Eric Felten, writing for the Daily Beast, has stumbled upon the worst-kept secret in the liquor industry: much of the craft whiskey, especially rye, that commands high prices comes from a giant, intensely ugly building ten miles west of the Cincinnati airport. Cue the clutching of pearls, the shattering of dropped tulip glasses, the rending of lapels, the wailing of women. How could we all fall for this?
He is correct on the facts: a former Seagram's distillery called MGP, located in Lawrenceburg, Indiana, furnishes much of the American whiskey we see on our shelves. Bourbon and rye flow from the industrial stills. He is correct that when you see a whiskey older than the company selling it, those barrels were bought from elsewhere.
Here is the entire reason MGP exists, in ten words: Our thirst for whiskey has overwhelmed the number of distilleries.
Does it matter? Not really.
MGP is to whiskey what co-packers are to food. When small food producers want to sell beyond what's permitted by cottage laws, they often contract a company to make the product for them. They hand over a recipe, container specifications, and the approved label, run test batches, and then go into production. The business owner benefits because he or she does not have to deal with the permitting, inspections, or equipment upkeep; he or she can concentrate on marketing and sales, and ramp up production simply by requesting it from the co-packer. MGP works the same way: there are different mash bills (the ingredients list that specifies how much of each grain goes into the fermentation tank) and proof requirements (how much alcohol is in the white lightning as it comes out of the still).
Some producers purchase the "standard" MGP recipe, the original product, but even that doesn't mean it's all the same whiskey in the bottle. Finished whiskey is nearly always blended; barrels must be tasted, selected, and blended. Blending is the step in the whiskey production process that most influences the taste of what's in the bottle. All whiskey starts with grain, which is an agricultural product, and therefore varies. Perhaps there was less rain as the corn ripened, thus resulting in smaller but starchier (and therefore eventually sweeter) kernels. Perhaps the rye was particularly "hot" tasting one year. All of these things have snowball-like effects on the finished whiskey that sits in the barrels. A master distiller tastes and blends the whiskeys, which is why George Dickel Rye tastes different than Templeton Rye, even though both come from MGP-distilled whiskey.
Even single-barrel whiskey must be tasted, analyzed and selected by the master distiller. The company doesn't just walk into the rickhouse and take the top four barrels. Saying it's all the same stuff with different labels on it is insulting to master distillers and blenders who have perfected their crafts, like Harlan Wheatley of Buffalo Trace, John Lunn of Cascade Hollow (where all the George Dickel except the rye is produced), and the late Lincoln Henderson of Angel's Envy. Frankly, anyone who can't tell the difference between High West Rye and Redemption Rye has a palate problem, not a production problem, and shouldn't be drinking fine whiskeys anyway.
Contract distillation has a long and storied history: the most sought-after whiskey in America, Pappy Van Winkle, started off being distilled by the Stitzel-Weller distillery, after which it was chosen and blended by Julian "Pappy" Van Winkle. Today, it's distilled at the Buffalo Trace distillery in Frankfort, Kentucky. Whether it's the best is subjective, but it is certainly a very good whiskey, and it doesn't taste anything like Buffalo Trace.
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The same "scoop" holds true for tequila. Destilería La Cofradia, which makes Casa Noble (one of the best high-end tequilas on the market), also produces Hacienda de la Flor (also quite good) and a huge number of those stupid novelty gun-shaped bottles of souvenir tequila you see in the duty-free shop at the Puerto Vallarta airport. Is it all the same tequila? No. But it all starts in the same distillery on the outskirts of the city of Tequila, and from the same agaves. What makes them so different is the blending and the production steps after the distillation. Just like with whiskey, American appetites for tequila have far outpaced the number of distilleries in Mexico.
Felten has a point, though: some of these liquors have origin or marketing stories that are deeply at odds with the truth. Templeton Rye, for example, has a whole song and dance about 80-year-old men in western Iowa and the recipe they guard fiercely, when every drop is produced at MGP. When you press their representatives at bartenders' tastings, the company line is that they are "temporarily" buying whiskey from Indiana while they get the Iowa distillery up and running. Casa Dragones tequila bottles have a bunch of blather about a house in San Miguel de Allende, Guanajuato, a place that isn't even allowed to call its agave distillate tequila; their tequila jóven is distilled at Destilería Leyros, on the east side of Tequila, Jalisco, 400 km to the west.
The problem, then, is learning to differentiate the products, to be able to pinpoint what it is about one whiskey you like or don't like. It's up to American consumers and the bartenders who serve them to distinguish between a $50 bourbon and a $15 bourbon in a $10 bottle with $25 worth of marketing on top of it. Whether the liquid started in Kentucky or Indiana doesn't really matter at all.