Ralph at Tuthilltown

Tuthilltown Spirits, Gardiner, New York supports this tax proposal. We will forward it to our legislators. Thank you Melkon for your concise description.

Look at the Fed's STANDARDS OF IDENTITY, the definition of Rum. Comment on credentials: The definition of "Master" anything is simply not a self-appointment. And I think our cousins in the UK would disagree strongly with the assertion that there is no real qualified program or curriculum that is the distilling equal of Master Electrician. Just because it doesn't exist in the US, doesn't mean it doesn't exist. In the EU the main difference is that the Governments often establish criteria and require a license from the governing body before recognizing the "Master" designation. We have no such criteria or program here, yet. The establishment of such programs takes an organized and deliberate effort among the players, all of us.

CAUTIONARY NOTE: A "producer" from FOX channel's series 'TIL DEATH has contacted us. He told us in two sets of emails, he represented the program and we had been tagged for product placement opportunity. All he needed was four cases of whiskey to be sent to NY office and LA office. Some simple inquiries uncovered FOX does not solicit such things (from FOX Legal Dept.). Be sure to carefully vet any requests of this sort.

Melkon of MODERN SPIRITS is drafting a position statement on taxing small producers. It is a good first project for the organization. If we can get everyone on board with the proposition we can begin to lobby our Fed representatives. Unfortunately (though unavoidably) it all boils down to your own personal political action. Much as we want to just focus on making our goods, we have to become politically active or we will be overlooked.

At our distillery, we do not claim any titles but Owners, Production Manager & Distillerymen, oh yeah and our conformance manager title "Queen of Compliance". In the climbing world, guides do not apply the title "Guide" upon themselves. It is up, as said earlier, to a governing body accepted nationally, or some recognized educational program/institution (in climbing it's the American Mountain Guides Assn.) to license qualified guides after years of experience and substantial training, then a testing program. Same goes for "certified" climbing gyms. Street cred does not speak to a person's technical ability. Anyone with minimum ability and the equipment can put out a product and it may or may not be good or popular in the marketplace. The person is not then a "master" of anything except perhaps marketing. The term "master" as I understand it, traditionally includes formal training, education, apprenticeship and a Journeyman period of work before the person is accepted by the general trade/craft community. It includes complete knowledge of the science, physics, biology, mechanics and finer detail points of spirits production. An electrician gets licensed, so does a plumber; ask the insurance underwriters the distinction betweek a hack electrician and a licensed master electrician. It's the piece of paper indicating a certifiable level of knowledge, experience and skill. The definition of "certified" calls for some process and the blessing of a recognized governing body. Seems to me, in every undertaking there are those who want to represent themselves as "Master" of their craft, for whatever reasons; for some it's ego, for others it's a sales ploy. So be it. Who the hell cares. The hacks will fall by the wayside. The true masters will work on, mainly unheralded. It's simply not enough to be good at it. And the only way distilling in the US will have a method for sorting out or recognizing the true "Masters" is to define the term and accept a governing body with the criteria established and a method of reviewing the "candidates". R

This is all perhaps true. But the trade off is we don't get absinthe in the US. The FDA specifies the amount of Thujone to be allowed in absinthe. If you want it to be more than the "trace amounts" called for by the Fed, put some verifiable research on Thujone on the table an change the law.

This discussion seems to be at the point of needing one simple statement, trimmed down, generic, that includes everyone making under a specified amount of finished product regardless if it is distilled by the producer or not. It is increasingly clear to me that the interests of the small craft producers are for the most part common. As a whole, we can not afford the luxury of fracture into all the niche definitions and distinctions or risk losing what little lobbying and marketing power we have. The fact is that the end products will rule the day, no matter if they are distilled or blended or infused or simply rebottled by the producer. If it is crap, it won't matter if you call it "artisan" or "craft". I do not believe we are a known enough quantity in the minds and hearts of the consumers that the industry will suffer as a whole just because someone puts out (arguably) substandard spirits and labels them "craft" or "artisan". We do not believe that because some numbskull in East Bumstead is putting garbage in his bottle and touting it as artisan alcoholic beverage will hurt our sales in any significant way. Deciding on a simple starting point is important, with latitude to make adjustments and changes as necessary, and it will be necessary. Is there anyone out there who is distilling and seriously disagrees that a craft producers organization should not include the non-distiller producers of craft spirits? I agree with the comment that the name may have to be changed, but down the road. Right now we should be open to nearly everyone who is producing and sending craft spirits to market, paying taxes and struggling against the enormous odds we all face. Drawing from many years of mountaineering, I would say there comes the time when you have to decide and go. Let's stop this and get something down and vote on it. "How?" is the question.

My suggestion is that we look at the State with the highest production limit, I believe the highest I've seen is 60,000 pg a year. That is also the point, it seems, that gets the attention of the big alcohol money. Since the production limits are placed at the State level, I think we do not have to too greatly concern ourselves with possible Federal limits. Any Federal considerations should defer in this matter to the license catagory of the home State of the distillery. It is unlikely that the Fed would establish or enforce a Federal standard for production limits. I suppose it is something that we could push for, but not sure if it is advisable to let the Fed determine such things. (Really, just don't know.) And yes, this is serious. This is all our futures, and that of our families and employees so yes indeed it is serious.

This is getting a little silly, everyone picking apart all the details. Anyone with half a notion where the industry is headed can not disagree our nascent industry needs to act together to get where we need to go. Perhaps here is a good point to talk about the nature of the organization. Should the ADI continue to keep "distiller" in it's title, or broaded its mandate to include all small craft spirits producers. Within the organization we can call ourselves anything we elect: Distiller, Rectifier, Blender, Infuser, etc. But to the Fed and States and Big Alcohol, we need to be one group of small producers. There is NO point, at this point, in debating whether a craft distiller uses a column, or pot still or puts a tea kettle on the kitchen stove. And those who spend their wee hours in the shop crafting spirits from varieties of herbs and fruit is performing a "craft" as well as any other producer whose product is that of a craft. It is not the spirits which determine the nature of the producer, it's how he produces and what he puts into it of himself. It is time to get over the distinctions for the time being and focus on the real issue, lobbying power at the Fed, State and with DISCUS. R

I agree with the tax comment wholeheartedly. Penn had suggested that we should be lobbying to get the Micro Distiller excise tax down entirely, not unlike the consideration given to micro brewers and wineries. If we were to argue for no tax hike or reduced hike, it may be counterproductive to our own wish to have the same consideration as our beer and wine cousins. That said, we should be finding a way to get DISCUS to give us a real seat at the table whenever discussions of this sort are conducted. I may have taken some license in my description of DISCUS members (not making alcohol, yes some do). The point is that we may be in the same industry but we are not in the same business. I'm all for working together. I'm totally opposed to being absorbed or condescended to.

The following lifted directly from the CFR: (ps, the happy face is not my addition, just comes up on the post, sorry) WHISKEY/WHISKY ( Class 2; whisky. “Whisky” is an alcoholic distillate from a fermented mash of grain produced at less than 190° proof in such manner that the distillate possesses the taste, aroma, and characteristics generally attributed to whisky, stored in oak containers (except that corn whisky need not be so stored), and bottled at not less than 80° proof, and also includes mixtures of such distillates for which no specific standards of identity are prescribed. (1)(i) “Bourbon whisky”, “rye whisky”, “wheat whisky”, “malt whisky”, or “rye malt whisky” is whisky produced at not exceeding 160° proof from a fermented mash of not less than 51 percent corn, rye, wheat, malted barley, or malted rye grain, respectively, and stored at not more than 125° proof in charred new oak containers; and also includes mixtures of such whiskies of the same type. (ii) “Corn whisky” is whisky produced at not exceeding 160° proof from a fermented mash of not less than 80 percent corn grain, and if stored in oak containers stored at not more than 125° proof in used or uncharred new oak containers and not subjected in any manner to treatment with charred wood; and also includes mixtures of such whisky. SCOTCH WHISKY (7) “Scotch whisky” is whisky which is a distinctive product of Scotland, manufactured in Scotland in compliance with the laws of the United Kingdom regulating the manufacture of Scotch whisky for consumption in the United Kingdom: Provided, That if such product is a mixture of whiskies, such mixture is “blended Scotch whisky” (Scotch whisky—a blend). (8) “Irish whisky” is whisky which is a distinctive product of Ireland, manufactured either in the Republic of Ireland or in Northern Ireland, in compliance with their laws regulating the manufacture of Irish whisky for home consumption: Provided, That if such product is a mixture of whiskies, such mixture is “blended Irish whisky” (Irish whisky—a blend). END CFR Note please: The US gives way to SCOTCH WHISKY and IRISH WHISKY by declaring they are specific to the source country and must be "in compliance with their laws regulating the manufacture". The US CFR allows that Scotch and Irish Whiskies are produced differently than American Whiskey and the criteria for the designation "whisky" are determined by the source country; if not then why would they not fall into the category of "whiskey distilled from mash of malted barley" since the wood is not charred, as our own domestic whiskey is designated? The EU producers are allowed in US law to call their product "whisky" even though it does not meet our own requirements for the term (without the qualifier: "from a mash of...."). Any US producer aging his whiskey in used oak is required to call it, for instance: "whiskey distilled from a mash of malted barley", rather than simply Single Malt Whiskey, as for instance the US spirit ST. GEORGE SINGLE MALT. Why do we in the US have to call out the fact of the "used oak" barrels vs the use of new charred oak? An American Single Malt Whiskey must be aged in NEW OAK to be called "Single Malt Whiskey"; whereas a Scotch Single Malt is not required to use the same descriptive and may call their whisky "Single Malt Whisky". Additionally, under EU law we may NOT sell corn whiskey under the traditional and legitimate American title: Corn Whiskey. If the SWA and the EU are defining the spirits in order, as their documentation and SWA stated position declares, to protect their own traditional domestic spirits, the regulations go well beyond that legitimate reason. But no reasonably intelligent consumer in the EU or anywhere else for that matter, would mistake a bottle labeled: BOURBON WHISKEY for product labeled SCOTCH WHISKY. What we seek is equal treatment as the US gives the EU in recognizing that the American whiskey is a distinctive product of the US and differs in production methods. What the EU has done is to include a "type" criteria into the "class" definition. Some solutions for the EU and the US to negotiate may include: Specifying that the EU definition applies to whisky made in the EU; or Deleting the 3 year minimum ageing requirement and including a 3 yr minimum under the "types": Scotch or Irish whiskies; or as mentioned above Specifically defining American Bourbon and American Rye and American Corn Whiskeys as "distinctive American" spirits with their own Federally prescribed definitions.

SORRY FOR THE DOUBLE POST.

Thank you Don. Couldn't agree more. And I like the idea of increasing membership fee based on volume, with a substantial leap from the current membership fee for small producers to the big alcohol guys. The big boys may have deep pockets and connections, but we have numbers, voting numbers that count for the lawmakers. And the press we can generate will be far more positive than any press Diagio or Bacardi could get; given the foundation of our industry (small businesses, local and regional employment and taxes, agricultural, eco-friendly operations, etc.) The tax question presents an interesting possibility that may put us at odds with DISCUS. If the Fed reduces our tax to half the full amount the big producers pay, and increases the big producer tax to meet inflation ($20 a pg), the amount the Fed would collect from the small distillers would be $10 per proof gallon, a reduction in what we currently pay; which will be more than made up for by the $20 a pg paid by the big boys. So the case could be made that smaller producers could benefit by the increase charged to the big producers coupled with a reduction for the micros. Perhaps we should be looking at trying to get our legislators to tie the increase in the big alcohol tax to a decrease in the small alcohol tax rate.

Love the logo Don. Good luck to you. And I sympathize with you about fishing. I moved to the Hudson Valley to be near the cliffs and can count the number of days I've strapped on a harness over the last four years on one hand. But hey, we're making whiskey. I can climb later. Chin up, it gets better and better.

Indeed, the EU market is as yet undeveloped for the new craft distiller, and yes there are few underaged whiskeys in the US at this point. But that will change quickly as all those who are applying for licenses come on line over the next two to three years. Certainly the big alcohol guys are not concerned with this situation because it is in their best interests to keep that market to themselves, obviously. But I totally disagree that we should simply do nothing. The EU laws are designed to keep new distillers out of the EU and out of competition with the SWA. That opinion is widely held in the US and EU. And the struggle may take years to resolve. But good things take time. And NOT addressing the issue is definately not the solution. Who among the new whiskey distillers in the US is happy to wait three years to put their whiskey into circulation in the top cities in Europe if there is a ready market for them, which there is? In my travels abroad it was made very clear to me throughout the EU, the barmen and the consumers are pretty tired of the same old thing from the big alcohol brands. They want new things to offer their customers. The potential for the American Craft Distiller is very good, and profitable (no excise tax on products exported out of US, no distributor markup, sound good??) I am reminded of the lyric: "The difficult we can do right now, the impossible may take a little time."

TALES OF THE COCKTAIL in New Orleans, for those who did not attend, was an eye opener. The COCKTAIL CULTURE is not only alive and well, it is growing and increasing in sophistication daily. Witness the attendance at TALES, up 100% over last year and with a substantial international attendance as well as mixologists and bartenders from all across the US. The enthusiasm was contagious. The seminars very informative and well organized. Overall the event (from an event producer's perspective) was very well put together and staged. Staff was helpful and friendly. The range of information available was broad. Presenters were knowlegable and interesting. The most important lesson taken from the (lengthy) event for the Craft Distiller is that the future for small brands is bright. The overwhelming response to craft products among the professionals in attendence was "Thank god, something NEW!" The welcome and encouragement we received from the barmen and women, the club owners and the top celebrities in the industry made clear, the foreseeable future of the cocktail market is brightest for the small unique crafted brands. And we're only at the start of the revitalization of the cocktail market.

In a discussion with a DISCUS representative over the weekend at TALES OF THE COCKTAIL in New Orleans, we learned that DISCUS is interested in having ADI join with DISCUS to lobby against the tax increase anticipated to be submitted to the Fed after the first of the year. The question posed back to the representative was "How can we join you, when we can't even become members of DISCUS?" The response was unsatisfying. "Any company can join." I pointed out that the cost of membership was prohibitive, six figures. "Oh but we've reduced the cost." I asked the new figure. "$75,000," was the response. Both Bill Owen and I laughed out loud. After, between laughs, commenting that figure was ridiculous, I added that kind of approach only confirms all the suspicions of the small producers about DISCUS. He suggested that we might be able to arrange an "Associate" membership. But that, I reminded him, is not a full membership status, like the difference between "civil union" and "married". We are not second class citizens, and we actually produce alcohol. The question is how to work with DISCUS without being relegated to the "kid's table". My position, which I made known to the DISCUS fellow in no uncertain terms, is that DISCUS can't have it both ways. DISCUS anticipates the increase which will be proposed will increase Fed excise tax to match the increase in inflation since the last increase in 1995. If this were to be adopted the tax would increase to nearly $20 per proof gallon. An increase of this magnitude would mean millions of dollars in increased tax to big alcohol, DISCUS members. But we have other fish to fry, as Penn has sugggested in an earlier post to this forum. It is in the best interests of the micro distillers to lobby for a substantially reduced tax rate for the micro-distillers matching the breaks given our cousins making beer and wine. This is not the same fight the DISCUS members want to engage at the Federal level. I wonder the feelings of other distillers. For those who are not aware, DISCUS has 12 members, who account for over 80% of alcohol sales in the US. The members are primarily "holding companies", not spirit producers. We (ADI members) are now 140 members. What we lack in financial wherewithal, we more than make up for in the amount of grassroots NOISE we can make, focused on our Federal and State legislators. The potential growth of the craft distilling industry bodes well for the power of our collective voice. And the fact DISCUS came to us hints at the rising level of seriousness with which we are being viewed by our big alcohol cousins. In my closing remarks to the DISCUS representative I suggested that ADI should indeed participate with DISCUS, not from within, but with a seat at the adults' table, a full voice in any discussions with legislators, and representing the interests of the craft distiller, which to a large degree are independent of the interests of DISCUS. I believe we can work with DISCUS, but we must be wary. And any legislative efforts of DISCUS that ADI membership chooses to undertake must not be in lieu of our own efforts on our own behalf.

I think Guy is correct. That last line should be dropped. Any discussion of what is "not" a craft/artisan/micro distiller should be for attachment in some kind of "caselaw" type document clarifying the ADI position. I do think it important to separate out those who actually produce their goods from those who just rebottle or distill simple vodka from GNS, or buy their spirits from others and bottle it under their label.

Perhaps the nature of the stills is the key to the definition. A craft distiller uses pot stills. Could the size and type of still be the determining factor? A 1200 gallon still is not producing the same way as a 200 gallon still. Maybe....... Food for thought. Any comments?

This is from the Scotch Whisky Association website: Most well-known dictionaries give both spellings. The Oxford English Dictionary points out that 'in modern trade usage, Scotch Whisky and Irish Whiskey are thus distinguished in spelling'. American-made whiskey is usually spelt with an 'e', while Canadian and Japanese whisky are not. Seems safe to assume that the SWA would not post the reference if it did not agree. Further exploration of the SWA site reveals not one single use of the American spelling of Whiskey in any defining way, nor does it mention American Bourbon and American Rye whiskeys, all the references to the definition contained on the SWA site are for, specifically "Scotch Whisky". It is not true to say that no rule applies to "whisky" which does not apply equally to "whiskey", the fact the SWA uses "whisky" to describe Scotch, and must specifically add "American Whiskey" as also included in the definition clearly implies the difference. There are absolute differences between the Scotch and American whiskey. Those differences are called out by the SWA. But they can't have it both ways. And it seems only right (though naive to believe it would happen) that since Scotch does not meet our definition of "whiskey" the prohibition should be recripocal given the EU ruling and Scotch Whisky producers should relabel, eliminating the word "whisky" from the labels of all they ship to the US. What's good for the goose........

Hi Jeff. I think we can not help you, just too far away. But I suggest you contact your Congressman to address the lack of response from the TTB. We have had good luck. It seems the TTB offices are responsive to Congressional inquiry. Remind your Congressman that you pay a lot of taxes to both the Fed and the State, and you're not paying taxes if you're not making alcohol. And be persistant with them. Our best wishes are with you.

It is true that there is no precedent to argue the difference between "whiskey" and "whisky". However, the fact is there are distinct differences between what the Scotch Whisky Association and the EU consider to be "whisky" or "whiskey" and what the US Federal Government, and thereby American distillers may characterize as "whiskey". The EU has chosen to specifically include "American bourbon and rye" whiskeys in the EU definition of the "whisky/whiskey" class. If we do not define what "whiskey" is, the EU will define it for us. It means under that definition there can be no "Corn Whiskey". There can be no experimental short aged whiskeys. More to the point, there is a distinct difference between Euro-Whisky and American Whiskey; it's the quality and character of the oak required. It has a profound effect on the spirit and separates the two types of whiskey/whiskys one from the other. One can argue that it's not "necessary" to define whiskey or whisky, or craft distiller, or artisan distiller. But the simple fact of the matter is that if we do not define our own industry and our products in terms we accept as a community, others will do it for us, like the Federal regulators, or the EU protectionists.

The definitions proposed in my early post were starting points. The terms "craft distiller", "artisan distiller", or whatever, may be agreed or not as the overall descriptive terms for the small distiller. The key issue for us at Tuthilltown, and I think for the nascent industry, is "distilling". If a producer takes already made spirits and merely ages it, or infuses it then filters and into the bottle, or in the case of ngs, simply waters it down and bottles it, or redistills ngs adds water and bottles it, is not a "distiller"; but instead is a "rectifier" or "bottler". If you are not substantially changing the nature of the product you start with by the process of distillation, it isn't a craft or artisan production by distillation. And yes, it is important that these things be defined. If you want a place at the table in the regulatory process, then you had better be able to define your terms in a qualified manner. I can tell you from direct personal business experience, any newly emerging business, and especially one so competitive as ours is, must take itself seriously if the players expect to make any progress without being trounced by the existing structure (read: BIG ALCOHOL). And guaranteed, the growing micro/artisan/craft distilling industry does NOT want big alcohol or the government telling it what it is or is not. Define the terms and accept them as the industry standard and it will be easier to convince the lawmakers and regulators and the industry at large that this is not a fluke and the small distilling industry is the future of high end spirits production. For me, the terms "craft" and "artisan" imply hands on, small batch production. The numbers are up for debate. I do think that trademarking the term "craft distillers" could be challenged as being to vague and generic. Regardless how long it has been in use, just means no one has challenged it yet. But it is my opinion that a trademark issued a phrase or term in common usage in the trade is not sustainable under challenge. Notwithstanding the issue of trademarks, defining terms is important in the larger picture. The Fed, in case you have not noticed, has changed the spelling of the commonly and traditionally used American "whiskey" to the Euro spelling: "whisky" in the Federal Standards of Identity. This seemingly innocuous change has the potential for great impact upon the small distiller. Why? Because the Euro definition of "whisky/whiskey" requires minimum of three years in oak. American Whiskey is different from European Whisky. The American definition has not minimum aging requirement for whiskey. The US definition requires aging in "new charred oak" barrels, the Euro definition has no such requirement. The EU definition was adopted from wording provided by the Scottish Whisky Association (you think they're a wee bit protectionist?) The decision was accepted by the US upon the acceptance of DISCUS (you think the big whiskey guys care if your young whiskey is prohibited from the EU market??) If the Federal Government has switched the spelling, the stage is set for acceptance of a European definition of American Whiskey. Scotch is Scottish, Bourbon and Rye Whiskeys are American Spirits and should not be defined by the Euros/SWA. So quit the debate and focus on the real issues. Sure no one of the wildcatters getting into the small distillery biz likes to be classified or named or told what the boundaries should be, me among them. But this is the serious side of the business, who are you? What do you make? Who says what you can call your product? Get to the definition instead of avoiding the issue and arguing semantics. Distillers distill. Everyone else is a producer, but not necessarily a distiller.

The following is meant as a jumping off point, though it does seem to cover the meat of the subject. Time to define the terms: "craft" and "artisan" distillers. Here's my first attempt. Comments welcome. **** PROPOSED DEFINITION OF "CRAFT" OR "ARTISAN" DISTILLER "Craft distillers produce alcoholic beverage spirits by distillation, or by infusion through distillation or redistillation. Maximum production for a "craft" or "artisan" distiller should not exceed 50,000 proof gallons per year. The "craft" or "artisan" distiller utilizes a pot still, with or without rectifcation columns, for distillation of beverage spirits. A distiller starting with neutral spirits produced by others, who redistills without substantially altering the neutral character of the spirit may not be said to be a "craft" or "artisan" distiller. *** This definition deliberately excludes producers of infused products making use of alcohol which the producer has not made from the fermentation and/or distillation process. It is inclusive of the distiller who starts with grain neutral spirits and then redistills as a function of infusion or some other process which substantially alters the neutral character of the original spirit. It excludes the distiller who starts with gns and merely runs it through a still again to create another neutral spirit; or starting with grain neutral spirits only adds flavoring and/or color unless those changes are introduced as the result of distillation, not merely as additives. It excludes blenders or bottlers who buy spirits from another distiller to blend and bottle it under another brand. The "distiller" must distill. Ralph Erenzo Tuthilltown Spirits Gardiner, NY