage you to take as many as you can. This is something else, something more. It's three full days of touring and I'll be there the whole time. We'll visit some distilleries, sure, but also a cooperage, and a place where they make bourbon candy. We'll pay our respects to Dr. James C. Crow and see copper stills being made. We'll take you shopping for bourbon at one of the popular local retailers and wrap it all up with a tasting at a favorite Louisville watering hole.

Because the distilleries and other attractions are pretty far apart, there's a lot of driving. We'll fill in that time talking about bourbon. It's going to be a small group, just 20 people, so there'll be plenty of time to chat. You should come, it's going to be great.

If it sounds like fun to bop around Kentucky with me on a comfortable bus, seeing things most visitors don't, why wait to pull the trigger?

To book, or for any questions, call Josh Dugan at (502) 583-1433 Ext. 108, or email him at

Sunday, March 2, 2014

The New Bourbon Country Reader Is a Must-Read

The February 2014 edition of the Bourbon Country Reader (Volume 15, Number 6) is at the printer now and will go into the mail shortly (though it probably will be March before anybody gets it).

If you're not already a subscriber, this one will tip it in for you. We've never had an issue this jam-packed with controversy. The lead headline: "Is KDA’s Kentucky Bourbon Affair Cheating On You?" If nothing else, the KDA may regret choosing that name when The Reader gets through with them.

You'll learn why the KDA's big 'Affair' is a huge power and money grab that kicks regular, loyal bourbon enthusiasts to the curb and is the spearpoint in a campaign to drive all independent visions and voices out of bourbon country.

But that's not all.

Michter's, sometimes called New Michter's to distinguish it from the predecessor company of the same name, gave The Reader unprecedented access to its new Kentucky facility and plans for the future. A lot of it will surprise you.

Finally, how much is a bottle of Pappy 23 really worth? The Reader was given access to a new service that attempts to make and publish a record of actual transactions involving collectible American whiskey, all on the down-low, of course. We'll tell you as much as we can and give you some real numbers too.

Why not just make it easy and post it all here? As we're learning from the KDA, if you want the good stuff, you have to pay for it.

Happily, a subscription to The Bourbon Country Reader is still just $20 per year (six issues) for addresses in the USA, $25 for everyone else. The Bourbon Country Reader is always independent and idiosyncratic and has no distillery affiliation. It is published six times a year, or thereabouts.

Click here to subscribe with PayPal or any major credit card, or for more information. Click here for a free sample issue (in PDF format). Click here to open or download the free PDF document, "The Bourbon Country Reader Issue Contents in Chronological Order." (It's like an index.)

(Please be patient with the links. They seem to be running very slowly for some reason.)

If you prefer to pay by check, make it payable to Made and Bottled in Kentucky, and mail it to Made and Bottled in Kentucky, 3712 N. Broadway, PMB 298, Chicago, IL 60613-4198. Checks drawn on U.S. banks only, please.

Saturday, March 1, 2014

Suntory Sale Puts Maker's Expansion Back on Front Burner

It was just a little over a year ago that Maker's Mark put us all through the proof cut fiasco. You remember that, don't you? My question at the time was, "Why Is Maker's Watering Its Whiskey Instead of Expanding?"

The people who run Maker's Mark have known for ten years or more that the Maker's Mark Distillery needs more capacity if they are going to meet demand while keeping their pledge to make every drop at the beloved distillery in Loretto. The expansion plan was completed and announced in 2005, when Maker's Mark was still owned by Allied-Domecq. Then the sale to Beam happened, but everyone assumed that after evaluating the plan Beam would pull the trigger.

The sale went through, Beam took over, and indeed it did appear that the trigger had been pulled. By 2008, the necessary infrastructure improvements were completed. The lake had been enlarged to increase the water supply and the facility's waste handling capacity had been increased too. The numbers said there was no time to lose. The current facility can produce a maximum of 1.5 million cases a year and sales were closing in on that number.

Still, the expansion was postponed.

Last year, during the proof cut fiasco, all I got in response to my question was a lot of double-talk. Although no one at Maker's or Beam is likely to confirm this, it is apparent now that Beam didn't want to spend the money because it was trying to make itself an attractive takeover target so it could finally get activist investor Bill Ackman (Pershing Square) off its back. With the Suntory deal all but sealed, and no doubt with Suntory's approval, everyone is finally able to exhale and move forward.

The gist of the plan is the same as it was in 2005, to build a third distillery exactly like the other two, thereby increasing capacity by 50 percent. The Rob Samuels letter to Ambassadors talks primarily about the beer still, and that is the heart of the operation, but they will need another doubler and the necessary compliment of cookers, fermenters, and so on.

Vendome, the Louisville still maker, is backed up with orders right now but that won't be a problem because they always have a spare Maker's Mark beer still on hand just in case.

When they get that third still up and running they can finally start to work on the much more vexing problem, what to do next? By all previous accounts, three stills is as far as they can go without finding a new water supply.