Alcohol-free 'Scotch whisky' made in Mexico using artificial flavours sparks legal battle
It looks like Scotch and features the phrase, ‘Scottish whisky’ on its label, yet contains no alcohol, uses artificial flavours and is allegedly produced not in Scotland, but more than 5,000 miles away in Mexico.
Little wonder, then, when the guardians of Scotland’s most famous export discovered that an American firm was making and selling its so-called ‘alcohol free’ beverage to consumers across the US, it left a bad taste in the mouth.
Advertisement
Hide AdAdvertisement
Hide AdNow, the Scotch Whisky Association (SWA) is toasting success after reaching a crucial court settlement as part of its international efforts to safeguard the unique and distinctive characteristics of Scotland’s national drink.
In what represents the latest example of the SWA taking legal action to protect against imitation and counterfeiting, it has secured a consent judgement in a Texas court that prevents the company in question, Arkay Beverages, from producing or selling its so-called ‘Scottish whisky’ style drink.
The offending product in question was sold by Arkay via its website, as well as through well-known third-party retailers, including Amazon. However, unlike traditional Scotch, which is made from only three natural ingredients - cereals, water and yeast - Arkay’s version featured the likes of xanthan gum, carboxymethyl cellulose, and potassium sorbate, according to the SWA.
The trade body for the Scotch whisky industry said it first became aware of the alcohol-free whisky flavoured drink being sold in 2018, but last year, learned the firm had revamped its labelling to display the ‘Scottish whisky’ branding more prominently. As a result, it took the decision to go to court stateside earlier this year, warning Arkay’s actions were causing “irreparable harm and damage” to the Scotch whisky industry.
Advertisement
Hide AdAdvertisement
Hide Ad

Its complaint, filed with the US District Court in the Southern District of Texas, pointed to a number of well-established rules and regulations put in place to ensure Scotch whisky is legitimate. They include the stipulations that whisky can only be distilled in Scotland from water and barley, is matured in oak casks in Scotland for at least three years, and crucially, has a minimum alcoholic strength by volume of 40 per cent.
Arkay’s version of whisky, the association’s lawyers pointed out, did not tick any of those boxes, and failed to meet the regulations and certification standards enshrined in landmark legislation introduced in the UK in 2009. The firm’s use of the phrase, “Scottish whisky”, the complaint added, was intended to create an “improper association” and “trade off of the goodwill and prestige associated with Scotch whisky in an effort to promote and sell a non-alcohol product”.
The Edinburgh-based SWA, whose members include well-known brands such as Johnnie Walker, Glenfiddich and Glenmorangie, said it had a “long history” of enforcing its rights against Arkay’s founder and president, Reynald Grattagliano, pointing to legal action it brought in Scotland against him and two of his firms which were using the name ‘Scottish spirits’, despite the fact they were not Scotch, and were not produced in Scotland.
The two parties settled that legal action in 2011, and as part of the settlement, the SWA said, Mr Grattagliano agreed he would not advertise, promote, sell or distribute products labelled with the words whisky and Scottish, unless the products in question were genuine Scottish whisky.
Advertisement
Hide AdAdvertisement
Hide AdBut under his new business, Arkay, the SWA said Mr Grattagliano was selling alcohol-free spirits via its website, as well as via online retailers. One infringing product, which utilises the term, Scottish whisky, was actually produced in Mexico, its complaint claimed.


In 2019, the SWA said Arkay’s alcohol-free whisky was “illegal under EU law”. But Arkay hit back, claiming its products were labelled as an “alcohol-free whisky flavoured drink”. At the time, the firm told the Spirits Business website: “As you can see the words ‘flavoured drink’ changes totally the meaning of the sentence. Our slogan says clearly ‘it’s not whisky’, contrary to the SWA claim. We clearly say in our advertising ‘it’s not whisky’, so where is the problem?”
After the SWA lodged its complaint in February, it was expected the case would drag on. But court documents seen by The Scotsman show the parties have agreed to what is known as a consent judgement and permanent injunction.
As part of the deal, Arkay and Mr Grattagliano, are no longer able to manufacture, distribute, sell or advertise any products in the US known as “Scottish whisky” or “Scotch whisky”, unless the drink in question happens to comply with the 2009 regulations. They must also recall unsold bottles of the whisky drink, and destroy all stock of the offending labels.
Advertisement
Hide AdAdvertisement
Hide AdThe agreement, detailed in a ruling by US district judge, Charles Eskridge, also orders Arkay to pay the SWA $5,000 (£3,800), and prevents the firm from registering any trademark or domain name relating to the SWA’s intellectual property.
Mr Grattagliano told The Scotsman he had “settled amicably” with the SWA, and as part of the settlement, had promised and committed that Arkay would not make, produce, or distribute its “alcohol free Scottish whisky flavoured drink” in Mexico, the US, or anywhere else in the world.
Lindesay Low, deputy director of legal affairs at the SWA, said the association was “extremely pleased” to be able to settle the case at an “early stage”.
He said: “The USA is the largest market for Scotch whisky by value, with four bottles per second being exported in 2023. We secured enhanced legal protection in 2022 when Scotch whisky was recognised as a certification trademark, building on its recognition under federal regulations, meaning only whisky produced in Scotland according to UK law can be sold under that name.”
Advertisement
Hide AdAdvertisement
Hide AdEarlier this year, the SWA successfully stopped the sale of a fake Scotch whisky, branded as ‘Dian The Legend’, in South Korea. Bottles of the drink were labelled as having been produced in Jordan rather than Scotland, and had a strength of only 35 per cent ABV rather than the legal minimum of 40 per cent.
Comments
Want to join the conversation? Please or to comment on this article.