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BEAM Inc (BEAM), Diageo plc (ADR) (DEO): Brown-Forman Corporation (BF.B) Sparks White Lightning

The distillers recognize the potential the craft market represents (or the threat) and have already begun making acquisitions. Just as Anheuser-Busch and SABMiller bought up craft brewers to catch some of that lightning in a bottle, Diageo plc (ADR) (NYSE:DEO) picked up Cabin Fever Distilling last year. Yet unlike craft brewers, who are actually brewing up their own barley, malt, and hops, many so-called craft distillers apparently outsource their straight bourbon from a wholesaler in Indiana.Perhaps Jack Daniel’s itself doesn’t so much need protection, but rather it’s the purity of the product that does.

Since the Tennessee legislature changed the law allowing the operation of craft distilleries, there has been greater production of moonshine, or what they like to call Tennessee white whiskey (not coincidentally, Jack Daniel’s has recently introduced its own unaged White Whiskey brand). Obviously, with the new state regulations in place on what constitutes “Tennessee whiskey,” distillers are worried their operations will be thrown in the hoosegow. The new law calls for a one-year license suspension.

Call it what you will — white lightning, mountain dew, or hooch — but a rose by any other name still smells as sweet. There’s a long, storied history of moonshining in Tennessee, one that even the real Jack Daniel’s could swallow, and which no law or regulation can contain.

As William Faulkner is reputed to have noted, “There is no such thing as a bad whisky. Some whiskies just happen to be better than others.”

The article Brown-Forman Sparks White Lightning originally appeared on Fool.com and is written by Rich Duprey.

Fool contributor Rich Duprey has no position in any stocks mentioned. The Motley Fool recommends Beam, Boston Beer, and Diageo. The Motley Fool owns shares of Boston Beer.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

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