Monday, December 4, 2017

Rant: Whisky, Sherry Barrels & A Lack Of Transparency

"Malt whisky, which emerges from the spirit-still as clear as gin, has to be matured in order to rid it of impurities and to improve its flavor. The choice of cask is therefore all-important, and the best is an oak sherry cask. It was, in fact, the sherry in the wood which gave the malt whisky its rich amber color, and, depending on the size of the cask, malt whisky is at its best between the eight and fifteen years."
--Scotch: The Whisky of Scotland in Fact and Story by Robert Bruce Lockhart (1951)

It all begins with an oak tree...

The tree is harvested, the wood cut into staves, and those staves are then used to construct a barrel which will eventually age alcohol, maybe Bourbon, Sherry or Port. In time, the used barrel will end up being sent to Scotland, where it will then age whisky. The significance of the barrel in the maturation of whisky cannot be underestimated and the choice of the cask is a crucial decision in the production process. Numerous individuals in the whisky industry claim that approximately 70% of the flavor of whisky comes from the oak barrels in which it is matured. Due to their vast importance, I believe it is also vital that the whisky industry be fully transparent in regard to the casks they use.

However, that isn't always the case, especially considering one specific type of barrel, the Sherry cask. That needs to change though first, it seems that much more attention needs to be brought to this issue, to make many more people aware of this problem. With greater awareness, then a larger and more united front can push for change in the whisky industry, to convince them to become more transparent about this matter.

As such, this is a preliminary article about the issue of the misuse of "Sherry" barrels, intended to raise public awareness and hopefully motivate others to explore deeper into these issues. I hope that it might even provide a little motivation for whisky producers to be more transparent, though I don't suspect a single voice will move them to action. However, I will be continuing to investigate, continuing to spread the word, and you can look forward to future articles about this controversy.

"These days they’re seen as slightly old-fashioned, looking back to a time when the Scotch whisky industry used more sherry casks than American oak. While it is not quite as simple as that – blenders were using refill casks in Edwardian times to produce lighter styles and sherry was still the dominant cask type in the 1930s, when light blends appeared – it’s true that the rich, deep blend is less common these days."
Whisky: The Manual by Dave Broom (2014)

In simple terms, Sherry is a wine produced in the Andalusian province of Cádiz in a region bounded by Jerez de la Frontera, Sanlúcar de Barrameda, and El Puerto de Santa María, the Marco de Jerez, or the “Sherry Triangle.” The Jerez-Xérès-Sherry DO (Denominación de Origen) and Manzanilla Sanlúcar de Barrameda DO cover approximately 17,500 acres of vines, with about 95% of that acreage dedicated to the Palomino grape. Sherry is a fortified wine, which means that a small amount of neutral grape spirit is added to the wine. There are a number of different types of Sherry, such as Fino, Manzanilla, Amontillado, Oloroso and Palo Cortado.

There are very few other wines that are produced in a similar manner as Sherry, with its flor and solera system. The flor, a combination of yeasts that coats the surface of the Sherry in the barrel, is a natural way to protect wine from oxidation and also contributes to the flavor of the wine. The solera system, with its multiple barrels and fractional blending, helps to contribute to a consistent Sherry, while enhancing it with older and more complex Sherries. The Sherry barrels are usually stored in above-ground bodegas, with very high ceilings, reminding you of a cathedral. Most other wines are aged in barrels kept underground, in cellars or even caves. Sherry production is a very intriguing process, and creates a special wine.

Most Sherry bodegas have their own cooperage departments as their barrels are so essential to their business. Sherry botas are usually stacked no more than three or four high, as the added weight of a higher stack would damage the botas below. Once in place, barrels are rarely moved, and may remain in the same place for decades, and you can commonly see the dust and spiderwebs verifying their age. The sherry barrels are regularly and constantly examined for any problems. The barrels are commonly painted matte black, allowing leaks to be more readily discerned. It is more difficult to repair their barrels, which may be over 100, or even over 200 years old. They must locate old barrels or staves which can be used for repairs, and that is not as easy as finding a new barrel. In addition, older barrels and staves are more expensive in the Jerez region than new barrel, which is the opposite of much of the rest of the wine industry.

"Unlike table wine, the higher alcohol content of sherry allows the barrels to be used for many years. This constant reuse of barrels minimizes their need for a continual supply of new barrels, at least relative to the whiskey industries."
Wood, Whiskey and Wine: A History of Barrels by Henry H. Work (2014)

The history of the Sherry region extends back about 3000 years and it is the ancient Phoenicians who might have introduced the Palomino grape to southern Spain. Throughout history, the Sherry region has experienced numerous cycles of high and lows, yet always it has persevered. For example, the Peninsular War (1807-1814), which pitted France against Spain and its allies, wrecked havoc on the vineyards of Jerez, and stores of Sherry were often stolen, plundered or requisitioned. France even sometimes occupied the Jerez region. Yet once again, in the 1820s, the Sherry industry found a way to rebound and the industry continued to grow over the next several decades.

One of Spain's biggest customers for Sherry was England, and in 1864, 43% of the total wine imports to England constituted Sherry. It became a custom in middle-class English homes to offer guests a glass of Sherry and a biscuit. By the 1870s, the Sherry industry reached its highest point ever, with much of the credit to the significant number of English consumers. However, that success did not last long, and the Sherry industry fell hard, reaching a low point during the 1890s. This time the fall was due to a tragic combination of numerous factors including a peasant rebellion in Jerez, plenty of poor quality Sherry, fake Sherry being sold by unscrupulous merchants, malicious rumors that Sherry had been adulterated with unsafe chemicals, problems with Phylloxera, and a trend towards lighter wines. There were too many simultaneous problems for the Sherry producers to be able to successfully combat at this time. It was a dark time for the Jerez region.

As usual, the Sherry industry eventually found a way to rebound from its lowest point, showing its tenacity despite great adversity. In 1910, some leading Sherry sippers came together and founded the Sherry Shippers’ Association, pooling their resources to launch an advertising campaign for Sherry. Rather than promote their individual products, they chose to promote Sherry in general. They were largely successful, helping to restore Sherry exports to a very respectable level. For example, during the 1930s in England, Sherry parties became very popular and they continued to be for at least the next 20 years.

As least as far back as the 16th century, and maybe even earlier, Sherry was being shipped around the world in wooden casks, commonly butts of 500 liters. Once the Sherry reached its destination, the casks would generally be emptied and the butts would be reused. The Scotch Whisky industry became enamored of these used Sherry butts and began aging their whisky in those barrels, enjoying the color and flavors those barrels provided to the whisky. However, by the 1940s, the Scotch industry started using some barrels from the American whiskey industry.

"Today sherry casks are not only expensive but insufficient in supply for the requirements of the trade."
--Scotch: The Whisky of Scotland in Fact and Story by Robert Bruce Lockhart (1951)

As Sherry barrels became harder to find, and more expensive, the Scotch industry needed to seek elsewhere, and found that oak barrels from America, commonly used for bourbon, were cheaper and more readily available. Sherry barrels were still coveted, yet continued to be tougher and more expensive to acquire. Making it worse, in 1981, the export rules in Spain changed, and Sherry producers were no longer permitted to ship Sherry in casks. The consequence was that Sherry barrels became even more expensive and more difficult to obtain.

Due to the solera system, and the value of old barrels, there are few old Sherry barrels for sale. As such, some bodegas started creating Sherry casks specifically for the whisky industry. There are Scotch producers who have partnerships with certain bodegas, which provide them a number of Sherry barrels each year. These are considered "seasoned" casks, which hold Sherry for a few months to a couple years, and they are outside of the usual solera system. As an example, The Macallan is alleged to annually import about 25,000 Sherry barrels from Spain although not all of those barrels are from the Jerez-Xérès-Sherry DO.

If The Macallan isn't getting all of those "Sherry" barrels from the Jerez-Xérès-Sherry DO, where are they getting them from? And are other Scotch producers obtaining barrels from similar sources outside of the Sherry Triangle?

Let's begin the answer with a brief discussion of legally recognized geographic indications. The term "Scotch Whisky" is a Protected Geographical Indication (PGI), meaning it can only be produced in Scotland according to UK rules. No other distillery in any other country can claim to produce "Scotch Whisky," and if they try, there are legal remedies to stop them from doing so. In some respects, you can think of it as a trademark. "Champagne" is another example of a Protected Geographical Indication, and no Sparkling Wine outside of the designated Champagne region of France can label itself as Champagne.  However, there is a quirk in the U.S. where some producers were grandfathered into a U.S.-France agreement and allowed to use the term "Champagne" provided they labeled it as "American Champagne."

"Sherry" is another Protected Geographical Indication and as with other PGIs, Sherry can only be produced within a specific legally demarcated region, the Sherry Triangle formed by the cities of Jerez de la Frontera, El Puerto de Santa María, and Sanlúcar de Barrameda. It is important to recognize and respect PGIs, especially if you desire others to recognize and respect your own PGI. Thus, producers of Scotch Whisky should respect PGIs such as Champagne and Sherry, as those producers certainly want the rest of the world to respect the Scotch Whisky PGI. However, that respect is apparently lacking with some producers of Scotch Whisky and it needs to change.

"In an excellent practical paper to the Scottish section of the Institute of Brewing in 1906, on ‘Casks, their manufacture & treatment’, Haldane discussed the need for control of cask quality and showed how this could be achieved through standardisation. Some interesting comments were made on sherry casks and how these could be fraudulently manufactured by unscrupulous traders who shipped worn-out casks from Leith to Spain, rinsed them with sherry, covered them with cobwebs and allowed them to lie around in the bodega to acquire a patina of age. The casks were sold back to the Scotch whisky industry at an inflated price."
Scots On Scotch: The Book of Whisky by Philip Hills (2012)

As Sherry barrels became more expensive and tougher to obtain, it was obvious that Scotch producers would seek out less expensive and more readily available alternatives, and not just oak barrels from the U.S. Within Spain, there are regions outside of the Sherry Triangle which produce Sherry-like, or Sherry-style, wines though they are not legally permitted to designate their wines as Sherry. Some Scotch producers purchase barrels of this Sherry-like wine from these other regions and use it for aging their whisky. However, many of these Scotch producers still commonly refer to these barrels as "Sherry" despite the fact they are not legally Sherry barrels.

This practice fails to recognize and respect the Sherry PGI. It also shows a lack of transparency on behalf of the Scotch producers, confusing consumers who might have expected authentic Sherry barrels to have been used. It would be an easy problem to resolve so why don't they do so? To be clear, I'm not objecting to the use of these Sherry-like barrels but rather I'm objecting to their designation by Scotch producers as "Sherry" casks. If they want to use Sherry-like casks, then just be transparent about their use and respect the Sherry PGI.

One of the regions outside the Sherry Triangle is the Montilla-Moriles DOlocated about 90 miles northeast of the Jerez region. It produces a number of Sherry-like wines though they are significantly different from authentic Sherry. For example, Montilla-Moriles wines commonly use Pedro Ximénez, rather than Palomino, as their main grape. In addition, most Montilla-Moriles wines are not generally fortified though authentic Sherry is always fortified. There are a number of other differences too and thus, there are additional reasons why the wines of this region should not be called Sherry.

I should join out that this problem isn't limited to the Scotch whisky industry and is an issue in the U.S. whiskey industry too. For example, at the Westland Distillery, in Washington, they produce a Sherry Wood American Single Malt Whiskey but it wasn't matured in authentic Sherry barrels from the Jerez-Xérès-Sherry DO. Instead, they sourced their barrels from Tonelería del Sur in the Montilla-Moriles DO. Although their website is clear the origin of the barrels, they do not specifically explain that they are not using authentic Sherry barrels. The average consumer will simply assume they are using legal Sherry casks.

The Condado de Huelva D.O. is another Spanish region, about 60 miles northwest of Jerez, which produces Sherry-like wines, and again, their wines have some significant differences from the Sherry produced in the Jerez-Xérès-Sherry DO. Though they do use the Palomino grape, they also use a number of other grapes which are not permitted in the Jerez region. Within this region, one specific producer, Bodegas José y Miguel Martin, is especially well known in its connection to the Scotch whisky industry. By some estimates, at least half, if not even more, of their production involves producing barrels for the whisky industry.

You'll find numerous Scotch producers which purchase barrels from Bodegas José y Miguel Martin, such as Glenfarclas, Compass Box, and The Macallan. It can be difficult to determine which Scotch producers use the Martin barrels as their websites may not indicate the source of their "Sherry" barrels. For example, both Balvenie and Laphroaig produce a number of whiskies which are aged in "sherry" casks but their websites do not indicate the source of those barrels.

As the barrels produced by Bodegas José y Miguel Martin are not legally Sherry barrels, then the whisky producers using those barrels should not be stating on their labels, websites and marketing materials that any whisky aged in those Martin barrels are "Sherry." It would be far more preferable for those whisky producers to refer to those barrels as "Sherry-like" or "Sherry-style." Yet they do not do so.

Bodegas José y Miguel Martin apparently understands the issues involved as back in 2014, they applied to The Spanish Patents and Brands Office (OEPM) for a trademark to use the term "Sherry Cask" on their barrels. They wanted whisky producers to be able to legally use the term Sherry Cask on their labels, websites and marketing material. In 2015, they were denied by the OPEM and subsequently appealed that decision, though the appeal was dismissed in October 2015. As such, Bodegas José y Miguel Martin does not have the legal right to refer to their barrels as "Sherry Casks."

The Consejo Regulador in Jerez is concerned about the issues of whisky producers properly indicating whether they are using authentic Sherry casks or not. They are working toward this end though nothing definite has yet been decided. One idea that has been discussed and may be eventually implemented is a voluntary certification system, where a whisky producer could obtain a certificate that they use authentic Sherry casks. This might be the direction in which the Sherry regulations are most likely headed.

While we are discussing regulations, it is worthwhile to examine the The Scotch Whiskey Regulations 2009, which help to define and regulate Scotch production, marketing and more. First, we will discover that the regulations do not mention Sherry at all. As such, there is nothing in the regulations that restrict the Scotch industry from using only authentic Sherry casks. There is also nothing that forces them to properly differentiate authentic Sherry casks from Sherry-like wine casks. Hypothetically, by these regulations, a Scotch producer could use a cask from an American winery that makes Sherry-like wines and call it a "Sherry" cask.

Under Section 3.(1)(c) of these regulations, it states that Scotch whisky must be "... matured only in oak casks of a capacity not exceeding 700 litres;.." That is the only restriction on the type of casks that may be used and you can see it provides much flexibility to the Scotch industry. The only other reference to "casks" in the regulations, under Section 7.(1), involves a restriction on moving Scotch Whisky from Scotland to another country in a wooden cask. In addition, none of the regulations, on marketing, advertising, labels, and more, mention identification of the type of cask used for maturation or finishing.

My interest in these issues was spurred on after a Scotch tasting with representatives of Compass Box, a company established in 2000 which produces and bottles a wide range of blended Scotch whiskies. I was impressed with their bottlings and asked about the source of their Sherry barrels, being informed that they were from Bodegas José y Miguel Martin. It was a Bodega of which I was unfamiliar but some quick research uncovered the reason for my unfamiliarity, that it wasn't a Bodega within the legally demarcated Sherry region. That led me to pose further questions to the Compass Box representative who directed my inquiries to John Glaser, the founder of Compass Box (pictured above on the right).

I exchanged several emails with John about this issue and then had the opportunity to speak to him in person as he presided over a local Compass Box event. John was very transparent and forthright about the issue, noting that I was the first person to inquire about this matter. As such, it certainly wasn't a high priority but John agreed as to its importance. John stated that Compass Box used both authentic Sherry casks as well as Sherry-style casks from Bodegas José y Miguel Martin. He uses the Martin casks because he feels they are very high quality, and that is a crucial aspect to their whisky production.

On their website, they provide a list of their Core Whisky Beliefs, including: "Good oak rules. Up to 70% of the flavour in mature Scotch whisky comes from the interaction of the spirit with the cask it is aged in. You can only create a great whisky when you use great wood." John stated that it was difficult to find authentic Sherry casks that met his high standards but that those from Bodegas José y Miguel Martin fit all of his needs. As I mentioned previously, I have no problem with the use of these Sherry-style barrels but I simply want complete transparency concerning their use.

Compass Box embraces the value of transparency and is already involved in a "Scotch Whisky Transparency" campaign, seeking to change the regulations concerning the information provided to the public concerning the aging of whisky. As their website states, "It is currently against EU regulations for a producer to mention an age when talking about a bottle of aged spirit – whether on the packaging or in the marketing of that product – unless there is only one age mentioned and that age is of the youngest spirit in the bottle." Compass Box would like to explain the aging of all of the individual whisky components in their blends, to be more transparent to consumers. That is a worthy goal though I would also like to see more transparency on the Sherry cask issue.

John indicated to me that they differentiate the usage of Sherry casks and Sherry-style casks by capitalizing "Sherry" when referring to authentic Sherry casks, and using a lower case "sherry" for Martin's Sherry-style casks. However, I pointed out to him that not all of his marketing materials follow this rule, showing him a marketing document I received at a prior Compass Box event. That document used both "Sherry" and "sherry" to refer to the same type of barrels. John indicated he would ensure that was corrected and that the rule would be followed in all marketing materials going forward.

I also inquired whether the Compass Box website would explain this rule as currently it didn't mention the different usages. Without a specific explanation, I don't believe consumers will understand there is a difference between "Sherry" and "sherry," simply assuming they both refer to authentic Sherry casks. An explanation would be simple to add to the website and could alleviate much confusion. John indicated that at this time, they would not add such an explanation as he felt that such an explanation might further complicate matters considering they already had to spend time explaining the basics of whisky, blending and such to consumers. Adding another level of complexity might be overwhelming.

In addition, John stated that they were involved in a number of other, more important projects so they didn't have the time currently to devote to the Sherry issue, although he agreed it was a matter that needed to be addressed in the Scotch industry. As I was the first person to raise the issue to him, there certainly wasn't any imperative to work on the matter. I'm sure plenty of other Scotch producers feel the same way, that as few people are raising the issue, it is a matter of low priority. Hopefully, that can be changed as we raise the visibility of this important issue.

These issues with "Sherry" barrels also raise the question whether the Scotch whisky industry is being less than transparent with other types of barrels that they are using. Are they using authentic Bourbon barrels or are they using Bourbon-style barrels, which held some type of corn whiskey which isn't legally Bourbon? What about their Port barrels? The question could be asked about all of these various oak barrels. And if they aren't transparent about their "Sherry" barrels, then it certainly isn't a stretch to believe it might also occur with other barrels types. I haven't investigated these other barrel types yet but I may do so in the future.

We want transparency from so many of our food and drink industries and should demand it as well from the Scotch whisky industry. We should demand that they be transparent about the nature of the barrels in which they age their whisky. We should demand that they respect the Protected Geographical Indication of Sherry, just as they want everyone else to respect the Scotch Whisky PGI.  Until we have enough people demanding this transparency, then it is unlikely the whisky industry will take any action.

Please spread awareness of this issue and then push the Scotch whisky industry to be more transparent and respect PGIs.

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