OCTOBER 8, 2010 | MODERN DISTILLERY AGE WEEKLY E-NEWSLETTER VOLUME 1 | NUMBER 41 “Spirit of Mount Vernon” Industry Another Letter to Congress on H.R. 5034 Heritage Dinner and Spirits Rare Auction On October 4, another joint letter was sent to Congress: “Dear Member of Congress: “Last week, the House Judiciary Committee held a hearing on H.R. 5034 and the new language being proposed by its author. We believe the testimony provided convincing evidence that this version of the legislation, like the previous version, would allow the promotion of discriminatory state laws and would invite new litigation that would upend the careful balance of local, state and federal regulation of alco- hol beverages. We remain united in our opposition to this version of H.R. 5034. “First, while proponents of H.R. 5034 have claimed that an ‘avalanche’ of litigation exists, nothing could be further from the truth. There is one case today that Former Gov. Frank Keating (Okla.) poses with James L. Bareuther has not been substantively resolved by the trial court. (R), retiring COO of Brown-Forman and two-term Chairman of the Since 2005, 39 lawsuits have been filed in federal Distilled Spirits Council, as he is inducted into the George Washing- courts, including two challenges filed by wholesal- ton Spirits Society. DISCUS President Peter Cressy speaks from the ers. In more than half of these cases, state laws were podium. upheld. “None of the court decisions have ever resulted in The Distilled Spirits Council’s (DISCUS) ninth annual “Spirit of Mount Vernon” the dilution of a state’s broad 21st Amendment power heritage dinner and rare spirits auction was held on the lawn of Mount Vernon to regulate alcohol beverages. Where courts have on October 6 and raised $200,000 for the education programs at Historic Mount overturned state laws, states have had no difficulty Vernon, bringing the grand total for the history of this event to $2.2 million. finding nondiscriminatory ways to exert control that “The partnership between Mount Vernon and the Distilled Spirits Coun- continued on page 8 cil has been extremely important to our mission of educating people about George Washington,” said Jim Rees, Executive Director of Mount Vernon. “Not only has DISCUS supported exhibits that allow us to tell the story of Washing- Michigan Governor ton’s entrepreneurial endeavors, the organization continues to raise funds that Repeals Spirits Sampling directly benefit our education programs.” “It has been a great honor for the spirits industry to work so closely with Ban Mount Vernon to support its important education programs,” said Peter Cressy, Michigan Governor Jennifer Granholm has signed a President and CEO of DISCUS, which sponsored the event. “It has also been bill repealing a Prohibition-era ban on spirits sampling a wonderful opportunity to showcase George Washington’s role as a leading events at package stores. House Bill 6426, sponsored distiller and entrepreneur of his time.” by State Representative Bert Johnson, gives consum- continued on page 8 ers the opportunity to sample up to three separate one-third ounce samples of spirits in any one calendar SF Mayor’s Veto of Alcohol Fee Upheld day at a pre-planned tasting event. Mayor Gavin Newsom vetoed, as expected, a Board of Supervisors proposed fee “In today’s economy customers want to know what on alcoholic beverages to reimburse San Francisco for the costs of abuse and addic- a particular single malt Scotch or bourbon tastes like tion. The veto held by a vote of one. before spending $40-$50 on a bottle,” said Distilled Under the proposal, the first of its kind in California, alcohol distributors would Spirits Council (DISCUS) Vice President David Wojnar. have been charged 35 cents for every gallon of beer they sell, $1 for a gallon of wine “Tasting events are a long-standing and responsible and $3.20 for a gallon of spirits. means by which customers can make better informed Supervisor John Avalos, who proposed the fee, said he might take the issue buying decisions. Tools like tastings allow business directly to the voters next year. owners to better serve their customers, and that’s continued on page 9 will be used in Diageo Scotch whisky blends past three years. Since fiscal year 2009, water Diageo Opens First starting in 2012. usage has been cut by 17.5 percent. Diageo may build another major Scotch Dewar’s recently unveiled a new cohesive Malt Whisky Distillery whisky distillery within the next few years look and package design, visually linking its of Scale in Over 30 if demand for its brands continues to rise in portfolio of blended and single malt Scotch Years Latin America and Asia. whiskies. Diageo recently opened its new £40 Bacardi Completes Brown-Forman million distillery in Speyside, Scotland. The Roseisle distillery is the first malt distillery First Phase of $250 Receives Perfect of scale to be opened in Scotland in over 30 years. In a statement, Diageo said the Million Investment in Score from the Human distillery was built “in response to the high Dewar’s Rights Campaign demand for Scotch whisky brands such as Bacardi Limited’s initial phase of its $250 Brown-Forman received a perfect score of Johnnie Walker and Buchanan’s around the million dollar investment in Scotch whisky 100 points out of 100 in this year’s Corporate world.” The investment in Roseisle is part of production has been completed. The invest- Equality Index (CEI), an increase of 15 points a capital investment program in Scotland ment was made to meet growing demand over last year’s tally of 85 points. A total of which has totalled £600 million over the past for Dewar’s Scotch whiskies. 615 businesses were rated this year. The six fiscal years. average rating across the entire index was “Economic growth and consumer demo- 87 percent, compared to 86 percent last year. graphics present a great opportunity for Companies are evaluated for their policies the Scotch whisky industry and for Diageo’s and practices affecting gay, lesbian, bisexual outstanding brands,” said Paul Walsh, Diageo and transgendered (GLBT) employees. CEO, “especially in the developing markets. “Brown-Forman has long supported the The construction of Roseisle will allow GLBT community and receiving a perfect Diageo to supply the growth in demand of score is an indicator of our continued its premium international Scotch brands as commitment to equality in the workplace,” well as spotlights our firm commitment to said Brown-Forman Chief Diversity Officer both the growth of the category and the Ralph de Chabert. “Brown-Forman is an Scottish economy.” inclusive organization that seeks to learn “The Roseisle malt whisky distillery from the diverse backgrounds and unique represents one of Diageo’s biggest invest- talents each of our employees brings to the ments into the Scotch whisky category and table.” forms part of our £100 million three year “Demand for Dewar’s Scotch whiskies Last year, Brown-Forman implement- investment program in the development has grown significantly in the U.S., Asia and ed domestic partner benefits regardless of Scotch,” said Bryan Donaghey, Managing other emerging markets and we are excited of gender or sexual orientation; created Director of Diageo Scotland. “This official to have completed the first phase of a new employee resource groups for GLBT, African- opening is a true celebration of the fantas- infrastructure project to support higher American, Hispanic and female employees; tic expertise and knowledge that we have in inventories of maturing whisky and increase began requiring mandatory training of all our business.” our blending, bottling and packing capa- employees on diversity and sexual orienta- Roseisle has been built at a time when bilities,” said Seamus McBride, President and tion in the workplace; amended its nondis- the global Scotch whisky market remains CEO of Bacardi Limited. crimination policy to include transgender buoyant with the Scotch Whisky Associa- Dewar’s has undertaken a comprehen- and sexual identity expression; and stipu- tion (SWA) reporting exports to have risen sive redevelopment of an existing site in lated that its travel and entertainment and by three percent in value to £3.13 billion, Parkhead, Glasgow, and has built five new relocation policies could not exclude GLBT contributing £99 every second to the U.K. maturation warehouses and a new blend employees and/or their partners on that trade balance in 2009. Over the same period, center, as well as installed new bottling lines basis. export volumes increased by four percent and packing equipment. The Dewar’s expan- worldwide, with the equivalent of 1.1 billion sion project, which started in July 2007, will Research and Markets 700-ml bottles of Scotch whisky shipped. be completed in phases over ten years. The Roseisle distillery has already won Bacardi also purchased more than 100 Liquor Stores Report two awards in the Royal Institute of Char- acres in central Scotland and developed Research and Markets has announced tered Surveyors (RICS) Scotland 2010 Awards a second maturation facility including six the addition of the “2011 U.S. Beer & Wine & — Sustainability Project of the Year and the warehouses. Three more aging warehous- Liquor Stores Industry Report” report to its overall Project of the Year. It features 14 es are currently under construction and a publications. copper stills crafted by Diageo’s coppermiths blending facility will be built next year. The Beer & Wine & Liquor Stores Industry at Abercrombies, Alloa, and has a produc- Efficiencies