Pellucidity

Today is International Scotch Day.  This is of course more a Diageo marketing exercise than anything else.  But still, it is an opportunity to enjoy Scotland’s most famous export.  And an opportunity to spend a few moments discussing this most delightful of spirits.

But the particular aspect of scotch that I want to mention doesn’t relate to a debate over the merits of any particular region (Islay is best, obviously), the optimum level of peatiness in a malt (the more the better) or the appropriate way to consume the stuff (neat, possibly with a splash of water – don’t even think of putting ice in mine, and if you put a good single malt in a cocktail we’re going to have words).

No, the aspect I want to discuss is transparency.  As a securities lawyer by training, this particular HoochLawyer spends a lot of time thinking about corporate transparency – the idea that a business should let its investors know what is going on.  A board of directors is, after all, entrusted with their shareholders’ money.  And since it is the shareholders’  money you can make a pretty good argument that they should know how the Board is approaching the task of protecting, spending and growing their investment.  But this issue of transparency isn’t limited to corporate conversations.  Lately, the concept of transparency is a big deal – making appearances in discussions from government to consumer products – including scotch.

Currently, there are laws in the European Union and the United Kingdom which actually impede transparency in blended scotch.  This is a bit unusual today.

The laws date back to a time when many marketers were particularly aggressive at marketing their whiskies as older than they really were.  According to some reports, at least one company would take a barrel or more of blended scotch whisky, add a very small amount of single malt that was 50-60 years old, and then market the final product in a way that touted the old stuff rather as if it was the primary ingredient.  It wasn’t.

With the stated goal of protecting consumers, laws were written that made it illegal for scotch producers to advertise the specific components and ages within their blends. Rather, the laws permit the blender to only provide the age of the youngest component in the blend.  [Note: this is similar to age statement regulations here in the U.S. – which also require that if you’re going to include an age statement you reference the youngest spirit in the bottle.]

One company, Compass Box, made quite a number of headlines in the last couple of years for fighting against these laws.  You see, Compass Box is a fan of transparency – and appears to believe that consumers should be able to know exactly what is going into their blends.  As a case in point, I’m pasting here a copy of some of their fact sheet marketing materials for their Flaming Heart blend.

Originally, Compass Box put this kind of information right on the bottles and boxes for their products.  But, of course, the laws are what they are – and the 800 lb gorilla in the industry – the Scotch Whisky Association (of which Compass Box is not a member) – alerted the authorities to Compass Box’s obviously nefarious behavior.  Yep, you heard that right.  The largest trade association for Scotch squealed on a non-member because it was providing consumers with accurate information.

Compass Box has since stopped providing this information directly to consumers in the packaging of its products.  But it will still provide you with the information if you call up and ask.  Put another way, they’re committed to providing consumers with the information to make an informed decision about what they’re drinking – but smart enough not to continue to poke their fingers into the eyes of the biggest players in the game.

So today, on International Scotch Day, consider pouring yourself a dram.  And while you enjoy it, you might want to think briefly about what it is that makes up the contents of your glass.  Transparency, it turns out, tastes pretty good.