Fake whisky (Part 2)

The Introductory Note at Fake Whisky (Part 1) explains the publication history of this distillery history. With so many redactions, rather than list them, the entire account is published uncut.

The Corrected Text

Early in 1996 someone complained to the Australian Competition and Consumer Commission (ACCC) that the advertising and the labels on Sullivans Cove whisky were false. Sullivans Cove whisky was not Sullivans Cove whisky.

The complainant (an employee who was a woman) alleged that the whisky was the same old Scotch blend that had been put into the commemorative flasks—just with a slightly different label. One word was changed. In place of the word Scotland the word Australia had been substituted. If true, this was an unusual infringement of the Trade Practices Act. The common pretence the ACCC dealt with at that time was the attempt to give exotic cache to a local product; that is, to pass off the local as foreign. This case, if true, was the reverse.

The ACCC interviewed the complainant carefully. Did she have any evidence? She did. (Note well: Lyn Lark had been on duty the day the ACCC arrived to investigate, but that she quit shortly afterwards—in the middle of 1996—was coincidental. She was expecting a child. She was not the complainant and she was not aware of the investigation. On the contrary, she had managed the importation of that whisky and had passed by the fake labels in the shop every day for over a year.)

The ACCC took the next step. Investigation. It sent in its own employees as secret shoppers to gather prima facie evidence. They bought samples, queried staff and picked up leaflets. People who knew about distilling were also asked to visit. David MacLennan was one. He was the chairman of the Small Concern Distillery and told me, ‘I went into the distillery and tried it. I thought oh my God! it was absolute crap, worse than Johnnie Walker Red Label. And can you imagine anything worse than that?’

MacLennan said to the people in the distillery, ‘This isn’t a single malt.’

‘Yes it is,’ they replied.

MacLennan gave his opinion to the ACCC.

The commission could have issued a warning but instead they sent a formal “please explain” letter to the distillery—the “target” investigators call them. The letter set out the serious allegations raised and sought, within 21 days, proof that the allegations were baseless. Further, they required the company to attend a proscribed “examination” before an ACCC commissioner and to produce any such documents and answer all such questions as the investigators demanded. The examination, presumably, ended far from satisfactorily to the commissioner because next the ACCC prepared a legal case backed with 35 affidavits.

In ACCC v Tasmania Distillery, the ACCC alleged that the distillery had engaged in conduct that was misleading or deceptive. The distillery had misrepresented the place of origin and method of manufacture of its whisky as well as its status as Australia’s only commercial whisky distillery.  

In fact, the distillery was making whisky in its own still with Tasmanian barley and Tasmanian water (though not, as stated, with Tasmanian peat—or any peat) but that whisky was all still on wood. None was in bottles. And in deed, in March 1997 (three months before the case would get to court), Sullivans Cove's barrel number one turned two years old. It was immediately prepared for bottling. To speed things up, the defloccing (which can take a month or more by gravity) was done in a day. Hosken had the cask forklifted into a chiller in the Hobart Cool Stores, refrigerated down to 3°C, then poured, cold, through a fine filter. The distillery thus produced the state’s first (and only?) chill-filtered whisky. What little colour and flavour the young spirit had obtained after such a short time in a new, raw cask was stripped out. Broken down to 37 per cent, it was almost see-through. A contractor confirmed that the whisky was almost clear when decanted but when it arrived for bottling shortly after it was dark brown. His presumption is that the whisky was coloured with spirit caramel. Another first. Hosken denies it was coloured.

But back to the case.

A court cannot put a company in the witness box; ultimately, it has to be a person (or persons)—on the court records abbreviated “Anor” (Another). The Respondent. Hosken. When the case became public knowledge the Mercury reported Hosken as saying only that ‘the company was doing its best to promote a new commercial and tourist venture’. The respondent was by then far up the cold and lonely reaches of Whisky Creek. The creek he claimed he’d crossed long before he did.

Before trial, in his Defence, Hosken had conceded that the whisky did not contain any local ingredients, had not gone through the charentais still, was not made in Tasmania nor triple distilled. In fact, it had been distilled in the Invergordon Distillery in Scotland, partially from grain spirit produced by continuous distillation and partially from pot-distilled malt spirit. The spirits had been imported by Inchcape Pty Ltd and blended (75/25) then filtered and bottled in Victoria. The bottles did not even have Tasmanian air in them. Hosken admitted that he designed the labels, caused them to be affixed, placed the ads, wrote to tourist agencies and talked to reporters. It was all just a cheap trick. His was not Australia’s only whisky distillery either* and the jig was up.

The matter came before Justice Heerey in the General Division of the Federal Court in Hobart. It proceeded by consent because the respondent pleaded guilty. No affidavits were read and the ACCC got the orders it sought on July 21st, 1997. The ACCC can seek unlimited fines, but there was no fine. Investigators told me, in practice, the ACCC usually stops at achieving an order for the malpractice to cease. Nor does it generally go after what investigators consider “the fry”, instead, ‘We go after those knowingly concerned in a contravention of the law.’ Justice Heerey ordered the distillery to publish an apology and refund all those it had misled since December 1st 1995.

The day the decision was announced Hosken—previously reported as expressing only “concern” about the effect the ACCC’s action would have on the business—was out of the state and not available for comment. The Mercury interviewed instead an employee who said he could not comment on how much of the disgraced product had been sold. The humiliating advertisement was duly placed. Hosken told me not a single customer sought a refund.

In the aftermath Hosken told the Mercury his son would soon take over. But not for long. The distillery had been offered for sale twice before without success, but on October 20, 1999 the Mercury reported the Works (though not the site itself) sold to Highland Holdings for “several million”. An eyewitness to the final negotiation told me that after a day of intense argument, a walkout, pleading, rage and even tears, Hosken signed below the figure of $1.4 million.

  • Intriguingly (and to me inexplicably) the other existing distillery referred to was not Lark but Small Concern.

Bernard LloydComment