The entire pipe is varnished or whatever they coat it with. Meaning, it's even inside the bowl. You can fight to get through their pre-coat, to the varnish and somehow get it out, or just leave it and fight with a (in my opinion) with a bad tasting pipe for maybe a dozen full bowls, after your break in. Peterson's also seem to take longer to break in, I think.
That being said. I have four Pete's and one of them (my smooth Malahide) is in the five pipes I usually gravitate too. It smokes wonderfully now that I've gotten past my initial dislikes about it.
Bottom line, Pete's are wonderful, but it it doesn't seem right at first, try powering through it and you'll have a great friend.