Diageo v. Brown-Forman

[Gillman]

This states that the law in Tennessee grandfathered Pritchard's case:

http://www.washingtonpost.com/blogs/govbeat/wp/2014/03/19/fight-over-tennessee-whiskey-spills-into-international-booze-business/

Gary

[Gillman]

Turning back to issue no. 1 for a minute, I think Brown-Forman has a point there because it created the name of Tennessee whiskey, it put it on the map. There is lots of ground for compromise, though. How about the non-JD/GD process whiskey made in Tennessee being called "Tennessee Country Whiskey"? That seems reasonable, this way the JD process doesn't monopolize use of the terms Tennessee and whiskey and distillers who distill or age differently can still use the terms to describe their product, but in a slightly different way.

Gary

[squire]

Yes, I'm aware of Pritchard being grandfathered in, that was my point. The current law which requires producers to use specific requirements in order to label their product Tennessee Whisky also exempts a single producer who does not follow those requirements.

[squire]

I like the term Tennessee Style Whisky but I suppose any number of variations would do insofar as consumer preference is concerned. Removing the words 'Straight Bourbon' form Early Time's label doesn't seem to have hurt sales of that brand.

[Gillman]

Yes but (in relation to Pritchard) the law is relatively new, so they basically had to do this to cover this instance. My point was simply that they did not ignore a violation by Pritchard; there was none.

Gary

[squire]

I don't see where they "had" to exempt Pritchard, there were certainly other going concerns at the time the law was implemented who would've liked an exemption as well.

Of course there is no reason someone cannot produce a Tennessee Straight Bourbon whisky if they like, those requirements are long established and clearly set out.

[Gillman]

I gather Pritchard was the largest producer. At a certain point the legislator decides, and acts; it is never a perfect equation. As to lack of enforcement in the past, we see a similar situation in other areas of alcohol regulation, or non-alcohol for that matter. The legislator acts fitfully and not always consistently. I think each side in this current dispute has some good arguments on the merits of it; we shall see.

[squire]

Fitfully is exactly the word that occurred to me earlier but I don't suppose the TN Legislature is unique in that.

[cowdery]

I suppose we can entertain the possibility that this is the first time anyone has violated the storage law. Also, it's not so archaic, in that it was amended just last year to make storage in an adjacent county legal.

The state of jurisprudence right now on Commerce Clause cases involving alcohol is that the mere fact that alcohol is involved does not mean the state can do whatever it wants. The state has to show that its rule is reasonably related to furthering the state's interest in alcohol control.

One argument I can imagine the TABC making is that it requires funding to do its job, and assuring that all products distilled in Tennessee pay taxes throughout their entire life cycle helps secure that funding.

Edited March 31, 2014 by cowdery

[Vadertime]

If what the Colonel surmises on his blog is true- I present the following as the Grand Diageo Conspiracy:

In two to three years, don't be surprised to see the following product announcement:

George Dickel (Brand)

Tennessee Lightning (Product)

Tennessee Sourmash (Product Description)

"Lightning in a Bottle" (Tagline)

No age statement (but aged approx 2 years)

In a square bottle with Black Labels very similar to EWB "wink wink"

Blended and colored by expert colorist to be the same color as JDB, and maybe includes sweet smoke flavor

Priced to be on the lowest of low shelves, but taste more like JDB than JDB currently tastes and at 1/2 the price.

It could even be at 70 proof or possib 90(?)

It could possibly be an export only product, which will fit right into their international distribution network.

This will accomplish multiple things: distort Tenn Whiskey, secure more barrels for the EU in a time of shortage, pressure Tenn lawmakers, build maket share, hurt JD. Note that it will not be labelled Tenn Whiskey (or possibly even Whiskey).

I don't particularly trust Europeans to protect American interests, so I am happy that Bourbon has strict legal protections- even moreso with BiB. I do hate that the great Irish Guinness has become the evil Diageo.

[kaiserhog]

Certainly glad this little bit of nasty business is over, now back to enjoying GD12.

[VAGentleman]

Looks like the complaint against Diageo for storing TN distilled whiskey in KY has been dropped. This article states that some GD is aged in KY. Not sure if its true or just poor reporting

http://abcnews.go.com/US/wireStory/fight-rages-definition-tennessee-whiskey-24083935

[Paddy]

Diageo had a warehousing shortage and did ship distillate to KY. They have built added capacity in TN, but it did occur (and may still be).

[TunnelTiger]

Article in this mornings Chatt. Times/Free Press says this is not over and is going to be continued in next legislative session.

[Paddy]

Here is an article from todays Lexington Herald-Leader.

http://www.kentucky.com/2014/06/11/3285746/fight-rages-over-definition-of.html?sp=/99/164/

[cowdery]

What happened last Tuesday really has nothing to do with the "what is Tennessee whiskey?" issue. It is about Diageo violating an obscure and sort-of stupid Tennessee law passed at the end of Prohibition. The law, requiring whiskey distilled in Tennessee to be aged in the county where distilled (amended to include adjacent counties), would probably not survive a constitutional test, so the Tennessee ABC said "never mind."

Details are here.