It’s not prohibition all over again, but there are some significant impacts to craft brewers ahead if the government shutdown that started today carries on for any length of time. Specifically, getting new breweries online and the release of new and seasonal beers are in jeopardy.
The part of the Federal Government most tied in to the beer brewing industry is the “Alcohol and Tobacco Tax and Trade Bureau” which is a section of the Department of the Treasury known colloquially as the TTB. The TTB is responsible for licensing breweries and approving labels for beer so that it can be sold legally. The TTB also collects the taxes on beer and beer imports.
According to a statement on the TTB website, the government shutdown will stop many of these services from being performed.
“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.”
No new brewery paperwork will be processed, no additional labels or formulas will be approved. Breweries in planning waiting to hear back from the TTB will wait longer until the shutdown ends – a process that was already slowed by staffing cuts due to sequestration, and the staggering number of breweries in planning. Other breweries waiting on label or formula approvals for their beer will face the potential of the delays resulting in their beer languishing on a shelf – ready to drink but not allowed to be sold.
The U.S. Small Business Administration (SBA) is also affected, which means that any brewers or beer-related businesses seeking or following up on loan paperwork will be on hold as well. the SBA.gov website also reports that “the agency may not be able to respond to inquiries until appropriations are enacted” – so questions that many start-up breweries have may go unanswered. Also, startups or breweries planning expansions may have to delay construction, equipment ordering, or other purchases until loans continue to be disbursed.
So what does this mean for Maine breweries? For breweries in planning, such as Austin Street Brewing in Portland, it means that the approval paperwork they’ve been waiting on will not be coming any time soon.
This gov’t shutdown guarantees delays in our opening but we’ll press on
— Austin St. Brewery (@AustinStBrewery) October 1, 2013
For other breweries, new releases of beer may be halted by label approvals coming to a standstill, and a lengthening of this process could mean that brewers are unable to package beer that they expected to – leading to a backup in their production schedules.
Just to add to the frustration, the process of paying excise taxes and filing reports to the TTB will remain intact. So even though no paperwork is being processed, brewers will still be expected to pay their share of taxes.