Bottled in bond refers to American-made spirit that has been aged and bottled according to a set of legal regulations contained in the United States government's Standards of Identity for Distilled Spirits (27 C.F.R. 5.21, et. seq.), as originally laid out in the Bottled-in-Bond Act of 1897,
To be labeled as "Bottled-in-Bond" or "Bonded," the spirit must be the product of one distillation season and one distiller at one distillery. It must have been stored (i.e., aged) in a federally bonded warehouse under U.S. government supervision for at least four years and bottled at 100 (U.S.) proof (50% alcohol by volume). The bottled product's label must identify the distillery (by DSP number) where it was distilled and, if different, where it was bottled.
While the regulations apply to all spirits, in practice, most bonded spirits are whiskeys.
A reaction to adulteration among spirits, the Bottled-in-Bond Act made the United States government the guarantor of the whiskey's authenticity. Although without assurance of quality, "bottled-in-bond" whiskey came to be regarded as "the good stuff."
One purpose of the Bottled-in-Bond Act of 1897 was to guarantee that the product the consumer was buying was really whiskey, according to a standardized definition. To ensure compliance, Treasury agents were assigned to control access to so-called bonded warehouses at the distilleries. Prior to the Act's passage, much of the whiskey sold as "straight whiskey" was anything but. So much of it was adulterated out of greed – flavored and colored with iodine, tobacco, and other substances – that some perceived a need for verifiable quality assurance. The practice was also connected to tax law, which provided the primary incentive for distilleries to participate. Distilleries were allowed to delay payment of the excise tax on the stored whiskey until the aging of the whiskey was completed (and the supervision of the warehouse ensured proper accounting and the eventual collection of the tax). This combination of advantages led a group of whiskey distillers, led by Colonel Edmund Haynes Taylor, Jr. (creator of Old Taylor bourbon), joined with then Secretary of the Treasury John G. Carlisle to fight for the Bottled-in-Bond Act.
To this day, some consumers consider the term as an endorsement of quality, but many producers consider it archaic and do not use it, even on products that qualify for the designation. However, since bottled-in-bond whiskey must be the product of one distillation season, one distillery and one distiller, whereas ordinary straight whiskey may be a product of the mingling of straight whiskeys (of the same grain type) with differing ages and producers (within a single State), it can be regarded as a better indication of the distiller's skill – compare single malt whisky, small batch whiskey, and single barrel whiskey.
The types of American whiskey typically labeled as "Bonds" are Bourbon whiskey, rye whiskey, and corn whiskey. Laird's also makes an Apple Brandy that is Bottled in Bond.