Tennessee Whiskey Defined

[sku]

A bill passed by the TN legislature would create an official definition of Tennessee Whiskey includes maple charcoal filtering as part of the definition. However, it has a grandfather clause which would allow certain existing distilleries (i.e. Prichard's) from using the Lincoln County Process. Of course, the law will have no application outside of Tennessee, but it's the state's first effort to create a legal definition of Tennessee Whiskey.

http://lastcall.bonelaw.com/2013/04/new-tennessee-law-narrowly-defines-whiskey-and-may-exclude-moonshine-distilleries/

[squire]

Stuff and nonsense, political musical chairs.

[cowdery]

This is fascinating and potentially significant. It's good because it gives "Tennessee whiskey" a meaning it would not otherwise have, including the recent U.S. trade rep definition, that defines TN whiskey as straight bourbon made it Tennessee, which also excludes the white whiskey purveyors. So, this is good for two reasons. (1) it gives "Tennessee Whiskey" a meaning it did not previously have, consistent with the popular understanding of the term and, (2) there isn't any Tennessee white whiskey product that would not benefit immensely from some charcoal filtering.

The law simply requires that the spirit be "filtered through maple charcoal prior to aging." It doesn't require the whole process JD uses and shouldn't be prohibitive to small producers. If they don't want to do it, then don't call the product Tennessee Whiskey. More onerous is no. 4, the aging requirement ("Aged in new, charred oak barrels in Tennessee"). Here again, it doesn't say for how long, and it can only help, but new barrels cost money.

This does have teeth since Tennessee producers are the only ones they need to reach. Without some authority putting some kind of definition into law, Tennessee Whiskey simply means whiskey made in Tennessee, and that's what the micros have been exploiting. They can still make a unfiltered, unaged product, they can make whatever they want. They just can't call it Tennessee Whiskey. That's a good thing.

[P&MLiquorsEric]

So this case is Jack Daniels vs Popcorn Sutton "Tennessee White Whiskey" legal battle? The popcorn Sutton recently switched from moonshine-esque Mason Jars to a black squared bottle very similar to Jack Daniels. The reason we were given was that they wanted to get it in more on premise locations and the mason jar packaging made identifying it from a distance very tough.

[sku]

Chuck, do you know to what extent the federal statutes have been found to preempt state alcohol regulation? It seems to me that defining classifications of spirits is an activity for which the Feds have occupied the field.

For the non-lawyers, as an outgrowth of the Constitutional Supremacy Clause, courts have held that in certain highly regulated areas, federal law preempts the entire field, so a state can't pass a law in that field even if it doesn't directly conflict with the federal law.

[squire]

If producers like Mr. Pritchard are to be exempted before the law even goes into effect then the handwriting is on the wall, the rules are to be selectively enforced and them that has the gold makes the rules.

[cowdery]

The key word in your query is probably 'entire.' TTB, the federal regulator, has not defined Tennessee whiskey and where they overlap, on the definition of whiskey, the Tennessee law tracks the federal regs exactly. This may be like California being able to enact automobile emissions requirements that are more strict than the federal ones, which the court found was constitutional. You only need the federal law to trump when there's a conflict. Here, there's no conflict. Harmony reigns.

[cowdery]

According to the note behind the link that started this thread, the 'moonshine oriented' micro-distillers seem to be the target. Consistent with the heritage of their namesake, outfits like the folks behind Popcorn Sutton's product will gladly steal anything from anybody. Without a authoritative definition, one can argue that Tennessee whiskey is whiskey made in Tennessee, period. But most consumers understand the term to mean Jack Daniel's or George Dickel, an aged bourbon-style whiskey made in Tennessee but also filtered through maple charcoal. Sutton et al are attempting to exploit a loophole. The consumer is better served by closing it.

As I read it, the Prichard exception was a compromise to get the thing passed, and it is temporary. Since he already has a well-established business and product, he has an expectation of not having the rug pulled out from under him, so I think this is fair. It just gives him some time to decide if he wants to change his product or just change what he calls it. I have sympathy for him, much less for the moonshine-types, who are just trying to exploit consumer ignorance and steal a little bit of Jack's good name. We used to call that 'borrowed equity.'

[bllygthrd]

I'll show my ignorance (or expose my laziness for not doing my own research) ... but, under present law, what precludes anyone from bottling a whiskey and calling it "Tennessee" whiskey (whisky)? I see the legislation as a good thing.

[sku]

As I read it, the Prichard exception was a compromise to get the thing passed, and it is temporary. Since he already has a well-established business and product, he has an expectation of not having the rug pulled out from under him, so I think this is fair. It just gives him some time to decide if he wants to change his product or just change what he calls it. I have sympathy for him, much less for the moonshine-types, who are just trying to exploit consumer ignorance and steal a little bit of Jack's good name. We used to call that 'borrowed equity.'

Chuck, it doesn't look to me like the Prichard's exception is temporary. I believe the Prichard's exception is that set out in section © of the rule, which appears to be a permanent exception from using charcoal filtering for certain producers, which I assume is for Prichard's. Section (d) gives a 36 month grace period to everyone currently producing before the law kicks in.

[cowdery]

You appear to be right, and the grace period only applies to goods acquired or made prior to the effective date, the public welfare requiring it. (I intend to start using that phrase a lot.)

[BigBoldBully]

Sku, just to chip in on the preemption issue, although I have not done much research on it (and will look later for federal cases to satisfy my curiosity) I am aware that in a lengthy opinion issued in 2004, the Cal supreme court held that a presumption against preemption applied in the context of a state wine labeling law that was attacked as impliedly preempted (despite a lack of any conflict between the fed and state provisions). The court determined the legislative history of the FAA act showed congressional intent to supplement, rather than supplant, existing state regulation of the industry in an effort to prevent deceiving or misleading consumers related to the labeling of wine and other alcoholic beverages. (Bronco Wine Co. v. Jolly, 95 P.3d 422)