Diageo Will ‘Vigorously’ Defend Itself in Court After Losing Appeal to Dismiss Whisky Fungus Lawsuit
A Scottish couple is taking Diageo to court over allegations that the company is responsible for a whisky fungus outbreak that devalued their home. (Photo: Pavlo Gonchar / SOPA Images/Sipa USA)(Sipa via AP Images)
On Tuesday, The Spirits Business reported that a lawsuit a local couple filed against the spirits behemoth, Diageo, is moving forward. The lawsuit was made over allegations that the distillery was responsible for an outbreak of whisky fungus. Diageo attempted to have the case dismissed for a second time and failed again.
The lawsuit was first filed against Diageo by Thomas and Gail Chalmers, two local residents of Bonnybridge, Scotland, in 2014. The couple alleges that the whisky fungus has damaged their home and caused it to depreciate.
According to The Spirits Business, the value of the house “has been reduced by approximately 5% to 10%.”
In July, the Chalmers won the right to sue Diageo, despite the spirit company’s attempt to have it dismissed.
“We are disappointed with the court’s decision and will continue to defend ourselves vigorously in these proceedings,” a Diageo spokesperson said in response to the court’s decision to move forward with the lawsuit.
The case was heard on January 19 by the Lord Justice Clerk Lady Dorrian, alongside Lord Matthews and Lord Armstrong.
Whisky Fungus: A Growing Problem That Sets Distilleries and Residents at Odds
As the whisky industry continues its meteoric rise — Statista reports that the revenue of the scotch whisky industry is expected to reach $67.9 billion in 2024 — so does its production output.
Whisky fungus, otherwise known as baudoinia compniacensis, is a black fungus that feeds off ethanol vapors, or the angel’s share. The mold resembles toxic black mold and can often be found on the sides of buildings and houses. A heat-shock protein from the ethanol vapors makes the mold quite difficult to get rid of.
Cases of whisky fungus have surfaced in places like Maine, New York and Tennessee.
Although there is no known evidence that Baudoinia is toxic, little medical research has been done on the subject.
It is a fairly common occurrence for residents afflicted by the fungus to take distilleries to court over the outbreaks. As for the most recent legal battle with Diageo, it appears the courts have leaned in favor of the Chalmers, and intend to proceed with the lawsuit.
“There is no lack of clarity as to the case the defenders [Diageo] have to answer,” Lady Dorrian, the justice, said in her ruling.
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