On May 13, 2013, Tennessee governor Bill Haslam signed House Bill 1084, requiring the Lincoln County process (which involves maple charcoal filtering) to be used for products produced in the state labeling themselves as "Tennessee Whiskey", along with the existing requirements for bourbon.
Diageo wanted to change these definition of Tennessee Whisky but failed. Instead they managed to change the definition of bourbon. I'll clarify below
The categorization of Tennessee Whiskey was orchestrated more or less 100% by Brown-Forman, who owns Jack Daniels Distillery, which by far is the biggest distillery in Tennessee, so big that bourbon expert Chuck Cowdery has named it "The Elephant in the Room".
So far this law has been opposed by Diageo, which at first sight seems very odd. Diageo owns the 2nd traditional distillery in Tennessee, George Dickel. George Dickel and Jack Daniels are the two distilleries that historically has produced bourbon in Tennessee with the added twist of the Lincoln County Process, which is a filtering process prior to aging the whisky. Defining Tennessee whiskey with the above requirements is a logical step to ensure the definition of whiskey that both Jack Daniels and George Dickel produces as the style of Tennessee Whisky. With several small distilleries opening in Tennessee, they were, before this law was enforced, able to make any style of whiskey and labeling it Tennessee Whisky. Not anymore (with one exception, Prichard's, but that's another story)
So why is Diageo (George Dickel) opposed to this. Not because they wan't to alter the production methods of George Dickel. It's because they wan't to limit the growth of Jack Daniels
Brown-Formans Jack Daniels and Diageo's Johnnie Walker (a scotch whiskey) are the two leading whisky brands in the world when it comes to sales. The sales of Dickel is maybe 1% of that of Jack Daniels, so that is not a very important brand for Diageo saleswise. It may be strategically, but not when it comes to the economy of Diageo. If Diageo can manage undermine the "Tennessee Whiskey" style, they can get hit in on one of their biggest competitors. Because whisky american style is taking market shares from Diageo these days
Diageo ofcourse claims something else, as Chuck Cowdery writes in his blog:
"Diageo firmly believes a single company should not be able to unilaterally determine the definition of an entire category. At its base, it is anti-competitive and protectionist. Diageo supports a return to the flexibility that Tennessee whisky distillers have had for the past 125 years, up until last year when Brown-Forman convinced the Tennessee legislature to define Tennessee whiskey as the Jack Daniel’s recipe."
Diageo has mainly tried to change the aging definitions of Tennessee Whisky. They want to remove the part that states the whiskey has to be aged in NEW charred oak barrels and that it has to be aged in Tennessee
But with no luck so far. Instead Diageo managed to get in on Brown-Forman another way.
On a federal level, what constitutes Tennessee whisky is legally established under the North American Free Trade Agreement (NAFTA) and at least one other international trade agreement that require that Tennessee whiskey be "a straight Bourbon Whisky authorized to be produced only in the State of Tennessee". Canadian food and drug laws state that Tennessee whiskey must be "a straight Bourbon whisky produced in the State of Tennessee".
Bourbon is defined by The Federal Standards of Identify for Distilled Spirits 27 CFR §5.22
By changing the requirement in §5.22 (b)(1)(i) that bourbon must be stored in "new charred oak containers" to "new or refill charred oak containers" The Federal Standards of Identify for Distilled Spirits has changed the way bourbon (and with that, Tennessee whiskey) is produced
Personally I think this is grand work by Diageos lobbyists in Washington. Undermining the definition of the style of whiskey your biggest competitors produce, is going to make it possible for the big brand of Diageo, Johnnie Walker, to stop it's current recession and go into growth again. And that will be on expense of american whiskies, which hasn't been in recession like Johnnie Walker, but on a steady growth
But I don't think this is good for the quality of bourbon we see. This is actually a sad day for bourbon fans. I do hope as many producers as possible will stick to the old definitions
Another thing that will backfire is the lack of used casks, which is allready in higher demand than supplies. The main part of scottish whiskeys is aging in ex-bourbon. I am pretty sure this will begin an era where scotch is aged in new wood and bourbon in refill casks!
I am not sure how this affect the bourbon produced in Japan and China