So, the federal government shutdown. You’ve no doubt heard about it and know that it is affecting Americans from all walks of life. Well, it’s also affecting craft brewers. And that is certainly true here in South Carolina. But, how?
When it comes to federal regulation of breweries, the entity most responsible is the Alcohol and Tobacco Tax and Trade Bureau, which is a part of the Department of Treasury that most in the trade refer to as the TTB. The bureau is the one that reviews and approves brewer’s notices, which are the licenses. It also approves beer labels and deals with excise taxes on beer (as well as wine and spirits).
TTB is not an excepted entity from the government shutdown. Believe it or not, the federal government doesn’t consider beer as essential. While some of us might take issue with that, for the moment, brewers cannot file applications for a federal license, or receive approval for their labels, which means that until the government opens back up, no new breweries can move forward in their quest to open and no new beers can be released that don’t have label approval. Also, the Small Business Administration (SBA), which issues loans to many small brewery startups is also closed. So, no new loans either. Here’s the official word from TTB:
Due to the lapse in government funding, only web sites supporting excepted functions will be updated unless otherwise funded. Our TTB web site, http://www.ttb.gov, will be available during this shutdown period and you will continue to be able to file electronic payments and returns for federal excise taxes and operational reports through https://www.pay.gov/paygov/.
However, there will be no access to TTB’s eGovernment applications including, but not limited to, Permits Online, Formulas Online, and COLAs online. Other information on the web site may not be up to date, and TTB will not be able to respond to questions or comments submitted via the web site until appropriations are enacted.
TTB will suspend all non-excepted TTB operations, and no personnel will be available to respond to any inquiries, including emails, telephone calls, facsimiles, or other communications. The web site and operations will fully resume when appropriations are reenacted. TTB has directed employees NOT to report to work and they are prohibited by federal law from volunteering their services during a lapse in appropriations.
Once funding has been restored, and the government shutdown is over, we will work to restore regular service as soon as possible.
In other words, no SBA loans for breweries, no brewery licenses, and no beer approvals. But, you still have to pay the taxes. Hey, politicians might act dumb, but they aren’t stupid.
So, how does this affect South Carolina breweries? Well, first, think of the breweries in planning that are in the process of opening and have applications into the TTB or are about to apply. Certainly, there are several in South Carolina that fit that description. A government shutdown delays approval of their brewery notices, which potentially delays an opening depending on how other things go. The same thing is true if a brewery needs an SBA loan. There are at least a few of those breweries in this state as well. There might even be more since we don’t know everyone who intends to open.
What else? Well, if a brewery wants to release a new beer that doesn’t have a label approved, then its release is delayed. Know any breweries that release a lot of beer requiring labels (meaning not just on draft)? Well, you might be waiting a little longer to get your hands on that beer. About 400 labels are submitted every single day. Usually, those take about 12 days to process. That period can also take longer if a brewer submits a label for a beer that has special ingredients such as coffee or which involve barrel aging. In that situation, a brewer also has to submit their formula before submitting the label. Usually, those kind of beers usually take two months to process. A backlog is building and it is impacting South Carolina breweries right now.
The last government shutdown lasted 28 days. Let’s hope that this time it doesn’t take as long. Who knows? Maybe some beer will bring both sides together.