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Will Tennessee Become A Whisky Monoculture?

by Oliver Klimek on April 26, 2013

There is some disturbing news coming out of Nashville. Tennessee lawmakers are currently discussing a bill to define “Tennesee Whisky” as a bourbon filtered through charcoal prior to ageing.

Charcoal filtration – also known as the Lincoln County Process – is a practice that is currently employed by most but not all distilleries in Tennessee. A noatable exception is Pritchard’s who take particular pride in the fact that they do not filter their whisky.

Pritchard’s actually managed to become exempted from the new legislation after their intervention, and we should note that the bill has not become a binding law yet, even though this is very likely to happen.

Some issues here are worth a closer look. Firstly this looks like a very successful piece of lobbyism from the Tennessean whisky big shots, as also alluded to by Pritchard’s on their website. Especially Jack Daniel’s have been very eager to set themselves apart from their Kentucky competitors by spreading the myth that their whisky is something different. But ironically, even under the new law-to-be, Tennessee whisky will still be a bourbon.

Mind you, this is not the first case of whisky lobbyism ever. The Scotch Whisky Asssociation for example is in a position to write the regulations for their product themselves. But there is a notable difference. While the Scotch whisky regulations are quite strict and rigorously enforced by the SWA, they do allow for a wide variety of whisky styles, from cheap mass market blends to high end single malts and whiskies with all kinds of weird cask finishes. And certainly this is one reason for the big success of Scotch whisky on global markets.

The Tennessee bill in contrary takes the already rather narrow definition of bourbon whisky and narrows it down even more by requiring charcoal filtration. And it is not about the filtration alone, because what the new bill means is that it will become illegal to label any other type of whisky as hailing from Tennessee. There would not be any Tennesse corn, rye or malt whisky, only charcoal-filtered bourbon.

This leaves you wondering if the legislators in Nashville actually grasp the scope of that they are going to do. Establishing a legal definition for Tennessee whisky itself is an understandable venture – even if Kentucky does not seem to care about not having their own category. But if putting their whisky industry into handcuffs and straitjackets would be good for the Tennesee economy overall is highy doubtful.

And then there is a legal aspect as well. I am not sure how US law works in this respect, but even if labelling requirements in one US state would be automatically valid in all other states too, for export it would need international agreements. Canada for example currently defines Tennessee Whisky as “a straight Bourbon whisky produced in the State of Tennessee”. On one hand the new Tennessee definition does not require it to be over two years old, but on the other hand filtration is not required in Canada. If Canadian lawmakers should decide to stick to their own definition, there would be a situation where unfiltered bourbon from Tennessee could be sold as “Tennessee Whisky” in Canada but not in the United States.

 

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{ 10 comments… read them below or add one }

sku April 26, 2013 at 3:18 pm

Just to be clear, the bill does not limit what can be produced in Tennessee, only what can be labeled “Tennessee Whiskey”. Anyone is still free to make corn, malt, rye or any other type of whiskey in Tennessee, they just can’t call it “Tennessee Whiskey”, “Tennessee Sour Mash” or “Tennessee Sour Mash Whiskey.” It appears they could even call something Tennessee Rye or Tennessee Malt.

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Oliver Klimek April 26, 2013 at 3:27 pm

I do understand it’s only about the labelling and I think the article makes this clear. I think what makes this complicated is that the bill is trying to tie a specific whisky type to a geographic provenance and the generic term “whisky”. Of course a rye whisky from Tennessee is a Tennesee whisky. Distillers just have to find a way to name it differently.

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Alex May 1, 2013 at 3:58 pm

I assume that federal labeling standards require the word “whiskey” (or “whisky”) on products that are whiskey. I assume a rye cannot be labeled just a “rye,” but that the label must state somewhere, even if in smaller type, that it is a rye whiskey. It’s not up to the producers to decide how to label their product–they must label it with the proper category of spirits under federal law.

I don’t know if the bill only prohibits the exact phrase, “Tennessee Whiskey”, but I assume that adding the word “rye” or “malt” would not satisfy the state.

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sku April 26, 2013 at 3:36 pm

In addition, it’s a state law, so it applies only to the state of Tennessee and has no application in other states. A producer would not be limited in calling something that did not meet the definition “Tennessee Whiskey” in another state, just not in Tennessee. There may even be lawsuits challenging whether Tennessee can create its own definitions given that the federal government already creates classifications of spirits.

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Oliver Klimek April 26, 2013 at 3:43 pm

This is exactly what I was wondering about. The fact that the US whisky types are defined by federal authorities made me wonder if a state law can just add their two cents to it. If this only applies to bottles sold in Tennessee the whole initiative would be pretty usesless.

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Alex May 1, 2013 at 3:48 pm

I don’t know if that’s the only interpretation. State laws can be enforced against any residents of the state, even for activities that take place outside of the state. It’s possible that a distiller or manufacturer in Tennessee could be prohibited from labeling any of their non-conforming whisky as Tennessee whisky, regardless of where it’s sold–the law could make the illegal act the act of labeling (which, often, isn’t even an activity outside of the state unless the bottler is somewhere else–even then, the bottler would be acting under the authorization of the Tennessee manufacturer, making the manufacturer liable).

Therefore, if this is the case (and I don’t know because I haven’t read the bill), a Tennessee producer would not be able to sell their non-conforming whiskey in other states (or even in Canada) as Tennessee whiskey. An exception would be if the producer sold their whiskey in bulk to a buyer outside of the state (thereby avoiding the act of labeling the bottles), then the buyer could repackage the whisky as bourbon, Tennessee whiskey, or whatever the prevailing law of their jurisdiction allows. Of course, there is little incentive for Tennessee producers to do that.

So it could be that this affects all Tennessee producers. Of course producers outside of Tennessee are not affected, but they can’t label any whiskey as Tennessee whisky anyway.

I highly doubt that lawmakers created a bill that would only affect the relatively minuscule sales inside Tennessee.

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Alex May 1, 2013 at 4:01 pm

I meant to add that the penalty for breaking this law is enforced by the state. So of course, the state is well within its right to suspend the distilling license of any producer located in Tennessee. This can’t affect producers outside of Tennessee, but of course they can’t label their product as Tennessee-made.

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Angrist April 28, 2013 at 9:15 am

Even if it would just apply in tennesse, which i doubt,

if would still have the advantage for JD, that it would raise the costs for producers of other sorts of whisky in tennessee.

If you can force your rivals to increase their price by 10% (or to lose 10% revenue, if they don´t raise the prices) most companies would be happy to do that

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Dave May 5, 2013 at 2:54 am

Correct me if I’m wrong, but I don’t think there is a product currently on the product that violates this law. Everyone that knows whiskey knows that Tennessee whiskies, ie. JD and DInkel are charcoal filtered, nobody else cares. What’s the big deal?

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Oliver Klimek May 5, 2013 at 6:22 am

1. Does really “anyone” know? I would bet that most JD consumers never ever heard of charcoal filtering. I agree that 99.5% or more don’t care at all about this issue. But this does not mean the government should do what they want or what Jack Daniel’s tells them to do.

2. You equate Tennessee whisky with charcoal filtration ehich is plainly wrong. Pritchard’s had to intervene personally to get an exemption because they don’t use filtration. What about others? What about someone wanting to open a craft distillery who happens not to like the a taste of charcoal-filtered whisky? Would you really say to them: “If you don’t want filtration, get lost and move elsewhere, we in Tennessee do things differently?”

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