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Al Capone Liked It, But …

CHICAGO (CN) - Templeton Rye Spirits deceived consumers into paying $35 a bottle for its whiskey, claiming it's made in small-town Iowa from a Prohibition-era recipe beloved by Al Capone, though it actually is distilled in Indiana from a stock recipe formerly owned by Seagrams, a class action claims.

Lead plaintiff Christopher McNair sued Templeton Rye Spirits in Cook County Chancery Court.

Templeton Rye advertised its product as small-batch whiskey, made in Templeton, Iowa, pop. 362.

"Defendant's Templeton Rye is marketed as the revival of a Prohibition-era whiskey recipe that was the favorite drink of Chicago mobster Al Capone," the complaint states. "Since its rebirth within the past decade, defendant has marketed Templeton Rye as being 'small batch' and 'made in Iowa.' Consumers, seeking an alternative to mainstream, mass-produced alcoholic beverages have purchased hundreds of thousands of bottles of defendant's Templeton Rye and have paid a premium price over other whiskeys to obtain those qualities.

"However, directly contrary to these representations, defendant's whiskey isn't actually made in Iowa. The whiskey - despite being named after Templeton, Iowa and owned by a company that owns a distillery there - is instead distilled and aged at the Indiana factory of MGP Ingredients, Inc. that also distills and ages whiskey for countless other brands. In defendant's own words, once the source of its whiskey was publicly revealed: 'It's very simply put: We buy the whiskey in barrels from (MGP),'" McNair says.

Templeton Rye's Facebook page prominently features a picture of its Iowa distillery, and a great deal of its marketing focuses on its small-town roots.

But "there is nothing 'local about the distillery where defendant's Templeton Rye is made. Rather, it is actually made in a large Indiana factory that also makes other 'cost effective' 'alcohol products.' As explained by Vern Underwood, chairman of Templeton, after news of its deception was publicized, the choice to not distill its own product was made because '[w]hen we got involved in this thing, I thought, 'I'm not going to spend millions of dollars on the distillery not knowing if I'm going to get booted out of town or never sell any of this stuff,'" according to the complaint.

Underwood told the Des Moines Register in August that Templeton's whiskey is made from an MGP stock recipe originally owned by Seagrams, also used by Bulleit and High West whiskies. It is then blended with other whiskies and water in Templeton before being bottled and shipped.

Underwood promised that Templeton will change its label to indicate that its whiskey is distilled in Indiana, but could not tell the Des Moines Register why the company decided to name Iowa as the place of distillery, according to the Register's Aug. 29 story.

"Relying on defendant's misrepresentations, McNair purchased more than a dozen bottles of Templeton Rye from 2008 to 2014, paying approximately $34.99 per bottle at retailers including Benny's Beverage Depot and Gold Crown Liquors," McNair says in the lawsuit.

"If plaintiff knew that Templeton Rye was not made in Iowa but was distilled and aged at MGP's facilities in Indiana, he would not have purchased Templeton Rye or he would have paid less for each bottle."

McNair seeks damages for fraud and unjust enrichment.

He is represented by Amir Missaghi with Edelson PC.

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