This is one place that holds no truck with the brie-and-chablis crowd, Perrier sippers, health nuts or "neo-prohibitionists."

They are bad for business, and the only business worth talking about in this quaint town of 361 is "Tennessee sippin' whiskey," which has been made here, legally and illegally, since the Civil War days.

"Tell the people up in Washington, 'You have to start drinking more Jack Daniel's,' " Moore County Executive John M. Bennett said the other day as he sat shivering in the chilly courthouse.

The Jack Daniel distillery -- on the edge of town in a picturesque valley called, of course, Jack Daniel's Hollow -- is Lynchburg's largest employer, biggest tourist attraction and chief reason for being.

But the American liquor industry has fallen on hard times, and now even Jack Daniel has begun to feel the pinch.

Since 1982 the company has laid off 110 employes here, or almost one-fifth of its work force. The latest 56 lost their jobs Jan. 1.

This is a calamity in a place where everyone knows everyone else, and almost every family has some connection to the distillery.

"Just about my whole family works at Jack Daniel. I've got my father, my mother, two uncles, two aunts and several cousins there," said Steve Fanning, 23, a laid-off warehouseman.

"The layoffs have a terrific impact. We only have 4,560 people in the whole county," said Bennett, the county's highest-ranking elected official. "You lay 25 off and the unemployment rate shoots up 5 percent."

Lynchburg, 69 miles south of Nashville not far from the Alabama state line, has somewhat of a love-hate relationship with Jack Daniel.

People respect the company, but some resent the Norman Rockwell image it has created for the town and the way it dominates the local economy. The layoffs, and a move to stop selling a liquid mash distillery byproduct to area farmers at cut-rate prices, have intensified bad feelings.

It is, in short, enough to drive one to drink. But not here in Lynchburg.

The town has been officially dry since Tennessee passed a prohibition law in 1909, although the distillery passes out a free pint of whiskey with each paycheck on the first Friday of each month.

Company spokesmen cite a host of reasons for the layoffs, including an excise tax increase and a few bad management decisions. "Moderation" and changing public views about alcohol also come in for their share of blame.

"People are on a health kick. They are drinking more moderately," said Arthur Hancock, Jack Daniel's executive vice president. "They are very interested in keeping control of themselves. In the evening, they are concerned about driving home safely. Then, when they get there, they say, 'I'm going to jog for five or seven miles.' "

The distillery industry has supported toughened drunk-driving laws and other moves to control excess drinking.

But Hancock complained, "We're almost heading into a neo-prohibitionist era. It is really a shame."

Ironically, the great shift in public thirst during the 1970s did not hurt the sale of Jack Daniel's charcoal-mellowed whiskey. While competitors lost customers to wine, vodka and rum, Jack Daniel increased sales 16 percent annually during the decade.

The company built dozens of new warehouses and expanded its work force to take advantage of the boom. Officials now concede that the company miscalculated. "We began believing our own press releases," Hancock said.

Meanwhile, sales leveled off and increased only 1.9 percent in 1984, according to the Alcoholic Beverage Executives' Newsletter. A $2-per-gallon tax boost, which goes in effect Oct. 1, is expected to cut sales by 5 to 10 percent.

Marvin R. Shanken, editor of Market Watch, another industry publication, said Jack Daniel succeeded in the 1970s when other companies failed because of the old-fashioned, down-home advertisement used to market its whiskey.

For the last 29 years, the company has pictured Lynchburg in national magazine ads as a "tiny little town where things don't seem to have changed very much."

The image is part truth, part hokum. A visitor can still find farmers trading coon dogs from the back of their pickups here, and old men in bib overalls whittling on the courthouse square.

But the two most colorful businesses on the square -- the White Rabbit Saloon and the Lynchburg Hardware and General Store -- are operated by the distillery to preserve an old-time flavor for the 300,000 tourists who visit annually. And much of the whiskey produced here is aged and bottled at a modern plant several miles west of town, not in Jack Daniel's Hollow.

"The company spent a million dollars creating the image that we're a bunch of hicks," said Thomas G. Armour, president of the Farmers Bank. "But we're no more country bumpkins than anyone else.