Tennessee distilleries battle over legal title of whiskey empire

BY Jordan Vesey  March 17, 2014 at 3:45 PM EST
Photo by Flickr user Amy Lloyd

There are strict guidelines in place to legally be considered Tennessee whiskey. Photo by Flickr user Amy Lloyd.

Lawmakers in Tennessee are re-evaluating state rules that determine what can and cannot be called Tennessee whiskey. The state’s most signature product and multi-billion dollar industry has a global reputation, one that might be at stake if lawmakers ease regulations.

According to a statewide law that went into effect one year ago, whiskey distilleries must abide by strict guidelines to legally be considered Tennessee whiskey.

The whiskey must be made from a fermented mash that is at least 51 percent corn, and it must be filtered through maple charcoal before it ages in newly charred oak barrels. This process of filtering the liquid through sugar maple and storing it in white oak barrels is known as the Lincoln County process, named for the process used at the Jack Daniel’s distillery previously located in Lincoln County. The same distillery technically now resides in Moore County, after county lines were altered.

Although other distilleries in Tennessee are allowed to deviate from this process, if they do they are legally obligated to market their product differently. Therefore, many distilleries are faced with a tough choice to either forgo the marketing advantages of calling their product whiskey, or make whiskey that tastes almost exactly like Jack Daniel’s, the highest selling American whiskey in the world. The tight definition has led two of the world’s largest liquor companies to battle it out in the General Assembly.

Company executives from the British company Diageo PLC — which owns George Dickel, Johnny Walker, and Bulleit Bourbon — are behind the push for new legislation. They argue that the law too closely resembles Jack Daniel’s recipe, and should be changed in order to allow for more creativity and competition among different types of high quality whiskey.

“This would be similar to Anheuser-Busch saying, ‘You have to use this recipe to call yourselves an American beer,’” State Rep. Ryan Haynes, R-Knoxville, told The Tennessean.

“I don’t think that it’s right that we put something in our law that is basically protectionism.”

Jack Daniels argues changing the definition of whiskey weakens their product’s label, and threatens a 139 year old brand that grew net sales for their parent company Brown Forman 11 percent in 2013.

The new legislation is pushing to allow distilleries to reuse their barrels — a small measure which could save about $600 per barrel according to the Associated Press. But Jack Daniel’s master distiller Jeff Arnett explains that this would critically alter the taste and standard of the whiskey.

“What we have here is nothing more than an effort to allow manufacturers to deviate from that standard, produce a product that’s inferior to bourbon and label it Tennessee whiskey — while undermining the process we’ve work for nearly 150 years to protect.”

Supporters of the 2013 law codifying Tennessee whiskey cite a precedent set by many beverage makers from all over the world. Scotch whisky makers in Scotland and Champagne producers in France are among the most notable examples — both of which have committees that strictly regulate the use of those names.

Last year, Jack Daniel’s sold 11.5 million cases of its Black Label whereas Dickel — the second largest Tennessee whiskey producer — sold 130,000 cases.