There's no such thing as American Whiskey

[cbenoit]

This is my first post, but I assure you that despite the inflammatory title, I'm not here to troll. I'm here to explain why some of you are running into trouble with exporting your whiskey.

Let me quickly introduce myself: I'm a lawyer here in Washington, D.C., and I specialize in international trade. A main aspect of this practice is making sure that governments live up to the commitments they made to play fair (usually when they joined the World Trade Organization, "WTO"). Sometimes, it's the United States that needs to be sued, as is the case with cover over rum subsidies. Laws and taxes regarding distilled spirits the world over have generated some of the best and most important WTO jurisprudence.

I very much enjoyed my time in Louisville back in April. I met a lot of wonderful people, and think this is a fantastic community, and I hope to see you all in Denver next year. Now, on to the reason for this post (prompted by my discussions with some of you and this post):

The Problem (We can't call our stuff whiskey in Europe)

The European Community requires that a grain spirit be aged at least 3 years before it is labeled as "whisk(e)y" (as does Canada). But many U.S. craft distillers often bottle grain spirit aged less than 3 years and label it as "whisk(e)y", as they are permitted to do under TTB Regs. When they try to export their whiskey, Europe requires them to drop the word "whiskey" from the label.

The Issue (This is unfair because the Scots are exempt here in America)

This is seen as unfair, because, for example, Scottish distillers can export their "Single Malt" into the U.S. without having to worry about TTB's definition of "Malt Whisky".

The Reason for the Dichotomy (Scotch Whisky is a Thing, American Whisky Isn't)

You'll notice on Scotch labels for the U.S. market the following ordering of words: "[Producer Name] Single Malt Scotch Whisky".

This is important. "Scotch Whisky" (and likewise, "Irish Wisky" and "Canadian Whisky") are their own "thing". "Thing" is a term I'm going to use because it's easier, but what it means in TTB parlance is that the title is "Sufficient as class and type designation".

So when you label your product "Scotch Whisky", you're no longer worried about the definition of "Malt Whisky".

Q: But the TTB does define "Whisky", so how can you say there's no such thing as American Whisky (A: Don't use common sense or make assumptions, this is highly codified law and we're operating within its parameters)

The TTB controlling the use of the term "Whisky" within the United States customs territory does not automatically establish "American Whisky" as a thing, whether here or abroad. Now, they actually do get a bit close to bridging the gap... if you're outside the U.S. and you have produced grain spirit that meets the TTB definition of Whisky, but you haven't taken the bare minimum step of blending it or doing anything to it so that it can be considered "produced" in the U.S. (an absurdly low bar - I hear we're drinking lots of Indian whiskey these days), then you have to label it as either being from the country you produced it in, or alternatively, use the designation "American Type Whisky".

Q: So why again is there no such thing as American Whiskey? (A: Because the U.S. Government never asked)

Don't blame the EU. When the U.S. negotiates this kind of thing with foreign governments, they have two items on their agenda: Bourbon and Tennessee Whiskey. See this U.S.-Europe Exchange of Letters, or NAFTA Annex 313. The Canadians asked for "Canadian Whisky" to be a thing, and in return the U.S. asked that Canada recognize Bourbon and Tennessee Whiskey as things in their own right. Now look at Canada's regs, which helpfully exclude Bourbon and Tennessee Whiskey from the baseline requirements for putting "whisk(e)y" on your label (requirements which include ageing for at least 3 years in small wood).

Q: So how do we fix this? (A: Ask the U.S. Gov't to Ask Its Trading Partners to Recognize "American Whiskey" as anything Produced under the laws of the U.S. that meets the U.S. definition of "whisk(e)y".)

The problem in Europe is just that the civil servant in charge of spirits labels has his hands tied. He sees that you submitted a label with the word "Whisky" on it, but you don't meet the word's requirements. He can't work with "American whiskey" anymore than he can work with "City of Atlantis whiskey" or "Planet Zongo whiskey". If you're lucky enough to be a Tennessee distiller making Tennessee whiskey, or you're making Bourbon, then you're good to go, just make sure to get your TTB Export Certificates and you shouldn't have any problem in Europe.

Conclusion: Petition the U.S. government to negotiate with other governments to get them to recognize "American Whiskey" as a classification! There's an opening right now, as the U.S. is negotiating a "Trans-Pacific Partnership" ("TPP") agreement which includes a host of countries around the Pacific rim. And of course, an Exchange of Letters with Europe is possible anytime.

Happy to take questions.

Best,

Charles

[cowdery]

Since the Office of the U.S. Trade Representative has defined "Tennessee Whiskey" as "straight bourbon produced in Tennessee," presumably the definition of "bourbon" requires "straight bourbon" as defined by TTB, and not the lower bar for mere "bourbon," which requires aging but of no minimum duration.

[cbenoit]

Thanks Chuck,

USTR asked Canada to define both Tennessee Whiskey and Bourbon, here's the exact request they put into NAFTA (Annex 313, paragraph 1):

1. Canada and Mexico shall recognize Bourbon Whiskey and Tennessee Whiskey, which is a straight Bourbon Whiskey authorized to be produced only in the State of Tennessee, as distinctive products of the United States. Accordingly, Canada and Mexico shall not permit the sale of any product as Bourbon Whiskey or Tennessee Whiskey, unless it has been manufactured in the United States in accordance with the laws and regulations of the United States governing the manufacture of Bourbon Whiskey and Tennessee Whiskey.

So Bourbon got its own nod, it doesn't have to be TTB's Straight Bourbon. Here's the exact language under Canada's Food and Drug Regulations:

B.02.022. (1) Subject to subsection (2), no person shall label, package, sell or advertise any food as Bourbon Whisky, or in such a manner that it is likely to be mistaken for Bourbon whisky unless it is whisky manufactured in the United States as Bourbon whisky in accordance with the laws of the United States applicable in respect of Bourbon whisky for consumption in the United States.

[nick jones]

Conclusion: Petition the U.S. government to negotiate with other governments to get them to recognize "American Whiskey" as a classification! There's an opening right now, as the U.S. is negotiating a "Trans-Pacific Partnership" ("TPP") agreement which includes a host of countries around the Pacific rim. And of course, an Exchange of Letters with Europe is possible anytime.

I like where you're going with this, Charles. Like Ralph, I've been disturbed by this issue. But I've never really seen a potential solution to it. The problem, as you say, is that the TTB doesn't codify

"American Whiskey" as a specific class or type of whiskey, therefore the EU is left with an all-or-nothing choice when it comes to recognizing whiskies made in America. Either all of them are acceptable, or all of them aren't.

A quick glance at the CFR is enough to make any foreign power wary of agreeing to abide by its whims. It's hardly surprising that they don't even want to touch something like the Standards of Identity (for comparison, check out the way that the Irish define whiskey).

However, I'd like to suggest that if we all are going to rally behind some "whiskey" that fits all of our various, creative, awesome whiskies, we use a term other than "American Whiskey". Not only is that term somewhat dismissive of our brothers to the north and to the south, but I dare say that its generally detracts from the passion that we're all putting into our work. That being said, I have no alternate term to advocate. Perhaps others on the forum can think of some snappy names?

I agree that once we decide a name (and a definition), the first step is to get that "type" into the CFR. Once that is accomplished, we only need to get these stubborn foreigners to recognize that one "type" and not the entire whiskey "class". Should be slightly easier, right?

Nick

[cbenoit]

Thanks Nick,

I hadn't seen the Irish Whiskey Act, thanks for sharing. Maybe not a bad idea on their part to lock down use of their geography. According to Proof 66, Seagram's VO Canadian Whisky is sourced from MGP Ingredients in Indiana - some loophole in the Canadian legislation? With no hard facts I haven't looked into this.

Let me clarify a few things though. I jumped right into the weeds with my first post, but let me take a step back. First, I'm operating on two assumptions with my recommendation:

1. Distillers don't want to have to change anything about their label here in the U.S.; and
   
2. Distillers don't want to have to drop the word "whiskey" in Europe and Canada when they use it here in the U.S..
   

Well, there's two ways to accomplish this:

1. Convince Europe and Canada to drop the 3 year ageing requirement for use of the term "whiskey"; or
   
2. Convince Europe and Canada to "give the U.S. a pass", recognizing that we have a different view on what makes a whiskey a whiskey.
   

Now, I think the first option - while very worthwhile - is a loser. If I'm the Scotch Whisky Association ("SWA"), then that ageing requirement is tremendously important to me, and I'll fight like hell to keep it there. Not because I want to screw over some American upstarts, but because I'm protecting the "Scotch Whisky" brand from new entrants who may dilute the brand. Think about what an incredible barrier the ageing requirement is for prospective distillers in Canada and Europe. Bruichladdich raised £6.5m to get started in Scotland, and Forty Creek Whisky in Canada was the offshoot of a very successful and large winery. Ultimately, my personal view is that the 3 year ageing requirement is a mistake from the point of view of consumers, industry, the economy, and science, but understanding the real reason it's there makes clear that it's not going away simply because the U.S. asks.

In light of the above, the second option appears much more doable. But there's a reason I put "give the U.S. a pass" in quotes. The reason for that is there's no precedent for just saying "Ok, well your whiskey is from this country, so you get a waiver or exemption". It's all about defined terms. We know Europe won't change the definition of "whisky" for domestic reasons. So if we want to use the word "Whiskey", we have to either comply with Europe's definition, or convince them to define a new term. It's not enough that the label says "Product of USA" at the bottom in small print.

No matter what, distillers will need to rejigger their label for foreign markets. That's unavoidable. So I guess my question for you all is this: in foreign markets, would you be satisfied with your label saying, for example, "Hudson Single Malt American Whiskey". You wouldn't have to change your label here in the States. Much like Canada, TTB would promulgate a definition for "American Whiskey"* that would match its existing definition of "Whisky", but it wouldn't touch the existing plain "Whisky" definition. So domestically, Distillers would be free to use either-or on their label. Having done that, TTB would call up USTR, and ask USTR to ask Europe and Canada to see if they'd accept "American Whiskey" as a defined term in their own domestic legislation, much as we already do for them. Assuming little-to-no resistance (why would the SWA care?), you all would be able to put the term "Whiskey" on your label, provided of course the word came immediately following "American".

Nick, having a new definition of "American whiskey" wouldn't affect any distillers in Canada or Mexico. "Canadian Whiskey" and "Mezcal" are already defined terms in North American and Europe.

Finally, I defer to you completely on your view of the term "American Whiskey". To reiterate, no one would have to use it, and certainly not Stateside. Having the defined term just gives U.S. craft distillers a way to put the word "whiskey" on their European/Canadian labels without worrying about the 3 year ageing requirement. If you can think of another defined term for foreign markets that's more reflective of what you're doing, then that's great, I just went with American because it reflects past practice.

* If going for this definition, it'd probably be worthwhile to add a "Produced in U.S." requirement to the definition, like bourbon has, but which is absent in TTB's generic "Whisky" definition.

[jlevac]

I like option 1: Convince Europe and Canada to drop the 3 year ageing requirement for use of the term "whiskey" . I'm in Canada and really want to produce a young "baby" whisky that is aged less than a year. Maybe it's not the "american whisky" we need to work on, but a new product name that would be whiskies aged less than a year but produced anywhere in the world. That way, scotch stays scotch, tennessee stays tennessee and so on.

[Ralph at Tuthilltown]

I think Charles is on the right path. Changing the EU definition of EU whisky appears to be a losing proposition. Better if we simply have American Whiskey identified and qualified as "whiskey" and a "product of the United States", made under American law.

The quid pro quo we offer the EU is the possibility of a broader exemption from the Standards of Identity so that the exemption includes all EU whiskey. This brings the Swiss, Swedes, Welsh, Spanish and French into the fray since the EU craft distillery movement is taking hold and those countries will want equal access to the American marketplace for new whiskies made by their distillers.

This will be a lengthy struggle, but the payoff is access for our legal "whiskey" in the EU which is very eager for new whiskey choices and willing to pay for them to be imported to EU.

R

[cbenoit]

Thanks Ralph. DISCUS could be of help too. For example, they're currently urging support of "Japanese Whisky" as a defined term in the U.S. in exchange for Japanese recognition of Bourbon and Tennessee Whiskey:

The Distilled Spirits Council understands that the Japanese spirits industry is seeking distinctive product recognition for “Japanese Single Malt Whisky,” which is a single malt whisky that is only produced in Japan. The Council has been assured that the Japanese spirits industry strongly supports recognition of Bourbon and Tennessee Whiskey as distinctive products of the United States. Accordingly, the Distilled Spirits Council strongly supports the United States’ and Japan’s mutual recognition of each other’s distinctive whiskeys. Thus, only single malt whiskies manufactured in Japan in accordance with the laws and regulations of Japan would be permitted to be sold in the United States as “Japanese Single Malt Whisky.” Such mutual recognition would ensure that both countries’ distinctive whiskey products are afforded similar protections in their respective markets.

I think it's a bit odd that they say "Japanese Single Malt Whisky"; they probably meant "Single Malt Japanese Whisky" (or more likely, just "Japanese Whisky").

The above quote was taken from DISCUS' annual trade barrier letter to USTR, filed last week, Oct. 15th. It surveys countries all over the world, it's good reading if you've got a foreign market in mind. You can access it by visiting this website, then clicking on "View Attachment PDF" on the bottom right hand side: http://www.regulations.gov/#!documentDetail;D=USTR-2012-0021-0017

Best,

Charles

[Jedd Haas]

Is there an aging or barrel type requirement for Japanese Single Malt Whisky? (However you want to phrase it.) Because if seems there might be some inequality of recognition with the phrasing above; and incomplete recognition for other US whiskey types.

[Ralph at Tuthilltown]

In response to Charles' question, I think we would not want to change the "title" line on our brand label. It is HUDSON MANHATTAN RYE WHISKEY for instance, not HUDSON MANHATTAN RYE AMERICAN WHISKEY. Requiring the insertion of "American" in the brand name would throw off the graphic image we designed.

It would be my preference not to change the brand name, but to indicate somewhere on the label the country of origin: "American Whiskey" in some minimum type size that is reasonable.

It is, however, likely that we would have to modify our labels to meet foreign "warning" standards. In the EU for instance it's the circle with a slash through it over the silhouette of a pregnant woman rather than our GOVERNMENT WARNING text. But the cost of that slight modification is small and the main thing is the identification of the brand "look", the logo, and the type of product. We do that for all our exports and no big deal, but changing the name of our brand from HUDSON NEW YORK CORN WHISKEY to HUDSON NEW YORK CORN and eliminating the word "whiskey" from our labels is what I would describe as forced misrepresentation, enforced by competing EU producers.

If the SLA or the EU want to "protect the integrity" of Scotch or Irish Whisky that's their business. But we're not making Scotch or Irish Whisky, we're making American Whiskey.

R

[nick jones]

having a new definition of "American whiskey" wouldn't affect any distillers in Canada or Mexico. "Canadian Whiskey" and "Mezcal" are already defined terms in North American and Europe.

Charles,

If you will indulge me for a moment, I would like to point out to you that there is an entire continent south of Mexico known as "South Mexico". You should have also mentioned the various countries of South Mexico in your list of countries who would have no problem with the term "American Whiskey" being used to refer to a small portion of what was once upon a time called "The Americas"

But seriously, would it be too nauseating to call it US Whiskey? (I think that USA Whiskey would, in fact, be way too nauseating).

Just throwing out an idea. Anyone else got any?

Nick

[cbenoit]

Nick,

Thanks for the snark. I originally read your comment to mean that Mexican/Canadian whiskey producers may be hurt in the U.S. market if there was a defined term for "American whiskey" abroad, that's why I said they wouldn't be affected. I'm sorry for misunderstanding you. But now I understand what you meant, and that's a very valid point: i.e., that other countries will object that "American whiskey" denotes "U.S. whiskey". That could prove to be a deal-breaker if they do feel strongly, because Peru, Chile, Canada and Mexico are all part of the Trans-Pacific Partnership Agreement negotiations.

Has anyone had experiences exporting to Australia? They're part of the TPP as well, and also have a 3 year ageing requirement.

[Ralph at Tuthilltown]

Charles makes a good point about "American Whiskey", that it may be problematic if the South American producers protest. I suggest a "type" be listed on the label in the same way as the "Type" must be on the label under US code, "Rye Whiskey" or "Bourbon Whiskey", perhaps a simple statement of origin would be acceptable: "Made in the US" seems sufficient.

[Edwin]

Okay, I am out of the box here. Why? Since I am "from Europe". But, Charles, maybe you can help me out. I want to release a whisk(e)y in Europe. I don't want to put it away in a barrel for 3 years. What are my possibilities? In Europe. Not thinking of exporting to the States. Hope you can help.

I thought about "rye brandywine" as an alterntative if I HAVE to meet the 3 years requirement. Or "single malt brandywine".

Edwin.

[Ralph at Tuthilltown]

Edwin, there may be specific language attached to the definition of "brandywine" in EU code. In EU law if you want to call it "whisky" or "whiskey" it must be the distilled spirit of a fermented mash of grain and must be aged in oak for minimum three years. Pretty straightforward for Europeans.

On the topic of "American Whiskey" vs another "type" name for whiskey produced under American law, I'm not sure if I agree that it is in any way a slight or proprietary to the our cousins to the South or North. The Canadians produce "Canadian Whisky" a type accepted in law in the US and EU. When anyone asks me what nationality I am, I say "American." If someone asks the same question of someone from South America, they would not respond "I'm South American," or the Spanish equivilant. They would say they are Peruvian, or Chilean, or Columbian. So if we want to be totally politically correct yes, we can get specific to "North American" "South American", but it seems silly to suddenly take up phrasing not used in practical everyday parlance.

For me, the favored phrase is "American Whiskey", though any text which allows me to sell my goods in the EU under their rightful type name may be acceptable. The goal is full acceptance by the EU of American Whiskey as a legitimate "whiskey", same as we recognize Scotch Whiskey as a legitimate whisky though it is not made the same way as our own whiskeys. Imagine if we said to the Scotch whisky producers "We recognize Scotch Whisky as a specific type of whisky made in Scotland under Scotch law; it must meet US Standards of Identity for storage in new charred oak barrels." Think that would fly?

This issue has been brought before DISCUS, which responds that the issue was taken up by DISCUS about a decade ago and no progress was made then, and so they believe no progress can be made now so it is not worth pursuing and may draw the ire of the SWA. My response is that ten years ago there were the big producer members of DISCUS and about a dozen craft producers in the US, now there are the small number of big producers greatly outnumbered by the 400 or so craft distillers and the world is changed. I repeat, the Scotch Whisky Association does a grand job at serving its Scotch whisky producing members and the integrity of Scotch Whisky worldwide. But the legitimate Bourbon whiskey producers of the US are not threatening that integrity in any way. And this attitude is not a reflection of any Nationalistic tendencies on my part, it is simply I'd like to call my "Whiskey" by its rightful name, just like every other hard working American craft distiller with legitimate young American goods.

[cbenoit]

+1 to everything Ralph said. Support entirely.