The rules and regulations that helped shape Scotch whisky as we know it

The rules and regulations that helped shape Scotch whisky as we know it

Date: Jun 2011 Author: David Williams

Why does whisky taste the way it does? There will be those who choose to answer that question in romantic terms, speaking of – in drinks writer Andrew Jefford’s evocative phrase – “peat, smoke and spirit” and the almost alchemical interplay of people, place, equipment and ingredients.

Others might prefer a more pragmatic response, one that focuses on the technical details: the size and design of still, the water source, the origin and age of the barrels…

I suspect most visitors to this website would come up with an answer that combines both these (equally valid, in my opinion) approaches – a mix of the poetic and the scientific if you like.

But there is a third, rather more prosaic set of factors that shapes the flavour of the whiskies we drink today, one that tends to be overlooked in our assessments and tasting notes: the effects of the rules and regulations – at industry, governmental, even international level – that govern whisky production.

In many cases these rules and regulations are benign in intention, whether they are designed to safeguard the traditions of Scotch production, to ensure that whisky lovers are getting the real Scottish thing, or to protect consumers from unscrupulous producers looking to sell watered-down bottles.

Intentionally or not, however, the decisions of lawmakers the world over have been at least as influential in shaping the flavours of your favourite whiskies as any master distiller, as the following examples show.

A glut of Bourbon barrels

The first of our examples is a great illustration of how Scotch production relies on global market and political forces.

Until the early part of the 20th century, most Scotch was matured in casks shipped from Jerez in Spain, used sherry butts that the roaring sherry trade could provide in abundance.

But the onset of the Spanish Civil War in the 1930s meant it became considerably more difficult for Scotch producers to secure a consistent supply of barrels and to get them out of the country.

Forced to look for alternative sources, they turned to the United States, and the Bourbon industry which was back in full-swing after the Repeal of Prohibition in 1933, and which, with its preference for new, charred oak, had a high turnover of barrels.

The trade between Scotch and Bourbon producers did not really take off until May 1964, however, when Bourbon was officially recognised as a “unique product” by the US Federal Government. This led to the introduction of legislation enshrining certain aspects of Bourbon production in law, including a stipulation that Bourbon must be aged in new, charred, white oak barrels.

The official recognition of new oak meant that producers who may previously have aged some of their Bourbons in second - or third-fill barrels, were now obliged to use exclusively new oak, which meant there were suddenly an awful lot of used Bourbon barrels on the market.

The barrels were enthusiastically taken up by the Scotch trade, but Bourbon barrels would not have taken up their current pre-eminence if it hadn’t been for another piece of legislation – this time from the European Union (or European Economic Community as it was then known) – banning the shipment of bulk sherry within the EEC in 1983. This made sherry casks as much as five times as expensive as their American counterparts.

Today, something in the region of 95% of the casks bought for Scotch whisky production each year are ex-Bourbon. And while very few Scotches are aged exclusively in ex-Bourbon casks (most are vatted with whiskies that have spent time in sherry butts), the Bourbon cask has become a defining influence on the flavour profile of modern Scotch.

An industrial scale

In the first few centuries of its existence, whisky was the very definition of a cottage industry, produced in small pot stills, often illicitly, away from the prying eyes and noses of the hated men from Her Majesty’s Customs.

Indeed, by the 1820s, illicit whisky production was so prevalent it is estimated that more than 50% of all the whisky produced in Scotland was produced without the taxman’s knowledge – often at night – and thousands of illicit sma’ stills were seized each year.

In a last-ditch attempt to contain the illegal trade, and fed up with the presence of illicit distillers on his own, vast estate, the Duke of Gordon petitioned the House of Lords to do something about it, proposing that duty should be regulated and fair to make legal whisky production a viable proposition.

This led to the 1823 Excise Act, which granted legal rights to distillers who paid £10 for a license, with a set duty per gallon of pure spirit.

But it came at a cost. As well as formalising the duty payments, the Act also introduced a minimum still size of 40 gallons, which persists to this day. The move was intended to prevent illicit distillers from dismantling and moving their stills from place to place to avoid detection from the taxman – something which is considerably easier to do if the still is small.

But it also had the effect of industrialising the industry. Legal producers had to make more whisky to make the licence fee and duty payments worthwhile. And, in terms of style, the distinctive, hand-made, more unpredictable flavours that emerged from sma’ stills – the kind of artisan approach that can still be found in Armagnac and Calvados for example – was lost to whisky forever.

Duty bound

By law, the legal minimum alcohol content of a Scotch whisky by volume is 40% and, as anyone who has ever tasted a wan 35% ABV Thai “whisky” will confirm, the fact Scotch has a minimum level some 5% higher than this is an entirely good thing.

However, things start to get more complicated when producers want to bottle at higher alcohol contents. In the UK, duty is calculated on a sliding scale, where the higher the alcohol content, the higher the duty. It doesn’t take a mathematician to work out what effect this has on producers who might wish to make whiskies at higher strengths. Put simply, it makes more sense economically to sell lower strength whisky. That means producers are more inclined to dilute their commercial whiskies, and producers of cask strength whisky are penalised.

Now, imagine for a moment that there was a flat duty on all whisky, regardless of strength. Would more producers be inclined to sell their whiskies at higher strength? It’s a tantalising prospect but, given the implacable stance that successive governments have taken on alcohol duty, one that remains entirely hypothetical.

Innovation vs tradition

On the whole, the Scotch Whisky Association does a pretty good job of protecting the whisky industry’s interests. Over the years, it’s certainly been a more effective lobbying group than either the Wine & Spirit Trade Association or the now defunct Gin & Vodka Association.

It’s also true that the presence of stipulations such as minimum age requirements and permitted ingredients are clearly necessary to ensure whisky’s identity and integrity – no serious whisky lover would welcome a regulatory free-for-all that, for example, allowed producers to use pretty much any ingredient they chose à la vodka, or sell whiskies with no more than a nodding acquaintance with wood.

But there are times when you wonder if the SWA is just a little too concerned with the letter, rather than the spirit, of the laws it safeguards and you start to wonder if it’s being guided by the same bureaucratic spirit that animates some of the more arcane French wine appellation laws.

Take, for instance, its behaviour over Compass Box’s The Spice Tree release in 2005. The company's guiding force, the ever-experimental John Glaser, set out to make a whisky using inner staves made from new oak.

This was a technique borrowed from the wine industry, but there were key differences. While many winemakers use inner staves as a more economical way to add oak flavours to wines matured in cheaper stainless steel tanks, Glaser was clearly motivated by quality concerns. The wood was certainly not cheap (it came from 195-year-old forests, was seasoned for two years, and was heavily toasted to his specifications) and it was inserted into used oak barrels.

But the SWA objected, mostly, it seemed, because the technique was unprecedented in whisky production. It didn’t seem to matter, as Glaser repeatedly pointed out, that the whisky had proved a massive critical success. It was simply not done, and, in 2006, the SWA threatened Glaser with legal action unless he ceased production.

What was perhaps most peculiar about this was not that the SWA had such strong objections to what Glaser was doing, but that they felt it was more of a threat to whisky’s integrity than other, considerably less traditional and more transformative methods that they, implicitly at least, endorse. Practices such as chill filtering or the addition of caramel that do nothing for Scotch’s reputation as a pure, authentic product.

Still, undeterred, Glaser went back to his coopers and developed a different technique for getting the same, or at least a similar, end product, building new oak cask heads to insert into old barrels.

It worked. Whether that was because the SWA realised they’d been reactionary fools, because they did not have the energy to fight the battle again, or because new oak cask heads are somehow more in keeping with whisky tradition than inner staves, only the SWA knows. But the new version of Spice Tree arrived in the market unopposed in 2009, making it a rare contemporary example of a whisky maker putting one over on the lawmakers.