Why The Craft Brewing Industry Is Stalled Amid The Government Shutdown

It is estimated that half of the nation's breweries are awaiting federal government approval of labels for new beers because of the shutdown.

AUDIE CORNISH, HOST:

There are a number of ways the partial government shutdown is affecting businesses throughout the country. We're going to take the next couple of minutes to talk about one of them - the craft beer industry. Brewers of craft beer won't be rolling out new beers in bottles or cans. That's because the agency that approves brewery labels can't do its job. Hope Kirwan of Wisconsin Public Radio reports.

HOPE KIRWAN, BYLINE: One job of the Alcohol and Tobacco Tax and Trade Bureau is to approve labeling on beer, wine and spirits sold in the U.S. Officials check the labels for things like alcohol content or fluid ounces in a bottle. It's a busy agency. It received more than 192,000 label applications in 2018. That breaks down to about 3,000 applications coming in every week.

But due to the shutdown, new labels aren't getting approved right now. And that's a problem for beer makers like Joe Katchever. He owns Pearl Street Brewery in La Crosse, Wis., which is celebrating its 20th anniversary next month. Katchever and his team brewed something special for their big anniversary party. He shows it off as we toured the brewery's basement.

JOE KATCHEVER: So this is bourbon barrel-aged beer right here on these racks. This is the 20 year beer, sitting, waiting patiently to be bottled.

KIRWAN: But Katchever can't bottle more than 500 cases of beer until his label gets approved by the bureau. Paul Gatza of the Brewers Association estimates that half of all craft breweries in the U.S. find themselves in the same dilemma.

PAUL GATZA: Any products that need those government approvals are just kind of frozen on hold. I think about all the spring releases that are going to be coming out soon. Well, a lot of them won't be coming out.

KIRWAN: Beer labels are generally approved within five to seven days, but brewers are not counting on the process to move quickly when the government finally reopens. The agency will be facing a huge backlog of applications.

GATZA: For beers that brewers want to release sometime in February or March, a lot of them are trying to rush their paperwork in now just so they don't get stuck having to wait months when the shutdown ends.

KIRWAN: And it's not just craft breweries that are being affected by the shutdown. Craig Purser heads the National Beer Wholesalers Association and says large beer makers in the U.S. are also worried about the bureau being furloughed.

CRAIG PURSER: Doesn't matter what the size of the company is. When nobody's answering the phone, the work stops. And it really puts the beer industry at a disadvantage as it relates to innovation, as it relates to new products being introduced, new labels being approved. It really makes it very difficult.

KIRWAN: So difficult that it could easily start to affect the bottom line as breweries across the country worry about what to do with all of their craft beer if they can't bottle and sell it. For NPR News, I'm Hope Kirwan in La Crosse.

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