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.


kaiserhog said...

Surely, this doesn't pass. The sad thing is that Diageo doesn't have a clue that they possess one of the hidden gems in the world of Whiskey.

Truly stunning that one company could possess such a tin ear.

scott said...

I'm confused. Is Diageo advocating using reused barrels? How is it "this is about Diageo"?

Chuck Cowdery said...

Yes, Scott, Diageo is "advocating using reused barrels" and worse.

Doctor Tarr said...

Considering what Brown-Foreman did to Early Times thirty years ago, and the way they've dropped the proof of Jack Daniels over the same period, this sounds less like defending quality and more like simply attack a competitor to me.

scott said...

Have they said why? I knew the micros were against the law that was passed. What does the big galoot want to do that they can't now?

Anonymous said...

I don't get it! Diageo is probably the biggest user of ex-bourbon barrels in the world (their Scotch distilleries benefit from relatively low cost wood).

Why would they advocate change in American whiskey law, thereby increasing their costs significantly in the Scotch (and rum) business?

Re-use of wood in America will reduce availability of ex-bourbon wood for use elsewhere in the world, thereby:
a) increasing costs for other whisky producers, and/or
b) significantly changing the taste profile of all other whisky

As the biggest producer of Scotch (and a large produder of Rum) both of those outcomes would impact Diageo the most...


Anonymous said...

Mmm... sub-two-year-old Dickel from a massive 4th fill hogshead. Just what everyone has been clamoring for!

Alex said...

Seems to me HB2330 and SB 2441 for the 108th regular sesion 2013-2014 is just about "requires commision to suspend or revoke a license or permit instead of imposing a fine after the third violation..."

Nothing in this bill about barrels.

Am I looking at the wrong bills? Do you have a link to the ones you mention?

Chuck Cowdery said...

All you can find online are the abstracts. That's not the whole bill, which apparently has not been published.

theBitterFig said...

@ portwood:

New barrels are an expense, too. Consider: Let's say Diageo reuses 20% of their Dickel barrels for a refill before shipping them off to mature Johnnie Walker components. That probably doesn't make too much of a difference to JW, a bit more second-fill bourbon as opposed to first fill. No doubt, a fair portion of Scotch is already second-fill, or beyond. Meanwhile, they can either reduce their new barrel purchases at Dickel or increase their production volume without increasing barrel purchases, and then use a mix of new and refill barrels for Dickel. 20% refill barrels probably doesn't make too much of a difference in the flavor profile, particularly since Dickel gets the charcoal treatment.

There might also be second-order effects. Allowing reuse of barrels might decrease the demand for new barrels slightly, lowering prices. I don't know enough about the elasticities of the barrel market to be sure, however.

That doesn't mean I support the idea, just that I can understand how Diageo feels it could be profitable.

Unknown said...

First off...hands off my dickel you philistines!
Secondly. ..not that I often defend brown forman, but they do make a early times using new wood
Thirdly. .stop telling people how good dickel is!

mrupright said...

If someone's messing with Dickel, I'm not going to be happy.

However, I looked up the full text of both bills (they are available). In the 2013-4 session, both House and Senate bills are identical and only deal with fines and revocation of licenses.

Could the bill numbers be wrong?

Here's the full text of the senate bill:

By Green

AN ACT to amend Tennessee Code Annotated, Title 57, relative to alcoholic beverages.


SECTION 1. Tennessee Code Annotated, Section 57-1-201(b)(1)(A), is amended by adding the following language at the end of the first sentence of the subdivision:

However, the commission shall not impose a fine on a license or permit holder for the same type of violation more than three (3) times in a two-year period. The commission shall be required to suspend or revoke the license or permit instead of imposing a fine after the third violation within the two-year period.

SECTION 2. This act shall take effect upon becoming a law, the public welfare requiring it.

Chuck Cowdery said...

Here is what seems to be missing online. The proposed new law is first, followed by the law as passed last year.

Jim Manley said...

Interesting that the new bill also leaves out the requirement that the charcoal filtering must use maple charcoal.

Anonymous said...

It's interesting that Jack Daniels is attacking this one aspect of the definition of Tennessee Whiskey when they have themselves tried to "duck and dodge" the rules. For example, did you know that some of their special whiskey products that are claimed to have been charcoal mellowed are only actually passed through a tube (yes tube!) of charcoal. I would say that the tube was about 6 inches wide and 2.5 ft long. "As long as it passes through this tube we can call it charcoal mellowed" (with laughs). While I'm at it I have major issues with the deception that they pass upon to the tourists/customers on a daily basis. Jack Daniels likes to make everyone believe that their whiskey is "drop by drop" but in reality it is flows through those vats at several gallons per minute. The ONLY charcoal mellowing vats that show "drop by drop" are those that the tourists in Lynchburg pass by each day. In the meantime, Brown-Forman and Jack Daniels are conducting research to see just how fast they can get away with on rushing it through those vats. I could go on and on about all of their deceptions!