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‘Tennessee Whiskey’ label under attack on Capitol Hill

Posted on Friday, March 21, 2014 at 1:31 pm

Phil Pritchard, owner of Pritchard’s Distillery, holds up a copy of federal alcohol regulations during a House State Government Committee in Nashville on Tuesday, March 18. Pritchard, whose Kelso-based distillery was exempted from last year’s law establishing a legal definition of Tennessee whiskey, testified in favor of a full repeal of the measure. (AP Photo by Erik Schelzig)

Phil Pritchard, owner of Pritchard’s Distillery, holds up a copy of federal alcohol regulations during a House State Government Committee in Nashville on Tuesday, March 18. Pritchard, whose Kelso-based distillery was exempted from last year’s law establishing a legal definition of Tennessee whiskey, testified in favor of a full repeal of the measure. (AP Photo by Erik Schelzig)

It appears that Jack Daniel’s Distillery and parent company Louisville, Ky.-based Brown-Forman are in for a fight. While the first jabs were thrown earlier this month, on Tuesday, the haymakers began to fly. It may be next week before a winner is declared.

State lawmakers are considering an outright repeal of a 2013 law that established, for the first time, a legal definition of Tennessee whiskey. Supporters of the move in the House State Government Committee said Tuesday that the law enacted last year unfairly benefits Jack Daniel’s.

State Rep. Bill Sanderson (R-Kenton) introduced an amendment Tuesday to repeal the entire Tennessee whiskey law passed last year. The panel adopted that change on a voice vote, but delayed a final vote on the bill until next week.

The battle has gained national attention.

Last week, officials at the Jack Daniel Distillery forcefully denounced the legislation, saying that Tennessee Whiskey is “under attack.” The legislation would allow for the reuse of barrels that Jack Daniel’s Master Distiller Jeff Arnett 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 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 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.”

The bill being considered in Nashville would amend last year’s legislation to allow for the use of used oak barrels in maturation and allow maturing whiskey to be stored outside of Tennessee.

Phil Pritchard, the owner of Pritchard’s Distillery in the Elora community of Lincoln County, noted that spirits like Scotch and Irish whiskies, brandy, cognac and rum are stored in re-used barrels.

“It’s about variety, it’s about entrepreneurship, it’s about quality,” he said. “But mostly it’s about the customers who buy our products.”

State Rep. David Alexander (R-Winchester), whose 39th District includes Franklin, Moore, and Marion counties, addressed the Metropolitan Moore County Council during Monday night’s regular monthly meeting. He gave a brief update on what’s happening in the state legislature.

“There’s a good bit of fighting going on about it,” said Alexander. “I don’t know why, but there is.”

The legislation would allow for the use of so-called “rejuvenated casks” in “Tennessee Whiskey” production, meaning casks that have been used previously and then planed on the inside to remove layers of charred and whiskey-soaked wood to expose fresher wood underneath. In an email response, the bill’s sponsor, Sen. Mark Green (R-Clarksville) said that this would help smaller distillers save money while still preserving the quality of their whiskey.

Arnett contends, however, that the fight isn’t with small distilleries, such as Prichard’s Distillery. But some new distillers argue they want to explore different types of spirits that wouldn’t be allowed to be called Tennessee whiskey under the current law.

“This is not forcing people to produce a product that’s going to taste like Jack Daniel’s,” Arnett said. “We think there’s plenty of creative and innovative space for each brand and new distillery to create their own unique form of whiskey.

“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.”

Alexander suggested that it could be in the best interest of small distillers to not amend the current bill.

“That’s why Jack Daniel’s wants to define Tennessee Whiskey, so if these other smaller distillers want to do that, they can hitchhike on Jack Daniel’s reputation … on Lynchburg’s reputation,” said Alexander.

Diageo is already in the Tennessee Whiskey business, as the company owns and operates Tullahoma-based George Dickel. Ironically, any attempt to alter the existing law would affect the Dickel brand as well. Diageo spokesman Mike DaRe has said that the bill is anti-competitive and hurts smaller distillers, while allowing one company to define an entire category of whiskey.

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,” Arnett said. “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 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 10 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,” Arnett added. “No one is saying that companies can’t make the product however they want — whether that’s 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.”

State Sen. Janice Bowling (R-Tullahoma) has proposed last year’s label rules not enter force for five years to give everyone more time to reach an agreement. Meanwhile, “I’d just invite everyone down to Tennessee and they can enjoy Jack and George,” said Bowling.

—By ROBERT HOLMAN, editor & publisher (DVL Public Relations, The Associated Press and The Wall Street Journal contributed to this story)

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