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Jack Daniel’s angers rivals over ‘Tennessee whiskey’ rule

  • File - The industry powerhouse said the move would help the Tennessee whiskey brand.

NEW YORK: For Jack Daniel’s, Tennessee’s world-famous corn-based whiskey should be made according to a strict recipe – basically, its own.

But to rivals, some with their roots in ginning up moonshine in the foothills of the Appalachian Mountains, Jack Daniel’s wants to lock them out of a booming business.

In a battle of two global giants of liquor distribution, Diageo versus Brown-Forman, Jack Daniel’s wants legislators in the state capital Nashville to implement clear standards on what spirit can wear the “Tennessee Whiskey” label.

The industry powerhouse says only the drink that is made from at least 51 percent corn fermented mash, aged in new barrels of charred oak, filtered through maple charcoal and at least 40 percent alcohol should qualify as Tennessee whiskey.

Unsurprisingly, that is how the 148-year-old Jack Daniel’s makes its own bourbonstyle whiskey.

The distiller, owned by Brown-Forman, was able to push that standard through the Tennessee General Assembly last year before competitors could mount resistance.

Diageo, whose George Dickel brand is the state’s No. 2 whiskey – and is already made to the new official code – said Brown-Forman engineered the change through “misleading and deceptive political moves” that gives it an advantage.

Establishing the pro-Jack Daniel’s definition amounts to “effectively reversing the flexibility that has been enjoyed for more than 130 years by Tennessee whiskey distillers,” said Guy Smith, Diageo executive vice president for North America.

“ Diageo is willing to consider a standard for Tennessee whiskey,” he said. “However, it is imperative that standard be reflective of the collective input from Tennessee whiskey distillers large and small, not just from one oppressive company as is currently the case.”

Jack Daniel’s dominates the business from its headquarters in Lynchburg, just west of the Appalachians. It produced 11 million cases last year, compared to just 130,000 by George Dickel, located just a few miles away.

The fight is over principle, for one, but also over an issue that disadvantages especially the many smaller independent distilleries trying to make a mark in the spirits business.

The rule requiring the use of new barrels – rather than reusing them – can be a heavy cost, at hundreds of dollars each.

Phil Prichard, owner of Prichard’s distillery, said the state law gave Jack Daniel’s an unfair competitive advantage.

“We have plenty of federal regulations that define our product type. But it is our choice how to combine those ingredients, how to manage the techniques that allow us to create those products,” he said.

“The final arbiter of quality, those who will judge our quality best, are those who buy our products,” he added.

Jack Daniel’s said the move was not to protect its market power but instead to help the Tennessee whiskey brand, in the same way that other famous drinks – such as champagne, cognac and scotch whiskey – are defined by strict production guidelines.

“Not any kind of sparkling wine can call itself champagne,” said Jeff Arnett, Jack Daniel’s master distiller.

By maintaining a production standard, he said, “champagne is held in a higher esteem as a higher quality product. ... It does not mean that all champagnes will taste the same. It is the same for cognac or Armagnac.”

The new rules, he argued, will help small distillers.

“They don’t mind being held to a higher standard. They don’t want to create cheap products that would become synonymous with the state name,” Arnett said.

 
A version of this article appeared in the print edition of The Daily Star on April 01, 2014, on page 13.
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Summary

For Jack Daniel's, Tennessee's world-famous corn-based whiskey should be made according to a strict recipe – basically, its own.

In a battle of two global giants of liquor distribution, Diageo versus Brown-Forman, Jack Daniel's wants legislators in the state capital Nashville to implement clear standards on what spirit can wear the "Tennessee Whiskey" label.

The industry powerhouse says only the drink that is made from at least 51 percent corn fermented mash, aged in new barrels of charred oak, filtered through maple charcoal and at least 40 percent alcohol should qualify as Tennessee whiskey.

Unsurprisingly, that is how the 148-year-old Jack Daniel's makes its own bourbonstyle whiskey.

Jack Daniel's said the move was not to protect its market power but instead to help the Tennessee whiskey brand, in the same way that other famous drinks – such as champagne, cognac and scotch whiskey – are defined by strict production guidelines.


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