WhistlePig fires up distillery, battles restrictions

SHOREHAM - Mortimer the Pig has been immortalized on the imposing new copper still at WhistlePig whiskey, located on a 467-acre farm at the end of a narrow winding road here. The still is named after the company's porcine mascot, who unfortunately, died recently in a breeding incident.

Raj Bhakta, founder and CEO of WhistlePig, told the improbable story of Mortimer's demise during a recent visit to the farm and distillery on a rainy October day. Bhakta got it in his head to create a new breed of pig, and in the process, Mortimer "dropped dead of exhaustion" trying to stop his long-time companion, Maud, from breeding with visiting Hungarian pigs.

"I felt so bad I named the still after him," Bhakta said. "But he died well, defending his maiden's honor."

The story is vintage Bhakta, who dresses like an English country gentleman, and is as idiosyncratic as his whiskey distillery in the middle of the Vermont countryside near the Lemon Fair River. The construction of the distillery in a reclaimed barn, built around 1880, is a major step forward for Bhakta, whose dream is to produce a "farm-to-bottle" whiskey using rye grown on his farm, aging the whiskey in barrels made from his own oak trees.

In the meantime, Bhakta is relying on a stash of aged Canadian rye whiskey sourced by Dave Pickerell, former master distiller for Maker's Mark, who now works as a consultant to the industry. Bhakta bottles the Canadian rye under the WhistlePig brand, and used it to break into the market in major cities from New York to San Francisco.

WhistlePig is growing quickly, expecting to produce 1,000 barrels of whiskey this year. In 2011, the company's first first full year of production, WhistlePig produced just 150 barrels.

Kara Newman, contributing editor at Wine Enthusiast Magazine, said the association of Pickerell with WhistlePig gave the brand instant credibility when it was launched in 2010.

"I think he's very gutsy to try to take on the rye whiskey space, which is already well established with lots of old names like Wild Turkey and Rittenhouse Rye," Newman said. "His secret weapon, which is not really so secret, is that he hired Dave Pickerell. He's tremendously well respected in the industry."

Newman also gives Bhakta credit for being upfront about his Canadian source of whiskey.

"A lot of brands have not been upfront," she said. "Good whiskey takes a long time to mature. You can't just open up a distillery and automatically have good 12-year-old whiskey available."

Newman gave WhistlePig a rating of 96 on a scale of 100 when it debuted in 2010, at the time the highest rye whiskey rating she had ever assigned.

"It's just me, it's subjective, but I think about WhistlePig being a very bold and rich and at the same time well-balanced whiskey," Newman said. "It has a lot of the characteristics that make rye whiskey very good and very interesting in my mind. The high rye content tends to offer a lot of spicy characteristics, a lot of cinnamon and clove, ginger sometimes, beautiful notes like that."

Black fungus scare

Bhakta's success in the marketplace has been counterbalanced by an Act 250 battle down on the farm, which Bhakta told the Free Press last year cost him $250,000 in legal fees and delayed him for two years. The trouble began when Bhakta began construction of offices, a whiskey bottling facility and associated parking on the farm without an Act 250 permit.

Established in 1970, Act 250 gives the Natural Resources Board the authority to manage the environmental, social and fiscal consequences of development, ranging from housing projects to gas wells. Farming and forestry are exempt from the Act 250 permitting process.

Bhakta assumed WhistlePig was exempt. Turned out he was wrong. The Natural Resources Board took Act 250 jurisdiction over Bhakta's entire farm, based on the distillery being a commercial operation, and a Supreme Court precedent. The precedent says once you trigger Act 250 jursidiction, it extends over the entire tract of land, unless an exception applies. WhistlePig agreed to pay an $18,750 fine for its permit violation.

Compounding Bhakta's problems, neighboring farm owners, George Gross and his wife, Barbara Wilson of Solar Haven Farm, objected to the distillery because they were afraid a black fungus that can form as a result of the aging process for whiskey would infect their berry bushes. The fungus problem is well documented surrounding large distilleries in Kentucky.

The Natural Resources Board addressed the concerns of Solar Haven Farm and other neighbors by limiting WhistlePig to just under 6,000 barrels of storage, but the dispute left a climate of personal animosity between Bhakta and his neighbors.

"It's been a huge financial and time drain," Gross said. "On the positive side, we have successfully defended our farm against whiskey mold."

Is water an ingredient, or not?

The battle over whether WhistlePig should be exempted from Act 250 continues in Environmental Court. The position of the Natural Resources Board is that the distillery is not exempt, said Pete Gill, general counsel for the NRB.

Bhakta's position remains that WhistlePig should be exempt, because it's in the best interest of Vermont to do everything it can to encourage farms making value-added products.

"If people want to come here and start a business like this that is fully utilizing the land, taking what they grow on the land and finishing it like we are, which creates jobs, it can drive big-time prosperity in this state," Bhakta said. "Clearly we know the state likes to spend money and it has one of the most generous social safety nets in the country. I'm not making any claim on whether that's the right policy, but if you want the generous safety net you need people producing money so you can give it away."

Act 250 currently holds that farms making products with more than 50 percent of the ingredients, by volume or weight, being grown or produced on the farm are exempt. For WhistlePig, the issue boils down to water.

As Leo Gibson, general counsel for Whistlepig, explained, he and Bhakta do not consider the water taken from the farm and used in the process of making whiskey to be an ingredient of that whiskey.

"It's how you make the mash, but is it really at the end of the day something we consider to be an ingredient?" Gibson said. "Not really. It's an input that allows fermentation and the distillation process to occur."

The Environmental Court, however, ruled that water is an ingredient of WhistlePig whiskey, and further ruled that it is not a farm-based product, leaving WhistlePig short of the 51 percent exemption rule. The only other farm-based ingredient is the rye grown and distilled to make the whiskey.

"If you take the position water is not an ingredient, then we're clearly over the 50 percent threshold," Gibson said. "If you do consider water to be an ingredient and don't consider it to be a farm-based product, then we're out of luck."

Whiskey maker tests VT's definition of farming

WhistlePig did win a partial victory in September, when Judge Thomas Durkin of the Environmental Court ruled that Act 250 jurisdiction applies only to the approximately 8 acres of the farm currently devoted to whiskey-making, not to the entire farm as ruled by the Natural Resources Board in 2014.

Durkin declined, however, to revisit the ingredients question. To adopt WhistlePig's argument that its whiskey should be exempt from Act 250 regulation would require a "complex chemical analysis of the finished product," Durkin wrote, something he found "unworkable."

From Bhakta's perspective, the Act 250 cap of 5,984 barrels of storage clouds the future of his pastoral distillery.

"I'm not complaining right now, but as we grow, maybe WhistlePig should have a 100,000 barrel cap, which is still 1/10th of a brand like Maker's Mark, which isn't even that big compared to Jack Daniels," Bhakta said.

This story was first published on Nov. 12, 2015. Contact Dan D'Ambrosio at 660-1841 or ddambrosio@freepressmedia.com. Follow him on Twitter at www.twitter.com/DanDambrosioVT.
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