The Challenge of Craft Whisky in South Africa

Craft Gin has taken the world by storm, with literally hundreds of new brands, spirit producers and distillers flooding the markets of Europe, Africa, the Far East and Australasia.

But this “craze” is nowhere near as big in the United States. Yes, there are Craft Gins produced and consumed in the USA, and yes there are some big brands coming out from those Northern shores, but in terms of local consumption, on a percentage bases, Craft Whisky is and always has been the front runner of the US Craft Spirit Category.

Why? What makes the USA different?

Is it just a question of personal choice and consumer profiles?

    

Does the USA think differently about Whiskey than South Africa?

    

There is an argument to be made for that. Since the first reactions to President George Washington’s Whisky Tax, right through to the exoneration Whisky received during Prohibition as a Medicinal Treatment for certain ailments, Whisky has held a special place in the heart of the United States’ Spirit Consumer.

But from a production standpoint there is, in my humble opinion, other reasons why Craft Distillers pursued the Whisky route.

Legislation. 

Craft Distillers in the USA produced Whisky because they could.

    

What makes South African Whisky Legislation different?

    

In South Africa, entering into the Whisky world as a Craft Distiller is not only challenging, but basically impossible if you want to establish yourself as a “Whisky Distillery” exclusively.

Again, this is due to legislation.

South African Whisky Legislation is contained in the South African Liquor Products Act Regulations which determines what we are allowed to do, and what not.

This Regulation states the following:

    

• Whisky shall be produced from a mash of grain in which the diastase of the malt contained therein, with or without other natural enzymes, has brought about sugar conversion; which has been fermented by the activity of yeast; and which has been distilled at less than 94,8 per cent alcohol by volume so that the distillate has a flavor and taste originating from the raw material used

• Malt whisky shall be produced from a mash of malt in which the diastase contained therein, with or without other natural enzymes, has brought about sugar conversion; which has been fermented by the activity of yeast; and which has been distilled in a pot-still so that the distillate has a flavor and taste originating from the raw material used;

• Blended whisky shall consist of a mixture of at least 25 per cent, calculated on the basis of absolute alcohol, of malt whisky and not more than 75 per cent, calculated on the basis of absolute alcohol, of whisky

• All categories of whisky shall be matured for at least three years in wooden casks with a capacity of not more than 700 liters

• Whisky produced in the Republic shall be matured in a customs and excise warehouse in wooden casks approved for this purpose by the Commissioner of Customs and Excise.

• Whisky shall have an alcohol content of at least 43 per cent Alcohol by Volume.

     

Analyzing South African Whisk(e)y Legislation

    

Let us take a closer look at what this actually means:

     

1. “Whisky shall be produced by a Mash of Grain” – South African law does not require the use of Barley or any other specific Grain type, hence we can use any Grain or mix of Grain to make Whisky

2. “The diastase of the Malt therein” – there must be Malt present in the mash, but the law does not specify Malted Barley, or a percentage, hence I could use any type of Malt and any amount

3. “With or without other Natural Enzymes” – we are allowed to use concentrated Enzymes to ensure a full conversion in the mash

4. “Which has been fermented by the activity of yeast” – obviously

5. “Distilled at less than 94.8% ABV so that the distillate has the flavor and taste originating from the raw material used” – this always get a laugh in my classes, as anyone who has ever played with Grain Fermentations would know that the moment you pass 90%, you basically have Vodka. The amount of flavor that remains is extremely low, and once that spirit goes into a barrel, it disappears completely. One is left with the only possible conclusion – that this was written in purely to allow the use of continuous distillation in Whisky production in South Africa.

6. “Malt Whisky must be distilled in a Pot Still” – hence the only difference between Whisky and Malt Whisky in South Africa is the distillation equipment used

7. “Blended Whisky is a mixture of Malt Whisky and Whisky” – self explanatory

8. “Wood Barrels” – The type of Wood is not specified, unlike Brandy legislation that requires Oak Barrels

9. “Barrels no larger than 700lt” – self explanatory

10. “Alcohol Content of at least 43% ABV” – Note that Overproof or Barrel Strength Whisky is allowed in South Africa, but unlike Brandy Legislation which allows for a lower ABV% (38% minimum) in the categories Pot Still Brandy and Vintage Brandy – the export categories – no such allowance is made for Whisky in South Africa, hence our Whisky’s remain too “strong” for overseas consumers used to 38% and 40% products (76 and 80 Proof).

11. “Whisky produced in the Republic shall be matured in a customs and excise warehouse in wooden casks approved for this purpose by the Commissioner of Customs and Excise.” – Too date no-one can provide me with a satisfying explanation as too why this regulation exists solely under Whisky Regulations and not Brandy Regulations. In addition, no-one can definitively explain to me what it means (I have received contradictory explanations from SARS and DAFF), nor why it is required from local producers but not imported products. The only possible application I have heard of is that with Whisky a SARS official needs to be onsite both for the filling and emptying of barrels, which does not seem to be a requirement for Brandy. Why? No-one can explain, other than stating “The law is the law”.

       

So why does this legislation hold South African Craft Distillers back?

     

What stops us from producing Whisky at the Craft level?

     

As with Brandy, the 3-year aging requirement is the problem. Unlike the USA where certain categories of Whisky (or Bourbon) have shorter aging requirements or no aging requirement at all, all Whisky in South Africa must be aged for a minimum of three years, meaning that a Craft Whisky Distillery in South Africa can only start selling its products in three years’ time.

Unlike Brandy legislation, where it is possible to produce an unaged component yourself and blend that with a purchased aged component and sell your own product, this is not allowed under Whisky in South Africa, hence the only way to sell Whisky in the first three years is to buy in Whisky from a mass producer, bottle it and sell it under your label – which completely defeats the purpose and intent of Craft, and is at the very least misrepresentation of your brand and process.

A Craft Whisky Distiller therefore needs to ensure that he has another form of income while the Whisky matures – hence Craft Gin and Craft Vodka.

Slowly though, locally produced Craft Whisky’s are appearing on our Liquor Store shelves. Distilleries that opened up some time ago, and whose products are now finally ready to be launched. It has been a long and hard road, costing immense quantities of time, money, blood, sweat and tears. But just as they are no finally ready to enter the market, we see an influx of Imported Craft Whisky’s and Bourbon’s on our shelves as well – mostly from the USA.

Now, seeing as how imported products are required to be adherent to the legislation of the country where they are being sold, it can only be hoped that proper checks and balances are in place to ensure that these products are actually compliant to South African law as well.

Personally, I have seen at least 6 imported products sold which I know is not compliant to South African aging requirements, and a couple more which is not compliant to our labeling and additive requirements.

Am I therefore advocating the removal of these products from the South African market?

Not at all …

All I ask, and many of the Craft Distillers are asking the same, is make the playing field level. 

If you are going to allow foreign producers to sell their product in South Africa, which is produced in a certain way, then surely the local producers should be allowed to produce the same products in the same way?

Is that not fair?