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dhdunbar

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dhdunbar last won the day on April 4

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About dhdunbar

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    Retired from ATF and began consulting for DSP's in 2012. When I'm not working, I like to head outdoors. That can mean simply sitting on the deck reading. Regulation bores me. Helping others deal with it does not.

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  1. TTB can't allow more than one gallon because that limit comes straight from the law. If you want larger consumer sizes, you will have to get congress to make that change. TTB cannot do it by regulation alone. Here is what the law says. §206. Bulk sales and bottling (a) Offenses It shall be unlawful for any person— (1) To sell or offer to sell, contract to sell, or otherwise dispose of distilled spirits in bulk except, under regulations of the Secretary of the Treasury, for export or to the following, or to import distilled spirits in bulk except, under such regulations, for sale to or for use by the following: A distiller, rectifier of distilled spirits, person operating a bonded warehouse qualified under the internal-revenue laws or a class 8 bonded warehouse qualified under the customs laws, a winemaker for the fortification of wines, a proprietor of an industrial alcohol plant, or an agency of the United States or any State or political subdivision thereof. (2) To sell or offer to sell, contract to sell, or otherwise dispose of warehouse receipts for distilled spirits in bulk unless such warehouse receipts require that the warehouseman shall package such distilled spirits, before delivery, in bottles labeled and marked in accordance with law, or deliver such distilled spirits in bulk only to persons to whom it is lawful to sell or otherwise dispose of distilled spirits in bulk. (3) To bottle distilled spirits unless the bottler is a person to whom it is lawful to sell or otherwise dispose of distilled spirits in bulk. (b) Penalty Any person who violates the requirements of this section shall, upon conviction thereof, be fined not more than $5,000 or imprisoned for not more than one year or both, and shall forfeit to the United States all distilled spirits with respect to which the violation occurs and the containers thereof. (c) "In bulk" defined The term "in bulk" mean in containers having a capacity in excess of one wine gallon.
  2. Whose idea was this and how did they determine they should propose it? Look at a 40 section. It' s ot room for x scu's. If Conglomerate Y has one size for product Z, then product Z takes 2 or three slots depending on turns. If he has four sizes, that multiplies the number of slot's the product fills. That favors him over guess who. Why are large producers taking a stake in "craft?" Let me propose, their distributors want a share of the craft market and acquisition gives the conglomerate a brand to fill that need and not just coincidentally the slots that brand takes up. Retailers get to have the craft segment they need and they get to deal with fewer reps. Decisions involve hard work. A retailer can get both majors and craft with a single sales call. Do you think Lay's makes all those different flavored chips because they want to give the consumer choice? Do you think that is why a major bottler would propose multiple sizes? Am I correct in this? Maybe. Is it the sort of thing that affects most of you? No, because you are not in that fight anyway. Would I as a consumer want my milk to come in many different size packages so that I had to calculate the cost per ounce of brand X vs. brand y and size z vs ....? If not, then why would I want that for bourbon? Why would your customer give a hoot if you package in 700 cl or 750 ml bottles? You don't want to have to deal with all those sku's either. The only client who has ever asked me about this was someone who wanted to package moonshine in pint mason jars. It was the jar perception that was the objective; not the size.
  3. Thanks James - I hadn't heard this phrase before and you sent me on a Google search - Wikipedia augmented by scholar is the way I go. Okay - so it's why, when I approach TTB with a proposal or even a question, I try to know, in advance, more than they do about it and to frame it carefully in my way before they have an opportunity to frame it first in theirs. I want my way in the first position. When they get to set their minds first and take a position, it is a lot harder to steer them to where I want them to go.
  4. Here is the link - https://www.reginfo.gov/public/do/eAgendaViewRule?pubId=201904&RIN=1513-AC45. You can see everything that TTB has one its plate at: https://www.reginfo.gov/public/do/eAgendaMain?operation=OPERATION_GET_AGENCY_RULE_LIST&currentPub=true&agencyCode=&showStage=active&agencyCd=1500&Image58.x=45&Image58.y=16
  5. The pending notice of proposed rulemaking on barrel size must have stirred a hornet's nest, because TTB's regulatory agendas has a spanking new item: See it at: https://www.reginfo.gov/public/do/eAgendaViewRule?pubId=201904&RIN=1513-AC50
  6. Thanks - I figured you got an aging "boost", but you have to pay for two new charred barrels, so $seemed like an expen$ive way to accelerate aging. I guess the economics works out if you crunch the numbes$. :-).
  7. One final comment of general applicability. I never ask TTB a question until I have done my best to get an answer. If what they say is not what I understand, then I ask them to tell me how they concluded what they did. I certainly can be wrong, and in the end they make the rules, but I want a citation in support of what they say. I also want to ensure that the person who is giving me the answer is someone vested with the power to speak authoritatively, on that issue, for TTB. I lived by that rule when I worked for the agency. My response was always, here is my answer, here is why I say it, and if you want to rely on it, then send me the question in writing and I will get you an answer in writing. I never resented being challenged either. People had aright to say, on what do you base your dumb answer. Too often TTB employees do not understand their own regulations - who out there who has submitted a label for approval has not experienced the frustration of a WTF denial. Again, TTB may have a policy that transfering from a barre, which was new charred oak when the product went in, into a new, new charred oak barrel, puts an end to the aging process. But, if they told me that when I asked them the "mother may I question," and it actually mattered to me, I would respectfully ask on what they base that answer. I wouldn't try to claim extended age without permission, but I would not shut the door on the possibility, unless, of course, winning the battle was worth it. If it wasn't, then there would be no point. And as a consultant, I always have to ask a client, how much are you willing to pay to fight this out. The answer is often, not what you are going to charge me to do it :-). Perhaps someone can enlighten me on why, other than some marketing claim designed to sell, you would want to go to the expense of double aging? I really am curious about that. I suspect that most consumers can't tell any difference, and, if they have a taster like I have - which is pass the jalapenos please and make that five star subtle - may trip in trying to discern a bourbon from a whiskey made with far less than 51% corn. True confessions - I could probably confuse rum and brandy when both have seen significant time in oak. In fact, I think I have. And there may be witnesses to that too. And how many people who drink Canadian whiskey know that it probably has a significant dose of NSG with compensating flavors added? Or care?
  8. Regulations come in three flavors, so to say: those that say you must; those that say you must not; and those that say you may, but if you do, then you "must" do this and "must not" do that. The proposed regulations want to say, "you must not" claim additional age when spirits are transferred from one new barrel to a second new barrel. But if I were going up against TTB under the current regulations, here is how I would argue: The definition of age is clear, "Age. The period during which, after distillation and before bottling, distilled spirits have been stored in oak containers. “Age” for bourbon whisky, rye whisky, wheat whisky, malt whisky, or rye malt whisky, and straight whiskies other than straight corn whisky, means the period the whisky has been stored in charred new oak containers." I would argue, the definition does not modify the phrase "new charged oak containers" with the the phrase, "the same." Further, I see nothing in §5.40 that would impose a same barrel requirement. Therefore, I would argue, in this let's pretend world, that claiming aggregate age is within the meaning of "age" as the term is defined in the regulation. Further, I would argue that TTB has considered the age regulations at length in hearings, for example, as it did in 1968, and nothing in the Treasury Decisions (I'd have to reread them carefully, but I think I am correct) indicates that the IRS (at that time it was the IRS) intend to implement a same barrel provision. Had it wanted to do that, it could have done so in the regulations it adopted. It did not. Thus, aggregation age is consistent with the current regulations Would I prevail? Who knows, but I could make an interesting fight of it, pointing out that the same barrel requirement,if such a requirement exists, for I have not found it, seems to have arisen outside of the formal rulemaking procedures required by the the Administrative Procedure Act, but that the rules that allow it, as I have argued it does anyway, were adopted by formal rulemaking. So, if TTB wants to change the rule, as it now is attempting to do, it should do so under formal rulemaking procedures, or at least issue a formal revenue ruling, for all to see giving the reasons it amplifies the existing regulation. But I generally try to avoid interesting fights. And I might be missing something. I can't be sure that I am not.
  9. Nor am I, but it does appear in the proposed regulations. §5.74(a)(3), as proposed, provides, "(3) If spirits are aged in more than one oak barrel (for example, if a whisky is aged 2 years in a new charred oak barrel and then placed into a second new charred oak barrel for an additional 6 months,) only the time spent in the first barrel is counted towards the ‘‘age.’’ I don't know how TTB would conclude that this sort of requirement is necessary. Transfer from new to new would seem to be a "no harm, no foul sort" of play - expensive, for sure- but not one that would lead to deception in age statements. The chart in the NPR that describes the impact "on rulings, industry circulars, and other public guidance documents issued over the years by TTB and its various predecessor agencies" lists no document that is superseded by §5.74(a)(3), so, if the list in the table is complete, you will not find the requirement "in the CFR or other TTB communication." I conclude that either this is a brand new rule - which some above say it is not - or it emerges from a private letter ruling that someone issued in the past. I don't plan on commenting because it seems to be a rule of little consequence to any of my clients, but it would be interesting to know the impetus that lead to the question and the logic behind the answer.
  10. On lawyers - Some deal with production and distribution, most focus on state retail licensing, law and regulation. . Most state license applications for producers are straightforward. They ask questions like, "Do you have an interest in a retailer, etc." I tell clients that in most instances, if I submit an application for a state license for them, I'm just transcribing info they give me to a state form. I don't add much value to that. Make sure the attorney is adding value if you hire one. If your are looking to the attorney for contract advice, make sure that the attorney is familiar with the matters that concern you. For example, if you are dealing with appointing a distributor, make sure the attorney understands the franchise law in the state where the distributor is located. This is not an advertisement; I don't understand anything but the questions that you should most obviously ask about such things 🙂. Nor do I know most states licensing requirements. State agents are a good source of info on what you can do in regards to distribution, sales, tax payment, etc.. Again, this is not an advertisement because I have had clients in 40 or more states and I will not pretend to known what each of those states requires, prohibits, or allows.
  11. Busy but a quick response without time for citations. I assume you are talking about bulk. 1. The person who makes the importation must have an importer's permit. 2. Your DSP permit does not cover that. 3. A person who doesn't have a DSP can import for you, but cannot take possession. 4. The spirits move from customs bond to your DSP bond. You pay duties, but not excise tax. 5. You become liable for the tax. 5. You receive the spirits into either the storage or processing account. 6. You receive them based on the last official customs gauge. Remember to check for losses. I would gauge them. 7. You may keep them in the containers in which you received them or you may physically dump them . 8. Marking requirements apply to the containers in which you hold them, whether or original or dumped.. 9. Once you have them, you treat them in the same way you would domestic spirits, but in some cases you have to keep a separate record. Puerto Rico and the VI for example, because of carry over provisions of the tax laws. 10. When you remove the spirits, you must label them under part 5 regulations. Make sure you can document class and type. 11. You pay the excise tax when you remove them. I've probably forgotten at least one thing, but that is it in a nutshell. Hire a customs broker to deal with the customs paperwork.
  12. TTB just published there annual report. You can read it by links on the TTB website. I keep arguing for th need for some perspective on the question of how long. Annectodal evidence does not give a true picture. Here is what TTB said about approval times: GOAL 1: Facilitate Commerce through the Timely Issuance of Permits to Qualified Applicants Streamline permit applications to reduce applicant burden and use technology to minimize application errors and improve processing times Priority Goal: Reduce average approval times for alcohol and tobacco business permits by at least 20 percent (from 96 days to 75 days) and achieve the 75-day standard for 85 percent of applicants by September 30, 2019. That is the goal. It is across all permits and registrations and average times vary by the type of application. Here, for example, are the times for January 2019, the last month for which TTB has posted average figures. Now, for every "oh my god I'm happy" that you find here, you must end up with a balancing "oh crap, this is taking a long time." I can tell you from experience, the long and the short of it is that any application can end up on the long or the short tend. Well prepared applications put in a position to get lucky, but you must get lucky first. Not everyone does.
  13. I've got a technology that keeps me in my own lane. I know nothing about barrels. Or importing them. Or how you would figure out how they had been used and there useful life Or ... the list of things I don't know about this is almost endless :-).
  14. Huffy: This is easy. Go into your PonL DSP record (not the entity record). Click on the record info tab to be the following menu: Click on tyhe supporting documents and attachment link. It brings you to a screen that shows all the documents that you submitted and that TTB has approved. Look for the following document (I omit the left hand columns). Click on the link it the column to the left of that. It will download the approved application. Save it, print it, and send it to the DSP from which you want to obtain spirits. Hope this helps.
  15. I wish I could claim credit for some magic ability to generate quick approvals. I can't. As I have stated on this thread before, it is more a matter of the luck of the draw and how quickly a specialist looks at the application. My results are scattered, just like everyone else who submits a lot of applications will be. Remember that TTB publishes average figures, which don't describe the range, median, mode etc. to give you a better idea of what to expect. We prepare good applications, answer requests for correction quickly and try to be in a position to take advantage of luck if it comes our way. Sometimes it does and sometimes it doesn't.
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