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dhdunbar

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dhdunbar last won the day on April 18

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About dhdunbar

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    Ellensburg, WA
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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. dhdunbar

    3 Tier and owning real estate not allowed?!?

    Texas is a bitch on this. Most states are not as strict in their interpretations. My general advice is that if Warren Buffet can't grind them down, there is not much chance that you can. That said, I have had some discussion with the ABC about it in a particular circumstance. I'd have to go back and look at what they said - I don't recall - and the issue was not husband-wife related. I'm not sure how wide a family net they cast. I'm sure it would not reach to 4th cousins twice removed, or everyone would be tied up by tied house restrictions. Texas probably has some specific rules/precedents on husband-wife situations. In most state where family restrictions exist, husband-wife arrangements jump to the fore. That said, don't rely on any advice you receive from anyone, attorney or some consultant giving random answers on a forum, that does not come with a citation of a source you can use to verify the advise you are receiving. Some attorneys know the law well; others not so well. Make them cite the source.
  2. PM me and we can discuss this - no charge for the first talk. You are right to be concerned, but it is certainly doable. That said, every situation is different and I don't like to offer specific comments in the forum, because I am pretty sure that at least some people would misunderstand how they might apply to their different situation. That said, all situations are similar in that, in all cases, the principal issue is curtilage, a term that TB does not employ, but it is nevertheless at the heart of the matter. You can look it up in a legal dictionary. I've helped maybe ten persons through the process. That includes mixed use buildings and DSP's in a separate building on the same tract of land as a residence. I've also posted about this on other threads in this forum, but have no idea how to find them. I will say that safety is not a TTB concern. Safety is a state and local issue. State and local come first. Then TTB.
  3. dhdunbar

    How to add sugar to VODKA

    By regulation, you must make the cut to bottle proof after all other operations have been completed, which includes sugar additions. When you should do that , from an operational standpoint, is a matter about which I am not competent to comment. Here is what the regulations say: Sec. 19.346 Determining obscuration. A proprietor may determine, as provided in Sec. 30.32 of this chapter, the proof obscuration of spirits to be bottled on the basis of a representative sample taken from a storage tank before the transfer of the spirits to the processing account or from a tank after the spirits have been dumped for processing, whether or not combined with other alcoholic ingredients. The obscuration will be determined after the sample has been reduced to within one degree of bottling proof. Only water may be added to a lot of spirits to be bottled for which the determination of proof obscuration is made from a sample under this section. The proof obscuration for spirits gauged under this section must be frequently verified by testing samples taken from bottling tanks before bottling. Sec. 19.353 Bottling tank gauge. When a distilled spirits product is to be bottled or packaged, the proprietor must gauge the product after any filtering, reduction, or other treatment, and before bottling or packaging begins. The gauge must be made at labeling or package marking proof, and the details of the gauge must be entered on the bottling and packaging record required in Sec. 19.599. I'm glad it is easier to search the regulations for answers than it is to do accurately what they require
  4. dhdunbar

    Organic Certification Requirements

    Check out - https://ttb.gov/faqs/alcohol_faqs.shtml#oa. You may have done so since you cite the 95% rule, but if you haven't, read through the information that TTB includes there. Note that the Department of Agriculture is the agency to whom you must turn for answers. § 5.71 Use of the term “organic.” top (a) Use of the term “organic” is optional and is treated as “additional information on labels” under §5.33(f). (b) Any use of the term “organic” on a distilled spirits label or in advertising of distilled spirits must comply with the United States Department of Agriculture's (USDA) National Organic Program rules, 7 CFR part 205, as interpreted by the USDA. (c) This section applies to labels and advertising that use the term “organic” on and after October 21, 2002. That is not much help, but it is the best I can do. Beyond that, I know nothing.
  5. dhdunbar

    Blending/ Proofing tank

    You are inviting trouble if you cut to bottling proof by volume. All gauges for tax determination must be done by weight, or approve flow meter, because that is more accurate than gauges by volume. See 19.183 (a) "Except as otherwise provided in paragraph (b) of this section, if the proprietor uses a tank to determine the distilled spirits tax imposed by 26 U.S.C. 5001, the tank must be mounted on scales and the contents of the tank must be determined by weight. The scale tank also must be equipped with a suitable device so that the volume of the contents can be quickly and accurately determined." Then the (b) exception, "The requirement to mount tanks on scales does not apply to tanks having a capacity of 55 gallons or less. Such tanks may be moved onto an accurately calibrated scale when a tax determination gauge needs to be made." Yes, I know that the mounting rule that is usually not observed, and that the bottling tank gauge arguable is not a tax determination gauge, but it arguable is. Since the tax is determined on the basis of the label proof, the cut in the bottling tank determines whether the label proof is accurate as a gauge. Note that TTB says that the cut in the bottling tank must be at exactly the label proof. There is no tolerance. See ATF Ruling 75-32, (https://www.ttb.gov/rulings/75-32.htm): Whoa! Is TTB likely to enforce that? I think it is unlikely in practice. But this is more than a wonky distinction. Practically speaking, cutting to bottling proof by volume is not going to be as accurate as cutting by weight. You are faced with inaccuracies on the calibration of the tank that do not occur when you gauge by weight. And it is a lot easier to get a scale recalibrated than it is to get a tank recalibrated. Proof of that? Check out the yellow pages.
  6. dhdunbar

    Solera Aging Whiskey

    Silk City is correct. It is the age of the youngest spirits. So you say, "Solera Finished," "Aged not less than 1 year," or whatever. Also, the spirits are going to be introduced into used barrels, not new, so you get whiskey distilled from malt mash rather than malt whiskey and disguise that in the clever way you break the lines on the label, not that I think most consumers would care. Of course, having said all that, I can quickly find a TTB label approval for a product that claims to be solera bourbon - bourbon being a product about which TTB be is more label-claim picky than other American type whiskeys - and which also states no age, which means it should be four years old and straight to boot, which also can't be treated, as bourbon can't be, in ways that are not traditionally employed, in TTB's opinion, in the production of the product. Since I insist on citing authorities, see Section 5.23 and TTB Ruling 2016-3, which addresses general use formulas, but strays into the realm of bourbon identity to give BAM statements about the sanctity of bourbon a higher level authority. I give all of this what I've what I've come to call my label approval shrug. I think a marketing shrug may be appropriate too. I think producers sometimes think that consumers care about issues like age and new charred vs. used barrels more than the consumers do care. "Solera" may be a hook for those who are seeking new experiences. The sales from novelty well might outweigh the sales lost from a one year age statement on whiskey, some of which has been aged four years. In a tasting room, it would create curiosity. You could express all the virtues that are attributed to the process with sherry and rum and even Scotch. Did I say that I am a notoriously bad judge of marketing strategy? Well, I am.
  7. Hi Dave,

    With regard to your question:  Out of curiosity, I'd be interested in knowing if this sort of compendium, of the various sections, into one place, is of interest to those of you who operate distilled spirits plants? Would it be useful, for example, to have, in one place, a description of all of the information you need to know if you are bottling bourbon, making bitters, using wine as a flavoring agent, etc?  Does  it answer a need?  And would you pay for that, say, in the form of an online tutorial, from which you could pick, like items off a menu,. as need?  Would, for example, a discussion of vodka be worth $30, one of bourbon $40, and TTB's stance on GRAS,,  something else?  Would an all access option be attractive?  

    Anything that makes life easier for us we would be willing to pay for.

    Tom Thatcher - West Branch Malts

  8. dhdunbar

    Joint Venture with local Brewery

    You can receive beer removed from a brewery without payment of tax. The answer to that is found in the brewery regulations, not part 19. "Sec. 25.201 Removal by pipeline. A brewer may remove beer from the brewery, without payment of tax, by pipeline to the bonded premises of a distilled spirits plant which is authorized to produce distilled spirits and which is located contiguous to the brewery." Yea,I know, pipeline, etc. As I think I've explained on another thread in the past, at least once., the brewery regulations are hopelessly out of date on this. A brewery can remove to any distilled spirits plant and it need not be done by pipeline. The law on that change in 1997, or sometime around then, removing the adjacent and pipeline restrictions. 26 USC 5222 (b)(2) - Under such regulations as the Secretary may prescribe, fermented materials to be used in the production of distilled spirits may be received on the bonded premises of a distilled spirits plant authorized to produce distilled spirits .... beer conveyed without payment of tax from brewery premises, [or] beer which has been lawfully removed from brewery premises upon determination of tax. The without payment of tax provisions is the one you would want to use. The after payment of tax was used to receive, on DSP premises, taxpaid beer that had been removed from sale because it had spoiled or had exceeded its age date, , allowing it to be distilled for use, generally, as industrial alcohol. The DSP then follows the rules at 19.296, etc...
  9. dhdunbar

    Final proofing documentation for TTB

    I'll add something here. You need to make sure that the gauge record records the kind of barrel into which you place the spirits. If you examine what is required in the storage record, you will find that you must keep tank records and package records. If you examine the information that the package record must include, you will find, much to my surprise, I'll add, that it does not include the type of barrel in which the spirits were stored. In general, you must keep records of the receipt into and activities in the storage account (19.590). Focusing on barrels, you record spirits received into the account in barrels, filled into barrels from a tank, and transferred from one barrel to another, and the addition of oak chips, if any. You must keep package summary records (19.591). A package summary record is a separate records of each kind of spirit – separated too by domestic and imported and VI or Puerto Rican origins - in packages that show the spirits deposited in, withdrawn from, and in the storage account. The regulations then require that they be arranged in a certain order. For domestic spirits, that is alphabetically by State and by the plant number and name of the producer or warehouseman. For most of you, that is easy probably easily enough done with a sortable spreadsheet or database, or not a problem because you only get spirits from one or two sources. But I mention it to show what is required, but also what is not. The package summary records must show the date of the transaction, the number of packages and proof gallons covered by the summary record,and any gains or shortages disclosed by inventory or when an account is closed (19.591) and the balance on the summary records (remember this is for each type of spirit) in the account at the end of the month. These are the figures that feed into the report of storage operations you send to TTB each month. As an aside, you are not required to inventory spirits that are in packages, so the shortage on inventory would be the loss of a package. You will record losses when you empty the packages, something the regulations seem to omit. You must also” consolidate” the records at the end of each month, “, to show, for all types of containers (barrels, totes, tanks, etc.) and kinds of spirits, the total proof gallons received in, withdrawn from and remaining in the storage account. That’s it. Well, you may say, it seems that is certainly more than enough. But where is the requirement that you show whether the barrel in which you have stored spirits produced from a corn mash are being stored in new charred, used, new uncharred, or used oak, or stainless steel or plastic totes? Oops, follow these requirements to the letter, and you cannot prove, from these records alone, to the inquisitive TTB, that the product you are labeling bourbon was stored in new charred oak, or that the product you are labeling corn whiskey was not. In fact, you can’t even show that it touched oak, so you can’t even prove its whiskey. That is where the gauge record comes in, because the gauge record, and as far as I have found, only the gauge record requires that you show the type of package into which you place the spirits. You must prepare a serial numbered (the serial number is important for tracking purposes) package gauge record (19.619) when you enter spirits for deposit into the storage account, package spirits from a tank in the storage account, The gauge record must include, for each package, among other things, “Cooperage identification (``C'' for charred, ``REC'' for recharred, ``P'' for plain, ``PAR'' for paraffined, ``G'' for glued, or ``R'' for reused, and ``PS'' if a barrel has been steamed or water soaked before filling). And, because you also must show “the identity of the related transaction form or record, and its serial number – if it has one – your records show that the the bouyrbon was stored in new charred oak. There you have the only required record, again, as far as I can determine, that is going to show that. Further, because the gauge record is going to show the proof of the spirits, it will also show that the bourbon was stored, as required by the standard of identity (5.22) at 125 prof or less. I’ll add another aside, when you gauge packages you must do so by weight (19.619). Finally, although it cannot be used to trace spirits through the system, if you transfers spirits from one package to another, you must give the package the same package identificaitohn number as the original, but must also affix, to the head of the new package, a sign or label “in the following form: The spirits in this ------------ [kind of cooperage: barrel or drum], package identification No. --------, were transferred from a ---- -------- [kind of cooperage: barrel or drum], on -------------- [Date], -------------- [Proprietor].” (19.468). Strangely, as far as I can determine, when you first put the spirits into a package, this information is not required. You need only assign a package identification number (19.485), which does not include any indication of the type of cooperage. I’ve not found an explanation for this. Out of curiosity, I'd be interested in knowing if this sort of compendium, of the various sections, into one place, is of interest to those of you who operate distilled spirits plants? Would it be useful, for example, to have, in one place, a description of all of the information you need to know if you are bottling bourbon, making bitters, using wine as a flavoring agent, etc? Does it answer a need? And would you pay for that, say, in the form of an online tutorial, from which you could pick, like items off a menu,. as need? Would, for example, a discussion of vodka be worth $30, one of bourbon $40, and TTB's stance on GRAS,, something else? Would an all access option be attractive? It would be a chore to do that. It would take a lot of time. And like textbooks, it would have a specialized audience - even narrower than a text book - and so could not be published as a book for $50.00. The ROI on my time would not be there. This answer, for example, took me a couple of hours to compile in useable, I hope, form. I did it because I think it is important information. But I've got a life, both commercial and personal. If you have an opinion on this, I'd like to hear it by PM, to keep the forum free of liter. Thanks.
  10. dhdunbar

    Final proofing documentation for TTB

    Not a member, so I don't know. TTB does not supply them. You've got two gauge records to deal with - bulk gauge and package gauge.
  11. dhdunbar

    Inventory Requirements - barrels

    This is getting a bit specific, but ... Tank vs. package is not account dependent. Further, there is nothing in the regulations that definitively differentiates a tank from a package. One part of the reg (19.75 maybe) says something don't need to list portable bulk containers of less than 101 gallons unless they meet the criteria for a tank under 19.182, but 19.182 only says, if you have a tank, then you must equip it with ... and totes have none of what is required by 19.182. Nor do barrels or drums. That does not say that a metal container of some size, say a million gallons, noit so equipped, would qualify as a drum. It would certainly be a tank, and if it didn't have what 19.182 required, it would be in violation of that section. But beyond that we have anomalies that TTB has not chosen to address, as far as I know. Webster - Tank - a large receptacle or storage chamber, especially for liquid or gas. Large? TTB may intend that anything larger than 101 gallons be equipped as required for tanks. They have not said so. Their de facto acceptance of 275 gallon and larger plastic totes may be taken as an answer not otherwise given. The same question could apply to how large an oak barrel can you have to store whiskey? At what point does an oak tank not serve as a container fit for aging? That is a question I will not ask until I have to answer a question for a client. Finally, a metal drum is a package and need not be inventoried. The section for processing inventories is Sec. 19.371 "A proprietor must take a physical inventory of all wines and bulk spirits (except packages) held in the processing account at the close of each calendar quarter." Holler by PM if you want me to go still further into this on your behalf :-).
  12. dhdunbar

    Inventory Requirements - barrels

    You found the section that has your answer, but getting the answer requires that you know that a barrel is a package. If the regulation uses a word, like "package", and you are not sure of what it means, look to definitions section (19.1) for answers . In this case, package means "A cask or barrel or similar wooden container, or a drum or similar metal container." So you need not inventory the spirits you have in barrels. Note, this would not exclude, as I read it, larger plastic totes, which are an anomaly. They are not tanks, they are not packages, unless we take "drum" to be inclusive, which i think is not intended. So totes, I suppose, are portable bulk containers with a capacity of over 101 gallons. The regulations do not address how to handle that kind of container. Container is also a defined term, by the way. It means "A receptacle, vessel, or form of bottle, can, package,tank or pipeline (where specifically included) used or capable of being used to contain, store, transfer, convey, remove, or withdraw spirits and denatured spirits." TTB fixes anomalies when they present problems. Since they have not dealt with the tote issue, they apparently do not perceive a problem that is worthy of the time necessary to give an answer. I've treated the totes question like a sleeping dog. I chose not to kick it.
  13. dhdunbar

    Canned Cocktails?

    Here's something from from 5.47 a(2) that causes me to question screw caps - "For metal containers which have the general shape and design of a can, which have a closure which is an integral part of the container, and which cannot be readily reclosed after opening"— leads to conclude that TTB may hold that cans with a screw cap are considered to be containers that must meet the standards of fill for bottles. There is no reason, in law, that that should be the case, but they obviously went to the trouble of adding the extra language integral and reclosing language for some perceived reason. Would TTB even take note of this? Who knows? But I'd hate to see someone invest in screw tops only to find that TTB puts the kibosh on such a container. I suggest asking first.
  14. dhdunbar

    Vodka Spritzer - standard of identity?

    This is an rather complicated question. 1. You cannot remove a product like vodka and carbonated water from the DSP premises in bulk (1.80). 2. You can do so in cans (see another post I made today on the issue of cans). 3. Removed in a can, it is not vodka, because it is not 80 proof (5.22). It would be a specialty item (5.35). 4. A fanciful name is required. So is a statement of composition unless it is a recognized cocktail, which I doubt. 5. If you remove the vodka (80 proof or more) , to the tasting room, in one gallon containers, and dump it into a barrel, then mix it with seltzer, and you have rectified it. 6. But premixing cocktails is deemed exempt rectification if you comply with some rules that TTB published years ago about premixing batches of margaritas. As I recall, that ruling is not easily found. My recollection is that it must be mixed for immediate consumption, which is defined to be consumption within 24 hours. I can't give the site right now because do not know it. 7. Similarly, the premixing doesn't violate rules that prohibit a retail form serving from other than the original container in which bottled. 8. Again, I would have to search for that ruling. It is going to say whether the premixing is possible. 9. But remember, if it is possible to premix, in a bulk container, under the rules I've not cited, you must do so on the tavern on the brewery premises (yes, you can serve spirits and wine there, as I assume you know) using spirits that were in containers of one gallon or less, that were properly labeled when you withdrew them from the DSP on tax determination an d received them on the tavern premises. 10. Neutral spirits are spirits distilled at more than 190 from any substance. It does not matter that the distilling material was derived from beer or wine. In whatever dilustions, it is a spirit and subject to spirits standards of identity (unless it is a mixture that is more than 50% wine on a proof gallon basis (5.11), which seems not to be what you have in mind at at.
  15. dhdunbar

    Canned Cocktails?

    Growlers in the tasting room are not allowed for at least two reasons. 1. The tasting room is not on bonded premises. If it is, TTB erred in approving it (19.52 ). All DSP operations, which include bottling, must take place on bonded premises. So no bottling on other than bonded premises (see definitions of distilled spirits operations and bonded premises in 19.1). 2. You cannot remove spirits in bulk (containers of more than one gallon) from the DSP to anyone not qualified to receive bulk spirits . The proprietor of a tasting room, retail area, is not among those qualified to receive spirits in bulk at any place other than the bonded premises (27 CFR 1.80 and following). Bottling is a processing operation. The bottling line must be on bonded premises when you conduct the bottling operations (19.1 again). You could alternate an adjacent brewery line from brewery to DSP, but it must be adjacent (19.143). You could probably qualify an outside area to DSP premises (you can have outside tanks - 19.74 -, so ...), but I'd want to frame that proposal carefully. Ditto from alternating an outside area that is designated as general premises to use as bonded premises (19.143 again). TTB talks about containers. Containers for sale to consumers can be either approved liquor bottles or cans. 5.11 - "Bottle. Any container, irrespective of the material from which made, used for the sale of distilled spirits at retail." The standards of fill for cans is found in 5.47a(2) For metal containers which have the general shape and design of a can, which have a closure which is an integral part of the container, and which cannot be readily reclosed after opening— 355 milliliters - 200 milliliters 100 milliliters 50 milliliters
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