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VOL. 38 | NO. 23 | Friday, June 6, 2014

Tennessee drops investigation into whiskey storage case

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NASHVILLE (AP) - Alcohol regulators have abruptly ended their investigation into whether liquor giant Diageo violated state laws by storing whiskey made in Tennessee in neighboring Kentucky.

Assistant Attorney General Kyle Hixson said in federal court in Nashville on Tuesday that the state would not pursue penalties against Diageo subsidiary George Dickel after hearing testimony from master distiller John Lunn, who said about 16,000 barrels of non-branded whiskey had been shipped to Kentucky in the previous five years because of a warehouse shortage at the distillery.

Hixson declined to elaborate about the reasons for dropping the investigation. Diageo attorneys, who argued the storage law violates interstate commerce protections, said he wants the state to agree not to seek penalties against Dickel if it has to send whiskey out of state in the future.

Diageo attorneys argued that its George Dickel distillery could have faced shutdown because of the law requiring locally made whiskey to be stored in the state.

Dickel is suing to halt the Tennessee storage statute, claiming it violates interstate commerce protections.

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