Wednesday, January 28, 2015

Three-Fourths of Alcoholic Beverages Don't Follow Government Rules

Based on a sample of 450 products analyzed by the U. S. Treasury Department’s Alcohol and Tobacco Tax and Trade Bureau (TTB) for the 2014 Alcoholic Beverage Sample Program (ABSP), 71 percent of the beer, wine, and spirits products sold in the United States do not comply with TTB rules, more than double last year’s violation rate. In 2013, there were fewer than 30 percent non-compliant products in the sample.

The 2014 sample included 190 distilled spirits, 155 malt beverages, and 105 wines. One-hundred-thirty-nine products were non-compliant; 73 distilled spirits, 46 malt beverages, and 20 wines.

The most common offense? Alcohol content that did not match the label. In some cases, the actual alcohol content places the product in a different tax classification.

Another common violation is labels that do not match their approved Certificate of Label Approval (COLA) due to changes that are not allowable revisions. Approximately 25 percent of the non-compliant labels contained such changes in information. As least one product in the sample went on the market without ever submitting a COLA.

By its own test, then, TTB is batting about 290. True, 450 is a small sample when TTB reviews more than 100,000 labels, advertisements, and other material each year. But it’s the only measure we have of TTB’s effectiveness at "assuring that alcohol beverages sold in the United States are properly described on the container."

I know that is TTB’s mission because I read it in the TTB labeling brochure, under the heading “How TTB Protects the Public.” It begins:

“American adults who enjoy an occasional alcohol (sic) beverage of their choice do so without fear that the product they are consuming might not be labeled properly. Why don't they need to worry? Because a small Government agency takes pride in assuring that the alcohol beverages sold in the United States are properly described on the container.

“TTB takes tremendous pride in its strategic mission to ‘Protect the Public,’ which is designed to assure the integrity of alcohol beverages in the marketplace, verify and substantiate industry member compliance with laws and regulations, and to provide information to the public as a means of preventing consumer deception.”

Please pardon my lack of confidence.

Thursday, January 22, 2015

There Is More New in the TTB Labeling Guidelines than Previously Thought

The labeling FAQ discussed here on Monday contains nothing new concerning the rules as written, but it does represent major changes in how TTB has been enforcing those rules. Several producers have told me that TTB advised them that only straight whiskey needed an age statement if less than four years old, and many products have been mislabeled as a result of that advice.

Here is the easiest way to understand the rule. If the label says 'whiskey' on it, and the product contains no neutral spirit (i.e., vodka, as in Seagram's 7 and similar products), and it is less than four years old, it needs an accurate and specific age statement, which is the age of the youngest whiskey in the bottle.

That's pretty much it. No exceptions. An age statement is required if the product meets all three of the following.
  • 'Whiskey' on label.
  • No vodka in the product.
  • A whiskey in the product that is less than four years old.
TTB will not require producers to recall mislabeled product, but it is in the producer's best interest to correct all labels as soon as possible.

TTB has, of course, not acknowledged that it has regularly mis-applied its own rules. Let's just hope they get it right going forward.

Monday, January 19, 2015

TTB Issues New Guidelines for Age Statements on Whiskey Labels

There is nothing truly new about the labeling guidelines published on December 29th by the Treasury Department's Alcohol and Tobacco Tax and Trade Bureau (TTB). (On the FAQ page, scroll down to S11.) Those have always been the rules. This is, however, the TTB's way of putting the industry on notice that its lax enforcement of these provisions is in the past. It remains to be seen if their bite matches their bark.

You may have read about the problem here back in September. The most egregious offense is the "Aged less than four years" convention, which clearly violates the rules, but which TTB was approving left and right. Now it says that form will not be allowed because it, "may mislead consumers as to the age of the product."

As stated in the new guidelines, "The TTB regulations at 27 CFR 5.40(a) require an age statement on the label of any whisky that has not been aged for at least four years. This requirement applies to any whisky produced by mixing or blending if the youngest whisky in the mixture or blend has been aged for less than four years. An age statement is optional for any whisky that is four years old or more."

In law school, my struggle with legal writing was aided by this advice. "In legal writing, unlike most other forms, it pays to state the obvious." The new labeling guidelines are in that spirit. For example, they define 'age' as "the period during which, after distillation and before bottling, distilled spirits have been stored in oak containers. For bourbon whisky, rye whisky, wheat whisky, malt whisky, or rye malt whisky, and for straight whisky other than straight corn whisky, the 'age' is the period during which the whisky has been stored in charred new oak containers." (Emphasis mine.)

In that same spirit, it might have been useful to point out that these rules apply to all whiskeys, and not just straights as many seem to believe.

If a spirit has been aged for a very brief period simply to qualify it as a whiskey, that period "must be stated in hours, days, months, or years, as appropriate." Age may be understated but never overstated.

One question is stated in the form of an example which I think someone sent to me a few months ago. I hope I answered correctly. Here it is: "I am bottling a straight whisky that consists of one straight whisky that has been aged for 3 years and another straight whisky that has been aged for 2 years. The older whisky makes up 60% of the mixture, on a proof gallon basis, and the younger whisky makes up the remaining 40%. Can I simply label the product as having been 'Aged for less than 4 years'?"

The answer is, of course, no but with this additional guidance: "You may choose to label the product with an age statement that reflects the age of the youngest whisky ('Aged 2 years') or you can set out the percentage of each whisky, with its age ('60% straight whisky aged 3 years; 40% straight whisky aged 2 years')."

Any questions?

Sunday, January 18, 2015

Something Else That's Great About Kentucky: Ginseng

Ginseng is a perennial plant with fleshy roots that are used in a variety of folk medicines. It is also an ingredient in many energy drinks. Medicinal qualities are attributed to ginseng leaves too.

The Chinese are the world's biggest consumers of ginseng. South Korea is the number one producer and also a big consumer of the herb. Canada and the United States are the other big producers, but most of our harvest is exported to Asia. Ginseng has been used in Asian medicine for thousands of years.

Ginseng, Kentucky, is an unincorporated community in LaRue County. The town was so named because wild ginseng was once harvested there for sale in nearby Elizabethtown. This is the part of Kentucky where Abraham Lincoln was born. It is close to the Catholic-dominated Kentucky Holy Lands and many of Kentucky's historic and contemporary bourbon distilleries.

There are many types of ginseng with different attributes. The type found in Kentucky is American ginseng, which according to traditional Chinese medicine promotes yin energy, cleans excess yang and calms the body. Although ginseng can be cultivated, wild ginseng is considered the most potent and, therefore, most valuable type. It thrives in deeply shaded woodlands where the soil is moist, well drained, and high in organic matter. Kentucky is the largest ginseng producer in the United States. Eighty-five percent of the U.S. ginseng harvest is exported to China via Hong Kong. In China, wild ginseng sells for $1,500 to $2,000 a pound. Chinese demand drives the market for Kentucky ginseng.

The wild ginseng harvest season in Kentucky is from September 1 to December 1. Because it is seasonal, ginseng gathering is not a fulltime job, but a lot of people do it. A successful ginseng gatherer can make good money, $300 to $350 per pound.

Limiting the harvest season is one way Kentucky tries to protect its ginseng crop. There are rules about harvesting only mature plants (you can tell by the leaves) and planting berries when they are found.

In season, you may harvest ginseng on your own land, or on other private land with permission. Ginseng gathering on public land is prohibited except in the Daniel Boone National Forest. You need a permit and can only take ginseng there for personal use.

For more information go here and here.

Friday, January 16, 2015

A. H. Hirsch Reserve Straight Bourbon Whiskey Has Left the Building

It's always nice to know how a story ends, so I am pleased to report that the producer of A. H. Hirsch Reserve Straight Bourbon Whiskey at long last has no more of it to sell. The last three bottles, numbered 998, 999 and 1,000, are now owned by a small restaurant chain called The White Chocolate Grill. The picture above is of the tag on the box containing bottle number 1,000.

I won't try to tell the whole story of A. H. Hirsch Bourbon here, but I wrote a book about it if you're interested.

The label above is, by the way, wrong on at least two counts, both in the second line. The bourbon was famously distilled in Pennsylvania, not Kentucky, and though it was always claimed to be pot distilled it was, in fact, not.

In 2009, Preiss Imports decanted their remaining stock of the 16-year-old gold foil expression and rebottled it in crystal bottles, which they packed in wooden humidors, with a suggested retail price for the set of $1,499 each. The sets were individually numbered and there were exactly 1,000 of them.The humidor set was the last release of A. H. Hirsch Reserve Straight Bourbon Whiskey.

In 2011, Henry Preiss sold his company and his interest in A. H. Hirsch to Anchor, including the remaining inventory of Hirsch humidors.

In April, 2013, in a thread on StraightBourbon.Com, it was established that Anchor still had 800 of the humidor sets in inventory, still at the original price. The mystery at the time was why they didn't lower the price and blow them out. It had taken four years to sell 20 percent of the inventory, how long would it take to sell the rest?

There were also reports of a few more in distributor and retailer inventories, but no more than a handful. Nobody was coming off the original price by very much. The lowest retail price reported was about $1,350.

The White Chocolate Grill originally wanted to buy two sets but their distributor, per the producer, said they had to buy a four-set case, which they agreed to do. Bottle number 997 was accidentally broken by the distributor. (A moment of silence, please.) So they got three.

When The White Chocolate Grill tried to buy more they were told that was it, the cupboard is now bare.

They paid $925 each for them. Presumably, that was the original wholesale price. It is available at The White Chocolate Grill in Scottsdale, AZ. They plan to charge $89 for a 1.5 oz. pour.

This news just means the producer, Anchor, has exhausted its inventory. It is possible there are still a handful out there in distributor or retailer inventories.

There is a secondary market in A. H. Hirsch and bottles have also shown up in some auctions. The market seems to value the humidor and crystal bottle at $0. The value is in the whiskey, which Bourbon Blue Book shows at $883 for the 16-year-old gold foil, regardless of the packaging.

Thursday, January 15, 2015

Developers of Stave & Thief Curriculum Revealed

Yesterday, the Kentucky Distillers' Association (KDA) announced the Stave & Thief Society, a new bourbon certification program targeted at Louisville's hospitality community. They also announced that Louisville's Distilled Spirits Epicenter is coordinating the curriculum and will administer the workshops, learning materials, and exams.

The press release had this to say about the program's origin:

"The inception of Stave & Thief Society came as part of a Bourbon & Food Work Group consisting of business executives, chefs, distillers and tourism leaders assembled by Louisville Mayor Greg Fischer to further the city’s image as a top food and beverage destination. The bourbon certification curriculum was then developed by an advisory panel that included master distillers, restaurant owners, beverage directors, and spirits industry veterans in partnership with the Kentucky Distillers’ Association."

Neither the press release nor the website itself named names, but upon request they were swiftly provided. They are:

Advisory Panel

CHRIS MORRIS - Master Distiller, Brown-Forman
RICHARD WOLF - Wolf Consulting
PEGGY NOE STEVENS - Bourbon Women, Peggy Noe Stevens and Associates
ERIC GREGORY - President, Kentucky Distillers’ Association
CHRIS ZABOROWSKI - Owner, Westport Whiskey & Wine
KRISTOPHER THOMAS - AGM/Director of Food & Beverage, Louisville Marriott East
ANDREW OTT - Against the Grain Brewery & Smokehouse
COLIN BLAKE - Creative Director, Distilled Spirits Epicenter
KEVIN HALL - Operations Manager, Distilled Spirits Epicenter


STACY YATES - Louisville Convention & Visitors Bureau
ADAM JOHNSON - Director, Kentucky Bourbon Trail
BRIAN SUR - Charr’d Bourbon Kitchen & Lounge
JACKIE ZYKAN - Doc Crows Southern Smokehouse & Oyster Bar

Wednesday, January 14, 2015

What the New Year Brings

I've been taking a little break. Here are some odds and ends by way of gradually working my way back into things in 2015.

First, some housekeeping. You now have the option of subscribing to 'The Chuck Cowdery Blog,' to instantly receive all new posts via e-mail. Just scroll down and look for 'Follow The Chuck Cowdery Blog by E-Mail' in the right-hand column, just below the 'Search' window. The service is provided by FeedBurner. Type in your email address and click 'Submit.' FeedBurner will send you an email asking you to confirm your subscription. Your email address won't be used for any other purpose.

And now, some news.

Jim Beam Rye is the best-selling straight rye whiskey in the U.S. and Beam Suntory has just announced that it is repositioning Jim Beam Rye a little bit. It will now be called Jim Beam 'Pre-Prohibition Style' Rye. The new suggested retail price is $23. The idea appears to be to get more separation from Beam's Old Overholt, which is only three years old and usually priced below $20. Jim Beam Rye is and always has been at least four years old. Flanking it on the other side is Beam's Knob Creek Rye, at about $30. Proof is the other differentiator. Overholt is 40% ABV, the new Beam Rye is 45%, and Knob Creek Rye is 50%. This appears to just be a proof and label change. What makes it 'Pre-Prohibition Style' is still vague.

In 2014, most of the volume growth in 'whiskey' was in 'whiskey in quotation marks,' i.e., flavored whiskeys and similar quasi-whiskey products, led by Sazerac's Fireball, which was up 65.5% and sold almost 4 million cases, according to Impact Databank. Most Fireball drinkers think it is whiskey but it is actually a liqueur, as is Jack Daniel's Honey.

The Stave & Thief Society is a new bourbon certification program targeted at Louisville's hospitality community. Louisville's Distilled Spirits Epicenter is coordinating the curriculum and will administer the workshops, learning materials, and exams. The program is endorsed by the City of Louisville's Bourbon & Food Work Group and the Kentucky Distillers' Association. Details are at

Tourism at Buffalo Trace was up 26 percent last year. The Frankfort distillery welcomed 123,331 guests in 2014. Since the end of 2009, Buffalo Trace Distillery has grown its annual number of visitors by 145 percent. In 2015, the visitor's center will be enlarged by 5,500 square feet.

In a thoughtful piece on Drink Spirits, site founder and managing editor Geoff Kleinman takes aim at the Distilled Spirits Council (DISCUS) for its lackadaisical enforcement of industry marketing standards. He sees it as very much a fox-guarding-henhouse situation, ripe for reform.