published Tuesday, April 1st, 2014

Whiskey maker George Dickel sues TN over liquor storage requirement

NASHVILLE, Tenn. — Whiskey maker George Dickel is suing to overturn a Tennessee law that requires liquor to be stored in or around the county where it is distilled.

Dickel, which is owned by global liquor giant Diageo PLC, said it stores all of its Tennessee Whisky at its distillery near Tullahoma, about 60 miles south of Nashville. But other products made there are stored at a company-owned distillery in Louisville, Ky.

The lawsuit filed in federal court in Nashville on Friday claims that state law violates interstate commerce rights under the U.S. Constitution.

"Tennessee has never before sought to enforce the geographic limitations of the storage statute," Dickel said in the lawsuit.

If the law isn't tossed out, the company said it would have to decide whether to expand storage capacity in Tennessee or reduce production of spirits other than George Dickel Tennessee Whisky at the distillery, which would likely lead to job cuts there.

The case follows a legislative fight over the state's legal definition of Tennessee whiskey. Diageo led the effort to scuttle a year-old state law enacted at the behest of Jack Daniel's, arguing that a provision requiring whiskey to aged only in unused barrels to be too restrictive on smaller producers.

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