Monday, July 27, 2015
Earlier this month, it was widely reported that Templeton Rye has settled the three class action lawsuits brought against it for deceptive marketing. If approved by the court, the settlement will entitle anyone who has purchased Templeton Rye since 2006 (about when the brand was launched) to up to $36 in compensation, depending on whether or not they have receipts, and other factors.
The Iowa-based non-distiller producer’s problem has always been that while its claims may be technically true, they have been deliberately framed to be misleading as hell. Templeton’s apologists have argued, “That’s just marketing,” which is true to an extent. Templeton’s sins have been of degree more than type.
In addition they broke a key federal labeling rule, essentially misleading the government along with everyone else. That's a problem. Misrepresentation on a label approval application can cost you your license.
When this story broke last year Templeton’s real owner, Vern Underwood, who also owns a large liquor distributorship called Young’s Market Company, emerged from the shadows and tried to contain the damage. He did joint interviews with Templeton president, co-founder, and usual front man, Scott Bush. Both men have now returned to the shadows, leaving co-founder Keith Kerkhoff to tidy up, a decision they may now regret.
As the settlement was being reported, Templeton released a statement. It begins: “After demonstrating to Plaintiffs that Templeton Rye Whiskey is not a ‘stock whiskey’ sourced from a third party…” That is just the first of many misrepresentations and outright lies in Templeton’s current campaign to rehabilitate its brand image.
Templeton Rye whiskey, as is now widely known, is distilled and aged at MGP of Indiana, a former Seagram’s-owned facility. It is made according to a recipe developed in the 1990s by then-master distiller Larry Ebersold. It is an unusual formula. The mash bill is 95 percent rye and five percent barley malt. It has, however, never been exclusive to Templeton. It was originally developed as a flavoring whiskey for Seagrams Seven Crown and other blends. You can buy the same whiskey as Bulleit Rye, George Dickel Rye, Redemption Rye, and many other brands.
What was unknown until last year, after the suits were filed, is that Templeton uses a little-known loophole in the Federal Standards of Identity for Distilled Spirits allowing Rye Whiskey (but not Straight Rye Whiskey) to contain “such harmless coloring, flavoring, or blending materials as are an essential component part of the particular class or type of distilled spirits to which added, and (ii) harmless coloring, flavoring, or blending materials such as caramel, straight malt or straight rye malt whiskies, fruit juices, sugar, infusion of oak chips when approved by the Director, or wine, which are not an essential component part of the particular distilled spirits to which added, but which are customarily employed therein in accordance with established trade usage, if such coloring, flavoring, or blending materials do not total more than 2 ½ percent by volume of the finished product."
Exactly what the flavoring additive in Templeton is has not been revealed but it is made by a company in Louisville. It is supposedly something “customarily employed in accordance with established trade usage,” but no one in the trade seems to know what it might be. That little bit of flavoring is the sole basis for the claim that Templeton Rye is not ‘stock whiskey,’ though to many consumers the revelation that the product is artificially flavored may be worse.
In the official statement, Kerkhoff is quoted as saying, "Though the relationship between Templeton Rye and our Indiana-based distillery partner is described on our website, we recognize that our marketing efforts should have provided more clarity about our production process." They refuse to admit that, from the beginning, Templeton has violated rule 5.36(d), which requires the state of distillation to be identified on the product label.
Kerkhoff and company would have you believe they have been upfront about buying, not making, their whiskey from the beginning. That is a lie. Although they never said ‘distilled in Iowa,’ they did say ‘made in Iowa,’ which really meant ‘bottled in Iowa’ and nothing else, but that was never made clear. They never mentioned that it was distilled in Indiana, as the labeling law requires. Their first web site even included a picture, under the headline ‘Our Still,’ that was clipped from the catalog of a still manufacturer in Germany. They had to use the catalog clipping because they owned no such still and the prop still they bought to show the rubes, I mean ‘fans,’ looked nothing like it. In his reply to my 2008 post, Bush merely conceded that “we make some of our product at another distillery.” Some? How about every single drop, from day one.
The Templeton label didn't come into legal compliance, finally revealing the whiskey’s Indiana origins, until this year, after they were forced to change it by the lawsuits. They also replaced the words "Small Batch" with "The Good Stuff," changed "Prohibition Era Recipe" to "Based on a Prohibition Era Recipe” and identified Alphonse Kerkhoff as the source of that recipe.
Although Keith Krekhoff sounds very temperate in the company’s official statement, his tone was very different when he talked to Mark Gillespie a day or two later for WhiskyCast. In the interview, Kerkhoff condemned the settlement as "legalized stealing."
He also repeated the lie that he and Bush “had always been clear about the fact that their whiskey has been distilled and matured at MGP Ingredients in Lawrenceburg, Indiana, but was shipped to Templeton, Iowa for bottling.” No, they were not 'always' clear about that fact, only admitting it over time in dribs and drabs. Even as late as 2008, while they admitted that a ‘distillery partner’ existed, they would not reveal who it was and mocked inquirers who guessed wrong. All this, of course, was written in places where most consumers would never see it. The product label, where the state of distillation disclosure was legally required to appear, still didn't show it.
In the WhiskyCast interview, Kerkhoff also said that “Templeton Rye bottles have always carried the term ‘Produced & Bottled by Templeton Rye Spirits LLC, Templeton, Iowa’ - which complies with federal regulations for whiskies produced by so-called non-distiller producers such as Templeton.” It is true that the rules allow a bottler to use terms like ‘made’ and ‘produced,’ even though those words suggest a greater role in making the product itself. Templeton’s intention to deceive is demonstrated by their use of ‘Produced & Bottled’ since, in their case, ‘produced’ and ‘bottled’ mean exactly the same thing.
Kerkhoff also told Gillespie that the real victims are the poor people of tiny Templeton, since his company probably will not be able to afford the big parties they have thrown and the philanthropic donations they have made in the past to cement the town’s complicity in their ongoing fairy tale.
In January, Templeton's insurance company asked a court to rule that it had no duty to pay any claims resulting from the lawsuits. In April, Templeton agreed that no coverage existed and the suit was dropped, so Templeton itself is directly on the hook for all claims. Its insurance company won't help. Last week, the Des Moines Register reported that the claims will be capped at $2.5 million.
While it is always nice to see a couple of nasty con men brought to justice, the tragedy here is that they have a delicious product and even the story is kind of sweet. The whole thing might have worked just as well if they had not tried so hard to make people believe it was literally true.
In the WhiskyCast interview, Kerkhoff called the plaintiffs ‘greedy people,’ but the greed of Kerkhoff, et al, is what laid Templeton low.
Thursday, July 23, 2015
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.
Friday, July 10, 2015
A Certificate of Label Approval (COLA) is a form producers submit to the TTB, the federal regulator. Producers can't bring a product to market until its label is approved. Where the producer signs it, it says, "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."
Pretty serious stuff.
It is with that background that we provide TTB ID 11018001000381, submitted by Brown-Forman Corporation on behalf of its Jack Daniel Distillery, approved and issued on February 15, 2011. It is for a 50 ml bottle of Jack Daniel's Old No. 7 Tennessee Whiskey. Look what it says under 'class/type description,' 'Bourbon Whisky.'
You can see the whole document here, on the TTB web site.
Doesn't this prove that the TTB considers Jack to be 'Bourbon Whisky'?
Jack Daniel's submits many COLAs every year. They usually just say 'whisky' in that spot. Sometimes they say 'bourbon whiskey.' That part of the form is completed by the TTB, not the producer. Approved COLAs can contain mistakes. In most cases, the COLA form doesn't have to be corrected if the ultimate label is correct. Anyone who has looked at a lot of COLAs has seen plenty of mistakes.
The real surprise would be if the words 'Tennessee Whiskey' appeared in that spot, because 'Tennessee Whiskey' isn't recognized as a class/type.
So is Jack Daniel's a bourbon or not?
The answer is yes.
Jack Daniel's is not bourbon because it is Tennessee whiskey. Seventy years ago, the federal regulator wrote a letter to Jack Daniel's, at the company's request, granting it permission to call itself Tennessee Whiskey and not bourbon, acknowledging that the 'Lincoln County Process' (i.e., extensive charcoal filtering of the distillate prior to aging) makes Tennessee whiskey a distinctive product. That letter is all there is, that and a long history of the regulator accepting the term without objection. No steps were ever taken to add 'Tennessee whiskey' as an official 'type' in the regulator's rule book.
So, yes, Jack Daniel's is Tennessee Whiskey and not bourbon.
However, Jack Daniel's is bourbon for the following reasons. It is made exactly like a bourbon in every respect, and nothing about the Lincoln County Process prevents Jack Daniel's from being called bourbon. Everything you have heard in that regard -- and there is a lot of stuff out there -- is false. Jack Daniel's tastes more-or-less like a bourbon and is found in the bourbon section of your liquor store. Even in Tennessee, stores don't have a Tennessee whiskey section. When industry monitors report bourbon sales, they include Jack Daniel's and Jack Daniel's is by a wide margin the best-selling bourbon-style whiskey in the world.
So by all of those measures, Jack Daniel's is bourbon.
Jack Daniel's, of course, is not the only Tennessee whiskey. Diageo's George Dickel uses its own version of the Lincoln County Process and also the term.
For 70 years, 'Tennessee whiskey' was not defined except by tradition and practice. A decade or so ago, the office of the United States Trade Representative, seeking to protect 'Tennessee whiskey' as a distinctive product of the United States, defined it as "straight bourbon whiskey made in Tennessee." In 2013, the state of Tennessee codified it further, spelling out the definition of bourbon and adding charcoal filtering through maple charcoal, and further requiring that all of those steps take place on Tennessee soil.
Although that law was challenged in each of the two subsequent legislatures, it survived and appears to be permanently ensconced. Although it is a state law, it effectively defines 'Tennessee whiskey' for the whole world.
So that's the story, and the moral is: don't get drawn into arguments about whether or not Jack Daniel's is bourbon. It's just not worth it.
Wednesday, July 8, 2015
'The Spirits Business' published an odd and oddly interesting list earlier this week. They call it 'Top 10 Best Selling World Whisky Brands,' but a clearer title would be 'Top 10 Best Selling Whisky Brands that Aren't Scotch.'
As it happens, the list consists of whiskeys from the United States, Canada, Ireland, and Japan. The United States leads the medal count with four. Canada has three, Japan has two, Ireland has one. Three of the four Americans are straight whiskey. Everything else on the list is a blend. Beam Suntory has three of its brands included, Diageo has two. No other company has more than one.
That's one of the ways this list is strangely skewed. Put scotches back in and Diageo would win by a mile. Take them out and Beam Suntory's US/Asia axis beats Diageo's US/Europe orientation, a sign of things to come perhaps.
The list is based on 2014 sales volume. It ranges from just under two million cases to almost twelve million, an extraordinarily wide range. That's because Jack Daniel's so dominates a list configured in this way, at 11.7 million 2014 cases, compared to 7.4 million for number two Jim Beam. Take Daniel's out of the mix and the volumes are much more tightly bunched.
Here's the list:
- Jack Daniel's
- Jim Beam
- Crown Royal
- Suntory Kakubin
- Seagrams Seven
- Black Nikka
- Black Velvet
- Canadian Club
- Evan Williams
The point of the list? Hard to tell, except that there are certainly many in the international drinks community who are prepared to imagine a world without scotch.
Monday, July 6, 2015
I'm asked to taste a lot of whiskey. I'm not complaining, not at all. It is, for one thing, free. Still, sometimes there is a disconnect between what I want to taste and what I need to taste. If I'm not drinking for the sheer pleasure of it often enough, I get grumpy.
Even though I receive a lot of whiskey for free, I sometimes have to buy the things I want to drink. I know, poor me.
Sometimes I have to let myself drink what I want to drink, even though I'm backed up with things I need to drink. I know, I know, such a tough job, but still.
I'm posting this because people often ask me to name my favorite bourbon. I couldn't possibly have just one favorite, so I try to name a few. A good place for me to start making that list is with bourbons I pay for.
Some of these may surprise you.
The list starts with 100° proof Very Old Barton. I've never gotten a bottle for free and yet I try to always have one on hand, as has been the case for 30 years or so. More recently, Rittenhouse Rye Bottled-in-Bond has been on that list. I did, however, recently receive a free bottle of Heaven Hill's rebooted Pikesville Rye, which is close enough. I predict that bottle won't last long.
I usually have one of my favorite wheaters in the drinking queue; Weller 12, Larceny, Van Winkle Lot B.
Two recent purchases that I could no longer live without: Eagle Rare 10-year-old and Wild Turkey Kentucky Spirit. Wild Turkey has been doing more and more limited editions and expanding the Russell's Reserve line, but it's awfully hard to beat Kentucky Spirit or Rare Breed, two bourbons that are just about as good as any bourbon really needs to be. Eagle Rare 10-year-old is the same way, and such a good deal too.
I'm never sorry to see a bottle of Evan Williams Single Barrel Vintage, regardless of how I obtain it or what year it is, although I still have a soft spot for the 1994. The same goes for anything from Four Roses. Buffalo Trace, the brand Sazerac never intended to create, has turned out brilliantly. It, too, is always welcome in my glass.
I love Booker's and would buy it if the Beam folks didn't keep me so well supplied.
This is some of what I like. If there's a larger message here, if my personal preferences have any meaning for someone else, you'll notice that I haven't mentioned any mega-dollar wood monsters. They, in fact, come under the heading of things I sometimes get tired of tasting. I'm much more interested in what Old Forester, Blood Oath, and others are doing, creating original flavor profiles by skilfully blending different straight bourbons. In Old Forester's case, they're doing it with liquid that all comes from the same distillery and recipe.
Also absent from this list is anything from a micro-distillery or anything from an NDP. Part of that is the free stuff. In both of those categories, what I get for free and what I enjoy drinking just about balance out, so no need to spend money. That said, most micros still have a way to go to get into my regular drinking rotation and most NDPs are over-priced compared to buying comparable products directly from the makers.
Drink critics are just like critics of music, movies, or anything else. I'm only really useful to you if what you like is similar to what I like. What I like isn't in any sense what anyone should like. You should like what you like. If you happen to like what I like, then you might find my recommendations helpful. If you don't, you can read me anyway for the snarky comments about Diageo.
It's all in a day's work.
Friday, July 3, 2015
With bourbon booming and supplies of aged whiskey tight, people who make their own whiskey from scratch are sitting in the catbird seat, but they're not alone. People who have long-term production agreements with distillers are also at an advantage over non-distiller producers (NDPs) who do not.
Best situated are the big regional rectifiers who buy a lot of whiskey for what are usually bottom shelf straights and blends, companies like Luxco in St. Louis. They are not distillers but in many cases they have access to enough whiskey to credibly create and support national brands. To put it simply, they have the flexibility to allocate their best stocks to profitable mid- and top-shelf brands, while still supporting their more marginal commodity products. They increase their profits, and we get to try some original whiskeys, often at a good price.
Luxco, a company founded in 1958, has had a long relationship with Heaven Hill but it gets bourbon and rye from other sources too. This year, it has made some bold moves to enter the big leagues. It's too early to tell if they'll succeed but if you want the whole story, you need to get the new issue of The Bourbon Country Reader, Volume 16, Number 6.
Luxco this year has upgraded Yellowstone and Rebel Yell, and introduced a new super-premium bourbon, Blood Oath.
Our other story in this issue is about the investment Kentucky's taxpayers are making in distilleries and other businesses. These days, we usually learn about new plants and proposed expansions when their tax incentives are announced, as several were this spring.
All of this is in the new issue of The Bourbon Country Reader, America's oldest publication dedicated exclusively to American whiskey. Honoring tradition, it still comes to you on paper, in an envelope, via the USPS.
A subscription to The Bourbon Country Reader is still just $20 per year (six issues) for addresses in the USA, $25 for everyone else. The Bourbon Country Reader is always independent and idiosyncratic and has no distillery affiliation. It is published six times a year, or thereabouts.
Click here to subscribe with PayPal or any major credit card, or for more information. Click here for a free sample issue (in PDF format). Click here to open or download the free PDF document, "The Bourbon Country Reader Issue Contents in Chronological Order." (It's like an index.) For the record, this new one is our 96th.
Because this completes Volume 16, that means Volume 16 is now available as a bound volume for $20, or you can get any three bound volumes for $50.
If you prefer to pay by check, make it payable to Made and Bottled in Kentucky, and mail it to Made and Bottled in Kentucky, 3712 N. Broadway, PMB 298, Chicago, IL 60613-4198. Checks drawn on U.S. banks only, please.
Tuesday, June 30, 2015
|David Beam (left) and his three sons (left to right) John Ed, Bill and Troy.|
I was saddened to learn of the passing yesterday of David Beam. He died peacefully at his farm. He was 74.
Daniel David Beam was the son of Carl 'Shucks' Beam and was born in the master distiller's house on the grounds of the Jim Beam Distillery at Clermont. He and his older brother, Baker, succeeded their father at the distillery, which runs on a 24-hour schedule. Baker had the day shift and David had the night. He worked there for 38 years, retiring in 1996.
A Memorial Mass will be held at 11:00 AM on Thursday at the Basilica of St. Joseph Proto-Cathedral with burial in the Bardstown Cemetery. Visitation is 3:00 PM to 8:00 PM on Wednesday, July 1, and 9:00 AM to 10:15 AM on Thursday, July 2 at Barlow Funeral Home.
David was a sweet guy. He was funny, told great stories, and knew how to make bourbon the way regular people know how to put on their shoes. I got to know him pretty well over the last 20 years or so. It was a privilege. I'll miss him.