Thursday, July 23, 2015

Diageo Goofs, Catches and Fixes It

The good news in this story is that everyone is taking label compliance more seriously these days. Case in point. Yesterday, a correspondent at a liquor store in New York state opened a case of Seagrams 7 and noticed a label change.

He also noticed a serious omission.

Section 5.39(a) of the TTB rules for American Blended Whiskey reads, in relevant part, --  “if neutral spirits have been used in the production thereof, there shall be stated the percentage of neutral spirits so used and the name of the commodity from which such neutral spirits have been distilled. The statement of percentage and the name of the commodity shall be made in substantially the following form: ‘--------% neutral spirits distilled from -------------- (insert grain, cane products, or fruit as appropriate).’”

American Blended Whiskey doesn't have to contain grain neutral spirits (GNS, also known as vodka), but most of it does. Diageo's Seagrams 7 is the best-selling American blend. Since the label says 'whiskey,' TTB figures you should know how much of it actually is whiskey and how much is vodka (the proof tells you how much is water), hence the required 5.39(a) statement.

Here is an example from an older bottle of Seagrams 7 in my possession. More recent bottles declare 75%. The legal maximum is 80%. 'Grain Spirits,' by the way, is the official name for GNS that has had some wood contact, typically 90 days in used barrels. They no longer go to that extra expense so newer labels say 'grain neutral spirits.'

After searching the new label in vain for the Section 5.39(a) statement, I sent an email to Diageo. In less than 24 hours I received the following from Zsoka McDonald, Vice President, Corporate Communications for Diageo North America.

"This was a mistake which we became aware of a few weeks ago.  As soon as the problem was discovered, we immediately notified the TTB, worked with the TTB to disclose all relevant information, and submitted a COLA for a corrected label.  We have since received approval from the TTB on that new label.  We are now in the process of producing these new labels, and expect product carrying the new labels to be produced in the coming weeks.  Please know that we take label compliance extremely seriously, and we have extensively reviewed all aspects of the process with our compliance team."

The new label. Note that, uncharacteristically, the 5.39(a) disclosure is on the front.

As I replied to Ms. McDonald, her answer is exactly what I was hoping for. Everybody makes mistakes and deserves the chance to correct them. That is the difference between responsible industry participants and schemers who omit required label statements hoping to deceive consumers about, for example, where the product is made. That's why this is a story. This is how the grownups roll.


David said...

There's a big difference between an honest mistake and deception. And both are worth talking about. I'm glad you're looking so closely at labels and specifically their TTB compliance. As a full-time label designer for the spirits industry, I've learned a lot of good stuff from your writing. Some of it clarifying the meaning of the rules and sometimes highlighting a rule I never knew existed - or that it really mattered or why. Thanks for that. Please keep up the good work.

Related to this, in particular: recently, I've noticed they are returning labels with a requirement to add "distilled from grain" or "distilled from sugarcane" in places where they previously hadn't required such text. Are they just that fickle? Or maybe it's just a matter of which agent you get? Or perhaps it's always been required but it's been slipping through the cracks and they are tightening up?

Not-as-related, I've also seen a few "white rye whiskies" out there. I thought whiskey had to be oak-aged in order to ever earn the name "rye". How is that working, I wonder. Perhaps it is just aged very quickly.

I digress. Thanks again.

Wade said...

David - To be Rye Whisky, it must be aged in new charred oak container. However there is no age requirement, so they could dump in and out very quickly. That's a big waste of a new barrel IMHO. I'm guessing you are referring to the label you did for Bluebird White Rye Whisky? That does not state aged 1 day in an oak barrel. It does not specify if barrel was new or used. If used, then they really made Whiskey Distilled from Rye Mash or it could also be called just Whisky. I looked the label info they submitted to TTB. It shows this as class type 140, which is just Whisky. Technical calling this Rye Whiskey in big print of front of bottle should be a TTB violation.

Chuck Cowdery said...

Section 5.40 requires an age statement for any whiskey that is less than four years old. This applies to rye whiskey, bourbon whiskey, or just plain 'whiskey.' It does not apply to blended whiskey.

Chuck Cowdery said...

Click here for more about Section 5.40.

Unknown said...

Diageo can't fool me, these mislabeled bottles are now collectibles, $950 a pop, behind glass along with Blade & Bow, ETL, and Jefferson Ocean.
What does 7 Crown mean anyway?

Anonymous said...

Well this is all nice and tidy, except : domestic blended whiskey requires both a formula, and potentially a sample approval of the actual product, which means that the TTB determined the class for this product, and on said formula stipulated the terms on the label. Thereafter the DSP and the TTB are required to match the terminology and wording on the formula, with the actual label, which apparently neither party did.

This isn't a case of the DSP leaving something off the label in a vacuum. Something else happened with the process with both entity's that allowed this error.

akendeall said...

Ugh. I thought the age-statement requirement was for "Straight" (Rye) whiskeys that are under 4 years. Not all Rye Whiskeys.

Every time I think I have the TTB figured out, I realize how little I know.

Thanks for the info! Gives me something to chew on...

Erik Fish said...

Speaking of labels (and only slightly off topic), I know the TTB isn't interested in the fairy-tales that the brands put on their labels, so it takes you bloggers and journalists to occasionally keep them honest.
The other day I had occasion to take a closer look at the Michter's label and almost choked on my dram because I had to laugh. The silliness of Bulleit's "frontier whiskey" thing is pretty well-known by now, but (and I quote verbatim from the label) "the Michter's pre-Revolutionary War quality standards" really take the cake. This deserves to be made fun of publicly much more often.

Unknown said...

So I guess if they exceed the legal maximum of 80% GNS it becomes 'flavored vodka' instead of 'blended whiskey'? Seems like having only 20% of the namesake material is a bit underwhelming to say the least! I think if consumers actually read and understood the labels they would be shocked.

Anonymous said...

Incorrect or lying on a Cola penalty is just losing License its Perjury. Consumers should push the Feds to prosecute Templeton management. That might stop the next company more so.
"Under the penalties of perjury, I declare; that all statements appearing on this application are true and correct to the best of my knowledge and belief; and, that the representations on the labels attached to this form, including supplemental documents, truly and correctly represent the content of the containers to which these labels will be applied. I also certify that I have read, understood and complied with the conditions and instructions which are attached to an original TTB F 5100.31, Certificate/Exemption of Label/Bottle Approval."

Oknazevad said...

Between 5% & 20% straight whiskey (or at any percentage the whiskey is not "straight", e.g., aged in used barrels), the proper label is "spirit whiskey".

And while only 20% definitely comes off as weak to someone used to straight whiskey, you'd be amazed how much it really does stretch for the lighter flavored category of blends. There's so much of the congeners and other heavy compounds in the straights that one gets a lot of flavor in the blend, even if the base is literally flavorless neutral spirits. Especially when one considers that the straight whiskeys used are often specifically designed to be used as components in a blend, and therefore specifically highlight particular flavors. (Though the masters of that are Canadian distillers. While the base of Canadian whisky is aged for at least three years (in used barrels), it too is pretty neutral in character, and most of the flavor comes from the longer-aged, lower-still-proof, straight-like whiskies they add.)