Virginia Distillery Company

A Lovingston distillery producing single-malt whiskey is being sued in the U.S. District Court of Delaware by a Scotland-based trade association for using on beverage labels words traditionally associated with whiskey produced in Scotland.

The Scotch Whisky Association claims that Virginia Distillery’s use of the words “Highland” and spelling of the word “whisky” falsely “indicates to the public that defendant’s product is Scotch whisky when it is not, and/or that it is whisky that originates in Scotland, which it does not.”

The association wants the court to stop the Nelson County distiller from using “Highland” and “Scotch” on labels and to order the distiller to “recall, at its own expense, all non-Scotch whisky products which have been manufactured, distributed, sold or shipped that bear or incorporate the word ‘Scotch’ or ‘Highland’ on their labeling.”

The different spellings of whiskey represent the variations in spelling between English-speaking countries. American-made and Irish-made spirits are traditionally spelled “whiskey” while “whisky” is used primarily in Scotland, England, Wales, Canada, Australia and New Zealand and most areas of the United Kingdom.

The Lovingston distillery imports aged-malt Scotch whisky from Scotland, blends the distillate with its own single-malt whiskey made in the Lovingston facility and ages it in barrels on site.

The independently owned distillery launched the Virginia-Highland Whisky series more than three years ago.

The company uses on its labels the description of “whisky from Scotland” and “Virginia whisky.” Company officials said they use the phrase “Virginia-Highland” to describe the product being made in Nelson County rather than other areas of the state.

“Our production process pays tribute to both Old World and New World techniques while taking advantage of our location and the climate provided by Virginia’s Blue Ridge Mountains,” said Gareth Moore, Virginia Distillery’s chief executive officer. “Our label clearly indicates the source of our whisky, stating ‘whisky from Scotland, married with Virginia whisky,’ and we have always been upfront in descriptions to our customers.”

The association, in its lawsuit, disagrees.

“Virginia Distillery’s labeling uses the words ‘Highland’ and ‘Scotch’ prominently to evoke an improper association with Scotland in order to more effectively promote and sell its products,” the complaint states. “Indeed, [Virginia Distillery’s] labeling of its products intentionally misidentifies the true geographic origin of its products in an effort to trade on the good will and prestige associated with Scotch whisky.”

The distiller also produces special whiskeys, including one in collaboration with and named for a social media personality known as Scotch Trooper, a whiskey fan who made a name creating photos of Star Wars figures posed with whiskey bottles and glasses.

Last year, Scotch Trooper was enjoined from making the photographs after a complaint was filed with Distilled Spirits Council, claiming the social media celebrity was advertising liquor to children by posing toys next to alcohol.

The association’s lawsuit notes that United States regulations preclude the use of the word “Highland” or “Scotch” on a whisky that is not wholly produced in Scotland and that Scotch whisky must be made entirely in Scotland.

But the labels were approved by the federal Department of the Treasury’s Alcohol and Tobacco Tax and Trade Bureau.

TTB personnel review artwork and verbiage of all alcoholic beverages sold to the public, from beer and wine to liquor. The agency sets label information requirements, including alcohol content, maker or importer, brand, category, a federal government-approved health warning, net contents of the container and country of origin.

The TTB approved the hyphenated Virginia-Highlands designation as different than being from Scotland. Moore said that Scotch Whisky Association itself weighed in on the label’s creation.

“Our team invested countless hours and took the necessary and appropriate steps to design labeling for the series in conjunction with the federal TTB regulations and an additional inquiry from the Scotch Whisky Association,” Moore said. “We’ve always been extremely transparent about our production process, from our labeling to the product’s marketing.”

Moore said his company is preparing to release this year its first full American single-malt whiskey, called “Courage and Conviction.” The distillery is also hoping to soon expand its distribution nationwide.

“We are confident this complaint will be resolved, and we will be responding through the court system,” Moore said. “We stand behind our product and its labeling.”

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