Last year, the Tennessee state legislature passed a law formalizing requirements for Tennessee whiskey. In order to be labelled as such, the spirit must consist of at least 51% corn, must be aged in charred, new American oak barrels, and must be filtered through maple charcoal prior to bottling. Charcoal filtration is the only step that distinguishes Tennessee whiskey from Kentucky bourbon: other than that, the process is identical.
The law was passed at the insistence of Jack Daniel’s, which sells nearly 13 million cases annually and accounts for 90% of the state’s whiskey production. New American oak barrels have become expensive, and the statute makes it difficult for craft distillers to compete. Jack Daniel’s is owned by Brown-Forman, which also happens to dominate the market for cooperage.
Now, the legislature is being lobbied by Diageo for a relaxation of the rules. The U.K.-based beverage giant happens to own George Dickel, the state’s second-largest distiller, and feels that changing the barrel requirements would level the playing field for independent startups. Jack Daniel’s has gone ballistic, and views the proposed changes as something that would put traditional Tennessee whiskey “under attack,” undermining the quality of the product and making it inferior to bourbon.
Certainly, the change in the law would enable craft distillers to enter the market with much lower capital requirements, but Diageo’s motivations aren’t entirely related to equality and fairness. Simply put, they would probably love to stick it to Brown-Forman; by doing so, they would enable a number of smaller distilleries to prosper, but those operations don’t pose much of a threat to them anyway.
It’s also doubtful that all the craft distilleries on earth could pose much of a challenge to Jack Daniel’s either. Anyone who has visited their facility in Lynchburg, TN, knows that their modus operandi is control. Tourists are not allowed to take photographs; they are carefully shepherded around the distillery, and everything they see and are told is carefully rehearsed. Whether they can exert the same influence on the Tennessee legislature remains to be seen, but the battle of the multi-national beverage conglomerates is definitely heating up.
Mark Spivak is the author of Iconic Spirits: An Intoxicating History, published by Lyons Press; his second book, Moonshine Nation, is forthcoming from Lyons Press in June. For more information, visit amazon.com