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On the Rocks: Jack Daniel's and Liquor Giant Diageo Feud Over 'Tennessee Whiskey' What makes a whiskey a Tennessee whiskey? These two companies have different ideas -- and the debate is getting heated.

By Jason Falls Edited by Dan Bova

Opinions expressed by Entrepreneur contributors are their own.

It looks like the company that owns Jack Daniel's is starting a pissing match over what can be called "Tennessee whiskey." And it ain't gonna be pretty.

Until last year, there weren't many requirements for a distilled spirit to be called Tennessee whiskey. It was broadly defined by the North American Free Trade Agreement and other laws as straight bourbon whiskey produced in Tennessee. But then the Tennessee legislature did an end-around. Since the product labeling has to be accurate, the state decided it would make the definition of Tennessee whiskey a bit more specific.

How specific? First, it needs to be made in Tennessee. That's a given. But it also needs to be made from at least 51 percent corn, filtered through maple charcoal and aged in new, charred oak barrels. If that sounds familiar, it's because that is more or less the recipe for Jack Daniel's.

As you can imagine, that change has spirits conglomerate Diageo in a tizzy, claiming the 2013 law essentially forces anyone wishing to make Tennessee whiskey to make it just like category leader Jack Daniel's. Diageo owns the George Dickel brand of Tennessee whiskey.

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The affectionately known "Jack" is bottled by the Louisville, Ky.,-based Brown-Forman Corporation and uses what's called the Lincoln County process. In it, the bourbon is filtered (called mellowing) over charcoal to add a distinctive flavor. Beyond the mellowing process there's only slight variations between Tennessee whiskey and bourbon, Kentucky or otherwise.

But the crux of the controversy is around whether or not Tennessee whiskey needs to be aged in new charred white oak barrels versus used charred white oak barrels. Diageo says craft distillers would be squeezed out of the market because new barrels are more expensive. Brown-Forman says there are many ways to make a Tennessee whiskey distinctive aside from the barrel char and that keeping the integrity of the requirements helps elevate the category, benefitting any maker of the Volunteer state's signature libation.

Honestly, both companies have a point. But there's a big fact hanging over this lobbying move by Diageo that seems to escape everyone: If a whiskey is aged in anything less than a charred new white oak barrel, it cannot be legally considered bourbon.

The parameters set by the Tennessee legislature were largely to give Tennessee whiskey a more official -- maybe even scientific -- set of requirements so it could better stand up to bourbon. The more distinguished spirit, largely made in Kentucky, though not required to be, was declared by Congress to be a distinctive spirit of the United States almost five decades ago.

Related: Why Customers Become More Loyal After Flirting With Other Brands

Removing the requirement of the barrel state nullifies one other requirement to be Tennessee whiskey: It essentially has to be bourbon first.

Bragging Rights or a Money Grab?
Don't be fooled. This feud is about money. Diageo wants to be able to call many more of its own products "Tennessee whiskey" to better ride the wave of craft spirits splashing through bars and restaurants today. Brown-Forman wants to protect the definition so fewer people can call themselves competitors.

And if you're caught up on why Brown-Forman would essentially invite people to replicate its recipe, understand that there are dozens of factors that change the flavor of a whiskey. From the mash bill (mixture of grains used) to length of time mellowing, to how many summers or winters spent in the rack house (buildings where the barrels age) and the relative heat or cold of those seasons, the type of barrel used isn't the only thing that can distinguish the taste.

Ultimately, any competitor to Jack Daniel's has an uphill battle against them. And consumers will be the final judge and jury. Whether you put "Tennessee whiskey" on the bottle or "whiskey made in Tennessee" it's ultimately all in how it tastes that judges whether or not the cash register keeps ringing.

Related: Yum or Yuck? MillerCoors Unveils a Bourbon-Flavored Beer

Editor's note: Jason Falls is a resident of Louisville, Ky., and a whiskey aficionado. He has worked with several of the spirits world's largest brands in a marketing capacity, including Jim Beam, Maker's Mark and Bacardi.

Jason Falls

Entrepreneur Leadership Network® VIP

Digital Strategist, Industry Analyst, Speaker, Author

Jason Falls is a noted author, speaker and influencer in the social and digital marketing space. He is the senior influence strategist at Cornett, an advertising agency in Lexington, KY. He is the author of three books on digital marketing, including Winfluence — Reframing Influencer Marketing to Ignite Your Brand, from Entrepreneur Press. 

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