17th January, 2019 by Edith Hancock
https://www.thedrinksbusiness.com/2019/01/this-craft-brewery-is-suing-the-us-government-over-the-shutdown-heres-why/
Craft Brewery Sues US Gov. over shutdown losses.
THIS CRAFT BREWERY IS SUING THE US GOVERNMENT OVER THE SHUTDOWN, HERE’S WHY
A craft brewery in Washington D.C. is unable to sell a tank filled with newly-brewed beer thanks to the US federal shutdown, so its founders are suing the government.
Altas Brew Works is one of many breweries around the US affected by the shutdown after the closure of the Alcohol and Tobacco Tax and Trade Bureau.
The TTB approves labels for new products like beer, wine and spirits, with a Certificate of Licensing Approval (COLA). Businesses that wish to sell their beverages in the US are required by law to have their labels approved by the department before they reach the market.
TTB is ‘Closed’ Due to Government Shutdown
The TTB has ceased most operations due to the lapse in government funding and will not be accepting, reviewing and approving label approvals (COLA).
Some “excepted” functions will be operational, including the web site electronic payments function and access to online permits review. The TTB web site will not be updated. No personnel with be available to respond to any inquiries, including emails and phone. TTB employees have been directed not to show up to work and are prohibited by federal law from volunteering their services during a lapse in appropriations.
The compliance company Compli has a blog post here on best practices during the shutdown.
Trump to Support Ending Federal Ban on Cannabis?
The L.A. Times has reported that President Trump would support a congressional effort to remove the federal government’s ban on cannabis. Ending enforcement against cannabis by the Justice Department would likely stimulate a dramatic increase in the cannabis industry, and could remove the TTB’s ban on CBD oils, hemp and potentially even THC in beer.
The TTB has cracked down in recent months on brewers who have not filed for a formula approval when using CBD and hemp. Letters have been sent to at least two craft breweries in California stating that the breweries were in violation. It is still not clear if the TTB will approve CBD or hemp in beer if the proper process for formula approval were to be followed, but the answer seems to be that they would not.
Trump, speaking to a group of reporters this morning said that he would support Senator Gardner, one of the lead sponsors of a bipartisan effort to allow states to legalize cannabis without federal intervention according to the Time article.
Maryland Craft Bill Dies
A bill in the Maryland state legislature to lift restrictions on the amount of beer a craft brewery can sell direct to the consumer died in committee, killing the hopes of craft brewers in the state, at least for now.
The bill was pushed and promoted by Maryland Comptroller Peter Franchot who is assigned as the state’s alcohol regulator. Apparently unhappy with Franchot’s outspoken role in supporting the bill, the panel also passed a measure to examine whether the comptroller’s office should continue to have oversight of the state’s alcohol industry.
The outspoken Franchot won the praise of most craft brewers but riled legislators on both sides of the political aisle as he ranted about power money paid out by large alcohol interests and portrayed himself as fighting for the “little guy.” This didn’t play well under the state Capitol Dome where both Democrats and Republicans on the panel rejected his recommendations. The panel went one step further by unanimously approving a bill to set up a task force to study whether the comptroller’s office should continue as the state’s regulator of the alcoholic beverage industry. That bill must still wind its way through the legislature for approval.
Top Stories of 2017
Here we go, with a look at the past. It has been a wild ride in the industry the last three years, and 2017 was no exception. More big changes, which will dramatically shape the future.
BA Defined Craft Up 6% in 2016
MARCH 28, 2017
TTB Posts Results of Label Non-Compliance Survey
One of the roles of the TTB’s is to ensure that alcohol beverages in the marketplace are properly labeled and do not mislead consumers. The TTB maintains an “Alcohol Beverage Sampling Program” (ABSP) which is a random survey of products in the marketplace to evaluate the success of the TTB label approval process and to check for non-compliant products which are in the market without receiving a “Compliance of Label Approval” (COLA) from the TTB.
Each year the TTB conducts an ABSP by purchasing products from the marketplace and do a label assessments to determine if each product is in compliance with TTB labeling regulations. Following the label assessment, each product goes to the TTB laboratory to undergo a series of analyses to determine compliance with certain information displayed on the product labels (primarily alcohol content).
The TTB has just released the results of the most recent ABSP. Of 158 malt beverage samples, there were 61 that were found non-compliant in some way. The number one non-compliance was alcohol content being higher than that stated on the label.
For all of the results, you can see the ABSP summery here
And Then There Was One – Tax Bill
After a ‘battle of the bills” between two competing beer tax bills in Congress, an Oregon Senator has stepped forward with a singular solution; a one-size-fits-all tax reduction bill for wine, spirits and beer.
Senator Ron Wyden (D-OR) introduced today the Craft Beverage Modernization and Tax Reform Act (S. 1562) which aims to reduce excise taxes for brewers, vintners, cider makers and distillers.
The bill combines components of both the Small BREW Act (introduced by the Brewers Association) and the Fair BEER Act (introduced by the Beer Institute). These two bills have received heavy lobbying on Capitol Hill in recent months by both groups.
Hard Fought Branch Bill Passes in KY
A Kentucky bill that will prevent breweries from holding distribution and retail licenses has passed the state legislature and the Governor has said in a statement yesterday that he will sign the bill. The bill has been closely watched by the beer industry as a potential “sign of the times.”
This means that Anheuser-Busch will be forced to sell branch locations they currently own in the state. A-B, which fought the bill aggressively has said they may sue the state to overturn the law.
The bill was supported by most in the craft beer industry. Daniel Harrison, co-owner of Country Boy Brewing in Lexington said that the legislation is essential for small breweries like his to get his product out.
Sweeping Pro-Craft Bill Introduced in FL
A broad and sweeping bill has been filed by a Florida State Rep. Greg Steube (R-Bradenton) which would have a number of positive impacts on the states craft brewers.
House Bill 107, in its current form, would address franchise agreements, allow 64 ounce growlers, allow a small amount of self-distribution and clarify brewery tasting room rights.
The most significant change to the states franchise provisions would enable brewers who make up less than 50 percent of a wholesaler’s business to sign written agreements that carry a maximum term of five years. Currently all suppliers must prove “cause” for termination, a very difficult standard for small brewers with minimal legal resources.
TTB Launches Online New Tutorial
The TTB has created a new online tutorial to help make using Permits Online a quicker and easier process. Permits Online is a free, secure electronic system that allows brewers to apply for the permits, notification, or notices needed to start any TTB regulated business, or amend your existing approvals.
The new tutorial covers the different types of TTB applications and outlines the mandatory documentation needed for each type of application, along with the documentation required by specific situations. There are also screenshots of the Permits Online system, along with tips and some expanded explanations.
The ABC’s of Marijuana and Beer
The annual National Conference for State Liquor Administrators was held last week in San Antonio, TX. This conference is attended by state alcohol beverage regulatory agencies and other liquor control departments along with many trade associations and stakeholders in the industry.
One panel discussion addressed the regulation and enforcement of both medical and recreational marijuana. The common opinion from the panelist was it’s not a question of “if” more states will legalize cannabis, it’s just a question of “when.”
Why is the legalization of marijuana being talked about at an alcohol beverage conference? Because it will almost certainly have some impact on the alcohol beverage industry. One area that could impact the beer industry is if the regulatory agency assigned to regulate and enforce medicinal or recreational use of marijuana is the same agency that currently regulates alcohol.
Huge Regulatory “Win” for Craft Brewers
In a big win for craft brewers, the U.S. Tax and Trade Bureau (TTB) has added over 30 new ingredients that will now be exempt from formula requirements. A new list of fruits, spices and other ingredients commonly used by craft brewers will no longer require a formula submission as part of the application process in receiving a certificate of label approval (COLA).
FDA Backs Down on Spent Grain Rule
The U.S. Food and Drug Administration is backing down from their proposed rule regarding the disposal of spent grain that ignited a huge response from brewers and triggered a ton of ink in the mainstream press. The FDA has indicated to numerous members of Congress that they will adjust the final proposal to take into account concerns from the brewing industry.
The rule would have required brewers to prepare written food safety plans including expensive monitoring processes to ensure that spent grain had not come into contact with any harmful substances. Given the expense of the possible treatment of spent grains before sending to the farmer as animal feed, may brewers suggested it would be less costly to send it to the landfill.
“I made clear to (FDA) Commissioner (Margaret) Hamburg when we spoke that this ridiculous rule would have been extremely damaging for upstate New York, harming both our burgeoning craft brew industry and farmers alike,” Sen. Charles Schumer, a New York Democrat, said in a statement Thursday. “I am glad she realized that the proposed rule is misguided and that she is committed to protecting this win-win transaction.”
New Co-chair of Senate Beer Caucus Announced
U.S. Senator Ron Wyden (D-OR) has been named co-chair of the Senate Bipartisan Small Brewers Caucus, which includes 20 members of the Senate from 14 states.
“With 161 brewing companies in Oregon employing 6,400 full and part-time employees, the small brewers are an important part of the Oregon economy,” Wyden said. “Leading this caucus with Senator Lisa Murkowski (R-AK) at a time when small breweries are becoming a part of communities across the nation is an opportunity to make all members of Congress aware of the how breweries are becoming an important part of the national economy as well.”
The purpose of the caucus, which was established in June 2011, is to “provide a forum for members of the Senate and their staffs to discuss the issues important to small brewers while exploring what lawmakers can do to strengthen the growth and role of these small businesses in local economies across the country.”
McClain to Leave BI
Joe McClain announced that he will be departing as president of the Beer Institute. McClain has been in the position since 2010 when he took over from the late Jeff Becker.
No successor has been named as yet.
Michigan considers 16-ounce ‘pint-size’ law
A bill introduced last week would amend the Michigan Liquor Control Act to require each pint of beer have at least 16 ounces. It would make it an offense to “advertise or sell any glass of beer as a pint in this state unless that glass contains at least 16 ounces of beer.”
Rep. Brandon Dillon, R-Grand Rapids and a co-sponsor of the bill, said short pints aren’t the most pressing issue facing the state, but “a lot of people, I think, would appreciate knowing what they get when they order a pint.”
Some pint-style beer glasses with thicker bottoms hold as little as 12 to 14 ounces.
TTB Shut Down
With the shutdown of the federal government most functions of the TTB will cease. This includes the processing of COLAs, formula submissions and all permitting functions.
According to their web site, “there will be no access to TTB’s eGovernment applications including, but not limited to, Permits Online, Formulas Online, and COLAs online.
Additionally the web site states that “no personnel will be available to respond to any inquiries, including emails, telephone calls, facsimiles, or other communications.”
Texas Gov. Signs Beer Bill Package
A package of five bills that passed the legislature was signed into law last Friday by Governor Rick Perry.
The highlight of the set of bills allows craft breweries to sell limited amounts of beer for on-premise consumption. The new set of laws will allow Texas brewers many of the same rights that have existed in other states for many years such as raising the production limits on Texas brewpubs and allow them to sell beer to distributors.
“We have spent the past decade on this effort in Austin, finally achieving a tangible result, and we couldn’t be happier for fans of Texas craft beer,” said Saint Arnold Founder/Brewer Brock Wagner,“ in a company statement. “The efforts of the entire craft brewing industry, represented by the Texas Craft Brewers Guild, along with wholesalers, individual craft beer enthusiasts and consumer groups such as Open The Taps have been a powerful force in finally seeing these antiquated laws brought up to date,” said Wagner.
TTB Issues ‘Serving’ Facts Guidelines
The Alcohol and Tobacco Tax and Trade Bureau (TTB) has issued a ruling that allows beverage alcohol marketers to include “serving facts” statement on their products’ labels, similar to those used on food and non-alcoholic beverage products. Including the serving facts is optional, but if included on the label must meet certain guidelines set forth by the TTB.
While the TTB has proposed making such label statements mandatory, no ruling has been made yet on that proposal.
The statements will include the serving size, the number of servings per container, the number of calories and the number of grams of carbohydrates, protein and fat per serving. Additionally, they may include information about the alcohol content of the product
TTB Release Social Media Guidelines
The TTB has released an Industry Circular addressing the use of social media. The TTB has made it clear that they consider any use of social media the same as an advertisement. All “fan pages,” posts, links, QR codes, blogs and comments made on any social media platform are considered advertising by the TTB.
There are two primary regulatory components of adverting that the TTB regulates; health (and false) claims and mandatory statements.
All social media platforms should include the mandatory statements (see below) and comply with the TTB’s prohibited statements and practices. See here a brief TTB presentation that details the prohibited statements and practices with associated code sections referenced.
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