As I write this, the US federal government has been partially shut down for about twenty days, due to an impasse over President Trump’s desire to build a wall on the southern border.
One of the agencies affected by the shutdown is the Tax & Trade Bureau (TTB), the division of the Department of the Treasury charged with regulating and taxing alcohol, tobacco and firearms. The TTB was created in 2003 when the old bureau of Alcohol, Tobacco and Firearms was split in two. The law enforcement functions of the agency were moved to the Department of Justice and retained the ATF name. The tax and regulation functions stayed within Treasury and were re-christened the TTB.
If you’re interested in my personal take on the politics of the shutdown check my Twitter feed and likes. You should be able to piece together my politics from those.
More interesting than my dumb opinions is how the federal shutdown, particularly the closure of the TTB, is affecting beverage producers in Michigan and elsewhere. So I reached out to some friends of the blog to ask how the shutdown has impacted their business. Here’s what they said:
At this point our biggest concern (besides the unraveling of our civil society) is getting new labels approved by the feds. I’m glad that we don’t have too many new wines that we need to get to market soon.
-Sean O’Keefe, Winemaker, Mari Vineyards, Old Mission Peninsula, Michigan
I just found out about [the shutdown] yesterday (January 8, 2019). Government shut down, tax collecting part of the TTB not shut down so I still have to do my 5120.17 annual report. So if it does affect me, I am unaware of how.
Only real effect (so far) has been the slow-doon (sorry) of federal label approvals, which I believe is considered a non-essential governmental service. Obviously, if the shutdown continues indefinitely, you will not see the emergence of scores of new wine, beer and spirits labels. (This may in fact be the only real blessing of the shutdown.)
-Randall Grahm, president & winemaker, Bonny Doon Vineyard, Santa Cruz, California
Obviously not this one, but from the shutdown that happened while we were getting licensed I can say that the timeline for approval was extended 25%+ *after* things started back up. From memory it was the same for existing companies getting label approval. So even if the shutdown ends tonight I’d expect it would be the end of the month at least before everything was back to normal.
-Corey Bowers, formerly of Tualatin Valley Distillery, Hillsboro, Oregon (via Twitter).
The government shut down actually impacts us quite a bit. Unlike most other distilleries we release new products very often. Since we opened in March of 2015 we have released over 50 whiskies. Most of these required government approval on their labels before we can sell them. When the government shuts down so does review of our new labels. We actually have several labels currently out for review that we’ll need to wait for the shut down to end before we can release those products. We are also in the process of designing our second distillery expansion that will include additional barrel storage and a new still that will increase our production capacity. Depending on how long the shut down goes this could delay our plans as government approvals are required before we can start construction and order our still.
-Rich Lockwood, owner, Motor City Gas Distillery, Royal Oak, Michigan
We are fortunate we had our pending approvals finished before the shut down, but I am certainly feeling it for the people in queue. The TTB always slows over the holidays, so if the shutdown ends soon, the catch up for them may be eased. But…if it continues for any length of time, there will be a mess. I know I’ve had product on allocation in the past and waiting on formula and process approvals to have to wait again on labels, a lesson in patience when things are normal so I’m guessing there are producers, let’s say politely, tearing their hair out!
5 thoughts on “No labels: The federal shutdown and selling booze.”
Thanx for gathering those comments, Josh!
I hadn’t even realized the TTB was affected by the shutdown; but I guess any branch of the Federal Government might be, at least in part, affected. The TTB has it’s issues when things are all going as well as they might. If this shutdown continues for several more weex, it may take the TTB many months to come back up to par.
Considering the big distillers, I suppose they plan far enough in advance in their approval requests that even an extended delay may not be a big deal; but, very small producers, with very limited space to store product, could be in a real bind before too long, I bet. …Another example of how big a detriment this BS can be to small businesses.
Well said Richard!
we can already tell your politics just by the way you phrased the 1st sentence.
Oh no, the secret’s out!
also the TTB allows label revisions without any approvals. And you can change many things; really as long as you don’t change the class type. So producers if stuck should be using that to their advantage. TTB online even has a guide about label changes allowed.