As we now enter the longest U.S. Government shutdown in history, we are being asked constantly by our alcohol clients how the shutdown is affecting breweries, wineries and distilleries. The answer is that the U.S. Government shutdown has caused, and will continue to cause, serious problems for the beverage alcohol industry.
The Alcohol and Tobacco Tax and Trade Bureau, or “TTB,” is a federal agency that handles all applications from companies seeking to start a business making, importing or wholesaling beer, wine or spirits. The TTB also handles applications from existing alcohol businesses that want to start distributing new labels of products. In 2018 alone, The TTB processed nearly 200,000 labels.
The TTB.gov home page states in part:
“You will also be able to access TTB’s eGovernment applications, including Permits Online, Formulas Online, and COLAs Online, during the shutdown period, but submissions will not be reviewed or approved until appropriations are enacted.”
Thus, breweries, distilleries and wineries in all phases of operations are affected: start-ups seeking a federal license so they can submit state paperwork and established companies seeking approval for new products and labels, expanding production facilities and going through corporate re-organizations all need the TTB.
Many of our clients are in the process of starting a beer, spirits or wine business and are now in a “hold pattern” due to this shutdown. With no end in sight, all we can do is submit paperwork to the TTP via Permits Online or COLAs Online and wait for the TTB to re-open. This does not mean you should stop all planning and development. For instance, Colorado’s alcohol licensing department, the Colorado Liquor Enforcement Division, continues to process new applications.
One of our clients in Denver has signed a lease, developed architectural plans, and is in the process of an expensive build-out – their dream is to brew Colorado Beer. But with the TTB shutdown and unavoidable backlog upon re-opening, this group of young entrepreneurs will have a new brewery but without the federal permit and approvals necessary to brew and sell beer.
Another client is in the middle of starting a wine importing business. With the TTB closed, they have not been able to obtain an Federal Basic Permit, and are on an indefinite hold that will almost certainly cause them to lose contracts with foreign winemakers and local wholesalers.
The consequences of the government shutdown can and will be severe for many small business owners. Craft breweries, distilleries and wineries are life long dreams for people and they are launched with a narrow margin for error. A delay of just a couple months can doom a new alcohol business to an early grave.
We expect processing times for TTB Permits Online for a Brewer’s Notice, Bonded Winery permit, and Distilled Spirits Plant (DSP) permit to greatly increase once the TTB re-opens. Getting back to the days of six (6) month TTB processing times may not be out of the question in the near term.
Our liquor lawyers are ready to assist you – whether you need to transfer, modify, or obtain a new liquor license, our beverage attorneys will start by addressing your needs and continue to provide guidance along the way. Your goals and bottom line are our priority. Contact the Colorado beverage lawyers at LaszloLaw today to discuss your Colorado liquor license needs.