Government Shutdown affects beer industry

Even beer is not immune to the effects of a government shutdown. With nearly even facet of Federal regulation facing furloughs for the time being, one of them is tasked with regulating alcohol - and that has impacts on both new brewers awaiting their licenses and existing brewers making new beers.

The Tax and Trade Bureau (TTB) is forced to furlough all but 35 of their 518 employees starting today, per their shutdown plan shared on the Treasury Department’s website. That plan calls for only emergency personnel to remain on staff. Those dealing with permitting and certificates of label approval are specifically called out as “non-exempt.”

That means the processing of brewery notices, which give clearance for breweries to open, are stalled for the time being. While a short government shutdown may not result in a significant lag in what’s usually a multi-month process by the TTB to give approval, a longer shutdown could stall what has been explosive growth in the craft beer industry, which has been adding new breweries at the rate of nearly one per day.

Meanwhile, existing brewers aren’t spared the wrath of the shutdown. Without Certificates of Label Approval (COLAs) issued, no new beers can be sold or imported. Any new style or offering by an existing brewer can’t be sold without first receiving a COLA. In fact, most states require a Federal COLA before brewers can get even apply to sell that beer in a state. New York is among those. Beers brewed previously can be brewed again, however, as long as the existing label hasn’t changed.

One thing that the TTB will still do during the shutdown: collect Federal beer excise taxes. That’s considered an excepted function of the agency, and nearly half of the remaining 35 non-furloughed employees are dedicated to that purpose, as it’s a function required by law. Yes, even without a functional government, the same two things remain certain: death and taxes.