BC Business
Graeme Macaloney is butting heads with the Scotch Whisky Association.
There are a few elements to Graeme Macaloney being sued by the Scotch Whisky Association for, among other things, using his own name.
The first is that Macaloney, who talks with a thick Scottish accent that shows zero sign of fading even though he’s lived in Canada for 30 years, is both incredibly innovative and old-school tough.
The latter is the result of growing up in a family of steelworkers in whose footsteps he thought he’d follow. “Someone said, Graeme, you’ve got enough smarts to go to university. I said, You’ve got to be joking—that was never a possibility in my mind.”
But they were right. Macaloney eventually got a bachelor’s, master’s and a PhD, all in biochemical engineering and fermentation. He ended up working for U.S. pharma giants like Eli Lilly and Co. and Pfizer before deciding that his heart was in producing whisky and craft beer.
“As a fermentation engineer, the process of making beer or making whisky is not dissimilar to making antibiotics or vaccines,” he says. “There’s a lot of overlap in technology.”
Macaloney came to Victoria from Edmonton with the goal of starting a whisky distillery and craft brewery under one roof. So in 2014, before the idea of crowdfunding had really taken hold in Canada, he went across the country and implored folks to join his venture. Having assembled 600 investors, he returned to the West Coast and slowly started to build the project, recruiting industry legend Jim Swan on as a consultant. (Sadly, Swan passed away a few years ago.)
Macaloney’s Caledonian Distillery & Twa Dogs Brewery launched in 2016, with the help of those investors, plus government backing and a raise on crowdfunding website FrontFundr.
In recent years, all the effort has started to pay off. Macaloney and his team of 19 have been regulars on the awards circuits of late for their infusion of B.C. ingredients with legendary whisky know-how. That’s included Gold wins at the 2020 World Whisky Awards in the World’s Best New-Make and Canadian Single Cask Single Malt categories.
A young Canadian distillery winning Gold in an international category at the World Whisky Awards? It just doesn’t happen. “Yeah, that got the world’s attention,” Macaloney says.
It also caught the eye of the Scotch Whisky Association (SWA), who recently filed a lawsuit against Macaloney for allegedly marketing his product too much like scotch.
Because Scotch whisky is registered as a geographical indication, no one is legally allowed to market any bottle of liquor produced outside of Scotland as scotch. The same kind of rules apply to sparkling wine that doesn’t come from Champagne, France.
“The SWA plays a valuable role. They often track down counterfeit whiskies and stop that illegal contraband; I respect and admire them for that,” says Macaloney, who notes that while the Canadian whisky export market is worth about $300 million and the American, Japanese and Irish cohorts each hit around the $2-billion range, scotch is an $8-billion industry.
“But the SWA also have big money backing behind it, and half the staff is lawyers,” he maintains. “So one of the unfortunate things they do and have a track record of doing is that they will use the lawsuit process—not because people are using the word scotch’—they can legally defend that. But to try and scare people from using Scottish-sounding words.”
Macaloney cites the SWA’s 2007 suit against Nova Scotia’s Glenora Distillers, in which it took issue with “Glen,” which means narrow valley in Gaelic—as an example. The Supreme Court of Canada dismissed the case, forcing the SWA to pay the legal fees.
But the association clearly wasn’t satisfied. One of the four items in its suit against Macaloney is the word “Glen” and its use on his Glenloy bottle. “The Canadian courts told them, Go away, don’t do these frivolous lawsuits on Scottish-sounding names,” says the exasperated business owner. “When you’re branding your own product, you want to tie in some of your own history. Glenloy ties into the valley my family lived in for 1,000 years.”
Another word the SWA took exception to is Macaloney’s own name. “I hope McDonald’s burgers never decides to open a whisky operation,” he says with a laugh. “But lawyers have told me that nobody has any right to stop you from using your bloody own name. How many Irish pubs are called O’Malley’s?”
Other items in the suit are the words “Caledonian” and “Island.” It’s no surprise that Macaloney finds the latter item especially ridiculous: “We’re on Vancouver Island; we’re celebrating the fact we’re on an island. And they seem to think an island whisky can only be from a Scottish island.”
All of this has happened even though Macaloney says the SWA initially approved his bottle’s usage of “Caledonian” and his name five years ago, and despite the fact that his bottles clearly say “Canadian whisky” on both the front and back.
Although Macaloney is committed to fighting the legal action and believes he’ll be able to with his army of investors and their resources in hand, that isn’t the case for many smaller distillers that have tussled with the SWA, he notes.
“What happens is, the lawyer paints a picture of reality for the small startup companies and says, You realize this could take three, six, nine years,” Macaloney says. “You’re not going to be focused on working on your business, and its going to cost you hundreds of thousands of dollars. And most of the time these guys have to back down; they bully them into backing down.”
As for his own case, one gets the sense that Macaloney won’t be pushed around. “I’m damn sure that as a matter of principle, I’m not going to let someone bully me out of celebrating my own family’s history and heritage.”
Update: BCBusiness reached out to the SWA for comment, and a spokesperson gave the following statement.
“The SWA consistently takes action in our global markets to prevent the use of Scottish indications of origin on whisky which is not Scotch Whisky. This is vital to protecting both Scotland’s national drink and to ensuring that consumers across the world are clear about whether or not they are buying whisky that is produced in Scotland.
“It’s critical to us to ensure that spirits producers in other countries do not take advantage of the quality reputation of Scotch Whisky that our industry has built up over decades. It is important that anyone who wants to purchase a bottle of Scotch Whisky can do so with the confidence that what they are buying is authentic, and that products which aren’t Scotch Whisky are clearly differentiated.
“In this instance, we have objected to the company’s use of certain words and terms that are strongly associated with Scotland on its whisky, when the company’s whisky is actually a Canadian product. This has the potential to confuse consumers.
“We never take legal proceedings lightly, and the SWA is always open to a resolution which protects both the Scotch Whisky trade and consumers without the need for additional legal action.”