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dhdunbar

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dhdunbar last won the day on August 20

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About dhdunbar

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    dhdunbar1@gmail.com

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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

    Is owning a separate bar prohibited?

      Add to that - 311.060(4) "The term “financial interest” as used in this chapter is defined to mean all interest, legal or beneficial, direct or indirect, in the capital devoted to the licensed enterprise and all such interest in the net profits of the enterprise, after the payment of reasonable and necessary operating business expenses and taxes, including interest in dividends, preferred dividends, interest and profits, directly or indirectly paid as compensation for, or in consideration of interest in, or for use of, the capital devoted to the enterprise, or for property or money advanced, loaned or otherwise made available to the enterprise, except by way of ordinary commercial credit or bona fide bank credit not in excess of credit customarily granted by banking institutions, whether paid as dividends, interest or profits, or in the guise of royalties, commissions, salaries, or any other form whatsoever.311.060(4). When a law or regulation or rule says "directly or indirectly" you need to know how widely the agency having jurisdiction cast the "indirect" net. You get a double indirect whammy here, because the law prohibits either a direct or indirect financial interest and the financial interest it prohibits can be either direct or indirect. No amount of speculation in this forum will replace a telephone call to the ABC asking them, "Is a person deemed to have a beneficial, indirect, financial interest in a retailer as a result of a direct or indirect, financial interest held by the person's spouse in that retailer." Then follow that up with an email or other document stating what you think you were told and asking for confirmation of your understanding. I think my first advise remains my best advice, "Go the the state ABC, tell them exactly what you want to do, don't be coy or clever, conceal nothing, and do as they say."
  2. dhdunbar

    Is owning a separate bar prohibited?

    Well, people should question what I say if I don't cite sources, and argue with me if they think I'm wrong, because I can be wrong. My take on the prohibition against retail sales on DSP premises was aimed at another comment and I did not make that clear. My capitalized response was intended to drive home a much more general point, which your answer recognizes. It was not intended as a comment on what you said, but as a an expansionb on what you said. It is about the relationship between state and federal law, the need to comply with the strictest of the two, and the fact that words as used in one law may not mean the same thing as the same words the other. So perceived conflict may only be an appearance of conflict. The Missouri retail provisions is but one example of where conflict does not exist, even though it might appear to exist, if one does not understand how the different laws and regulations rely on different definitions or understandings. That is a first principal. If we don't understand that, then we hit all sorts of foul balls when trying to figure out what is allowed and what is not, e.g., the distillery premises for state purposes can be different than the distillery premises for federal purposes. so I jump up and down insistently on the point that nothing says they have top be the same. The question of retail sales has to be examined independently for state and federal requirements, keeping in mind the definitions used in each statute. I think people often misunderstand that. And I think that statement does not create a straw man. People do misunderstand that. But it was not directed at your comment. And question me when it seems that what I say is off the mark. Make me justify.
  3. dhdunbar

    Is owning a separate bar prohibited?

    To be clear To be clear. Under federal law, you may NOT sell at retail on either the bonded or general premises of a DSP. Period. No exceptions. However, you may sell from a retail space that is attached to the DSP premises, but is separated by, what TTB is not officially saying, in its new permits on line applications, what muyt be a floor to ceiling partition (the application says wall, but chain link has always sufficed when persons disclosed the sales to TTB and clear not all have). Once a retail space is off DSP premises, TTB simply does not care how far away it is. It could be in Nome, AK. You are required to register as a retail liquor dealer at that location, just as every retailer is reacquired to register and I'd wager not one in ten does. You are also required to keep records of receipt and any sales of more than 24 wine gallons at a single pop. Want to bet few if any know about the 24 wg provision? Want to bet that TTB won't be asking them unless it comes to believe that they are regularly wholesaling without a permt? TTB does make provisions for the operation of a taxpaid room in the immediate vicinity of the DSP or on DSP general premises, but not on bonded premises. You can operate as a wholesaler from that premises without need of an FAA basic permit, or need to register as a wholesale dealer under the separate dealer regulations, but must keep records required in part 19.. As a wholesaler, you may make sales at retail from the taxpaid storeroom, unless it is on DSP general premises, when sales at retail are prohibited by law. So, what do you do in MO. THERE IS NOTHING THAT SAYS THAT YOU CANNOT HAVE THE RETAIL AREA ON WHAT THE STATE REGARDS AS DISTILLERY PREMISES BUT IS NOT INCLUDED IN THE DSP PREMISES ON YOUR FEDERAL REGISTRATION. THEY ARE SEPARATE LAWS WITH SEPARATE RULES SEPARATELY APPLIED. YOU MUST HEED THE MOST STRINGENT WHEN ONE ALLOWS WHAT THE OTHER PROHIBITS, BUT THE EXTENT OF DSP SPACE CAN BE DIFFERENT FOR EACH, ALLOWING SALES FROM THE SAME AREA, WHICH IS ON THE DSP FOR STATE PURPOSES AND OFF THE DSP FOR FEDERAL PURPOSES. Some things need to be said in capital letters. :-).
  4. dhdunbar

    Bottling line help

    I know nothing of the technical info here. Ignorance is bliss. Silk City - re damned if you do and damned if you don't - a winery told me many years ago there was a reason they used neck labels. Neck labels hide apparent differences in fill level when the contents are actually within tolerances. TTB's only guideline on this that I know of on headspace, "Section 5.46 - headed standard liquor bottles, provides "Headspace. A liquor bottle of a capacity of 200 milliliters or more shall be held to be so filled as to mislead the purchaser if it has a headspace in excess of 8 percent of the total capacity of the bottle after closure." Hope this isn't too far off topic.
  5. dhdunbar

    Wording for lease

    They should not because it does not constitute an agreement by which you have right of occupancy. What they will accept is another story.
  6. dhdunbar

    Adding a Signing Authority to ttbonline.gov

    I have four questions pending, from how to amend the operating trade name; to who can be the key contact (TTB says it has to be someone who has a financial interest in the business, but only one person does, and he can't operate as a key contact because he is in the main an absentee. Plus, what happens in the case of large, publicallyy held entites like Anheuser Busch?; to how to revoke a power of attorney (the applications wizard takes you into a black hole and that may be your problem too; to a collocation with a residence issue, which the instructions say can't be done and which I have done, successfully at least 10 times in the past, with fuill disclosure of all circumstances, so they seem to be changing the rules by a single line in the instructions. I assume that there are a lot of people like us who are suffering the slings and arrows of outrageous fortune. So too, I imagine, are those who answer the telephones and are unfailingly polite and helpful when I get through. My problem is not with them. It is with management who supervised this roll out. In sum, did no one beta test the darned thing before they implemented it? I'm calling again right now and intend to keep calling all day long. I've got five clients who are looking to me for help :-). Make that :-(. ,
  7. dhdunbar

    Expanding our Tasting Room

    The tasting room and/or retail are for sales of liquors of any sort, may not be on DSP premises. So you need not include, or mention them, in your description of the new arrangement. TTB does require that you show the location on the diagram if they are adjacent to DSP premises. In my opinion, ten feet away is not adjacent. It is as good as a mile If the area on which they are now located is not currently included in the DSP premises, and you want to change the area for use as bonded premises, then you must amend the descriptions and diagrams of the DSP premises and bonded premises. You do that by filing an amendment. If, when you qualified, you simply omitted mention of the fact that a portion of what you described as DSP premises was going to be used as tasting room, then you need not amend the application as long as it accurately describes the boundaries of the DSP under the new configuration, that is, there is no change in the boundaries of the bonded or any general premises you may have. Now, you mention that the current area is "marked off." That makes me squirm a bit, because TTB has recently opened a can or worms. By policy, TTB has required floor to ceiling separation between the tasting and or retail area and the DSP. If you have only a line on the floor, you are in an "ooops"position. I know that is the case with some DSPs. I've seen them. If the area is separated by bless than floor to ceiling partitions, you still have an ooops problem. TTB has recently compounded the problem.. When you amend the application, it now requires that you affirm that you know that the division between the tasting/retail space must be a floor to ceiling wall (partition would be the better word given the way the regulation is written, but wall is the word TTB chose). When you affirm that, you are record as knowing that the line or less floor to ceiling partition is not acceptable as separation. When you know something is wrong and do not attempt to correct it, violations become willful. If you only have an eight-foot high ceiling, that may not be a problem. Build the wall and get Mexico to pay for it. But if it is a 40 foot ceiling, whoa!. Things are not so simple. Mexico is apt to refuse to pay for that sort of partition. That an eight foot partition in a space with 40 foot ceilings will be as effective as a 40 foot partition does not matter. TTB's mantra is floor to ceiling and they have made that apparent in the affirmation they now require. Do I see a few hands going up in the air? When I asked about this, informally, because I sought not to cause a splash with ripples that could capsize, I got the answer that the NRC would not change the language of affirmation. They have dug in their heels.. I now that this is going to cause problems for someone sometime. I recommend that associations, not individuals, approach TTB about this to see if we can convince them that the floor to ceiling requirement is unnecessary, as long as there is a partition of sufficient height to prevent inadvertent movement of spirits onto and off the bonded premises. So I'm hijacking this post to say if some association wants to do that, I'm on board, pro bono as it were, to figure out how best to frame the approach to TTB. That's pro bono unless the organization is charging someone to make the approach. In that case, I want my share of the charge. But I prefer to do it for nothing, in return for the opportunity you guys give me to make a living consulting.
  8. dhdunbar

    Adding a Signing Authority to ttbonline.gov

    Without looking to confirm, TTB recently went to a new permits on line system, which means that the old instructions are no longer valid. Go to the website and locate the new instructions for amending. So far, my verdict is that the old system was a lot easier than the new one, but I'm still playing with it and am a notorious curmudgeon when it comes to TTB's digital systems.
  9. dhdunbar

    Processing form Line 13 & 29

    I've got to get to work, but ... Part IV is where TTB collects the information it uses to prepare its statistical reports. Period. I think it has no other use; at least I don't see how it fits into an audit, because I don't see the way to establish an audit trail. Part 1 of the form reports bulk ingredients, as does part IV, column b. So the total dumped in cell 6(b) should equal the total dumped in cell 67(b). But what does that prove? Nothing. I don't know what purpose the comparison makes and the part IV data seems to have no sue other than to inform industry, or any others who may want to know, how many proof gallons of blended light whiskey, for example, were dumped in the month of June. It is purely statistical, but the total of all commodities can can compared to the total dumped. But there is no way to compare the part 2 and part 4 bottled entries. One is in wine gallon s and one in proof gallons. So, unless you bottle everything at the same proof, there is no way to reconcile the two figures short of converting proof gallons to wine gallons from the bottling records. "For what reason?" is a rhetorical question. What you want to ensure is that the dump records for the processing account total to the quantities you show as dumped into the account on the operating report and that the records create a trail back to the materials from which produced, so you have evidence in support of label claim.
  10. dhdunbar

    Lessons in Barrel Aging

    Did I mention I don't deal in either COLA or formula submissions? There are reasons for that. Label questions are complicated. Since it appears to the internal controls to ensure that all employees act consistently, the employees sometimes (often/usually) bring their own rules to the game. When people start applying personal interpretations, things are not only complicated, they are complex. You can reason through complicated, but things that are complex are unpredictable. That said - here is a basic rule - don't worry about things like whiskey specialties not being included in some list that lacks the authority of regulation. I repeat, don't worry about that, unless, of course, you must. Let me explain how I reach that conclusion: TTB classifies as TTB will. I lump that into the category of things that "are because TTB says they are" and dismiss the idea of arguing unless necessary.. The numbering system is an unnecessary hodgepodge. So too all those BAM tables. (Yea, a pun does lurk in the homonym suggested). The basic rule YOU follow is you must designate the class and type on the label (5.32). The rules for class and type statements are in 5.35. It provides that if a product does not comport to a standard of identity (5.22), then it is a specialty item and must be labeled as required by 5.35. Applying the rule, what TTB deems a "whisky specialty" is not, in TTB's opinion, a whiskey and does not comport to other standards in 5.22. Now, 5.22 includes a number of class and type standards for products that can include bourbon, or straight bourbon. These include bourbon (5.22(b)(1); a couple of blend variants (5.22(b)(4) and 5.22(b)(5)i)); bourbon liqueurs (5.22(h)(2)); and flavored bourbon (5.22(i)). Add to that the specialties (5.35), which may in some cases be designated in accordance with trade and consumer understanding, and it is a daunting potpourri. I'm not sure how many TTB specialists understand how to split those hairs. And if they can't, how can you or I. But split them, they do, into all those number categories and lists like you find in the BAM and which you may, for most purposes, ignore. Okay, you may need them to determine whether you need a pre-COLA evaluation, but other than that, let TTB deal with it. So, that is how I arrive at the conclusion that is usually best to let TTB sort it out and accept what they say. If what they say somehow takes an iron pipe to the knees of your plans, you can argue with them,. However, given a label approval, in hand, like the one for Parkers discussed above, do you really care how TTB categorizes it as long as they approve it? What difference does it make if they enter 641, 732, or the square root of the average distance to the moon.The only practical difference, it seems, is how you report it on the back of the processing report, which is info TTB collects solely for the purpose of publishing the statistical reports that congress requires. What can be interesting is disagreement between the label people and the formula people. With that I return to, "Did I mention that I don't submit formula or COLA applications? And yes, I know you must. But the best I can do is advise you how to try to maintain sanity while doing that.
  11. dhdunbar

    Lessons in Barrel Aging

    The TTB COLA's on line system is not user friendly, but Tom Lenerz nailed it. TTB classifies the product as CT 641, "Whisky Specialty." TTB assigns the code; the applicant does not. Here is the report from the database: and here is a copy of the label as submitted: I mentioned creative. I'll go with the brand name Parkers Heritage Collection, but then TTB , presumably searching the label for anything it can use, assigns "Barrel Finished" as the fanciful name. And the required truthful and accurate statement of composition (5.35), must be what is left, "Kentucky Straight Bourbon Whiskey Finished in Orange Curacao Barrels." TTB allows the statement of composition to be broken, so that it gives the appearance that the spirit is bourbon, which TTB , by its own rules, insists it is not. I've got no argument with that because the consumer is fully informed about the nature of the product in the bottle. If verdicts were mine, I'd say the label is fine. As it is, it is an inventive way around an arbitrary rule that bourbon can't be finished in the same way as rye. It is a way of having your cake and eating it too. That is how it fits.
  12. dhdunbar

    Whiskey Hypothetical

    This is an interesting thread to which I will bring a dose of oh god the boredom of regulation. You make a production gauge. When you do so you have to designate the product. Assume the production methods used meet the production procedures (19.77) you have on file for for bourbon, corn whiskey, and whiskey distilled from bourbon mash and also meet the the grain/proof standards (80% or more corn at not more than 160) for each. Once produced, you must immediately make a production gauge (19.304). The rules for production gauges state, "Spirits in each receiving tank will be gauged before any reduction in proof and both before and after each removal of spirits." (19.289). I read this to say that you can can have more than one removal of spirits ("each removal") from a receiving tank - or more than one receiving tank ("each receiving tank"). So, let's assume, in either case, three gauges, each of which is deemed a separate production gauge (19.304). I see nothing that prohibits you from entering two of those to the storage account, where you put them into a stainless tank and cut them to 125 or less - this must be done after the production gauge (19.289), designating the first "bourbon designate" and the second "whiskey distilled from bourbon mash designate" (19.305). Then, you transfer (19.324) the first to new charred and the second to used oak as "bourbon" and "whiskey distilled from bourbon mash," respectively, and proceed through a nanosecond or more to create age. The spirits in the third gauge go directly to processing, where you bottle them as unaged corn whiskey. I see nothing in the regulations that prohibit that and 19.304, 305, .324 and .289 seem to authorize it. At the least, it would be an interesting challenge to a TTB investigator or auditor who sought to challenge what you did. I think they would lose the argument that you violated any provision of the regulations. The caveat is that your records would have to include the gauge record (19.618 and 19.619) for each of the three production gauges, showing the quantity and designation in each case, and create the trail that would establish that the products are eligible for the designations you give them. Note that I have not mentioned a formula once, although someone's comment above that you have to have a formula for bourbon is correct, not to show what you did to it, but to show that you did nothing to it that would change the class and type under the special rules that apply to bourbon and not to other American type whiskeys. Now, the above discussions about the methods and procedures you use to create the spirits are a lot more interesting, but wasn't the original question :-).
  13. My job is to tell you how you can do something, not why you can't do it. But sometimes, to borrow from Paul Simon, there must be 50 ways that TTB is going to say no to an idea. From contrary to law, to danger to the revenue, to increased costs to the government, to administrative difficulties, to leases of a particular plot of land, to problems with class and type and prior approval of labels for spirit produced from fermented concoctions brought in that morning by interested parties, to construction requirements, to restrictions on where you can obtain distilling material, to ... oh god ... the requirement that places where spirits are stored by equipped for locking, to the requirement that you case spirits when you bottle them, to ... the list, like the beat, goes on. And as a person who knows squat about the art of distilling, I agree with with Silk City, watching a still is pretty damned dull after a minute or so, unless you are trying to learn how to make cuts. And then the FDA is going to get involved, and, and, and .... 🙂.
  14. dhdunbar

    Lessons in Barrel Aging

    The rules for bourbon and for other American type whiskeys are not the same, even though they are of the same class and type. This is the result of a policy developed over time. Before TTB issued the ruling on general use formulas, you could not find any mention of the issues, at least as far as I know, in any higher level documents, i.e., documents in which TTB expresses an official position on a matter in a binding way. You could find it, without explanation, in the Beverage Alcohol Manual, but as much as people view that as a biblical source for label information, it does not have the authority of regulation or ruling. Clearly, placing a whiskey, into a used port barrel adds something, color or flavor, to the whiskey. If not, why else go to the trouble, unless, of course, one is searching for a nitch in which to market. At any rate, TTB is willing to accept an argument that finishing malt whiskey, or rye, in used sherry, etc barrels is consistent with established trade usage and so does not change the class and type under the provisions of 5.23. However, it holds bourbon to a different standard. Bourbon is the sacrosanct American type whiskey; it is the distinctive product of the United States. So for reasons which are lost to history - they were never the subject of rulemaking that I know of - TTB appears to limit what TTB will allow before treatment of bourbon transforms it to a specialty which is marketed with a fanciful name and truthful and adequate statement of composition. As I said, I can't explain how TTB makes those connections, but it does. I think it is an evolved position. Notwithstanding that, creative people devise ways of splitting the statement of composition into phrases that appear on separate lines on the label and TTB approves the labels, creating the impression that the product is a bourbon, when the label is approved as a specialty. That said, here is the official position as stated in the general formula ruling, beginning with the explanation and ending with the ruling (See - https://ttb.gov/rulings/2016-3.pdf) Furthermore, Chapter 7 of the Distilled Spirits Beverage Alcohol Manual (BAM) (TTB P 5110.7 (04/2007)) provides that bourbon whisky may not contain any amount of added coloring, flavoring or blending materials. This reflects the determination by our predecessor agency, the Bureau of Alcohol, Tobacco and Firearms (ATF), that added coloring, flavoring, or blending materials are not customarily employed in the production of bourbon whisky in accordance with established trade usage. Held further, no coloring, flavoring, or blending materials may be used in the production of spirits designated as “bourbon whisky” in accordance with § 5.22(b)(1)(i) or “straight” whisky in accordance with § 5.22(b)(1)(iii). Check, for example, the difference in the TTB approvals for Angels Envy products. You can find them on line in the public COLA database. I think these hair splitting machinations have sometimes eluded the specialists in the past. I think they are now aware of these provisions. But given the ratio of COLA's to specialists, I'm confident some will still slip through. And I doubt that one consumer in a 1000 gives a damn about that issue.
  15. dhdunbar

    Contract Production

    Give me a call at 206-914-0595. I can discuss in 10 minutes what it would take me 30 minutes + to type. Plus, it will prevent misunderstandings. No fee or obligation if it is a short answer, which it should be. I charge consulting fees when it gets complicated. What you propose is not.
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