Another lawsuit claims Templeton Rye deceived customers

A third class-action lawsuit has been filed against Templeton Rye, this one in Polk County District Court.

The Carroll County-based whiskey company is already facing two other lawsuits filed by Chicago law firms in Illinois. Each of the lawsuits allege Templeton Rye's marketing deceived customers, including not disclosing on bottles that the spirit is made using a stock whiskey bought from an Indiana distillery.

The company's owners, however, argued Monday in a meeting with The Des Moines Register's editorial board that they can still claim locally made status, as they add their own ingredients at their Templeton facility. Those ingredients, recommended by a Kentucky flavor engineering company, help replicate the taste of the prohibition-era whiskey made by Alphonse Kerkhoff, the grandfather of co-founder Keith Kerkhoff.

"Templeton Rye is very unique," Kerkhoff said Monday. "To say it's a stock whiskey made in Indiana that goes directly into the bottle is totally false. It couldn't be further from the truth."

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In an August interview with the Register, co-founder Scott Bush and the company's chairman disclosed that the base ingredient in Templeton Rye is a rye whiskey produced by Indiana-based MGP Ingredients. That admission led to the lawsuits, claiming violations of Iowa and Illinois consumer protection laws.

In the most recent lawsuit, filed in Polk County, attorneys argue the company deceived customers with claims that the whiskey is distilled using a "prohibition-era recipe." The company's marketing materials highlight the whiskey's ties during prohibition to Chicago bootlegger Al Capone.

Currently, the cap on each bottle is topped with a seal that reads "prohibition-era recipe." But, the original recipe handed down by Kerkhoff's grandfather could not legally have been called a "rye whiskey" due to its rye content being too low, Kerkhoff said.

The decision to brand and market the whiskey was intended to capitalize on the national popularity of the illegally distilled rye whiskey made in Templeton during prohibition.

"(Templeton Rye) was known in New York City, it was known in San Francisco," Kerkhoff said. "It had a real rich history. We wanted to stay with the name Templeton Rye … that's why we had to do what we did."

Before the company rolled out its first bottles on store shelves in 2006, Kerkhoff and Bush provided Louisville, Ky.-based Clarendon Flavor Engineering two samples: One of the stock MGP rye whiskey and another of the prohibition-recipe. The Kentucky company recommended a set of ingredients to achieve the prohibition-era flavor, though Kerkhoff would not disclose the ingredients in the Monday meeting.

In labeling the bottle and producing the whiskey, the company also relied on approvals from the federal Alcohol and Tobacco Tax and Trade Bureau, Kerkhoff said. The bureau approved Templeton Rye's labels and twice completed audits of the company and its facilities without mentioning any concerns about consumer fraud, he said.

The company is also taking steps to disclose more information about the whiskey's origins, Bush said. Though the words "prohibition era recipe" currently remain on the cap of each bottle, labels will now include that distillation is done in Indiana, he said.

"We've come together and said, 'Fine, let's be the most transparent company in the whole industry then.' "