TTB May Crack Down on Section 5.36(d) Violations

Tasseography is a fortune telling method that interprets patterns in tea leaves, coffee grounds, and wine sediments. It's unfortunate that bourbon enthusiasts are so often forced to engage in divination to figure out where certain whiskeys are made, but it has always been so.

The Federal regulator, the Alcohol Tax and Trade Bureau (TTB), is supposed to help by requiring producers to put certain information on their labels. Section 5.36(d), for example, requires that "the State of distillation shall be shown on the label of any whisky produced in the United States if the whisky is not distilled in the State given in the address on the brand label."

So since Templeton Rye's label gives its address as Templeton, Iowa, but its whiskey is distilled in Lawrenceburg, Indiana, the words "distilled in Indiana" should appear somewhere on the Templeton label, but they don't. That's a violation of Section 5.36(d).

Templeton is far from alone. Other producers with one or more whiskeys not in compliance include Whitmeyer, Troubadour, Yellow Rose, Red River, Witherspoon, Rebecca Creek, and Treaty Oak.

You can view the list and a thread about it on straightbourbon.com here. They found at least 29 offenders. That list has been provided to TTB, at their request.

Some producers have already caught on. Smooth Ambler's first Old Scout releases didn't show the state of distillation but the more recent ones do.

This has come to light because so many small producers are getting their whiskey from the same distillery, MGP of Indiana. In many cases, the omission may be a mere oversight. In others, it looks like a deliberate attempt to convey a misleading impression about the whiskey's origins, exactly what 5.36(d) is intended to prevent.

Communicating with the TTB about these issues requires some divination too, as it is their policy never to discuss enforcement activities. An email yesterday to Tom Hogue, TTB's point of contact for all media inquiries, asked if we are interpreting 5.36(d) correctly. "5.36(d) is pretty straight forward and it sounds like you are reading it correctly," he replied. "If there are concerns about the accuracy of specific labels, please let us know and we will address the issue as appropriate directly with the affected industry member(s)."

Finally, since so much of this sourced whiskey is coming from MGP of Indiana, perhaps they should be encouraged by TTB to alert their non-Indiana customers to this requirement.

If your reaction is "So what? It's just a bunch of little guys I've never heard of," consider this. Through action by the Tennessee ABC, it was revealed that Diageo is distilling whiskey in Tennessee that it is aging in Kentucky, in violation of Tennessee law. All Diageo has said about this whiskey is that it is not intended to be sold as George Dickel Tennessee Whisky. It appears that none of this whiskey has been COLA’d yet, but when it is TTB should be alert to the potential for a 5.36(d) violation.

As we wrote last month, TTB fails like this have become all too frequent as the bureau has been bombarded by thousands of COLAs from hundreds of new, small producers. It matters because it undermines confidence in the TTB's entire consumer protection mission.