The great Sourced Whiskey Scandal tells the story of independent bottlers or Non-Distiller Producers purchasing bulk whiskey from a former Seagram’s distillery and covertly bottling it for phony-backstory brands. Although industry insiders have known about sourced whiskey for years and it has been reported in trade publications, consumers perceived many so-called NDP brands to be dishonest and reported them to the federal government for Tax & Trade Bureau (TTB) regulation violations, while class-action lawyers are suing them. Lumped in the middle of this controversy, dozens of honest sourced whiskey bottlers saw their business greatly impacted from the negative publicity despite never hiding the whiskey's origins. In “The Audacity of Sourced Whiskey,” the seminar explores the business of sourced whiskey, detailing the storied history of Kentucky distilleries selling barrels to each other. The seminar will detail what distilleries sell sourced whiskey and give attendees an idea of where the whiskey is coming from, while explaining what and why distilleries require confidentiality in their sourced whiskey contracts. While this seminar may be deemed controversial, it’s time people learn the truth about Sourced Whiskey. It’s not a dirty word, and independent bottlers should not be punished for practicing a 200-year-old American whiskey business model. Or should they?

1. The Audacity of Sourced Whiskey
Moderated by Fred Minnick, author of
Bourbon Curious
Presenters: Wade Woodard, consumer.
John Little, Smooth Ambler. David
Dykstra, MGP.
! Tales of the Cocktail

2. Sourced Whiskey
! What is Sourced Whiskey?
! Sourced Whiskey History
! Who is involved in Sourced Whiskey?
! Legal matters in Sourced Whiskey
! The Sourced Whiskey Business

3. What Is Sourced Whiskey?
! Contract Distillation – When a company hires a distillery to
distill a product specifically for them.
! Purchasing Bulk Whiskey – When a company purchases
barrels or tankers filled with whiskey and bottles it themselves.
! Both are commonly called Non-Distiller Producers (NDPs),
but most operate under rectifier licenses.

4. Sourced Whiskey History
Contract Distillers
• Since distilling became a business, American distilleries have provided contract
distillation services to bottlers.
• Historic Example: Stitzel-Weller Distillery
• Contract distilled for Austin Nichols
• Contemporary Example: Brown-Forman Distillery
• Contract distilled for Heaven Hill after 1996 fire
Bulk Whiskey
• When distillers have a surplus of whiskey, they often try to sell whiskey either by barrels
or tanker.
• Historic Example: Barton Distillery
• In 1966, Barton sold $2.45 million in bulk whiskey to other distilleries/bottlers.
• Contemporary Example: Heaven Hill Brands
• Brokered or sold bulk product to many NDPs.

5. Historic Brand Example
! Chapin & Gore
! Circa 1940s to 1960s
! Owned by McKesson &
Robbins
! Distilled and aged by Fairfield
Distillery

6. Historic
Example
cont.
! Marketing: Chapin &
Gore claimed Frank Gore
invented the Sour Mash
technique. Not true.
! No public outcry over
the the false marketing
practices.

7. Contemporary Brand Example
! Templeton Rye Whiskey
! Owned by Templeton Rye
Spirits LLC, Iowa
! Distilled and partially aged by
MGP Ingredients Distillery,
Indiana

8. Contemporary Brand Example
! Marketing: Templeton claimed connection to Al Capone and
the area’s rye whiskey.
! Result: Public outcry and class-action lawsuit.

9. Sourced Whiskey Disclosures
Why Brands Don’t Disclose Sourced Whiskey Sources
• There are too many sources. Jefferson’s and Angel’s Envy include three sources
for their bottlings.
• Non-Disclosure Agreements. Brown-Forman, Sazerac, Heaven Hill and other
companies do not want their sourced whiskey clients encroaching on their
trademarks.
• They don’t want to. “There is no law that says I have to disclose it. I’ve got to
put state on there, but I don’t have to tell you where I got the whiskey. If you buy
a gallon of milk, does it say what dairy produced it?” – Steve Thompson, former
president of Brown-Forman and founder of the Kentucky Artisans Distillery

10. 26 CFR 5.36 (d) State ofdistillation. Except in the case of “lightwhisky”, “blended light whisky”,“blended whisky”, “a blend of straightwhiskies”, or “spirit whisky”, the State ofdistillation shall be shown on the label ofany whisky produced in the UnitedStates if the whisky is not distilled in theState given in the address on the brandlabel. The appropriate TTB officer may,however, require the State of distillationto be shown on the label or he maypermit such other labeling as may benecessary to negate any misleading ordeceptive impression which might becreated as to the actual State ofdistillation. In the case of “light whisky”,as defined in §5.22(b)(3), the State ofdistillation shall not appear in anymanner on any label, when theappropriate TTB officer finds such Stateis associated by consumers with anAmerican type whisky, except as a part ofa name and address as set forth inparagraph (a) of this section.
Label Laws & Sourced Whiskey

11. Simplified Version of 5.36 (d):
The State of distillation shall be shown on the label of any
whisky produced in the United States if the whisky is not
distilled in the State given in the address on the brand
label, with exceptions for certain class types.
Label Laws & Sourced Whiskey

12. Which class types does 5.36 (d)
apply?
- Straight Whiskies
- all BIB whiskies
- Bourbon, Rye, and Corn Whiskey
Label Laws & Sourced Whiskey

13. Under the penalties of perjury, I declare; that all statements
appearing on this application are true and correct to the best of my
knowledge and belief; and, that the representations on the labels
attached to this form, including supplemental documents, truly
and correctly represent the content of the containers to which these
labels will be applied. I also certify that I have read, understood and
complied with the conditions and instructions which are attached
to an original TTB F 5100.31, Certificate/Exemption of Label/
Bottle Approval.
Label Laws & Sourced Whiskey

14. Treaty Oak
Red Handed
Bourbon
Example
Label Laws & Sourced Whiskey

15. Original Label
Label Laws & Sourced Whiskey

16. Revised Label
Label Laws & Sourced Whiskey

17. The Business Side
! How Sourcing Whiskey Can Help Build
Craft Distilling

18. MGP’s Side of the Story
! The History of MGP
! Working with MGP
! Our Commitment to Our Customers
! The Uniqueness & Value Our Customers Provide
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19. Questions?