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American Distiller #112
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ADI Whiskey Conference / Getting on TV / ADI forum )
  • Nakka Whiksy Ochone, Japanese Whiksey Voted Best in World / Distiling Workshop
  • The New Breed of Handcrafted / Top Shelf Spirits / Cayman-made rum
  • Distiller Wanted / Ethanol boondoggle
  • Templeton Rye / Orgeon Vodka Maker, Craft?
  • Diageo 900 million equity Stake in Nolet.
  • Moonshine Exhibit
  • Beverage Alcohol Manual / Back issues
  • The DSP Distillery Link / How to get a DSP Permit
  • Photo above of Blue Grass Cooperage, Louisvlle, KY
    2008 ADI Whiskey Conference:
    The Bus Tour
    by Sonja Kassebasu, North Shore Distillery. (Reprinted from http://www.thinkingofdrinking.blogspot.com/
    Monday, April 7th was a very busy day at the ADI conference. We loaded up on buses at 8 am from the Seelbach Hotel and headed out into the country.
    First stop: Vendome Copper & Brass
    I've been to Vendome before, so I mostly hung out by the coffee. Here are a couple of photos, one from this trip and one from the last time I was there. The people at Vendome are always very gracious when we come for tours. However, when we had tried to contact them about our still a few years ago, no one would get back to us. Right or wrong, we got the impression that they were so tied up with the big bourbon distilleries in the area that our project was too small.
    Second Stop: Independent Stave Company If you've never been inside a cooperage, you are missing out. I've been to two now, and they were similar, but actually more different than I expected. This year, we went to Independent Stave's cooperage in Lebanon, KY. Unfortunately, they did not allow photographs within the cooperage, so all I've got is a couple of shots from the outside and in the cafeteria (where we had a nice box lunch, thanks to ISC).
    These places are very loud (they pass out ear & eye protection before you go in). New American oak logs (mostly from Missouri) are cut, and then laid on pallets to season in the sun for a few months. Then they are dried to 10-11% moisture levels in dryers and gigantic kilns. Each board is sanded, filed and shaped by one of their employees using a large sander/cutting machine. Some boards are made into barrel heads, and they have a separate production line for heads. A cooper chooses the staves (the individual boards that go into the barrel) for each barrel and lays them in place by hand. Machines then drop on the first rings, and the barrels continue on their journey.
    Future steps involve steaming the barrels to make the pliable enough to shape and force on the other rings. The barrels are then dried, and heads are added. Final step - test for leaks. Interestingly, they had about a 25% failure rate at Independent Stave, and a separate line of folks who take those barrels apart to fix them. The guys in these jobs are tough, its hard work.
    Third Stop: Makers Mark Distillery
    Makers Mark has a beautiful campus and facility in Loretto, KY, and they do a great job of conveying their story to consumers who come to visit. However, a few things about my experience there were not what I expected. We were given the exact same tour as other (non-industry) visitors, which means we got a very basic lesson in fermentation and distillation that most of us didn't need or want, plus a whole lot of marketing.
    If I had counted the number of times our tour guide had used the phrase "quality bourbon" or "we only make a quality product," I think I would have used all my fingers & toes, and maybe someone else's. She also called us "you people" a lot, which for some reason irritated me (I sometimes am amused when things like that actually bug me, not sure why).
    Finally, at the end of our tour, we were led through one of the rickhouses, through a door that led directly to the gift shop. All of a sudden, I thought I was at Disneyland or something.
    I think the experience would probably be great for the general Makers Mark consumer, but I was annoyed. I did enjoy the tasting, however, and one of their distillers joined us then.
    Final Stop on the Tour: Heaven Hill Distillery We drove onward to Heaven Hill in Bardstown, KY. They were ready for us, with some great snacks and several mini-tour options (rickhouses, barrel filling ,etc.). They don't actually distill anything at their facility in Bardstown - apparently the still and its building burned down awhile back and they now do their distilling in Louisville. Spirits are trucked in for barreling and aging in Bardstown. There are many rickhouses, as well as a big visitors center and other facilities.
    We got to meet Parker Beam, who guided us in a tasting of the Evan Williams Single Barrel and Bernheim's Wheat Whiskey. He was gracious and answered our many questions about how they make their products.
    Unfortunately I missed out on the tour of a rickhouse somehow, but I did get to see the area where they fill barrels.
    It was a great day of tours, and we headed back to the Seelbach Hotel in Louisville for a free night.
    ================

    Jonathan Forester has just posted a new topic entitled "Want your facility and products featured on a new TV show?" in forum "General Discusion".
    -----------------------------
    Bill Owens asked me to post this announcement.
    I am the host of a new TV show that is about to start production. Would you like your facility and products featured on our National TV show?
    The show is on Artisanal Distilleries, Wineries, Breweries, Cider Makers, and Meaderies in the US. The first season will be focusing on facilities in the North-East. If you are in Connecticut, Maine, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, or Vermont you are invited to be on the show.
    We start taping June 1, 2008. The show premise is that I and a guest expert on wines, spirits, etc. will visit your facility, ask you to give us a tour, and teach us about who you are and what you make. Then, back in our kitchen studio, we have guest mixologists and chefs who will create cocktails and a meal to pair with the spirits, beer, or wine. Each show will feature one artisanal distillery and one winery or brewery, etc. We have lined up the top mixologists in the country and world as guests, as well as top chefs.
    We will also have a website with bio's on your facilities and products, the cocktail recipes created by our world reknowned mixologists, and links to your website.
    Do you want to be a part of this production? If so then please CONTACT ME IMMEDIATELY since we are about to move from pre-production to production and taping, the show is to air starting the Fall 2008 season.
    Thanks,
    Jonathan M. Forester
    ----------------------

    The topic can be found here: http://adiforums.com/index.php?showtopic=104 Please note that if you wish to get email notification of any replies to this topic, you will have to click on the "Track this Topic" link shown on the topic page, or by visiting the link below: http://adiforums.com/index.php?act=Track&f=24&t=104 Unsubscribing:
    --------------
    You can unsubscribe at any time by logging into your control panel and clicking on the "View Forums" link. If you are not subscribed to any forums and wish to stop receiving notification, uncheck the setting "Send me any updates sent by the board administrator" found in 'My Controls' under 'Email Settings'.
    Regards,
    The ADI Forums team.
    http://adiforums.com/index.php
    ==================


    Nakka Whiksy Ochone, Japanese Whiksey Voted Best in World / Distiling Workshop

    NORWICH, England, April 27
    The winner of Whisky Magazine's single malt award this year is distilled on an island, the Japanese island of Hokkaido.
    Yoichi 20 years old is the first single malt produced outside Scotland to win the award, The Times of London reported. Talisker 18 years old, produced on the Isle of Skye, which took the top prize last year, went down to defeat.
    To add insult to injury, Suntory Hibiki was named the top blended whisky in the world. Suntory Hibiki got one of the ultimate product placements in the 2003 movie "Lost in Translation," with Bill Murray playing a U.S. actor in Japan to do commercials for the whisky.
    Both brands are owned by The Nikka Whisky Distilling Co.
    A panel of 16 whisky connoisseurs selected Yoichi in a blind taste-testing of 200 varieties. They suggested that the Japanese climate helps create a mature whisky that can stand up to Scotland's best.
    =================
    From The Sunday Times April 27, 2008
    Ochone! Japanese whisky is voted the best in world
    Stuart MacDonald and Shota Ushio Like English wine, it has suffered from the taint of inauthenticity and has been the butt of condescending jokes. Now Japanese whisky has finally scotched all criticism by being voted the best in the world, ahead of its Highland rivals.
    Yoichi 20 years old, distilled on the shores of the Sea of Japan, has become the first variety produced outside Scotland to win the coveted single malt award in an international competition run by Whisky Magazine, the main industry publication.
    The whisky, distilled near the city of Sapporo on the northern Japanese island of Hokkaido, beat dozens of other varieties, including last year's winner, Talisker 18 years old, produced on the Isle of Skye.
    Suntory Hibiki, the brand advertised by the washed-up actor played by Bill Murray in the film Lost in Translation, scooped the award for the world's best blended whisky. The historic double for Japanese whiskies has provoked consternation in Scotland, where whisky is as integral to a certain strand of national identity as bagpipes, haggis and the kilt.
    Whisky war looms as high taxes price Scotch out of Indian market
    Yoichi 20 years old, which sells for £150 a bottle, was praised by the judges for its "amazing mix of big smoke and sweet blackcurrant", "explosive aroma" and "big, long and sweet finish".
    The decision to give the top prize to Yoichi followed a blind tasting of more than 200 of the world's finest varieties by a panel of 16 of the world's leading whisky experts.
    The judges said Japanese distillers had succeeded in producing top Scotch thanks to the variable climate in Japan, which assists maturation and creates a purer whisky with a heightened aroma.
    Traditional distilling apparatus such as coal-fired pot stills, used widely in Japan but rarely seen in Scotland, was also praised for producing a superior dram.
    "Japanese whiskies performed magnificently and they are really starting to make waves," said Rob Allanson, editor of Whisky Magazine.
    Nikka, the company that produces Yoichi, and Suntory, the biggest spirits company in Japan, are making inroads into the British whisky market.
    Tetsuji Hisamitsu, chief blender at the Yoichi distillery, said he was "very moved" by the award.
    ==================

    The Northwest Agriculture Business Center (NABC) and WSU's Center for Sustaining Agriculture & Natural Resources at the Northwest Research and Extension Center in Mount Vernon will host an educational workshop for producers interested in micro-distilling.
    The workshop will run from Friday June 20th through Saturday, June 21st at the WSU-Mount Vernon Research and Extension Center in Mount Vernon, WA. The NABC is bringing nationally recognized distilling experts to Washington: Nicolas Haase, CARL Distilleries, Director of Technical Sales, B&D Technologies and Alexander Plank, Director of Operations at CARL Distilleries, Germany and Professor Kris Berglund from Michigan State University where he teaches in the Department of Chemical Engineering and Material Science.
    Passage of the new 'craft distillery bill' makes it possible for Washington growers to join the micro-distillery movement going on throughout the United States. The new annual distilling license defines 'craft distilling' as an agricultural practice and will drop the licensing fee from $2,000 to $100, allow for on-site tastings, sales of up to two liters per person per day, and allow production of up to 20,000 gallons of spirits per year.
    For registration information about the June 20 and 21st Artisan Distilling Workshop, call NABC at 360-336-3727
    or visit the NABC website for registration information at www.AgBizCenter.org. Space is limited.
    ===================

    The New Breed of Handcrafted / Top Shelf Spirits / Cayman-made rum

    I was at the ADI Conference a few weeks ago and Bill Owens asked me to make an announcement there, which I did; and then post it here as well.
    Anyone who would like to have their products reviewed and published on Slashffod.com (http://www.slashfood.com) and on AOL Food please contact me.
    Slashfood is part of America On Line and works directly with AOL Food. I'm sure all of you are aware that millions of people read AOL every day. As for Slashfood, it is the number one professional team food blog the past six years. 25,000-55,000 or more daily visitors with 1.8-2.2 million a month. (That is discrete visitors, not page reads or multiple visits.) We have 15+ bloggers and are a source for numerous buyers for stores and big chains, including such like BevMo whose buyer is a reader and has contacted companies whose spirits have been reviewed on Slashfood. I specialize in reviewing spirits, wines, liqueurs, hard cider, mead, sake, etc. I have no interest in writing negative or luke-warm reviews, and will only publish ones on products I really like.
    Thanks,
    Jonathan M. Forester
    ==================

    The new breed of handcrafted, top shelf liquors
    Liquor connoisseurs may clamor for rare, decades old Scotches, but these superlative spirits are as common as Absolut at least when compared to the boutique creations from Gardiner, New York's tiny Tuthilltown Spirits.
    This artisanal distillery handcrafts small batch liquid luxury, such as vanilla-nuanced Hudson River Rum and local corn fueled Hudson Baby Bourbon, which is New York's first production whiskey since Prohibition. Bourbon gourmands can either buy limited release bottles or snag an entire wooden barrel of bourbon that Tuthilltown will age until the liquor, and you, are ready.
    "For $1,200, you'll get three gallons of 92-proof bourbon," says Tuthilltown's co owner Ralph Erenzo. "When you want it" five, 10, 20 years later "we'll inscribe your initials on each of your 30 bottles," he says.
    Such hands-on commitment symbolizes America's burgeoning microdistilling movement, which is slowly breaking Jack Daniels' stranglehold. Twenty years ago in the U.S. and Canada, there were about a half-dozen independent microdistilleries; nowadays, there are nearly 100, from Philadelphia's Bluecoat Gin to Iowa's Templeton rye to Denver's Stranahan's, which makes whiskey with filtered Rocky Mountain snow.
    "The number of licenses for producing distilled spirits is increasing every year," says Frank Coleman, senior vice president of the Distilled Spirits Council. He says the increase is attributed to changing legislation. "Prohibition era blue laws don't make sense in a modern economy. On the 75th anniversary of Prohibition's repeal, many states are changing laws to allow people to distill spirits."
    They're not changing fast enough for some distillers.
    "The government creates lots of barriers to success. There's no blueprint to starting a distillery," says Rich Stabile, owner of just launched Long Island Spirits. Stabile's company makes high-end LiV vodka, Long Island's first licensed liquor since the 19th century. Stabile and Co. spent more than 18 months restoring a barn (located on an 80-acre potato farm) and navigating Byzantine layers of government, before starting production in late winter 2008.
    "That was 18 long months without a paycheck," he says, "but now we're overseeing everything from the fermentation to bottling, while using some of the world's finest potatoes: We're allowing the Long Island potato to thrive outside of North Fork potato chip companies."
    Instead of taters, Steve McCarthy's muse is far sweeter. "I'm committed to crafting high quality spirits out of Oregon fruit," says McCarthy, whose Portland, Oregon, Clear Creek Distillery specializes in eau de vie, which are clear brandies made from fruits like cherries, apples and pears. "The fun is finding fruit that helps convey a sense of place. Right now, I'm looking out of my office, and we're crushing blue plums."
    McCarthy was an early champion of America's microdistilling movement. He launched his company more than 23 years ago, "and we went absolutely nowhere for probably 15 of the 23 years we've been in business," he says. Despite the rollercoaster economic ride, McCarthy's remained steadfastly dedicated to stretching people's perception of spirits. He's created oddities such as Douglas fir-flavored liquor, grown apples inside of bottles then filled with apple brandy, and even fashioned his own eponymous, peaty Scotch. It's aged in sherry casks and air-dried Oregon oak barrels and comparable to anything sold in Scotland.
    "The last time we made this, we sold out in two days," he says. "It's hard to keep up with demand."
    For other distillers, it's harder to educate customers. "Some people don't know how whiskey gets its brown color," says Tuthilltown's Erenzo. To combat this lack of knowledge, he often travels to restaurants and liquor stores to give "distilling 101 lectures." (By the way, freshly distilled whiskey is clear; it slowly takes on the color of the wood in which it's aged.)
    That's something a big distiller can't do, says Erenzo. "It makes a big difference to get out there and meet people. This is a grassroots revolution, and I still get up at 6AM. every day and turn the furnaces on and keep the mash going."
    This do-it-yourself ethos has long been synonymous with microbrewers, many of whom are making inroads into the spirit field. "The first step in distilling is fermentation. If you have the skills to make beer, then you can start making spirits," says the Distilled Spirits Council's Coleman.
    In San Francisco, Anchor Steam's owner, Fritz Maytag, runs Anchor Distilling, where he creates colonial-era single-malt whiskeys of the kind that George Washington might've made. In Bend, Oregon, the people behind Rogue Ales started Rogue Spirits, and now churn out piney Spruce Gin and rum formulated with Hawaiian cane sugar and champagne yeast, then aged in Jack Daniels bourbon barrels. (And don't miss the Rogue House of Spirits bar.)
    Despite this rampant innovation, microdistilling remains in its infancy. These small-potatoes spirits are barely a drop in the $58 billion booze market. Still, McCarthy notes, "look at the evolution of winemaking in America. When I was in high school in the '60s, there were only three or four wineries in America. It was all factory made stuff; wineries completely rewrote the book. Now we're making up the rules."
    But, he admits, "this is a very long-run proposition. Even after being eyebrow-deep on this business for 23 years, I can't tell you I know how it's going to end up."
    ==================

    Cayman made rum launched
    By Alan Markoff, alan@cfp.ky
    The first commercially made distilled rum made entirely in the Cayman Islands was launched last week.

    Seven Fathoms Premium Rum uses an underwater aging process thought to be the first ever used with a spirit, said Walker Romanica, one of the co founders of Cayman Islands Distilleries.
    "By aging our spirits underwater, we are able to take advantage of the kinetic properties of the ocean tides and currents to create a very unique flavour profile and a remarkably smooth rum," he said.
    After the distilling process, the rum is put into oak barrels and taken out to the ocean, where it is dropped to a depth of 42 feet hence the name Seven Fathoms.
    Cayman Distilleries other co founder Nelson Dilbert said the aging process is not just a gimmick.
    "[The underwater aging] works very well with marketing, but there is actually science to it," he said. "The product is always moving and is also subjected to sound waves, which is excellent for the aging process. There is a Japanese company doing it with sake and the French are doing it with wine."
    As a result of the unique kinetic maturation process, Seven Fathoms rum takes on characteristics of rums aged much longer using traditional methods.
    "It's a gold rum with a light finish and no harshness," said Mr. Dilbert. "It's actually a sipping rum with plenty of flavour."
    The idea of making rum isn't a new one for Cayman Islands Distilleries.
    Mr. Dilbert said his company has been doing research for more than six years on making rum, and has been tinkering with the distilling and aging process ever since.
    "We finally produced a product we're very, very happy with," he said.
    The idea that motion could help in the aging process of rum goes back centuries, Mr. Dilbert said, explaining that rum produced in the Caribbean in earlier days was found to be quite harsh. However, after travelling across the Atlantic Ocean on British Navy ships, the sailors noticed it had mellowed.
    Seven Fathoms will be distilled in small batches, and will be sold only in the Cayman Islands.
    The rum has already impressed one critic, author and rum consultant Luis Ayala of Rum Runner Press, Inc.
    "[Seven Fathoms Rum] is not only revolutionary, carefully distilled and well packed, it is also quite tasty," Mr. Ayala wrote. "I am sure that in the next decade several rum distilleries across the world will also be adopting this method of kinetic maturation, but Seven Fathoms will forever be remembered as the first one to do so, and do it right."
    The rum will be available in liquor stores after the official launch party at the end of this month.
    ================

    Distiller Wanted / Ethanol boondoggle

    Good analysis of ethanol boondoggle
    By Jon Nones

    The National Review reports: Ethanol contains merely 25% more energy than is consumed by the process of making it. This means that the farming, distilling and shipping required to bring five gallons of corn ethanol to market consumes four gallons of ethanol. Here is an excerpt:
    "Each gallon contains 76,000 British Thermal Units (BTUs) of energy but requires 60,800 BTUs for production. The net energy gain from ethanol is therefore approximately 15,200 BTUs per gallon, which translates to 99 trillion BTUs for the 6.5 billion gallons we produced last year. That's the energy equivalent of 868 million gallons of gasoline - slightly more than what Americans consume in two days."
    =================

    Distiller Wanted
    30 year-old company in the beautiful Pacific Northwest seeking experienced distiller to establish a high-end whiskey distillery. Distiller must have experience and knowledge of the entire production process. Vodka and gin to be distilled, however, whiskey is the primary long-term goal. Responsibilities include selecting and ordering all ingredients and equipment, overseeing the preparation of the facility and producing the spirits. Applicant must possess a strong work ethic and be very detail oriented. Salary DOE / excellent benefits. Non-smoking environment. Contact
    Jon Combs, PO Box 8000, Spokane, WA 99203.
    (509) 534-9000.
    jcombs@oldworldchristmas.com
    ==================

    Templeton Rye / Orgeon Vodka Maker, Craft?

    Left to Right.
    Keith Kerkhoff, Michael Killmer, Scott Bush, Kevin Boersma, Jason Walsmith and Carl Carlson stand on the foundation of the 11,000 square foot expansion of the Templeton Rye Distillery. The expansion includes additional production, storage and bottling space. Templeton Rye is also growing rye adjacent to the distillery for the first time this year.
    Go to Templetonrye.com for more informations.
    =================

    Vodka maker finding customers after years of sacrifice
    By SHERRI BURI McDONALD
    Just about anyone can start a business, said Jeff Meyers, co-owner of a distillery and bottling operation in Cottage Grove. The tough part, he said, is staying in business.
    "You've got to learn how to love grilled cheese," Meyers said, only half joking.
    Since founding their company, Side Pocket Corp., in 1998 when they were just barely out of high school, Jeff, 30, and his sister, Megan, 31, have made countless personal sacrifices. Instead of spending their cash on cars, travel and entertainment when they were in their 20s, they plowed everything back into their company.
    They've even put off finding mates and starting families.
    "Our view is (the business) comes before everything," said Meyers.
    He and his sister routinely work six days a week.
    The sacrifices have started to pay off. Side Pocket has been profitable each year since 2005, Meyers said. Its sales growth has topped 100 percent in each of the past five years. It provides 12 - soon to be at least 15 jobs - with good pay and benefits.
    In the past year, the company has spent millions of dollars buying its site in the Cottage Grove industrial park, expanding its plant to 88,000 square feet, and launching a new ultra-premium vodka.
    That product, "Support Her," comes in a frosted bottle with a screen-printed pink ribbon, the international symbol for breast cancer awareness.
    A bottle costs $34.95 in Oregon. For each bottle sold, Side Pocket donates $5 to breast cancer research and treatment. That's more than twice what the company makes on the product, Meyers said.
    By launching Support Her, Side Pocket hopes to help people battling breast cancer, increase sales, and establish national distribution not just for the company's new vodka, but for its line of about 10 other brands of distilled spirits, Meyers said.
    Support Her is one of the fastest-growing brands of vodka in the nation, he said. Side Pocket introduced the product in September, and it's now available in 22 states, with plans to be in 48 states by December.
    "We've had incredible interest in it," he said.
    National grocery chains, such as Kroger - Fred Meyer's corporate parent - have agreed to stock the product in states that allow grocers to sell distilled spirits.
    Now the race is on to line up distribution in the full 48 states.
    Side Pocket has spent $12 million on custom bottles, equipment and marketing to quickly launch Support Her, said Meyers.
    Side Pocket has hired specialized brokers to make Support Her available nationwide. One, for example, who works with the buyer for the Army and Air Force Exchange Service, which provides products and services to military families worldwide, opened the door for Support Her to be sold at military bases in California, Louisiana and in the Washington, D.C., area, Meyers said.
    Earlier this year, the buyer for Air Force One and the White House called Side Pocket to request Support Her.
    Once Side Pocket has established national distribution for Support Her, it can use those same sales channels to promote its other brands, Meyers said.
    The company's early products, such as Lubrication vodka and its Octane line of 100-proof spirits, were geared to people in their 20s and 30s. Others, such as its Vixen brand and Chick Food Premium Schnapps, were marketed to women.
    In recent years, the company has been creating products for customers in older demographics (age 40 to 60), such as Meyers brand premium blended Canadian Whisky.
    Oregon, a leader in microbreweries and wineries, now is home to nine craft distillers, according to the American Distilling Institute. There are 144 nationwide.
    When they first started, the Meyers siblings had no idea that they'd eventually own and operate a distillery. Jeff's original idea, which he outlined for a high school project, was to create a gourmet food company centered on salsa.
    He and Megan renovated a garage behind their parents' Cottage Grove home, and obtained FDA approval to make and package foods. But when the siblings finished the renovations, they realized that the salsa market was flooded.
    "Everyone who had a stove and a kitchen sink was making salsa," Meyers said.
    They came up with another idea. They thought their mom's Bloody Mary mix was a winner, so they decided to try to sell that. They introduced a line of drink mixes and later made contact with a broker for Baja Bob's, who asked Side Pocket to bottle the product. Side Pocket bought an automated filling line and Baja Bob's orders kept them so busy, "We didn't have time to do anything else," Meyers said.
    Before long, Baja Bob's asked Side Pocket to import tequila to package with the cocktail mix. Meyers obtained a certificate from the Oregon Liquor Control Commission. Later, when he made arrangements to start importing tequila, a federal regulator called and said Side Pocket needed to obtain a special federal permit.
    Just as Side Pocket got its federal permit, "the low-carb craze crashed," Meyers said, and the plans to sell tequila with Baja Bob's drink mix fizzled.
    Jeff and Megan spent about a week batting around ideas of how else they could use their hard-won distilled spirits permit. That's when they came up with plans for Octane, their own line of 100-proof products and Lubrication vodka.
    Meyers said his goal over the next five years is for Side Pocket to become one of the nation's largest distillers.
    "You've got to find a creative way to keep yourself in business during difficult economic times," Meyers said.
    ===================

    Diageo 900 million equity Stake in Nolet.


    Diageo has bought the rights rom Nolet to distribute the Dutch Vodka Ketle One. The photograph above leads you to think Ketle one is "hand crafted" because it shows a small distillery
    Does anyone know who really produces Ketle One?
    ==================
    Diageo and Nolet to form a 50/50 company for super-premium Ketel One vodka
    Diageo to pay $900 million for its equity stake
    London and Schiedam, The Netherlands (5 February 2008) - Diageo, the world's leading premium drinks business, and the Nolet family have agreed to form a new 50/50 company, which will own the perpetual exclusive global rights to sell, market and distribute the successful super-premium Ketel One vodka.
    Diageo has agreed to pay US$900 million for its 50% equity interest in the newly formed company, which will be based in the Netherlands with the Nolet family owning the other 50%. Due to its rights under the agreements Diageo will fully consolidate the financial results of the new company accounting for the Nolet holding as a minority interest. Profits from the sales, marketing and distribution operations will be shared broadly equally.
    The Nolet family will continue to own the brand rights for Ketel One and Diageo will become the exclusive distributor of the brand globally.
    Ownership of the Nolet distillery in Schiedam in Holland, where they have been distilling since 1691 and where Ketel One vodka is manufactured will remain with the Nolet family. The distillery will supply Ketel One vodka exclusively and perpetually to the new company at an agreed rate of return.
    Currently, Ketel One vodka has an annual volume of 1.9 million cases. It is primarily a North American brand in the super-premium vodka segment and will complement Diageo's premium Smirnoff and its ultra-premium Ciroc brands. Similarly outside the United States Ketel One will expand Diageo's brand range in vodka. The Nolet family and Diageo believe that this new relationship will accelerate the growth of the brand in the USA and elsewhere in the world.
    The transaction is expected to close by 31 March 2008, subject to the required regulatory approvals and other conditions. Diageo expects that the transaction will be EPS neutral in the first full financial year after closing and will be economic profit positive in year five using a weighted average cost of capital of 9%.
    Both the Nolet family and Diageo consider this alliance to be perpetual. However, should either party ever decide to sell its stake in the company, the other party will have the right to purchase it at a price to be agreed. The Nolet family has an additional right to put its stake in the company to Diageo in the 4th or 5th year after closing for $900 million plus interest. If Diageo buys the Nolet family stake, full ownership of the brand will transfer to Diageo. Diageo can choose not to buy in exchange for a $100 million payment. The family may then pursue a sale to a third party.
    Commenting today, Paul Walsh, Chief Executive, Diageo, said:
    'This transaction is strategically important for Diageo, giving us an interest in an outstanding high quality brand and fantastic potential for global growth in the super-premium vodka segment.
    The new company represents a unique alliance in our industry.
    Commenting on the transaction, Carel Nolet Sr, said:
    'We are proud to be partners with Diageo, the world's leading premium drinks company, and look forward to working together with this team of highly talented people.
    The partnership between Nolet and Diageo will combine our brand building and entrepreneurial skills with the unrivalled brand management, marketing and distribution expertise of Diageo to fully develop the potential of Ketel One vodka in the USA and globally.'
    UBS Investment Bank acted as financial adviser and Sullivan & Cromwell LLP and Morgan Lewis & Bockius LLP acted as legal advisers to Diageo in this transaction.
    ===================

    Moonshine Exhibit

    Local moonshining history on exhibit in Richmond
    This small still, which uses propane gas instead of wood to fire the operation, is one of three authentic moonshine stills in an exhibit produced by the Blue Ridge Institute and Museum at Ferrum College that will be on display at the Virginia Historical Society Center for Virginia History in Richmond, beginning May 10. The exhibition is called Moonshining in the Blue Ridge. Monday, May 5, 2008
    A piece of Franklin County history will be showcased in Richmond starting this week.
    "Moonshining in the Blue Ridge," an exhibition hosted by the Blue Ridge Institute and Museum at Ferrum College, opens at the Virginia Historical Society on May 10.
    "This is the most comprehensive exhibit that has ever been developed on moonshine in the country," said J. Roderick Moore, exhibit curator and director of the institute and museum. "The exhibition was so popular at the museum that we decided to keep it open for an additional 11 months. National Geographic Magazine even filmed the exhibit for their documentary on moonshine."
    Items on display in the exhibit include actual stills, a full-size diorama of a still operation, still makers' tools, dozens of period photos, video interviews with moonshiners and federal agents, documents, jars and other memorabilia.
    "Much of what people think they know about moonshining is shrouded in folklore and myth," said James Kelly, director of museums at the Virginia Historical Society. "We wanted to take this opportunity to tell the real story of an important cultural and economic phenomenon to visitors who couldn't make it to Southwest Virginia to experience the original exhibit."
    On May 28, Moore will do a gallery walk of the exhibit to explain how moonshining paralleled economic conditions and the availability of legitimate jobs during its peak.
    "Today the number of people involved in moonshining appears to be just a small fraction of the number running stills in the 1940s and 1950s, but moonshiners are still in the Blue Ridge mountains of Virginia," Moore said, adding that "the skills of making smooth corn liquor or apple brandy are all but gone because, today, moonshiners deal in quantity rather than quality." Distilling know-how came to Virginia's southwest region with the first English, Scots-Irish and German settlers, said Jennifer E. Mason with the state historical society. The U.S. government briefly taxed alcohol in the late 1700s and early 1800s, and following the Civil War, an alcohol tax became permanent.
    By the middle of the 1800s, scores of distillers were licensed, she said. With railroads expanding and roads improving, the Blue Ridge distillers extended their distribution area to include the coal mine region of West Virginia and factory towns in Southside and in North Carolina.
    By the late 1800s, Franklin County had more than 70 legal distilleries and an untold number of illegal moonshine operations, Mason said.
    But Prohibition in the 1920s sounded a death knell to distilleries, as making alcohol became illegal. That's when illegal stills started to flourish, along with conspiracies involving local politicians, the moonshiner's adaptation of larger stills and new technologies, the shift from brandy and grain alcohol to so-called "sugar liquor," market expansion into large urban centers such as Philadelphia and the transformation of the moonshiner into a regional folk hero, Mason said.
    Franklin County made national headlines for one of those conspiracies involving local politicians and officials.
    According to "A Bicentennial History" of the county by John S. and Emily J. Salmon, a federal grand jury indicted 34 people in a 1935 conspiracy case that defrauded the federal government of an estimated $5.5 million in whiskey excise taxes.
    Those indicted included former Franklin County Sheriff D. Wilson Hodges, a state prohibition officer, several deputies with the sheriff's department, former House of Delegates member David A. Nicholson and Franklin County Commonwealth's Attorney Charles Carter Lee. It took the government 25 days over a period of five weeks to build its case. The defense used 16 days to try to refute the case, calling 69 of its own witnesses. Introductory statements to the jury, closing arguments and rebuttals took nine days.
    The trial lasted 10 weeks and was the longest trial on record in Virginia to that date, except for the treason trial of Aaron Burr held in Richmond in 1807.
    The Franklin County conspiracy case went to jury at 3:10 p.m. on June 29, and a verdict was reached on July 1. Twenty of the 23 defendants that stood trial were found guilty. Lee and two deputies were acquitted. Most of those received light sentences and were reportedly back in the business before they even started serving their jail times.
    The exhibit will run at the historical society, located at 428 North Boulevard, until Sept. 22.
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