Scotch whisky – labelling and bottling

The Scotch Whisky Association report that approximately 22 million casks lie maturing in excise warehouses across Scotland – that’s an incredible 12bn bottles (700 ml) of Scotch whisky that will enter the market in the future¹.

There are many factors to consider when deciding when the time is “right” to bottle a cask – including the alcohol strength of the spirit, commercial requirements, and achieving the optimum flavour profile. In advance of bottling, the design of the label must be considered carefully to ensure compliance with regulatory restrictions and requirements. Failure to do so carries a risk of enforcement action, and a possibility of civil claims if the intellectual property of another brand or product is infringed.

Therefore, as well as considering your preferred “look” for the label and packaging, there are important regulatory requirements and legal considerations to be kept in mind at the design stage.

This article will provide an overview of the labelling requirements and provide some practical advice on the process for bottling casks of Scotch whisky. The creation of a brand and the advertising of Scotch whisky will be considered in a later article.

 

The Scotch Whisky Regulations 2009

Formal regulation of Scotch Whisky is contained in the Scotch Whisky Regulations 2009 (the “Regulations”). The Regulations set out the regulatory requirements for the production of Scotch whisky. Only whisky produced in accordance with the Regulations can be sold as Scotch whisky.

Amongst other requirements, the Regulations specify that for a spirit to be sold as Scotch whisky, it must have been produced (and matured) in Scotland; have matured for at least 3 years; and have only matured in an excise warehouse or other permitted place.

The Regulations also contain requirements for particular categories of Scotch whisky – comprising Single Malt Scotch Whisky, Single Grain Scotch Whisky, Blended Malt Scotch Whisky, Blended Grain Scotch Whisky, and Blended Scotch Whisky.

Whilst the minimum period of maturation of Scotch whisky is 3 years, many casks are matured in warehouses across Scotland for a far greater period of time. However, for the spirit to be sold as Scotch whisky, the alcohol strength (ABV) must not drop below 40 percent. Over time, allowing for evaporation of the spirit whilst the cask matures (the angel’s share, approximately 2% a year), the alcohol strength (and volume) of the whisky reduces. Care therefore needs to be taken when maturing whisky that, whilst waiting for an optimum flavour profile, the spirit will still meet the technical requirements of Scotch whisky. In practice, casks are carefully monitored by warehousekeepers and re-gauged to test the alcohol strength of the spirit as it continues to age.

 

Labelling

The Regulations contain detailed requirements that must be met when designing the label for Scotch whisky. These requirements include the following:

1. Category of whisky²: there is a requirement that the category of the whisky (noted above) must be stated on the bottle (and all packaging used for marketing and transportation purposes). The Regulations also contain provisions about the way in which this information is to be presented on the label. For example, the name of the category must be printed “in a conspicuous place in such a way as to be easily visible and legible to the naked eye” and printed in such a way as to give equal prominence to each word in the name of the category. For example, it would not be permitted to have the words “Scotch Whisky” in a larger font size than “Blended” on a bottle of Blended Scotch Whisky.
   
   
2. Names of distilleries and distillers³: the Regulations contain a list of names of distilleries which must not be used as a brand name (or part of a brand name) or be used in a “similar position in terms of its positioning or prominence” unless the whisky has been wholly distilled at that distillery. The list is contained in Schedule 1 of the Regulations, and includes the name of over 100 distilleries in Scotland. Scotch whisky must also not be labelled, packaged, advertised or promoted in any way which, considering the product as a whole, would create a likelihood of confusion by consumers as to the place of distillation of the whisky.
   
   
3. Locality and region geographical indications⁴: Scotch whisky must not be labelled, packaged, advertised or promoted in a way that includes the name of a protected locality or a protected region unless the Scotch whisky has been distilled in that locality or region. The protected regions are Campbeltown and Islay, and the protected localities are Highland, Lowland and Speyside. The Regulations also contain provisions which prohibit Scotch whisky being labelled, packaged or promoted in a way that includes any reference to a name that is similar to a protected locality or region such that it may create a likelihood of confusion by the public as to where the spirit was distilled.
4. Maturation, age and distillation statements⁵: the Regulations prohibit labelling, packaging, selling or advertising Scotch whisky in a way that includes a reference to when it was distilled unless:

a) the maturation period or age of the whisky refers to a single calendar year;
b) all of the whisky was distilled in that year;
c) the year of bottling, maturation period of the whisky, or the age of the whisky must be stated; and
d) the reference to the year of bottling, maturation period, or the age of the whisky appears in the same “field of vision” as the reference to the age of distillation.

In practice, therefore, only the year of distillation of the youngest spirit in the bottle can be referenced in the label, packaging and advertising materials.

These measures are intended to standardise the way in which Scotch whisky is labelled and promoted, to protect the Scotch whisky brand and avoid confusion by consumers. It can also, indirectly, offer protection to an individual brand of Scotch whisky (i.e. by prohibiting labelling which could create likelihood of confusion by consumers).

The SWA offer a checking service for proposed labels. Whilst the SWA will not confirm that the label meets the requirements under the Regulations, the SWA may advise of any apparent issues. The SWA has also produced guidance on the labelling requirements under the Regulations, which is available here.

Enforcement action can be taken for non-compliance of the requirements in the Regulations. In addition, care needs to be taken to ensure that another brand’s intellectual property is not infringed (for example, by using a name that causes a likelihood of confusion with another brand on the market). Court proceedings for an interdict (injunction) could be raised in all relevant countries where the whisky is being sold and a claim for damages could be made. This can be an expensive process – particularly if it involves an international brand.

 

Bottling

There are many factors to consider when deciding the point at which to bottle a cask. For example, reaching a preferred age of the whisky, achieving the optimum flavour profile, or meeting a business need.

If you are considering the export of Scotch whisky, it must be remembered that Scotch whisky cannot be exported in casks – it must be bottled first or exported in a container. Further, Single Malt Scotch Whisky can only be exported from Scotland in bottles that are ready for retail sale and cannot be re-bottled outside Scotland.

Regardless of the reason for bottling, advance planning is required. The following is an overview of key practical considerations for the process:

1. Identify an authorised bottling facility: HM Revenue and Customs (“HMRC”) authorise persons and properties in which the bottling of Scotch whisky can be carried out. Many warehouses which are authorised by HMRC for the maturation of Scotch whisky are also an authorised bottling facility. Enquiries should be made of the warehouse to confirm whether they are authorised to bottle casks. If they are not, arrangements will need to be made for the transfer of the cask for bottling. A search of authorised warehouses can be made through HMRC’s Spirit Drinks Verification Scheme “look up” service online available here.
   
   
2. Confirm the scheduling for the bottling: Enquiries should be made at an early stage to confirm the availability of the facility to carry out the bottling. There can be busy periods for bottling, and it is important to have the bottling scheduled in advance. As noted above, the alcohol strength of the whisky must not fall below 40 percent to be sold as Scotch whisky. There may also be commercial reasons for requiring the bottling of casks within a particular timescale.
   
   
3. Instruct the cask to be re-gauged: Related to the point above, a test of the alcohol strength of the cask (known as “re-gauging”) should be carried out in advance of bottling.
   
   
4. "Finishing" the whisky: The flavour profile of the whisky should be considered, and whether any steps are to be taken to “finish” the whisky. In many cases, casks are bottled straight from the cask, with only a simple filter carried out. However, there are other options to consider – for example, transferring the spirit to another cask to achieve a particular flavour profile; adding purified water at the time of bottling to achieve a particular alcohol strength and flavour; or applying a chill filter to the whisky at bottling.
   
   
5. Instructions for bottling: Consideration should also be given to the labels, bottles and packaging requirements. It can take time to design and source bespoke items, which should be factored into the timescale for the bottling process. Some excise warehouses offer assistance in design and sourcing of these products.
   
   
6. Excise duty: it must be remembered that excise duty becomes due and payable to HMRC as soon as the whisky leaves the excise warehouse. The current rate of excise duty is payable at that time, and so this sum should be checked and calculated in advance. Alcohol duty rates can be checked here.

 

Comment

The bottling of whisky is the final (and most exciting) stage in the cask journey. However, the design of labels for Scotch whisky is carefully regulated, and the restrictions and obligations must be met.

Our team of regulatory experts at DLA Piper based in our Scottish office in Edinburgh have experience of advising on the regulatory requirements, as well as industry custom and practice, and can provide advice to assist you.

DLA Piper's Scotch whisky team has experience of advising clients across the globe in the distilled spirit sector and would be pleased to discuss any issues which arise from the terms of this brief guide.

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¹ Facts & Figures (scotch-whisky.org.uk)
² Regulation 8
³ Regulation 9
⁴ Regulation 10
⁵ Regulation 12