Leaderboard

Thought it would be appropriate for the first post in the Canadian section of ADI forum to be about the basic requirement associated with "Product of Canada" claim on spirit labels. Based on information available on CFIA website, less than 2 per cent of the ingredients used in making the spirit can be imported from outside of Canada if one is to use "Product of Canada" on their label. Here is a link to source of info: http://www.inspection.gc.ca/food/labelling/food-labelling-for-industry/origin/eng/1393622222140/1393622515592?chap=5 My Kannuk vodka will be made from 100% Canadian ingredients, therefore not an issue for my vodka. However, if I was to make a spirit from Bananas for example, and we don't grow bananas in Canada, would you then indicate on the label "Made in Canada from imported ingredients"? Or would you just indicate "Distilled in Canada"? Curious what others know about this topic.

Actually, this is not entirely correct. The hot vapors rise in the still because the condenser creates a lower pressure (slight vacuum) and the vapors travel from the higher pressure where the vapors are generated in the pot to the top. Even at 200'F (above its atmospheric boiling point) ethanol vapors are 20% heavier than air. Ethanol vapors will fairly quickly mix with air, although they will still tend to seek the floor.

Just a quick check list of things distilleries should record Jan 1: Take a complete physical inventory on or after January 1 (but before January operations start) including: - Production, Storage, and Processing Tanks (list Tank name, Account, Spirit Type, Total Proof Gallons, True Proof + any gauging calculations) - Barrels (Counts by fill date, size, spirit types, entry proof, and Original Proof Gallons) - Finished cases (Counts by product type, bottle proof, with Proof Gallons/case) Sum up the total Proof Gallons in each of the 3 accounts. Compare the total Proof Gallons in house to what your End of Month December TTB Reports would show. If there are discrepancies, start the research to reconcile and/or make correcting Gains or Losses. You can actually do this exercise at the beginning of any month to compare how many Proof Gallons you have in-bond versus what you are reporting. If you have significant discrepancies, feel free to give me a shout for a possible on-site clean up. Donald@whiskeyresources.com Also, consider registering for Whiskey Systems to make 2017 the year you are in full TTB compliance! https://whiskeysystems.com/

The above is good advice. I'm a bit late, but will offer a couple comments. On the issue of discrepancies. If I were auditing your accounts and did not find discrepancies between the book and physical inventory I would become very suspicious that you are not making the required gauges. Stuff disappears in lines, evaporates, errors get made on gauges, etc. so that everything coming out spot on is very unlikely. That said, you have to determine what your tolerance is for losses. Do pursue those that are too large. I'll underline the fact that you do not inventory spirits in barrels. You take your losses there only when you empty the barrel and record and report the angels share on the monthly reports of storage and processing operations. Any spirits in the production account are spirits that have not been recorded as produced, i.e., tanks holding heads or tails and any hearts from the stripping run. They are reported as spirits in process, line 17b, if I recall, of the operating report. You only make an entry there quarterly. Any finished spirits must be entered into storage or dumped into processing, not held in the production account. Finally, remember that you must pay taxes on any shortages in the cased goods account. Cased goods do not experience losses due to evaporation, etc. Since you record accidental losses, TTB presumes that any shortages on inventory result from unreported removals and are taxable.

Re: a 20-day approval. Miracles do happen, but don’t expect them. To understand the unlikelihood of your application being approved in 20 days, you must understand the way in which TTB processes applications. The system makes it all but impossible. That is why 20 days to approval is miraculous. When you submit the application, it is assigned, within a day, to a specialist. TTB used to use a triage system, but it appears to have abandoned that. The assignment to the specialist appears to now be made before anyone looks at it. The assignment to the specialist is made like dealing a deck of cards. The applications that come in each day are dealt round robin to the specialists. Who gets it is a lottery. The specialist who gets the application doesn’t look at it when she or he (I’ll chose she) receives it. It comes dealt face down and remains face down. She doesn’t look at it to say, oh, this one is great or lousy. It’s simply inserted into the bottom of the stack of applications she already has pending in her pile. She works this stack from top to bottom. This is a matter of “fair play.” One application is not favored over another. Since the specialists carry an “inventory” of 150 plus pending applications – I’ve heard figures as high as 250 - it takes a while for new ones to rise to the top, no matter how well prepared, to become the old ones at which they take a first look. This first look often does not occur for 180 days or so, although the October average time to approval was 180 days, so the average first look probably came at closer to five months after receipt rather than to six, for those applications, but that varies too, since in September the average was 206 days to approval. Now, is it possible that any particular application can bore through the pile to make it to the top in 20 days? Sure, anything is possible. But it would be an anomaly that would fall more than several standard deviations from the expected. But, let’s assume, for purpose of argument, that such a miraculous event does occur. What then? TTB says 75% of applications require correction notices. That was a 2015 figure. My experience says it probably is now a higher number than that. Some of that is because of real errors or omissions, but a lot is not. I submit quite a few conscientiously and competently prepared applications. I have found that what one specialist wants may not be what another specialist wants, so an entry that generates a “correction request” from one specialist, will not from another. Worse yet, the “corrections” that one specialist might require might be entries that are anathema to another, i.e., precisely the entries that would generate a correction request from the second specialist. In short, there is no “right” way to make entries when the specialists, or their immediate supervisors, are free to invent their own rules about what is required and the form in which it should appear. [Note, in fairness, I do make errors, from time to time, that generate needed requests for correction, so not all such requests are nonsense, but in my opinion many are]. In this situation, I proceed as follows. I read what the instructions ask for, provide that, and do so in a form that most specialists accept most of the time. I then handle any correction request, nonsense or not, in a couple of days. But I can’t prevent it. And I can’t get an approval in 20 days or 40 days or 60 days or 80 days. That is my reality. I can’t perform miracles. Next, let’s assume, for purposes of further argument, that the specialist who has reviewed the application within the miraculous 20 days, finds no fault with it and sends it off for “management disposition,” which is yet another hurdle that the applications must clear before it crosses the finish line. While it is possible to get management to dispose of the application quickly, if one has been expressing legitimate concerns about how long it has been pending, getting expedited service is not likely. The manager’s review serves as a “quality control” check. The managers return the application to the specialists if they find any problem and “gig” the specialist for the error, be it real or imagined. But that is not the problem. The problem is that the “gig” system is a Machiavellian management style that has the specialists working in fear of even the tiniest error and managers, who are also subject to gigs, working in fear that they will miss an error the specialist also missed. The absurd consequences that result from working in fear of errors, a nitpicking, excruciatingly slow review, do not matter in TTB's present mileau. Specialists and managers, in turn, look at each application in detail to find reasons the application should not be approved, not to find reasons that it should. Next, like the specialists, the managers have stacks of applications on their desks. Yes, if you guess that the most recent ones go to the bottom of the pile, you are correct. Unless someone is complaining about how much the processing time for their application has exceeded the average time, i.e. 180 days, not something less than 20 for others, things do not get expedited by merit. So, absent legitimate concerns about how long the processes has already taken, again in the sense of fair play, the managers take up the applications in the order received. My experience says that the times in which the manager acts in less than 20 days from the date the manager received the application are not common, unless, again, there are extenuating circumstances. So, management disposition alone general takes as much or more time than the 20-day application took from its conception to its approval. While the 20-day approval suggests that the application may have been immaculately prepared, in the manner of which the submitter justifiably is proud, the care with which it was prepared does not account for TTB not carrying it full term. The application was in fact "blessed." Unless your application is similarly blessed, by whom or what I cannot suggest, your application will not receive such favored treatment. I can all but guarantee it. As I said, I can’t get an approval in 20 days or 40 days or 60 days or even 80 days, because they do not even look at the applications until well after such time frames are in the rear-view mirror.

Mail merges are a dying art. Only the Nigerians seem to make the effort anymore.

We submitted ours May 2, 2016. State June 3, 2016. TTB approved on 9/27, 2016. Ahead of schedule. They had one round of questions in late Aug which we turned around in a day. Unfortunately, it was lost in the shuffle and I eventually called them to check in and they processed it that afternoon. State has also been very quick. The biggest challenge is the local municipality. They didn't know what to do with us, so we got conflicting direction which they had to sort out. That has extended everything since the State needs a valid CO. Some insight for those starting or going through the process... Definitely spend the money to have a lawyer (with experience in the industry) look over applications. They caught a few changes which made things easier with TTB. Wait a few months, then give the TTB a call. It takes time to get through to someone, but once you have a direct connection, and can show that you won't be a nuisance asking for daily updates - but you do want communication open and regular, they seem to really appreciate that. See what you can do to simplify their effort which will have them more willing to work with you. On the town level - if you're the first distillery in town, engage the building/fire/electrical/plumbing and zoning offices asap. They will most likely be challenged to know how to give you the inspections and oks you need. I ended up pulling OPRAs on other towns with distilleries for any CO/building subcode documentation on record. This gives you a baseline to present to your town to help them with their approvals. Good luck all and stop by if you're in NJ!