Editor's Viewpoint – When Companies Argue about Who is Right, Both are Usually Wrong
The argument between Diageo and Brown-Forman over Tennessee whiskey spilled into the public eye this week
Unless it's you that is in the middle of the melee, there's nothing more thrilling than a good old street fight; be it in the playground, in a bar, in the street... . As the two (usually) men circle each other, fists raised and ready to wade in, it gets everyone's juices going, doesn't it?
Well, it does mine.
So, I've had a fantastic time enjoying Brown-Forman and Diageo square up to each other in Tennessee this week. The row between the two over new legislation regarding the definition of the term 'Tennessee whiskey' has also proved very popular with our readers.
First up, Brown-Forman came out swinging when it claimed the Tennessee whiskey segment is under attack from the likes of Diageo. “This is about Diageo, a large foreign company with more interest in Scotch and Bourbon, trying to weaken what Tennessee whiskey is and we simply shouldn’t allow it,” said Jeff Arnett, master distiller of Brown-Forman's Jack Daniel's Tennessee whiskey brand.
Diageo's counter-punch came soon after. “Diageo firmly believes a single company should not be able to unilaterally determine the definition of an entire category,” the firm said on Tuesday. “At its base, it is anti-competitive and protectionist.”
Back to Brown-Forman: “That's part of a long-term trend in which Jack Daniel's and American whiskies are moving into global markets around the world and taking market share from Scotch whisky,” a company spokesperson said in response. “We believe Diageo is threatened by that and is doing its best to undermine Tennessee whiskey and therefore Jack Daniel's.”
This situation certainly makes for entertaining reading. But, it should be of great concern to the spirits industry that it has got to this point.
From the outside, arguments like this do not cast our industry in a positive light. Considering the many battles ahead that we undoubtedly have, such infighting among companies expends precious time, resources, energy and patience.
It's also a shame that the competitive spirit is being channelled in this direction. I am reminded of something the late Patrick Ricard told me a few years ago, about a similar inter-industry row: “Until now,” he said in 2006, “along with our competitors, we are fighting on the ground to attract customers. We never fight in the courts to beat a competitor. So, it's something new to us to be fighting in the courts.”
(I'll leave you to guess which argument he was referring to.)
I'm not trying to denigrate the point that both sides are trying to make in Tennessee. Like in previous battles, each side is trying to look like they are being more rational than the other. Indeed, both sides will argue - and, in this case, have argued - that they have the greater good as their main priority in all this.
This I do not doubt.
But, once the scrap ends and the excitement subsides, it's usually the case that everyone - observers included - feels a little bit disappointed with themselves.
Global market review of non-Scotch whiskies – forecasts to 2018
Non-Scotch whiskies in aggregate represent an enormous and growing category, with Irish whiskey in particular showing real momentum. With over 100 data tables and unique insight, this new joint IWSR/j...read more
Brown-Forman Corporation (BFB) - Financial and Strategic SWOT Analysis Review provides you an in-depth strategic SWOT analysis of the company’s businesses and operations. The profile has been compiled...
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Diageo plc (DGE) - Financial and Strategic SWOT Analysis Review provides you an in-depth strategic SWOT analysis of the company’s businesses and operations. The profile has been compiled by GlobalData...
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