Brewery

Government Shutdown Means No New Beers, Because No Bureaucrats Are Working To Approve New Beer Labels

Why do we need the government to do that in the first place?

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The ongoing partial shutdown of the federal government, now in its 19th day, means breweries around the country are unable to get the government's permission to sell new types of beer—not because it's dangerous or unhealthy to make new alcoholic drinks while government regulators are on furlough, but because there's no one available to approve labels for cans and bottles of booze.

Those labels have to be approved by the Alcohol and Tobacco Tax and Trade Bureau (TTB), which is housed within the Treasury Department, one of the parts of the federal government affected by the shutdown. While the TTB's main responsibility is collecting alcohol taxes—and don't worry, it's still doing that during the shutdown—the bureau is also charged with ensuring that beers, wines, and spirits accurately communicate details like the amount of alcohol by volume (ABV) and the mandatory Surgeon General's warning. Without government approval, the drinks those labels envelope can't be sold.

The turn-around time for this rote bureaucratic process is generally pretty quick, reports Philly.com's Allison Steele, usually taking no more than a few weeks. But the shutdown has breweries rethinking their plans and even scrapping beers that were already in the pipeline. Michael Contreras, director of sales and marketing for the Pennsylvania-based 2SP Brewing Company, tells Philly.com that the brewery has canceled plans to make an imperial oatmeal stout, because it was unclear they would get label approval by the time the beer is ready.

At Atlas Brew Works in Washington, D.C., a brand new apricot IPA might have to be dumped because it's already fermenting in the tanks but there's no timetable for getting approval from the TTB. "That hurts, emotionally and monetarily," Atlas founder and CEO Justin Cox tells DCist.

Other breweries are taking their frustrations directly to the president.

The longer the shutdown drags on, the more costly the consequences could be, with the potential to spread up and down the supply chain.

"If we can't get our new labels approved in a timely manner, then it affects our entire operation. It hurts our employees, our farmers who provide our grain, our hops suppliers, our label printers, our box manufacturers and ultimately our distributors, retailers, and beer drinkers," Bill Butcher, founder of Port City Brewing Company in Alexandria, Virginia, tells the Craft Beer Cellar newsletter. "This is a failure of government to do its job! Everyone suffers from the shutdown by slowing our business after we have busted our tails planning. It is inexcusable that this should happen."

The Brewers Association, a trade group for small breweries, is advising breweries to expect longer waiting times for approval, even after the government reopens, because there will be a backlog of applications.

With the government shutdown grinding brewery operations to a halt, it seems like a good time to question whether the TTB's role in approving beer, wine, and spirit labels is really necessary. After all, we're not talking about oversight of anything that affects the safety or quality of the drinks themselves—the TTB's involvement is just one more step that breweries and wineries must take before getting their product to the public, but it's not a step that does much of anything in the public's interest.

The other problem with the TTB is a First Amendment one. As Greg Beato pointed out in a 2008 feature for Reason, the TTB routinely denies certain labels for alcoholic beverages that would be considered perfectly fine to slap on any other product. "If you're a perfume manufacturer and you'd like to name your latest fragrance Opium, no government agent will stop you," he wrote. "The world's flagship soda is called Coke. A company called Chronic Candy has been selling lollipops flavored with cannabis flower essential oil for eight years."

But the TTB has used vague statues to justify blocking labels for beers that make references, usually, to drugs. In 2016, for example, a Minnesota-based brewery was told it could not sell a beer made with lavender extract, sunflower oil, and dates as "LSD Ale." The exact same product, though, is perfectly legal to be sold under the name "Lavender Sunflower Date Honey Ale," which is what Indeed Brewing Company ended up calling it. By any other name, right?

Instead of having to proactively approve every label for every alcoholic drink sold in America, the TTB's bureaucrats could be relegated to an enforcement role. Breweries and wineries know what information they are supposed to include on their labels; if they fail to do that, let the TTB get involved. That's how most other government agencies regulate consumer goods anyway. Better yet, do away with the TTB entirely and let the Federal Trade Commission enforce the beer label requirements if breweries fail to note the ABV of their brews.

The TTB is exactly the type of government agency that a shutdown should make us reconsider. When it's operational, it causes problems. When it's shut down, it causes other problems. Let's get rid of it.

Eric Boehm is a reporter at Reason.