Every year, calls for clearer and stronger regulations around how Australian whisky is defined and labelled grow louder. The debate isn’t new. Disagreements on Australian whisky laws and definitions stretch back to the early 1900s, when Australia was a leader in defining what high quality whisky production should look like.
I wrote about the subject in-depth last year in response to anger around the labelling of a number of Lark whiskies, an issue that’s become even murkier with recent ‘House of Lark’ bottlings.
But the conversation has been kicked into overdrive in recent months following the Japanese and New Zealand whisky industries setting firm definitions on how their whisky can be produced and labelled.
In the last few days, the American Single Malt Whiskey Commission also announced that the TTB in charge of U.S. alcohol labelling laws is poised to publish a new rule this December that formally defines American single malt whiskey.
Australia is now one of the only significant whisky producing nations not to have updated its definitions and standards of identity following the spirits boom of the last two decades. And with questions constantly circulating about the appropriateness of the regulations here, it’s time to talk about what’s working, what’s not, and whether change is needed.
As I pointed out last year, this is an onerous and divisive subject. It’s unavoidably complex and inward-looking, and most punters will likely switch off and quickly get back to figuring out which bottle of whisky they want next, and I’m all for that.
But these laws are in place precisely to protect that transaction. They exist to make sure that the next bottle of Australian whisky a consumer purchases matches their expectation of quality and provenance.
To that end, a number of questions on the current Australian regulations and laws need to be addressed:
- What definitions and laws are in place and are they working?
- What points of disagreement exist on the adequacy and enforcement of the regulations?
- What conflicts might arise internationally if the current state of play continues?
- And what’s being done to progress the situation?
If it’s not broke…
In answer to these questions, many local distillers argue that if it’s not broke don’t fix it – don’t allow bureaucracy to meddle where it’s not needed. Others ask – are the majority of consumers complaining or unsatisfied with Australian whisky products? And if not, why are we confusing them with this malarkey?
On the other side of the fence, some distillers, online retailers and whisky commentators argue the regulations need updating. They want more transparency on whisky labels to identify where and how Australian whisky is produced, and that the looseness of the laws is putting Australia out of step with major whisky-producing nations.
The current state of play
Contrary to what some believe, there are in fact a raft of regulations and laws that govern Australian whisky and spirits production. The issue is, they don’t neatly align with those set down overseas, which leads to confusion about what’s permitted here and what’s not.
A guidance summary of Australian definitions of whisky, brandy and rum and the various bodies tasked with enforcing those definitions and laws has been compiled by the Australian Distillers Association (ADA).
‘Various’ is the key word here. There isn’t a central authority governing Australian whisky and spirits production like there is in Scotland (Scotch Whisky Association), the U.S. (The Alcohol and Tobacco Tax and Trade Bureau) and Europe (European Commission). (I’m also fascinated by how this conversation affects Australian rum and brandy, but that’s a whole other minefield for a different time and place.)
Cameron Syme is perhaps best placed to explain how this plays out in practice. He’s the founder and CEO of Great Southern Distilling, a lawyer with over 20 years experience, and was the vice president of the ADA (he’s on hiatus from the latter until a patent issue is resolved).
‘Australian law on whisky production is pretty well set, it’s just not in one place,’ Syme says. ‘You can’t turn to one document and there’s your definition of whisky and here’s what you can do. Your bottling strength is in one place and your definition of whisky, brandy and rum is in another place.
‘Under Australian consumer law, there are specific laws around geographical indicators. If you claim something comes from a certain region then it has to have been made there. So there are existing mechanisms in common law.’
From ‘Guide to Labelling of Achoholic Beverages 2014’ Food Standards Australia New Zealand
Syme is also of the view that the current laws on Australian whisky production are sufficient.
‘If you look at our requirements here, single malt whisky must be made from a fermented mash of malted grain. And it must be stored in wood for no less than two years. There is beautiful simplicity but absolute clarity in what the Australian legal definitions are. So from my perspective as a former lawyer, if it’s not broken, we don’t need to fix what we have.’
But other members of the distilling community aren’t so sure.
When asked if the current regulations are adequate, Kristy Booth-Lark, founder and owner of Killara Distillery, and the vice president of the Tasmanian Whisky and Spirits Producers Association, says there’s room for improvement.
‘I certainly believe that now is the time when we should be looking into it further…’ says Booth-Lark. ‘Most of the people I talk to refer back to European Union definitions or Scottish definitions. But now that the industry is growing and booming, it’s going to attract people that maybe want to cut corners or do things in a different way.’
Going rogue
In preparing this article, I spoke to several distillers who have encountered practices that would breach Australian laws (they preferred to stay off the record). I’ve also been told about companies that are looking to exploit loopholes by importing American or Scottish whisky into Australia, further maturing and bottling it here, and then exporting it internationally as ‘Australian Whisky’.
I won’t dive into the swamp of those matters as a number of Australian and international organisations are investigating what might be done to prevent them. But obviously, the fact that these breaches are occurring adds further weight to the need for greater clarity and enforcement of the laws.
Here, I’m more interested in exploring the sticking points that the industry is divided on, and what amendments, if any, are necessary.
Sticking points
Much of the disagreement on the current situation centres on the production and labelling of Australian single malt whisky, but other practices also cause disagreement.
Unlike in Scotland, the EU, and most significantly for Australia, New Zealand’s stringent guidelines, there’s no formal definition for how Australian single malt can be made. For instance, wash can be produced at external breweries, distilled in multiple locations and still classify as ‘single’ malt whisky, a practice that would contravene guidelines set elsewhere.
Australian whisky can also be matured in a wooden vessel of any type and size (like Scotland, New Zealand now sets a 700 litre maximum capacity on the latter). There are also no firm regulations against the use of wood chips or other additives to enhance or change the flavour of a whisky – New Zealand’s new regulations now prohibit that, too (E150a colouring aside).
Whisky and other spirits can also be bottled at 37% ABV in Australia, a curious hangover, supposedly, from rationing and temperance appeasement stretching back to the First World War. This regulation frequently sees Bourbon and American whiskey bottled legally underproof in Australia, despite U.S. regulations stipulating a 40% minimum for their home market.
American whiskies bottled in Australia at 37% ABV
When I push Cameron Syme on how he feels about some of these practices, like many, he has differing opinions.
He doesn’t think there’s a need for an Australian single malt producer to brew their own wash (a bugbear for some), and points to renowned distilleries like Sullivans Cove, Lark, Bakery Hill and several others who have used externally-produced wash in the past, especially during their crucial start-up phases (interestingly, the NZ definitions allow for off-site mashing and fermentation). Syme does, however, recognise that there is disagreement on this point across the industry.
But on the use of wood chips, additives and especially the unlimited size of the maturation vessel, he thinks there’s room for clarification.
‘In terms of further clarity, there maybe is a need to add further detail than what is currently set out in the law when it comes to certain practices,’ he tells me.
‘As the industry becomes much bigger, some of the newer entrants are not as understanding of the legal requirements to make whisky in Australia, and are more motivated to push boundaries in pursuit of economic gain. So I think it would be good to have a point of clarity for them. But any time you open up a definitions debate, you’ve got to be cautious.’
The problem of change
Andrew Fitzgerald, co-founder of Melbourne’s The Gospel Distillers, which specialises in American-style rye whiskey, also argues for caution.
When Fitzgerald and co-founder Ben Bowles created their Gospel Straight Rye Whiskey, the export market was key to their thinking. To meet U.S. standards, they ensured their whiskey complied with the legal requirements and definitions for straight rye whiskey (their Gospel Solera Rye was also designed with American definitions in mind).
But despite their attention to local and even overseas rules, Fitzgerald believes that changing Australian regulations could adversely affect the development of the industry here.
‘I think the worst part about changing the laws in Australia is probably that the people with the most restrictive opinions will have the loudest voice,’ he says.
‘Our regulations could do with more definition, I don’t dispute that. But I’d caution the level of definition that’s been given in other whisky producing nations. I look at New Zealand and I think their framework is off the charts. It’s ridiculous. Some of our signature, trailblazing single malts could not produce a compliant single malt under the New Zealand framework.’
Fitzgerald takes particular issue with New Zealand mandating the use of copper pot stills for the production of single malt whisky.
‘Defining what sort of still you can use, that’s ridiculous. You should not define what sort of still somebody can use. It’s a distilled spirit, how you get there is up to you, in my opinion, that’s part of the craft.’
Peter Bignell, Tasmania’s maestro of innovation and sustainable distilling, makes a similar argument.
‘My personal view on regulation is that it should be very broad and not prevent innovation,’ Bignell has said across a number of forums, echoing others who worry that restrictive laws will stymie progress.
The… enforcers?
Cameron Syme points out that enforcing any changes made to the laws would also be difficult.
‘I see practices regularly from small companies that are contrary to Australian law. The problem is there is no enforcement of it.
‘When there are breaches by producers at the moment, is the ACCC going to act on it? Or is it a Food Standards labelling requirement, and each state-based consumer trading organisation will enforce standards?
‘Ultimately, when it comes to defining things, you go to a judge, and then a judge will be asking, well, what do consumers think? And what does the industry think?’
Industry response
The Tasmanian Whisky and Spirits Producers Association (TWSA), the peak representative body for Tasmanian distillers, has taken matters into their own hands.
Kristy Booth-Lark, TWSA’s vice president, says discussions between Tasmanian whisky producers have been ongoing, and agreement is being sought on a set of guidelines and standards in the hope that the state will secure its own geographical indicator for Tasmanian whisky.
‘Working with the TWSA, we’re in the process of trying to get Tasmanian whisky and Tasmanian single malt whisky recognised as a geographical indicator (GI) along the same lines as Tasmanian wine or Clare Valley wine and those regional areas,’ says Booth-Lark.
‘We’re not changing the federal definition, we’re just tightening it here so there is a better definition on what makes Tasmanian whisky Tasmanian whisky. We are working with government as well, so it is something that we’d like legislated down the track.
‘It could then give the rest of Australia the framework on how to develop regional GIs for whisky and spirits.’
Whisky trading
As to what future regulations might look like, the preliminary word is that they might sit somewhere between New Zealand’s guidelines and the U.S. single malt definition that’s currently under review. Consultation is, however, ongoing between the TWSA, the Australian Distillers Association, and multiple government and trade bodies.
The UK have been particularly forward in their calls for change, especially the Scotch Whisky Association.
In one of their most recent submissions to the Australian parliament in 2017, the SWA argued that the definition of whisky in Australia should be improved. They asserted that Australia’s Food Standards Code is ambiguous, and that a number of spirits on sale in Australia described as ‘Whisky’ do not comply with traditional definitions and could deceive consumers.
More recently, I was contacted by Debbie Ferns, the First Secretary of Regulatory Diplomacy, Health and Agriculture for the British High Commission. Ferns is working on the Australia-UK Free Trade Agreement currently being negotiated. As part of ongoing talks, the UK is hoping to ‘secure agreement in Australia to the UK proposal for a whisky definition in a form enforceable by domestic authorities.’
Ferns had this say to me about the proposed reforms.
‘There’s definitely a consideration around protecting the ‘whisky’ brand and protecting the quality that’s associated with it. I know that those links between Australian and Scottish whisky producers are pretty strong. But I think there may be some rogue companies who are aren’t quite living up to the spirit of high quality whisky production…
‘There’s no difference either in the government position or the industry position in that regard. I think the majority do want to see a high quality product and that the rules, regulations and definitions should move towards that.’
Where to now
As Dave Broom recently observed in his piece on the new Japanese whisky agreement, it’s about trust. At the moment, for the most part, consumers trust what they see on an Australian whisky label and have confidence in the producers that have worked tirelessly to build the reputation of the category. Surely, Australian distillers don’t want to get to a point where consumers lose that confidence and trust because of ambiguities in the regulations.
The industry has some choices to make. Will it stand by the current regulations and advocate their worth to consumers and the international distilling community?
Will it create new collectives or associations and get distilleries to sign up to guidelines under regional GIs?
Or will the industry push for new Australia-wide regulations and definitions to be enforced by an overarching body?
Right now, there’s an opportunity to get on the front foot, control the narrative and promote Australian whisky-making to a broader audience. Whatever path the industry takes, the sooner the better.
