Diageo done screwed up

In this industry one of the things I am known for is pointing out producers when they violate TTB federal labeling laws on spirits.  I do so as a consumer advocate.  Prior to 2007 there were about a dozen companies producing whiskey in the US.  Per the American Craft Spirits association as of 2017 there are now 1589 craft distillers in the US.  When a distiller wants to create a new label, they submit a COLA application for approval to the TTB.  Under penalty of perjury, they swear that the label meets all US labeling laws.  Now one might think that the TTB would know all these laws and only approve labels that met them, but that have proven time and time again that don’t.  I however have studied our labeling laws extensively and know them inside out.

Almost all of the labeling mistakes I see are from these newer small craft producers.  Often it is an honest mistake in that they were not aware of a particular portion of the law.  I have pointed out mistakes and had many appreciate it and update their label accordingly.  Others violate label law on purpose because to follow them would mean telling their potential customers more than they want to and potentially hurt their sales.  I rarely see mistakes from the big producers because I suspect they have teams of lawyers that review these labels and know the laws. So that brings us to Diageo, the world’s largest spirit company.

One of Diageo’s brands is Crown Royal.  Crown is introducing a new product in the US called Crown Royal Bourbon Mash Blended Canadian Whiskey.  It’s imported from Canada.  Bourbon is red hot these days so I can see why Crown Royal wants to jump on the Bourbon bandwagon.  The problem is they broke the law in doing so.  Bourbon is distinctive product of the US as declared by the US congress in 1964 and signed by President Lyndon B Johnson.  NAFTA contains a section where Canada agreed to recognize Bourbon Whiskey as a distinctive product of the US.  American law is found in 27 CFR 5.22 (b) (2) – ‘Whiskey distilled from bourbon mash produced in the United States’.

27 CFR 5.22 (l) (1) is the smoking gun.  It states That the word “bourbon” shall not be used to describe any whisky or whisky-based distilled spirits not produced in the United States.  This is exactly what Diageo did.  They used Bourbon to describe a product that was produced in Canada.

Here is their COLA approval – CR Bourbon Mash Label  In my state Texas, it is required to have state approval as well.  Here is their Texas approval – CR Bourbon Mash TX approval PDF  If you notice the Texas approval was approved Jan 04, 2018 and is based off the Federal COLA approval #17206001000359.

This label should have never been approved by the TTB. It should have never even been submitted by Diageo.  And now it gets even more interesting.  This label status is now ‘surrendered’, which means it is no longer valid – picture of this CR label surrendered

When the label was surrendered is unknown.  I have searched the TTB database extensively and I have not found any replacement COLA approval.  Yet, Diageo is continuing to sell this product.  There is even a launch party for it tonight in Houston.

Diageo is the 900 lb gorilla in the room in the spirits business.  Maybe they think they are too big for the law to apply to them.  I for one will call them out on their shenanigans when appropriate.

Update – Diageo’s compliance officer name was on the original COLA label application, so I sent her an email asking about this.  Screenshot of email here email to Diageo

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18 thoughts on “Diageo done screwed up

  1. I think I’m going to buy a bottle for the ‘bunker’. . .maybe I’ll write and see if I can get Javier Ferrán to sign it for me. . . .cheers

    1. It is concerning. I posted an update showing that I emailed their compliance officer to see if they have another COLA label approved or pending approval. If they answer, I will post it here.

  2. What’s the damage to the society, company or reputation if the label does not follow the TTB thing? Wouldnt it be more important if the content of the bottle is legit?

    Noob here

    1. You found my blog so your likely know a little something about whiskey. For me it’s important to keep Bourbon as product of only the US. This Crown Royal does not taste like Bourbon, yet if it has Bourbon in the name some consumers will buy it thinking it’s bourbon.

  3. There are armies of Diageo innovation people in Norwalk as well as teams of in house for hire attorneys to prevent this type of thing from happening. COLA submission and approvals are as basic as they come, and from what I hear, the TTB is overwhelmed with submissions from the crush of new sku’s that are hitting the marketplace. Not surprised to see the TTB or even TXABC miss one, but the marketing and sales team, and even SWS/Glazer’s should have seen this one, it’s so glaring. I have a bottle of Cardhu “Pure Malt” from the early 2000’s when DEO was running out of Cardhu single malt, so they tried to switch it to a blend. The powers that be in Scotland got involved and it even went to Parliament. DEO quickly swapped it back. So, not the first time DEO has pushed the envelope on something like this. Good job Wade!

    1. Thanks. I look at as no different than if a US producer of malt whiskey tried to sell a product with label of Scotch Mash Malt Whiskey. The SMA would go ballistic on that.

  4. I definitely understand and agree with most of what you are saying, but I think they were very careful in their wording. Nowhere on the label does it say that it is a Bourbon. The average customer will be confused when looking at the label though. Very similar to Johnnie Walker Rye Cask.

  5. I’m no expert in these legalities, but my guess here is that they thought it could slip through given that it is still identified as a “Canadian Whisky.” They are not overtly claiming it is bourbon, but rather a “Bourbon Mash Canadian Whisky.” For someone very involved in the whisk(e)y world, I can understand this to mean “a Canadian Whisky that was distilled from a mash of at least 51% corn.” But that is not how the average consumer would read this, particularly given that “Bourbon Mash” is in huge letters and “Canadian Whisky” is a subscript below; these laws are put in place to protect the lowest common denominator of whisk(e)y drinker, and, therefore, should make the product’s contents explicitly obvious to someone with no knowledge of the category whatsoever. This clearly fails at that.

    When you look at the other types of label and trademark disputes in the spirits category lately* to protect consumers’ interests and clearly identify the product, I don’t think there’s any way this label could be permitted. The fact that the label has been suspended and products haven’t been pulled from shelf is pretty astounding. I know in the case of Templeton, those bottles disappeared REAL quickly once that ruling came down.

    I also have another Diageo product with a faulty label, but one that I think is probably a greater legal violation, albeit a lesser consumer violation. I have a bottle of their Talisker 57 North, which is bottled at 57% ABV. The bottle’s label correctly states the ABV and proof, but the box says 57% ABV, 100 Proof. Surely this is just a typo, but I’m shocked it made it into production and onto shelf. Better still, I have single barrel bottle of Redemption Rye where they just forgot entirely to fill in the barrel # and ABV. The printed part is present, as is the line where they are supposed to write in the unique figures for this bottle. But it’s all been left blank.

    *Namely the forced re-branding of 1792 Ridgemont Reserve to just 1792, owing to a ruling of over-similarity to the name “Woodford Reseve” (I find this ridiculous) and the class-action suit against Templeton Rye for misleading production relating to sourcing

    1. Not a typo. 57% ABV is 100 proof in the UK, proof is calculated differently here than it is there. But still, bottles with UK label information probably shouldn’t make it onto US shelves.

  6. I would have preferred the TTB stopped all sales and required Diageo pull the product. Yes, the TTB did initially approve the label, but when Diageo submitted the label they swore under penalty of perjury that the label complied with all US Federal labeling laws, which clearly it did not.

  7. I agree with most of what you have said. But, this sentence denigrating government employees “Now one might think that the TTB would know all these laws and only approve labels that met them, but we are dealing with government employees here so think again.” is not cool.

    1. Like all things I’m sure there are some excellent government workers and if you fit this mode, good for you. I’ve seen plenty of examples of very dumb labels that the TTB has approved like a low proof fruit liqueur with Bottled in Bond on the label. Had an employee in the private sector made the mistake of approving this Diageo label, they would have been fired; a government worker does this and will still get their annual raise.

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