Ralph at Tuthilltown

I actually shared Chuck's opinion on the terminology for the definition. Anyone who followed the thread for over a year as we attempted to refine the definition read the various discussions on the ambiguity and vagueness of the term "craft" or "artisan". The choice of "micro spirits producer" was meant to be inclusive, rather than exclusive. But the events of the recent past, with folks like DIAGEO capitalizing on the phrase "craft distilled" and therefore, as has been expressed here, misrepresenting their product to the consumer, there may be some need to find a way to include the term "craft" in the definition. "Craft" is a term of art, well defined and implies direct contact with the product throughout the process by a skilled artisan. "Artisan" on the other hand does not imply a style of production, but rather refers to the individual who is a qualified maker of goods, in a factory or a small craft distillery, no distinction is made that I can find between an "artisan distiller" working in a huge industrial plant, or one working at Tuthilltown Spirits for instance. But the point is well taken and perhaps there are some suggestions how to work "craft" into the definition. Many State's have used that term in their small distillery license laws. R

I wouldn't go so far as to say that trying to get changes in the SOI is "folly". But I do believe the fastest way home is to get the term defined within the context of the Tax code as we attempt to get a reduced FET for "craft" distillers.

This issue should be of great concern to members of the DISCUS CRAFT DISTILLERS ADVISORY COUNCIL (Tuthilltown is among that group). DISCUS CDAC defines "craft distiller" as producing no more than 40,000 nine liter cases of goods a year in a single distillery, according to the DISCUS website. DISCUS largest member is putting out misleading information and advertising about MOON MOUNTAIN, claiming it is "craft distilled", though it is mass produced in an industrial plant. The ads and website show photos of whiskey stills and claim the vodka is pot distilled, implying it is made in the stills shown. I'm curious to know what the rest of the members of the Craft Distillers Advisory Council, a DISCUS committee, think about this and if they intend to raise the issue with DISCUS. Both the DISCUS and the ADI definitions of a "craft" or "micro" distiller are in direct contradiction of DIAGEO's claims about their MOON MOUNTAIN product being a "craft" product. I'm not alone wondering how DISCUS can claim to be working with and for all the Craft members while the largest DISCUS member, indeed the largest producer of alcohol in the world is making false claims that diminish the very special character of what we do, misleading consumers in their perception of the nature of "craft" spirits.

Mr. Cowdery's comment in GOVERNMENT forum page regarding the obscure Kentucky law goes to the heart of the issues raised by HR 5034. Were this bill to pass into law, Kentucky would be protected against any challenge to that law, though it does not conform to the CFR STANDARDS OF IDENTITY. Thank you to Mark Brown for pointing out the following case which, though it is a wine issue, relates directly to this discussion: Wine Retailers Appeal to the Supreme Court Over Discrimination in Wine Shipping Source: Business Wire Nov 29th In asking the Supreme Court of the United States to grant a review of the case of Wine Country Gift Baskets v. Steen, a coalition of American wine retailers hopes the high court will to bring a definitive end to the ongoing interstate trade war over the direct shipment of wine. The battle over direct shipment of wine is one that rages on even in the wake of the groundbreaking 2005 Granholm v. Heald Supreme Court wine case, but that has switched battle grounds from wine producers to wine retailers. At issue in the case of Wine Country Gift Baskets v. Steen, decided in the Fifth Circuit Court of Appeals, is whether, notwithstanding the 2005 Granholm v. Heald decision that determined States may not discriminate against out-of-state wine producers, the Twenty-first Amendment overrides the Commerce Clause and allows States to discriminate against out-of-state wine stores. The Specialty Wine Retailers petitioning the Supreme Court contend that the Fifth Circuit, as well as the Second Circuit, has turned the Granholm decision upside down. Rather than construing the Granholm decision as a prohibition against discrimination, these courts have interpreted that decision as a license for states to discriminate against inter-state commerce. Wine Country Gift Baskets v. Steen originated as a lawsuit challenging Texas law that allows Texas wine stores to ship wine direct to Texans, while prohibiting out-of-state wine stores from doing the same. A Federal District Court in Texas ruled the law unconstitutional based on the 2005 Granholm v. Heald Supreme Court ruling that declared, "in all but the narrowest circumstances, state laws violate the Commerce Clause if they mandate differential treatment of in-state and out-of-state economic interests that benefits the former and burdens the latter." That District Court ruling was overturned by the Fifth Circuit Court of Appeals, which did not identify any compelling justification for such discriminatory treatment. Rather, the Appeals Court held that the Twenty-first Amendment, which repealed Prohibition, categorically immunized the Texas law from Commerce Clause scrutiny. If this view is upheld, millions of wine consumers across the country will fall victim to protectionist state laws and hundreds of thousands of wine retailers will see their protection from state based discrimination promised by the Commerce Clause of the Constitution stripped from them. "In asking the Supreme Court to hear an appeal of this case we hope the high court will instruct states across the country that laws discriminating against interstate commerce in wine for the purpose of protecting in-state interests cannot stand and violate the fundamental principles of our Constitution and of a national economic union," said Keith Wollenberg, President of the Specialty Wine Retailers Association. The Petition for a Writ of Certiorari in Wine Country Gift Baskets was written on behalf of the petitioners by Tracy Genesen and Ken Starr of the firm of Kirkland and Ellis. The case involves critical Constitutional issues of concern to wine retailers across the country and to the foundations of Internet Commerce. Today only 13 states and the District of Columbia allow consumers to have wine shipped them from out-of-state wine stores while 37 states allow such transactions by wine producers, thereby severely limiting access to wine by American consumers. The unconstitutional treatment of American wine retailers occurs despite the fact that both wineries and wine retailers are engaged in an identical retail transaction when they sell wine remotely and ship it to the consumer. ****** Given the above noted case, it is not inconceivable other States will take protectionist measures should HR 5034 be put into law. R

This issue is being debated NOW in the EU at the bilateral trade talks. If you are interested in selling your atypical whiskeys in the EU, NOW is the time to comment to the US OFFICE OF TECHNICAL BARRIERS TO TRADE. Send your comments to: Jeffrey Weiss, Senior Director Office of the United States Trade Representative 600 17th Street NW Washington, DC 20508 You can fax a comment direct: 202-395-4549.

This goes to "truth in advertising" and "protecting the consumer", both of which are the mandate of the TTB/ALFD. I can speak to the difficulty in getting label copy approved, having dealt with this issue with the TTB and the constantly shifting interpretations provided by reviewers who are at liberty to use "discretion" in their determinations. By way of example, one reviewer denied use of the phrase "Single Malt Whiskey" for one of our whiskeys, claiming it can only be made in Scotland. And twice in the last two years the TTB has denied label approval for labels which had been previously approved and in use for a number of years, causing us to dispose of labels and reprint. It appears in this case that Diageo perhaps is not getting the same level of scrutiny for their label claims. As Chuck points out, it is unlikely they are actually using a pot still and the product is definitely NOT an artisan product, or "craft" produced. And as Chuck has pointed out many times, the laws don't prohibit the making of any particular type of spirits, only what you can call them. Unfortunately the TTB seems to missed the boat here and is allowing Diageo to ride the coattails of the Craft Distillery movement by permitting statements to be used which it has not qualified or even questioned. Of course, one could say that imitation is the sincerest form of flattery, but we can be certain Diageo is not trying to flatter anyone. They are co-opting the phrase "craft distilled", which is undefined in Federal law.

Now THAT is some obscure language and law. I have to agree it does not seem like something which would hold up in court if it was enforced; which may not be so much of a stretch these days given the proliferation of small distilleries making young whiskeys. It is conceivable some larger distiller, seeing the craft producer as a threat (camel's nose in the tent), might call the wrath of the Kentucky ABC down upon some small whiskey producer. And though the court might overturn a decision of the ABC when challenged, the cost of litigation for the small producer could break that distillery's bank and put it out of business, which would be the point after all. This also seems to be something which WOULD hold up if HR 5034 were to be passed, giving that Kentucky law the assumption of correctness, unassailable. The other side of the coin? With the sudden expansion of craft distillers, and the growing number of new products being introduced by small distillers across the US, the cache of the affiliation with Kentucky is likely to decrease in the minds of the consumers. Who cares if it comes from Kentucky, with all due respect of course? The world of whiskey is changing on a daily basis. The consumer's choices are expanding as we (craft distillers) educate the public. Everyone agrees it is one of the primary jobs of the new spirits producers to educate the consumer. And the better informed the consumer is (and the non-producer side of the industry, restaurants, bartenders, servers, retailers), the less inclined they will be to believe that Kentucky is the only place American whiskey is made, or that Kentucky whiskey is superior to any other by virtue solely of the fact of its Kentucky origin. It should be interesting to see what happens.

Thank you Melkon for that image. Speaks volumes. In discussion with Frank Coleman at DISCUS, after sending him the definition which was published in the ADI mag at the last conference, it seems that DISCUS Craft Advisory Council's definition does not match the definition published by ADI. DISCUS CDAC sets a different upper limit: "...we are going to stick with our definition of 96,000 gallons, since it will permit a little growth for the members of our group without bumping into the cap, which is why we ended up at the 40,000 case level after some discussion. So our definition will be a little more generous than ADI’s for the moment. Also, for now, we have limited our craft distiller membership to folks who actually own a distillery; a number of small importers, rectifiers and brand marketers have inquired about joining but we have not gone down that road yet." I responded, all the ADI members I've spoken with agree that for a reorganized, member driven, Board managed ADI (or whatever it ends up being called) must hold a current DSP permit. The higher upper limit is the choice of the group that wrote the DISCUS CDAC definition and has no immediate impact upon any of our situations; that is, until we have to go to the FED to talk about the reduced FET for "craft distillers". It also reopens the discussion of use of the term we are defining: "MICRO SPIRITS PRODUCER". Many, me included, felt that Micro Spirits Producer was the more inclusive phrase. But the possibility that DISCUS could, with its resources, carry the day when we sit down with the Fed to actually get this into law may require we, as the actual micro distillers, have to revisit the use of the word "Craft". Some may recall this discussion in the "Definition" thread, early on. The term "Craft" was thought to be too vague, "what is 'craft'?" was the question under debate. But looking at it now, I am inclined to replace "Micro Spirits Producer" with the term "Craft Distiller", without changing any of the rest of the definition. Of course we may sit with the DISCUS group and come to an agreement about that upper limit, and revisit the wording overall. But the point is that the small producers, the Craft Distillers should decide the definition as a group at large, not as an "Advisory Council" to DISCUS. This is a discussion which should be on the agenda in Portland for discussion by the General Membership when we ratify the Articles and form the new ADI. And for the sake of future lobbying work and to ensure conformity in the minds of the consumer DISCUS CDAC and ADI definitions should match, barring any unforeseen disagreement among the distillers themselves; though it seems in the best interest of all to find consensus. R

The TTB has issued an Industry Circular addressing the matter of caffinated alcoholic beverages: To: Producers, Importers, Wholesalers, and Retailers of Alcohol Beverages, and Others Concerned: 1. What is the Purpose of this Circular? The Food and Drug Administration (FDA) has advised four companies that their alcohol beverages containing added caffeine are adulterated under the Federal Food, Drug, and Cosmetic Act (FFDCA). The purpose of this circular is to advise you that FDA's determination that a product is adulterated under the FFDCA would have consequences under the laws enforced by the Alcohol and Tobacco Tax and Trade Bureau (TTB). TTB enforces the labeling provisions of the Federal Alcohol Administration Act (FAA Act), 27 U.S.C. 205(e). Pursuant to these provisions, it is TTB's responsibility to issue regulations governing the labeling of distilled spirits, wines, and malt beverages. While TTB regulates the labeling of alcohol beverages, it is FDA's responsibility to evaluate the safety of ingredients added to alcohol beverages, pursuant to its authority under the FFDCA. It is TTB's position that adulterated distilled spirits, wines, and malt beverages are mislabeled within the meaning of the FAA Act. Subject to the jurisdictional requirements of the FAA Act, mislabeled distilled spirits, wines, and malt beverages, including adulterated products, may not be sold or shipped, delivered for sale or shipment, or otherwise introduced or received in interstate or foreign commerce, or removed from customs custody for consumption, by a producer, importer, or wholesaler, or other industry member subject to 27 U.S.C. 205(e), even if the bottler or importer of the product in question has obtained a certificate of label approval (COLA) or an approved formula. 2. What Actions Has FDA Taken with Regard to Malt Beverages Containing Added Caffeine? By letter dated November 17, 2010, FDA advised four industry members that it had reviewed the regulatory status of seven malt beverage products, each of which contains caffeine that has been directly added to an alcohol beverage and packaged in combined caffeine and alcohol form. The FDA letter warned the industry members that as it was used in their products, caffeine is an unsafe food additive, and therefore the products are adulterated under section 402(a)(2)© of the FFDCA, 21 U.S.C. 342(a)(2)©. Among other things, the FDA letter stated that "FDA is not aware of any publicly available data to establish affirmatively safe conditions of use for caffeine added directly to alcoholic beverages and packaged in a combined form." FDA provided these industry members with fifteen (15) days to advise FDA of the specific steps the companies have taken to correct the violation identified above and to assure that similar violations do not occur. The FDA letter provided that their responses should include any documentation necessary to show that correction has been achieved. Finally, the FDA letter provided that if the industry members cannot complete all corrections within the 15 days, they should explain the reason for the delay and the date by which each such item will be corrected and documented. The warning letters, as well as other information on the issue of alcohol beverage products containing added caffeine, may be found on the FDA Web site at \http://www.fda.gov/Food/FoodIngredientsPackaging/ucm190366.htm. 3. What Actions Has TTB Taken? On November 18, 2010, TTB issued letters to those four industry members regarding the seven malt beverage products that FDA identified in its warning letters as being adulterated. The TTB letters put these companies on notice that FDA's determination that a product is adulterated under the FFDCA would have consequences under the FAA Act, because of TTB's position that adulterated alcohol beverages are mislabeled within the meaning of the FAA Act. Consistent with the terms of the FDA warning letters, TTB asked that the companies advise TTB within the same 15-day period of the steps that they have taken to correct any violations of the FAA Act and the date by which each violation will be corrected. TTB sent copies of these letters to the brewers who have obtained COLAs from TTB for these products. 4. Will TTB Take Enforcement Action with Regard to the Alcohol Beverages that FDA Has Identified as Adulterated? Consistent with the actions taken by FDA, TTB is not planning to take enforcement action pending expiration of the 15-day period provided to the companies to respond to our letters. At that point, we will evaluate their responses and we will consult with FDA prior to taking enforcement action. It is our expectation that the companies will take voluntary action that will prevent violations of the FAA Act and, at the same time, will address the concerns expressed by FDA. 5. What are the Consequences under the FAA Act of a Determination that An Alcohol Beverage Product is Adulterated? As previously indicated, it is TTB's position that adulterated distilled spirits, wines, and malt beverages are mislabeled within the meaning of the FAA Act. Subject to the jurisdictional requirements of the FAA Act, mislabeled distilled spirits, wines, and malt beverages, including adulterated products, may not be sold or shipped, delivered for sale or shipment, or otherwise introduced or received in interstate or foreign commerce, or removed from customs custody for consumption, by a producer, importer, or wholesaler, or other industry member subject to 27 U.S.C. 205(e). TTB may pursue action to suspend or to revoke the FAA Act basic permit of industry members who willfully violate the conditions of their permit with respect to mislabeled, adulterated products. See 27 U.S.C. 204(e). Violations of the labeling provisions of the FAA Act are punishable as misdemeanors and the Government may seek injunctive relief to prevent and restrain such violations. TTB also may seek an offer in compromise covering the liability arising with respect to such violations in the sum of not more than $500 for each offense. See 27 U.S.C. 207. Under the Internal Revenue Code of 1986, TTB officers may, in appropriate circumstances, temporarily detain any alcohol beverage container that is being removed in violation of law, or seek a voluntary detention agreement with the industry member. See 26 U.S.C. 5311. 6. What if I Have Obtained a COLA or Formula Approval for My Alcohol Beverage Product? TTB reminds you that each producer and importer of alcohol beverages is responsible for ensuring that the ingredients in its products comply with the laws and regulations that FDA administers. TTB's approval of a COLA or formula does not imply or otherwise constitute a determination that the product complies with the FFDCA, including a determination as to whether the product is adulterated because it contains an unapproved food additive. Subject to the jurisdictional requirements of the FAA Act, mislabeled distilled spirits, wines, and malt beverages, including adulterated products, may not be sold or shipped, delivered for sale or shipment, or otherwise introduced or received in interstate or foreign commerce, or removed from customs custody for consumption, by a producer, importer, or wholesaler, or other industry member subject to 27 U.S.C. 205(e), even if the bottler or importer of the product in question has obtained a COLA or an approved formula. 7. Where Can I Find Current Information Regarding TTB's Position on Alcohol Beverages Containing Added Caffeine? TTB has published Frequently Asked Questions, along with other information on this topic, on the TTB Web site at \http://www.ttb.gov/main_pages/caffeine-added.shtm. As new information is available, we will update this site. 8. Questions? If you have any questions concerning this circular, please contact the Advertising, Labeling and Formulation Division at 1-866-927-2533 (option 5) or at ALFD@ttb.gov. John Manfreda John J. Manfreda Administrator Alcohol and Tobacco Tax and Trade Bureau

The various Provinces have their own rules, as do our States. I believe Alberta is the only "open" Province; all others buy as a response to a "tender offer" put out by the Province. Your best bet is to enlist the aid of a wholesaler already operating in the major markets you are looking to crack and have them approach the Provincial LCBO. It is possible to do it yourself, but it is difficult, international, time consuming and no guarantee you'll get in. The important thing to remember, as with our own "control states" is that there needs be created "pull" from the market before the Provincial agency will take it on. You may also have "buy back" clause wherein if they do not move the product within a certain amount of time you must buy it back, and pay for all the shipping and customs. Find a reputable distributor in Toronto or Quebec and start making inquiries through that distributor, establish a relationship and see where it takes you. R

Paul, here is the exact regulation from the CFR: Subpart F - Location and Use (of distilleries) § 19.131 Restrictions as to locations. Distilled spirits plants shall not be located in any dwelling house, or in any shed, yard, or enclosure connected with any dwelling house, or on board any vessel or boat, or on premises where beer or wine is produced, or liquors of any description are retailed, or (except as provided in §19.133) on premises where any other business is conducted. The wording is clear. There are existing precedents like TUTHILLTOWN which property also includes the house I live in. There is no prohibition in the regulations other than what is stated clearly above. Many distilleries of all sizes have residences on the property for workers or the manager. There should be no issue with this at the Federal level and if you are running into resistance contact your local Federal Legislator and get their staff on it. You're going to create jobs and economic development, they should be hot to get you into operation and start collecting taxes.

Just had a question from the Senior Director for Technical Barriers to Trade Office, who is following up on EU prohibition on selling legitimate American whiskey as "whiskey" or "whisky" in the EU if it has not been aged at least three years. He asked me to estimate the number of cases (9 liter) might be marketed in the EU as a result of a lifting of that prohibition. So I put it to the American craft whiskey makers who have no stocks three years old: Would you be making young whiskey or white whiskeys to sell in the EU market as Bourbon or Rye Whiskey (or any other "Type" of American whiskey which is recognized as "whiskey" under US law)? And over the next three years, what would you guess might be your goal for EU sales? I realize this is guesswork, not unlike the cash flow projections you made when you dreamed up your business plan. But please take a stab at it. And remember a few things. The EU market knows mainly two things about American whiskey: it's not Scotch, and there are is only one American whiskey, Bourbon. It is a wide open market eager for your goods. Remember too, there is no FET or State Excise tax due on goods exported. Anyone care to take a crack at estimating an EU market for your young whiskeys?

Have to disagree with you here Chuck. Ask any craft distiller if there's a difference between vodka or "neutral" spirits made from grain and vodka made from fruit. The two are not the same. I stand by a previous post, laws are not "made to be broken", they're made to evolve and change with the times, they're made to be "fixed". And this particular regulation, based on the both the technical definition of neutral spirits and the actuality of the difference between grain and fruit or cane neutral spirits is real. To quote the oft heard phrase "the law is an ass". The Fed definition for "neutral spirits" defines nearly neutral spirits, if we take the word "neutral" to be devoid of all character, this is decernable coming off the still. It is not the definition of neutral spirits needs fixing, it's the definition of "blended whiskey" which, as a result of the lack of specificity in the definition (leaving out the word "grain" when specifying "neutral spirits)is a contradiction in terms. Yes it may be unfixable, given the money behind questionable products. But it is not a waste of time to question the status quo, particularly in cases, as we go forward, where the regulation turns out to present such contradictions. I posed a question earlier, what if we make "neutral spirits" from algae and blend it with whiskey? How far afield can this go? But those may be rhetorical questions. R

Agreed. Our own selves and our relationships with customers and consumers is really our best defense. That said, it is important to address the inconsistencies rather than simply treat them as "accepted truth". Bill Owens raised an interesting point about "truth in advertising". Is the TTB being true to its mandate and that of the ALFD, permitting phrasing on labels which misleads?

I can only say to the willingness to acquiesce: Laws are NOT made to be broken, they are made to be CHANGED. We can live with the regs the way they are forever, or we can find the inconsistencies and at the very LEAST address them. I am not one to stick my head in the sand. The law contradicts itself, simply stated, by mistake or by deliberate action, no matter. Easy to live with it when it comes to stupid, illogical, arcane and contradictory law. But it is not productive and it will come back to bite you every damned time. So it seems difficult to change regulation, or impossible to get entrenched law changed in the face of huge liquor funded lobbies fighting for the status quo. To quote the lyric: "the difficult we can do right now, the impossible may take a little time". But back to HR 5034, the topic of the this thread. Singing the chorus of "protecting the health of our State citizens" the wholesalers are digging in their heels and spending a lot of money on passage of 5034. DISCUS is fighting to keep it off the books as should every producer and retailer and on-premise owner in the country. Everyone ELSE in the business knows who the wholesalers are trying to protect, and it isn't the citizen. The craft distillers of the US may think it is hard to get product out on to shelves now; just you wait. If 5034 is passed into law, you will be on your hands and knees before the great gods of distribution praying one of them takes a liking to you and your product when you try to move it into another State. Protectionism exists, and it is practiced not only by countries and States but by the wholesalers too. It's a logical sound business position, "protect your market". But 5034 limits competition, restricts trade and opens the door to the breakdown of the Commerce Clause of the Constitution which protects equal interstate commerce practices. I should think the US BARTENDER'S GUILD would want to take a stand on this, since they are the professionals in the field who will be most likely to be limited in their creativity behind the bar by a wholesaler who decides not to introduce some of the very special and unique products the small privately held distillers are producing and will produce in the future. I can almost hear the salesman saying "Hey, use PUCKER. It's like the hand made apple stuff those guys are making, and it's cheaper." Speak out against HR 5034, your ability to show the world your spectacular goods is also at stake. R

Absolutely so. Hyperbole and outright hijacking of "high concept" happens every day in every craft and art and business. Something gets press and there's a new bandwagon to jump onto. And the big guys didn't get where they are by quibbling about the details of the truth in things. Most consumers don't read the labels to see if their vodka is from a factory in Illinois or in central France; and the overwhelming majority of the world has no idea what "craft distillers" are or what we do or how. It's up to the "craft" or "micro" movement participants to educate the public. It would be a waste of time to try to out-shout the big eight as they scramble to capitalize on our successes as small producers. Your defenses are organization and education; not just among ourselves, but at the Legislative level. We have an accepted definition of Micro Spirits Producer which defines the "craft" by it's method and size of production (neither of which is the exact definition of "craft distillery" but overall as close as we could come and not eliminate the ability of the craft distiller to exercise his "craft" through experimentation and variety). It would be the goal of an organized small distillery industry association to draw that distinction apart from any stamp the big guys might attempt to put on it so to call it theirs. They can not do what we do, and by their very nature are not "micro" or "craft" distillers. One can rightfully say, "the hell with this" and simply go back to the distillery and to work, and make money (if they're good at it) and live happily ever after......that is till something happens to threaten their business, something for instance like a doubling of Excise Tax on distilled spirits WITHOUT a discount to the micro producers akin to that which is enjoyed by micro brewers and wineries. It's conceivable. And without DISCUS support for a discounted rate to micro producers your FET may actually double in short order. Without organization NOW and action NOW, which action is being taken by a small ad hoc group to reorganize ADI into a viable industry association, only the voices of DISCUS members will be heard. The value of your craft products will decrease in the perception of the consumer if similarly labeled products flood the shelves. I am continuing to work on getting a bill in front of the Congress that will actually define our category. That is the only protection we can hope to get, for what it's worth (reference the acquisition question, if DIAGEO buys out a craft producer is that producer still a craft producer)? R

What a surprise! Mr. Rangel judged by his peers to be guilty of nearly a dozen ethics violations and now subject to "punishment" by the Congress; of course "punishment" does not mean any criminal charges just a slap on the wrist by his fellows on the hill; though that slap may end up in expulsion which is a rare outcome in the history of the Congress. Rangel of course still pleads and storms out of committee rooms, bolts hearings and goes back to work like nothing at all is happening. But that's a problem for the Congress and the Attorney General isn't it. Our problem is, as the result of highly questionable practices by the Ways and Means Committee under Rangel's Chairmanship has led to a trade war among our own US Territories that has implications for all American spirits producers. There is a movement to resurrect the question should the COVER OVER program exist at all. Or, as some suggest, should the Congress revisit the issues raised by the sabotaged HR 2122, which would have mandated a cap of 10% on the amount of those returned funds which could be used as incentives to lure new spirits producers to the islands. And there is another specter raised by the failure of the Ways and Means Committee to properly consider HR 2122, that is the sudden availability of cheap CANE NEUTRAL SPIRITS, which may be used in place of GRAIN NEUTRAL SPIRITS to make......wait for it......"Blended Whiskey". You read correctly. Under the CFR the word "grain" is missing from the definition of blended whiskey which permits the use of "neutral spirits" in the blend and still permits the end product to be labeled "whiskey". Some will, and do, argue that this is simply the way the law reads and nothing to be done about it. Perhaps true. But all the "craftsmen" I know across the US who make whiskey believe "whiskey" to be a grain based spirit, unadulterated by non-grain spirits. We've all heard the phrase "laws were meant to be broken", but I disagree. I say "Laws are made to be changed." All legal experts agree the Law is a living, changing, evolving thing; not set in stone. The whole system, when it works properly, identifies the broken law, the mistaken regulation, and provides mechanisms for change, correction, modernization. Simply accepting the fact of a major mistake in the regulations that only now comes to the fore because of modern conditions not heretofore existing, does nothing to solve the problem, and encourages the defense and blind acceptance of other problematic, purposeless, obsolete law. The Congress should take up HR 2122 again and look at it without the leaden influence of the former Chairman. R

Another inducement for the REAL craft producers to get our act together and get a fully functioning Industry Association together before "craft" goes the way of "extreme", being so overused and abused it loses all meaning; meaning we have been working very hard to establish. Diageo can not by its very nature do what we do. And they've demonstrated their willingness to co-opt the definition of "whiskey" by claiming the appellation "blended whiskey" and using non grain neutral spirits to blend. And by the way, it is not possible to make vodka in a pot still using heat, against the laws of physics; it's still neutral spirits made in a column then redistilled in a pot; like running through a filter, then running through a larger filter and calling it better.

Just in case any other unlicensed would be distillers are considering setting up in the basement: Man, 19, guilty of making booze THE COLUMBUS DISPATCH By Regina Garcia Cano Saturday, November 13, 2010 02:54 AM Facebook bragging appears to be the undoing of an Upper Arlington man, who police say was selling homemade liquor and boasting about it on the Internet. Joseph A. Rotkiske IV, of 2279 Edgevale Rd., pleaded guilty yesterday to a liquor-acts prohibition charge, a first-degree misdemeanor. Municipal Court Judge Anne Taylor sentenced Rotkiske, 19, to two years of probation and 180 days in jail, with all but two of those days in jail suspended. Taylor dismissed a second charge of underage drinking. "We suspect that he was manufacturing wine, liquor and whiskey," Upper Arlington police Sgt. Jon Wilhelm said. "It's illegal." Rotkiske had a liquor still in his house, authorities said. Although it's OK for people to make beer or wine for personal use, no one is allowed to "manufacture any beer or intoxicating liquor for sale, or shall manufacture spirituous liquor," according to the Ohio Revised Code. Rotkiske was arrested Nov. 4, after a tipster told police that Rotkiske had told her he made and sold moonshine and wine, according to the Upper Arlington police incident report. She said he'd also advertised it on Facebook. A confidential informant contacted Rotkiske and confirmed that he was offering wine and moonshine for $20 per quart and $60 per gallon, Wilhelm said. The informant bought one quart of moonshine from Rotkiske on two occasions, police said. In a search of Rotkiske's home, Wilhelm said, police found distillery equipment; ingredients and recipes for liquor manufacturing; and liquor in various stages of production. A recent check of Rotkiske's Facebook profile showed this comment from him: "ok once I get the distillery up and running to the level i expect, i'll get a good amount of money rolling in SO I wont have to depend on the Auto Body/ painting/air brushing stuff to put food on the table." Police arrested Rotkiske in the home that he shares with his mother, Wilhelm said. The detective said she apparently didn't know he was selling the liquor he'd been making. Rotkiske didn't return calls for comment this week. Wilhelm said this is the first time in his 21 years with Upper Arlington police that he's heard about someone selling homemade liquor.

Just in case anyone is still thinking it's okay to distill spirits at home: Man, 19, guilty of making booze THE COLUMBUS DISPATCH By Regina Garcia Cano Saturday, November 13, 2010 02:54 AM Facebook bragging appears to be the undoing of an Upper Arlington man, who police say was selling homemade liquor and boasting about it on the Internet. Joseph A. Rotkiske IV, of 2279 Edgevale Rd., pleaded guilty yesterday to a liquor-acts prohibition charge, a first-degree misdemeanor. Municipal Court Judge Anne Taylor sentenced Rotkiske, 19, to two years of probation and 180 days in jail, with all but two of those days in jail suspended. Taylor dismissed a second charge of underage drinking. "We suspect that he was manufacturing wine, liquor and whiskey," Upper Arlington police Sgt. Jon Wilhelm said. "It's illegal." Rotkiske had a liquor still in his house, authorities said. Although it's OK for people to make beer or wine for personal use, no one is allowed to "manufacture any beer or intoxicating liquor for sale, or shall manufacture spirituous liquor," according to the Ohio Revised Code. Rotkiske was arrested Nov. 4, after a tipster told police that Rotkiske had told her he made and sold moonshine and wine, according to the Upper Arlington police incident report. She said he'd also advertised it on Facebook. A confidential informant contacted Rotkiske and confirmed that he was offering wine and moonshine for $20 per quart and $60 per gallon, Wilhelm said. The informant bought one quart of moonshine from Rotkiske on two occasions, police said. In a search of Rotkiske's home, Wilhelm said, police found distillery equipment; ingredients and recipes for liquor manufacturing; and liquor in various stages of production. A recent check of Rotkiske's Facebook profile showed this comment from him: "ok once I get the distillery up and running to the level i expect, i'll get a good amount of money rolling in SO I wont have to depend on the Auto Body/ painting/air brushing stuff to put food on the table." Police arrested Rotkiske in the home that he shares with his mother, Wilhelm said. The detective said she apparently didn't know he was selling the liquor he'd been making. Rotkiske didn't return calls for comment this week. Wilhelm said this is the first time in his 21 years with Upper Arlington police that he's heard about someone selling homemade liquor.

The unfortunate thing is that the consumer will not know that. They'll see "blended whiskey" on the front and assume it's whiskey, when in reality it is not (regardless what the "blended whiskey" definition says, which contradicts the definition of "whiskey" which precedes it in the Code of Federal Regulations). The challenge is not to declare cane neutral spirits not whiskey, but to more clearly define "neutral spirits" in the definition of "blended whiskey" as having to be GRAIN neutral spirits. Notwithstanding arguments that "neutral" is "neutral" (which is arguable easily by anyone who is actually making neutral spirits from fruit for instance), the contradiction exists and is an open invitation to further dilute the reputation of American "whiskey". But given the money to be made by large distilleries who are happy to make cheap blends to make tons of money (nothing wrong in profit, by the way), it is unlikely the small real craft whiskey makers will have the chance to make the case that a whiskey blended with cane spirits is no longer whiskey. The shame of it is the willingness of the venerable American whiskey houses to sell out and mix non grain substances with their whiskey and attempt to pass it off as "whiskey". What's to be introduced next: squash neutral spirits, algae neutral spirits? We've all read the reverse argument already about the "types", "You can make anything you want, the regs just tell you what you can call it." By this logic and argument the larger spirits makers who are making so called "blended whiskey" with cane neutral spirits may of course make it as they want, but the regs in this case have a loophole that needs be closed. If the big players are preaching to the little guys "does it really matter if you call it whiskey or not if you're selling it?", the retort should be the same. In the EU they argue, "you can sell your goods in the EU, just call them 'aged grain spirits'"; but everyone in the industry knows it is easier to introduce and sell your new product as "bourbon whiskey" or "rye whiskey" than to sell it as "aged grain spirits" then identifying the grain. Public perception of the product drives sales to a major degree; and the perception of "whiskey" is that it is a grain spirit. The introduction of cane neutral spirits will fool the consumer into thinking they are drinking a whiskey, when what they are truly getting is a "blended spirit", not a "blended whiskey". R

Congratulations to Tom and Lianne Herbruck! It CAN be done. And no need for a "hobbyist" distiller to be illegal unless it's more important to be the radical wildcatter outside the law than it is to make spirits. Well done. R

The NEW YORK TIMES reported in yesterday's BUSINESS section the COLA applications filed by BEAM had been approved. The following article is mainly about the COVER OVER program but also relates that issue to the fact of BEAM's applications and other producers shifting their neutral spirits to CANE: http://www.nytimes.com/2010/10/16/business/16rum.html