When Does a Beer Need a COLA from TTB?

First things first, a COLA is a Certificate Of Label Approval issued, after review, by the Alcohol and Tobacco Tax and Trade Bureau aka, TTB.  But I’m guessing you already knew that.

In March, 2013, TTB clarified the certificate of label approval (COLA) requirements as they apply to brewers who are selling their domestically bottled malt beverages exclusively in the State in which the malt beverages were bottled.

Simply, TTB does not require a brewer to obtain a COLA if a beer^ is sold only in the state it was manufactured.  Beer sold outside of the state in which it was manufactured, or in “interstate commerce” requires a COLA.  Read the TTB Ruling 2013-1.

TTB: The regulations implementing the FAA Act do not require brewers to obtain a certificate of label approval in order to bottle or pack malt beverages that will not be shipped or delivered for sale or shipment into another State. The regulations do not require a brewer to obtain either a certificate of label approval or a certificate of exemption for a domestically bottled malt beverage that will be sold exclusively in the State in which it was bottled.

Hold on though, we’re not finished.  Just because the TTB doesn’t require a COLA in this situation, doesn’t necessarily mean you won’t need a COLA or Certificate of Exemption from the TTB to sell your beer– why?  Because some states require a TTB COLA before you can sell your beer in that state.

Take Colorado for instance.  According to the Colorado Department of Revenue:

The manufacturer or importer of any alcohol beverage product sold in Colorado must register said product with the Liquor Enforcement Division prior to the date of the product’s initial intended date of sale.  All products registered in Colorado must have first obtained either a “Certificate of Label Approval” or a “Certificate of Exemption” from the Alcohol and Tobacco Tax and Trade Bureau US Department of the Treasury (TTB). (Emphasis added).

1 Colo. Code Regs. § 203-2:47-904(F)

The manufacturer or importer of alcohol beverage products that have obtained a TTB “Certificate of Exemption” are required upon request to certify that their product’s label will comply with TTB labeling criteria as found in the “Federal Alcohol Administration Act” 27 CFR Subchapter A – Liquor Part 4, Subpart D; Part 5, Subpart D; and Part 7, Subpart C.

1 Colo. Code Regs. § 203-2:47-904(G)

So, Colorado requires either a COLA or a Certificate of Exemption from the TTB.  Thus, we turn to the TTB.  According to the TTB:

We also note that unlike the regulations for wine and distilled spirits (set forth in 27 CFR parts 4 and 5, respectively) the part 7 regulations do not require certificates of exemption for malt beverages sold exclusively in intrastate commerce. TTB and its predecessor agencies have never issued certificates of exemption for malt beverages.  (Emphasis added).

…

Under the statutory and regulatory provisions cited above, Federal label approval is not required for domestically bottled malt beverages unless they are bottled or packed for shipment, or delivery for sale or shipment, into a State from outside of that State. Accordingly, bottlers of malt beverages are not required to obtain either a certificate of label approval or a certificate of exemption for malt beverages that will be sold exclusively within the State where the bottling brewery is located.

…

Brewers may continue to apply for certificates of label approval for malt beverages currently sold in intrastate commerce to cover the possibility that such products may be sold in interstate commerce in the future. Furthermore, nothing in the FAA Act or the TTB labeling regulations relieves brewers from their obligation to comply with any applicable State requirements or regulations with regard to label approval.

The TTB does not issue certificates of exemption for malt beverages.  Thus, by default, Colorado brewers will necessarily need to obtain a COLA in order to register their brands in Colorado.

Be sure to contact your state liquor authority before making a decision not to obtain a COLA or Certificate of Exemption from the TTB.  It is always important to remember that Federal and State Governments (and sometimes local) will have separate requirements for manufacturers of alcohol.

If you are in a state that does not require a COLA, keep in mind that nothing prevents a brewery that currently only sells in its home state from obtaining COLAs in the event such beer will be sold in other states.  Indeed, it may be the best practice to do so in order to avoid hassle down the road.

Don’t forget that even those beers sold only in their home states and not required to obtain a COLA must still comply with “all applicable marking, branding and labeling requirements under regulations implementing the Internal Revenue Code of 1986 for all beer removed from the premises, and must comply with the health warning statement requirements imposed by the Alcoholic Beverage Labeling Act with regard to alcoholic beverages manufactured or bottled for sale or distribution in the United States.”

So, if your brewery does not distribute outside of the state, and your state doesn’t require a COLA, no COLA necessary.  But, if there is any possibility you will distribute interstate, best practice would be to obtain the COLA now.

This article was originally published on September 5, 2013.

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^I’m using the term “Beer” in this post to refer generally to malt beverages.  As stated by the TTB, not all beer is considered a malt beverage.

TTB Ruling 2008-3 TTB HELD: in order for a brewery product to fall within the definition of a “malt beverage” under the FAA Act, it must be a fermented beverage made from both malted barley and hops, or their parts, or their products. A fermented beverage that qualifies as a “beer” under the IRC (other than saké or similar products) but that is made without both malted barley and hops is not subject to the requirements of the FAA Act.