Canadian producers can get a tax break on product they import into the United States by using some U.S.-made spirit, up to 9.9% of the batch's total volume.
Originally Posted by AaronWF
Most have a file of recipes that have been made successfully in their distillery in the past, but they don't necessarily use them very often. Some are vestiges from when there was a lot more contract distilling going on.
Chuck, when you say that most of the companies have a whole bunch of different recipes, are you you saying that most companies that do a lot of 'bulk' whiskey distilling typically have many recipes that they can offer to make for their client, or are you saying that in general most companies 'own' recipes for multiple mashes?
BF making Rit for HH is a good example. Working with HH, BF went into their files and found a rye whiskey they had made at that distillery many years ago and that became the starting point for BF-made Rit. They also tweaked it along the way.
Is contract distilling different from bulk distilling? Like with B-F making Ritt for HH, I assume they are making the juice to HH's specifications rather than offering to distill whiskey from 2 or 3 different mashbills that they specialize in.
Same thing, really. LDI's recipes are what they made for Seagram. Primarily they were the flavoring whiskeys for Seagram Seven, but also used for the Seagram Canadian blends per the tax break mentioned above. LDI has continued to make Seagram Seven for Diageo but when they have excess of those flavoring whiskeys, they can and do sell it to folks like Templeton and High West.
LDI, on the other hand, seems to just make 95% rye, and whoever wants it can buy it. LDI makes what they make, and is not in the business of catering to a client's requested recipe...?
The difference between contract and bulk is that with contract, the customer agrees to pay you $x to make a certain amount of a certain whiskey and may also pay you an annual fee to age it. In effect if not in reality, the customer owns the whiskey before the first kernel of corn goes through the mill so the producer's profit, though typically modest, is assured. With bulk, the distiller makes and ages the product at their own expense, on the if-come, in anticipation of selling it at a profit at a future date.
There are different kinds of contracts, lots of possible variations, but that's the basic outline.