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    The Government Shutdown Is Mildly Sober: A Chat with Brooklyn Brewery's Compliance Department

    Written by

    Ben Richmond

    Contributing Editor

    Photo by Ben Richmond

    Yesterday, we reported that America’s heroes are starting to feel the sting of the ongoing partial government shutdown. No, I’m not talking about the military, although the shutdown is heaping plenty on them and their families. I’m talking about those other patriots: American craft brewers.

    The lack of appropriations has shuttered the Alcohol and Tobacco Tax and Trade Bureau, or TTB, which is in charge of approving new labels and formulae for those seasonal and limited-run beers that make the passage of time that much sweeter, and which are the trademark of craft breweries.

    Pardon the pun, but it was a sobering moment to realize that the government shutdown was hitting this close to home. Not only impacting something we loved, but, since Motherboard HQ is right across the street from the Brooklyn Brewery, affecting our literal neighbors. All politics is local, after all.

    In order to better understand what exactly is at stake, I reached out to Carla Villa, who handles compliance at Brooklyn Brewery. The resulting conversation has been edited for clarity, so it didn’t happen in the order in which it appears below; however, the words are Villa’s own, and taught me more about getting beers on shelves than I had ever even considered.

    MOTHERBOARD: So how is the shutdown affecting the Brooklyn Brewery?

    The biggest issue for us is we can’t get new labels approved. The way it works is that we have to get the new label approved by the TTB (which usually takes 2-3 weeks) before we can apply for state approval. We’re in 26 states and each state has their own set of rules. This process can take anywhere from five minutes to six weeks depending on the state.

    So in order to release a new beer, we need at least nine weeks before we can ship it. Add another eight weeks onto that if the beer has any ingredients like honey, orange peel or other spices. If that’s the case, before we can apply for label approval we need to submit the formula to the TTB and that approval takes about eight weeks. 

    Our Brewmaster’s Reserve series is a quarterly, limited availability, draft only beer that we only make once. We’re already on a tight timeline to crank out four of these a year, so being at the current standstill puts a huge kink in our plans.

    Can you tell us what Brewmaster’s Reserve is coming up that we might be missing out on?

    It’s called Fire & Ice—a robust porter with a silky oatmeal core. We use a special smoked malt that the maltsters make by using beechwood cut from the surrounding forests of Bamberg, Germany, in the malting process. Fire & Ice is gently smoky and chocolaty with notes of coffee and caramel. Perfectly paired with steaks, chops, stews, chili, lamb, and even chocolate desserts and ice cream.

    Yum. So what does TTB look for on labels? Are they just making sure you're warning pregnant women not to drink it and listing bottle deposit rules, or is there something else they're after?

    The TTB looks for a variety of basics: Government Warning, Address & Name matches what’s on your brewer’s permit. Net contents. But they also make sure that any wording is compliant with their rules—for instance they won’t allow you to say “a strong IPA” but they will allow you to say “an aggressively hoppy” beer. They have some rule that you can’t imply the strength of a beer in the flowery language you put on it. They also approve and deny names. For instance, they wouldn’t allow us to call a beer “The Tonic” because they said “tonic” implies a medical benefit. So we ended up calling it “The Concoction”.

    What do they look at when they examine the "formula"? Just check off that none of the ingredients are dubious, or are they verifying it against the label to make sure that no one will open something called a pale ale and end up drinking a lager?

    They look at the ingredients. You need to submit the formula when you use any “untraditional” ingredients like spices, honey, peppers, fruit. Same goes if you use processes like aging a beer in bourbon barrels. Then they come back to you with approved wording you need to include on the label. For instance our beer Local 2 has honey, orange peel and Belgian candy syrup in it. They came back to us to say we had to put “malt beverage brewed with honey and spice”. We went with “Ale brewed with honey, orange peel and Belgian candy syrup”, which they accepted on the label because it’s more specific than their suggested wording.

    So how else does the shutdown affect the brewery?

    There’s the money side of things. It doesn’t cost us anything to get these approvals from the TTB, but the states collect anywhere for $0-$200 for each new label, PLUS taxes on the amount of beer we sell. So the states are missing out on revenue. We have standing orders for beers like our Brewmaster’s Reserve that we will have to delay shipping on and that means missed sales for us, our distributors and retailers.

    The other side of what the TTB does is it approves new brewing permits. I’ve started to hear of new breweries that are waiting for their permits to go through to open their doors, but now they have no idea when that will happen. It’s a shame to think of people who are *so close* to making and selling beer, but instead are now paying rent on a space that they can’t do anything with because our government can’t get it together.

    via Brooklyn Brewery

    Do you anticipate any lingering problems on the horizon when (if?) the shutdown ends, even if it ends soon?

    How backed up will the TTB be when they finally re-open? Will we see a domino effect with the states? Texas is already painfully slow when it comes to approving new labels. Part of that is because the beer business is booming but they are understaffed, so I expect they will be more backed up than usual once TTB approvals start up again.

    Damn.

    I’ve been handling compliance at breweries for eight years. Craft beer is known for being creative and fun and the compliance end is pretty dull paperwork most of the time. We’re the nagging voice that tells the brewers and sales people to slow down most of the time because we have to make sure we’re legally compliant. I never thought anyone would actually be interested in hearing about it! If it weren’t because Congress is so shamefully dysfunctional I might actually be happy that people are interested in learning more about this lackluster part of the industry.

    Well thanks for your time, Carla. Good luck.

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