The Scotch Whisky Association v. Macaloney Brewer & Distillers Ltd.
In March, 2021 the Scotch Whisky Association (“SWA”), a Scotland based trade association of the Scotch whisky industry, and Whyte and Mackay Limited, a Scotland based distilling and bottling company, commenced an action in the Supreme Court of British Columbia against Macaloney Brewer & Distillers Ltd., the Victoria, BC based owner of Macaloney’s Caledonian Distillery. Macaloney’s distills, matures, bottles and sells whisky.
The SWA asserts that Macaloney’s whiskies are marketed and branded in a way that would deceive or confuse consumers into believing its product is bona fide Scotch whisky. It’s interesting to note that in their lawsuit the plaintiffs SWA and Whyte and Mackay don’t seek damages, or an order preventing Macaloney’s from distilling and bottling single malt whisky – instead they seek an injunction restraining what they call Macaloney’s “misleading branding and marketing” and an order that Macaloney’s destroy all such packaging and marketing materials.
Scotch whisky has been imported and sold in Canada since the 1800s, and over the decades has developed exceptional goodwill and reputation amongst consumers worldwide, including in British Columbia.
The SWA says that Canada is Scotch whisky’s 15th largest global export market, with exports worth in excess of $160 million dollars in 2019. The characteristics of Scotch whisky are specific to its geographic origins and are the result of production processes, carefully regulated by law in Scotland. This is recognized by various multilateral trade agreements to which Canada is a party, the Trademarks Act which recognizes Scotch whisky as a protected geographical indicator of a whisky that has been distilled and matured in Scotland, as well as the Food and Drug Regulations.
The SWA says that Scotch whisky, as a geographical indication, is well understood by British Columbians to designate a category of premium quality whiskies with the unique characteristic of having been distilled and matured in Scotland. Geography aside, there can be no real dispute that Scotch is widely understood, even by non-drinkers, to be a superior category of whisky in an otherwise crowded marketplace.
The role if the SWA (in part) is to protect the Scotch whisky brand by taking action against distillers and bottlers who seek to pass off their whisky as Scotch whisky, or take unfair advantage of Scotch whisky’s reputation by adopting names or images which are evocative of Scotland.
Long-time readers of Alcohol & Advocacy, and fans of Canada’s burgeoning single malt whisky scene, will not doubt be familiar with the SWA’s previous attempts to stymie Glenora Distillery in Cape Breton, NS from marketing their whisky in conjunction with the prefix “glen”. Alcohol & Advocacy unpacks that decade-long battle that ended in the Federal Court of Appeal, after leave to the Supreme Court of Canada was denied, here.
The SWA’s Allegations
The plaintiffs, in their notice of civil claim, say that the word “Caledonian” is a common dictionary word meaning something related to Scotland, the Scottish Highlands, or a person from Scotland. The SWA points out that there are historic and current associations with the term Caledonian and Scotch whisky products.
The plaintiffs complain that Macaloney’s, by incorporating the word Caledonian into both the name of its product and its distillery, when read and viewed alongside other aspects of the distiller’s packaging, including references to the Scottish heritage of the distillers, geographic locations in Scotland, and the descriptor “island single malt whisky”, this collectively amounts to a “blatant attempt” by Macaloney to circumvent the legal prohibitions against the use of the protected geographic indication of Scotch whisky and misrepresent itself to consumers as a whisky originating from Scotland.
The SWA calls Macaloney’s activities “misleading”, and an attempt by Macaloney’s to deceive consumers in British Columbia into believing that their products are spirits from Scotland or Scotch Whisky, when they are not. This says the SWA has permitted Macaloney to make “unlawful profit” which in turn has caused Whyte and Mackay to lose sales, and has eroded the goodwill and reputation of whisky originating from Scotland.
Serious allegations indeed.
Macaloney filed its response to civil claim in April, 2021.
Macaloney’s denies the SWA’s assertions, and in its response to civil claim states simply that its products at all material times have been labelled as being distilled, matured and bottled in Victoria, British Columbia and as a product of Canada, or as a Canadian single malt whisky.
Moreover, Macaloney’s states that its products are sold in cartons with a map of Vancouver Island, and the descriptive text makes reference to, amongst other things, Vancouver Island and the Pacific Ocean. At no time have any of Macaloney’s whiskies (that are the subject of this litigation) been labelled as Scotch, Scotch whisky, or having been distilled in Scotland.
With respect to its use of the term “Caledonian”, Macaloney’s says that the word is not itself a trademark or geographic indication, and the word has been used in Scotland and elsewhere in a variety of different contexts and is not distinctive of any particular product, region or place. Macaloney’s observes for example that Caledonia is the name of a street in Victoria, and the names of towns in Ontario, Wisconsin, Minnesota and Michigan, and a county in Vermont. In fact, “New Caledonia” is the former name of the region now known as the province of British Columbia. The name Macaloney is the surname of whisky maker Graham Macaloney, and the distillery’s master distiller and whisky consultant were all born in Scotland and were familiar with traditional Scottish methods of production.
Macaloney says this lawsuit should be dismissed with the plaintiff’s ordered to pay its legal costs. You can read Macaloney’s statement here.
This action remains at a very early stage, and it is far too soon to know if it will end up before a judge some months or years from now, or get resolved quietly out of court like most lawsuits do.
Alcohol & Advocacy will be monitoring the litigation and encourages readers to examine a bottle of Macaloney’s and ask themselves: is this a Canadian whisky attempting to trade as Scotch? Or distillers from Scotland making whisky in Canada?
*Alcohol & Advocacy publishes articles for information purposes only. They are not a substitute for legal advice, and persons requiring such advice should consult legal counsel.
*The author of this post has reviewed the pleadings in this action but is not involved in the litigation. This post reflects the author’s own summary of the allegations made by the parties, and is not an expression one way or the other of the accuracy of facts alleged or the merits of any party’s legal position.