Lawsuits make sure 'local' and 'craft' are accurate labels on booze

Savvy whiskey sippers have learned that many small-batch, locally made spirits are neither. And now these drinkers are demanding truth in advertising.

Case in point is Iowa's popular Templeton Rye, which became the poster child for poseur micro-distilled booze after several reports surfaced this summer that the company uses a rye whiskey from a large Indiana plant. In August, Templeton officials admitted to using the stock rye, which it marketed as Al Capone's preferred Prohibition-era recipe "produced and bottled by" Templeton Rye Spirits.

The Templeton confession gave the issue broader exposure and triggered at least three consumer fraud lawsuits.

Last month, a separate lawsuit called out Texas-based Tito's Handmade Vodka for allegedly not being "handmade." All these court filings have fueled a national debate about transparency and sales-boosting buzzwords such as "craft."

"It's much bigger than I thought it would be," acknowledged Randy Wilharber, a partner at Iowa law firm PeddicordWharton, which filed a suit against Templeton this month.

The rumpus comes as all things "local" are en vogue, and many consumers often pay a premium for homegrown spirits. Last weekend, Cody Braudt of Burnsville purchased a bottle of 11 Wells Spirits' Minnesota 13 — a St. Paul-made white whiskey based on a Stearns County Prohibition-era moonshine — largely because of the history and local roots.

"It is important to me if something is locally produced even if it is a couple dollars more," he said. "It's a quality that I know I can trust, and when it comes to ingredients, it's something that I can feel a little bit more comfortable purchasing, [rather] than something that I possibly have no connection with that comes from a further distance."

"Why are you wasting your time?" 11 Wells' Lee Egbert asked with a chuckle. "Just put it in the damn bottle. You're not adding value."

The fledgling Minnesota Distillers Guild is discussing ways to distinguish products using — or rebottling — spirits from another distillery compared to those entirely made in Minnesota, or defining terms such as "craft" for the consumer, president Shanelle Montana said.

"Craft is the ability for someone to have their hands in every part of the process," said Montana, who also co-owns Du Nord Craft Spirits with her husband, Chris. "It is bringing in the grain and sending out the liquor and being part of the entire process in between."

While Egbert and 11 Wells make everything in house, he has a wider definition, which would include some companies sourcing spirits — a practice "grain-to-glass" distillers often frown upon, especially when done surreptitiously.

"It's like a painter painting a house and saying, 'I built the house,' " Du Nord's Chris Montana said.

Last month, Heather Manley launched Crooked Water Spirits. She doesn't hide the fact that her Twin Cities firm gets its bourbon from Yahara Bay in Madison, Wis. — purchasing nearly two-year-old booze and then aging it for roughly six months in old port casks (a practice more common with Scotch whiskies than bourbons) before releasing it as Kings Point.

"Relabeling someone's products and putting it right out to market is not interesting to me," she said. "If I'm not making it, I sure as hell better be bringing some value to the table that nobody else is doing."

For entrepreneurs like Manley, sourcing spirits is an attractive way to launch a brand without the hardships of running a distillery, said Gamle Ode's Mike McCarron. His aquavit line is made by 45th Parallel Distillery of New Richmond, Wis., which produces spirits for a handful of outside companies.

While the Templeton and Tito lawsuits have struck a nerve in the spirits world, 45th Parallel's Paul Werni and other distillers say it's a good thing.

"I'm just glad the public is educating themselves," he said. "It's long overdue."