Jack Daniel's distillery faces threat from Tennessee lawmakers

State lawmakers are considering an outright repeal of a 2013 law that established, for the first time, a legal definition of Tennessee whiskey.

Supporters of the move in the House State Government Committee said Tuesday that the law enacted last year unfairly benefits  the Jack Daniel's distillery, the world's most famous Tennessee whiskey.

Some new distillers argue they want to explore different types of spirits that wouldn't be allowed to be called Tennessee whiskey under the current law.

"We don't want to make our whiskey like Jack Daniel's makes their whiskey," said Michael Ballard, owner of Full Throttle distillery in Trimble, a town of about 600 in the northwestern corner of the state.

"Why put us all in one box together?" asked Ballard, who also stars in a cable reality show about his Full Throttle Saloon in Sturgis, S.D.

But Jeff Arnett, master distiller at the Jack Daniel's distillery in Lynchburg, Tenn., argued Tuesday that the law requiring charcoal filtering and storing whiskey in new oak barrels is meant to establish minimum quality standards for the category.

"This is not forcing people to people to produce a product that's going to taste like Jack Daniel's," Arnett said. "We think there's plenty of creative and innovative space for each brand and new distillery to create their own unique form of whiskey."

Jack Daniel's, owned by Louisville, Ky.-based Brown-Forman Corp., was behind a 2013 law that laid out requirements for spirits to be labeled Tennessee whiskey. The law is opposed by George Dickel, which is made about 15 miles up the road from Jack Daniel's and is owned by Brown-Forman's worldwide rival Diageo PLC.

Jack Daniel's sold 11.5 million cases of its Black Label last year, a 5 percent increase from 2012. Dickel was the second-largest Tennessee whiskey producer in 2013, with 130,000 cases sold.

Arnett said he disagrees with efforts to allow refurbished barrels to be used to store whiskey.

"When a barrel basically produces all of your color and half of your flavor, we don't see that the barrel is a small thing," he said.

But Phil Pritchard, the owner of Pritchard's Distillery in Kelso, noted that spirits like Scotch and Irish whiskies, brandy, cognac and rum are stored in re-used barrels.

"It's about variety, it's about entrepreneurship, it's about quality," he said. "But mostly it's about the customers who buy our products."

State Rep. Bill Sanderson, R-Kenton, introduced an amendment Tuesday to repeal the entire Tennessee whiskey law passed last year. The panel adopted that change on a voice vote, but delayed a final vote on the bill until next week.

Full Throttle's Ballard said he has 18 employees and is finishing a barrel house. But he said his recent order of 2,000 new barrels got him placed on a six-month waiting list.

"We've got millions of dollars invested in this town based on the fact that we'd be able to use the words Tennessee whiskey on our product," Ballard said.

Ballard's business partner Jesse James Dupree, lead singer of the hard rock band Jackyl, is also building a distillery nearby. He said he's disappointed that Jack Daniel's would try to create high barriers to entry.

"We grew up loving Jack Daniel's, we've been big fans and they've been an inspiration," Dupree said. "But this is not really about the barrels, this is about them trying to maintain a monopoly."