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dhdunbar

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Everything posted by dhdunbar

  1. I've addressed this before on these forums, in some detail. Short answer here. The answer that you need a basic permit as a processor and bottler is correct. You also need to register the DSP under the IRC, get a bond, etc... But you can't just have someone else bottle for you unless you know how to play that game. If they distribute it for you, and you never take title, and they pay you a royalty on sales, then you don't need a permit as a wholesaler. But if you take title to bottled goods, you have to have a basic permit as a wholesale liquor dealer. Here is the best advice I can give. When you have a question like this, ask TTB to give you the answer. Don't ask here. When you get the answer, post it so others can see it. Then have them call TTB to confirm what you've reported you heard, just in case what you heard was not what TTB actually said. It happens.
  2. Well yes, it is a large error, and it has a tax consequence. TTB can assess taxes. Now, just for kicks, take a look at the results of TTB's market basket sample last year. TTB reports (https://www.ttb.gov/pdf/2015-03-08-fy2016-results.pdf) as follows: "The most common compliance issues we identified involved alcohol content that did not match the label and was outside regulatory tolerances, or that placed the product in a different tax class than indicated by the label." After explaining that "distilled spirits generally allow for a loss of 0.15% alcohol by volume; however, no tolerance is allowed for an increase in alcohol by volume (27 CFR 5.37(b))," TTB contined, "On average, for distilled spirits, underproof products were 0.95% alcohol by volume below what was shown on the label, and over proof products were 0.58% alcohol by volume above what was shown on the label." Averages are a very crude measure. What was the range, the mode, the median? TTB does not say. But here is an amazing finding. In 2015 they found "82 noncompliance issues in 62 different distilled spirits products." Look at the chart in the above link. Forty (40) - to affirm the number was not a typo - of those products were over proof. I repeat, 40! My head calculates that at about 66%. For the record, Alcohol under - eight. So what did TTB do about that? I don't know. But it would appear that a lot of people are getting the proof wrong, when 48 out of 62 are out of tolerance (yup, about 77%). Doubt what I'm saying. Look at the website yourself. I read this to say that for the most part, you guys are trying to give me, the consumer, full measure of what I am due. That's not a bad thing. It just has tax consequences. At one time, a very long time ago, the California weights and measures people would run tests of things like the fill of beer cans. If they found one underfill, they rejected the whole shipment. This led to some brewers routinely overfilling beer shipped to California (they gave it a different product code) and routinely paying taxes on more than they removed according to labeled fill. Like Chicken Little, I saw it with my own eyes. But no one declared that the sky was falling. ATF reacted in a reasonable and understanding way. I don't know what California does now and it is far from clear how TTB is going to proceed when so many are giving away so much!
  3. Licenses, permits, registrations. Okay - we need to review the ABC's of distilled spirits plants. First, you do not need to have a still to be a distilled spirits plant. There are three kinds of DSP operations. They are production (distilling), warehousing (storing bulk spirits) and processing ("making adjustments, " as you put it, or bottling). Any of these operations must be conducted on distilled spirits plant bonded premises. You can qualify in a number of ways. Basically, you can qualify for any combination of the three, but you cannot qualify to process only (to process you must be either a distiller and processor, or warehouse man and processor, or distiller, warehouse man and processor). Now, if you get product bottled for you, and that is all you do, then you are not going to qualify as a DSP, because (1) bottled spirits cannot be transferred in bond and (2) you therefore are not engaged in any distilled spirits plant operations (distilling, warehousing, or bottling spirits on which tax has not been paid or determined). If you buy bottled spirits for resale at wholesale, you have to get a basic permit as a wholesaler, not as a DSP. If you buy bulk spirits to bottle yourself, then you would need to qualify as distilled spirits plant that warehouses and processes. Bottling is a processing operation, but remember the rule, you may not be just a processor. A basic permit and registration for warehousing operations only allows you to store bulk spirits, as in a storage area for barrels, and nothing else. What are bulk spirits? They are spirits in containers of one gallon or more. It is illegal for a DSP to ship bulk spirits, other than industrial alcohol, to anyone who is not qualified as a distilled spirits plant. You can trace through all of this by looking at the definitions in part 19 and the basic permit requirements of part 1. It is important that you understand these basics. And yes, mucking about with the spirits makes you a "rectifier," a term that now appears only in part 1. Strip it from your language when you talk about distilled spirits plants. Substitute processor. Forgive me, but to advertise shamelessly - which I don't often do on these forums, where I offer advice for free - these are the kinds of issues I spend a day discussing at SIPS training. Check it out if you are interested. .
  4. Getting around is the art of it!
  5. Silk City has provided an excellent example of why one should stick to things about which one knows. I'm indebted to him for reminding me of my limitations. Thanks James.
  6. I don't know squat about dunder, other than recalling someone referring to me as a dunderhead once upon a time. But if Wikipedia has it correctly: Dunder is the liquid left in a boiler after distilling a batch of rum.[1] It is a traditional flavor source used in the fermentation of the wash of Jamaican rum. Similar in process to sour mash in Bourbon whiskey, it is a crucial step in achieving an authentic rum flavor. The problem is, it is what is left in the boiler AFTER distillation. So someone has to distill. Which is an Oops moment. You can't distill spirits period until you get a permit and are registered. I'm not even sure that if you found a kind distiller who would ship you its leftovers that someone would not get into hot water over that. I think it would be the removal of a distilling by-product. Here are the requirements: Sec. 19.308 Spirits content of chemicals produced. - All chemicals and chemical byproducts produced must be substantially free of spirits before being removed from bonded premises. The spirits content of chemicals to be removed from bonded premises must not exceed 10 percent by volume unless the appropriate TTB officer approves higher limits. A proprietor must test chemicals for spirits content and maintain a record of such tests as required by Sec. 19.584. Sec. 19.309 Disposition of chemicals - Chemicals that meet the requirements in Sec. 19.308 may be removed from bonded premises by pipeline or in containers marked to show the contents. The proprietor must determine the quantities of chemicals removed from bonded premises and keep records of removals as required by Sec. 19.586. A TTB officer may take samples of chemicals. But remember, someone called me a dunderhead, so I'll leave it to persons schooled in distilling to argue whether dunder meets the requirements. I suspect that if you asked most TTB employees about this, you would get a blank stare. So go armed with the above provisions and if you want to make sure, get someone to put it in writing. We used to give written answers. I suspect it would be a case of "good luck with that" if you tried it today.
  7. The proof drop is why TTB requires that you cut to final bottling proof after you have completed the filtering.
  8. Yes, and there are a lot of examples of TTB giving inappropriate approvals. White whiskey labels are one. White whiskey, which is an oxymoron out of the gate, is one such example. TTB regularly screws up on enforcing its own rules. That is why it is useful to make a distinction about what one "can" do and what one "may" do under any particular provision of the regulation. You "may " use geographic brand names on whiskey if the name is not misleading as to the state of distillation of the whiskey. You "can" use geographic brand names on whiskey, even if the name is misleading as to the state of distillation of the whiskey, if TTB approves the label. We could go further. You "may " not omit the State of distillation on the label of any whisky produced in the United States if the whisky is not distilled in the State given in the address on the brand label, but you "can" get a label approved that omits that statement. [27 CFR 5.36(d)] So, is the standard what you can get away with or what TTB requires? If TTB does not enforce a provision of regulation, the answer to that question is an ethical judgement that you make. But, if TTB decides that it will begin enforcing a provision it has ignored in the past, the formerly ethical question becomes one of the consequences the enforcement will have on you and your brand. Approval is not a panacea or a get out of jail free card (no, I'm not suggesting TTB will lock you up, but it could "incarcerate" your brand. Remember, the COLA comes with conditions. You find them on the back of the form. It states, "This certificate does not relieve you from liability for violations of the FAA Act" and other applicable regulations. It goes on, "You must ensure that 1) all the information on your application is true and correct and 2) any and all information (including words, text, illustrations, graphics, etc) shown or presented on the label(s) affixed to this certificate is truthful, accurate and not misleading." TTB is giving a warning: just because its approval of a label says you "can" affix it to the bottle, that does not mean that you "may" affix it without consequence if it is misleading in anyway. If you ignore the ethical dimension of the question - I am not making any judgement on whether you "should" do so - the practical question still lingers as a "reward vs. risk" assessment that you have to make. Is TTB's bark worse than its bite? If it bites, will it be a mere nip, a worrisome puncture, or a tearing away of hunks of flesh?
  9. Product name and brand name are the same. What you call product name, TTB calls brand name. Blue Star's advice is sound. Specifically, Section 5.34, which discusses brand names, prohibits misleading brand names. It states, "No label shall contain any brand name, which, standing alone, or in association with other printed or graphic matter, creates any impression or inference as to the age, origin, identity, or other characteristics of the product unless the appropriate TTB officer finds that such brand name (when appropriately qualified if required) conveys no erroneous impressions as to the age, origin, identity, or other characteristics of the product." A brand name like "Wisconsin's Best," when used on a whiskey, would, I think, convey the "impression" that the whiskey's "origin" was Wisconsin. That is fine if the whiskey was distilled in Wisconsin. But as blue Star points out, Section 5.36(d) provides, "Except in the case of “light whisky”, “blended light whisky”, “blended whisky”, “a blend of straight whiskies”, or “spirit whisky”, the State of distillation shall be shown on the label of any whisky produced in the United States if the whisky is not distilled in the State given in the address on the brand label." Thus, the language of the statute that prohibits statements that are likely to create a misleading impression, becomes, in the regulation, a policy that TTB must actually find that the brand name does not create a misleading impression. TTB is sloppy in what they approve, but if they adhere to their own requirements, TTB's thinking on these matters is best illustrated by the prohibitions it has imposed on wine labels that bear a brand name that includes a vitacultural area. Wine is not spirits, and the parts of the regulation that address the labeling of each are different, but the regulations derive from the same sections of law.
  10. There is a limiting problem with Lassister's approach to effective government liaison. It worked because Lassiter contacted congressmen who carried the ball for it and got it the special consideration that most do not receive. A perhaps self obvious rule - not everyone's application can receive special treatment or the treatment is not special. Moreover, the special consideration came at the cost of those whose applications were bumped down while Lassieter's rose to the top. I'd like to be clear. I don't intend that as a moral judgement. I don't even want to suggest that the approach should play out in a moral spotlight. I am just stating what I think is fact. That allows me to shine a spotlight on why I think another approach is needed to solve the problem of long waiting periods for approval. Clearly, my argument hinges on a presumption that approvals are a sum-zero game, in which one person getting a larger piece of the pie can only come at the expense of someone else getting a smaller one. That is not necessarily true. Perhaps Lassier's approach actual caused TTB to spend less time on reviewing Lassister's application, thereby expanding the bureau's processing capacity. I doubt that, but it is possible. However, either case points to the question we should be asking, "How do we create a bigger pie that allows - or forces - TTB to expedite all applications?" To stick with the metaphor, the pie is bursting at the seems with your applications and it about to explode in TTB's oven. Dropping the metaphor, the average time to approval, 165 days is obviously unacceptable, for any number of reasons, which I don't need to state here. But, if (1) TTB doesn't increase capacity and (2) applicants all adopt Lassister's strategy, then (3) the Lassiter's strategy will collapse like a pyramid scheme. To avoid that, the inquires should focus on, or drive, a general solution that allows TTB to meet its goal of average processing times of 65 days. If that is still unacceptable, then says some revised number, like Lassiter's 30 day turn around. That turn around demonstrates that action in 30 days does not exceed TTB's carrying capacity for a single application. In fact, I'd say three days doesn't exceed that capacity when dealing with only a single application. But TTB is not dealing with single applications and the carrying capacity is a function of the number of applications. Whatever efficiency equation one might concoct, at some point, more applications are going to drive longer processing times. Next, the quality of the applications received will also drive processing times. Whether Lassiter got approval quickly, after congressional inquiry, because the application was pristine, when most are not, is another question. TTB says 75% of applications require correction. While I will argue that some of the corrections requested are inane, many are legitimate. But in any case, 30 days is possible for good applications. There are no systemic driven built-in delays that prevent approval of any particular, well prepared, application in that time. Here is the point I want to make:, Lassiter's solution worked for Lassiter, but it cannot work for everyone unless the general onslaught of congressional inquiries leads to changes in TTB's carrying capacity. I think TTB must either (1) re-allocate the funds it has, (2) figures out a more effective way of processing applications that comply with the requirements of statutes, or (3) elect to ignore the requirements of the statutes and rubber stamps applications that do not comply with them. Of course, congress could, but probably will not, cough up enough money to allow TTB to handle the increasing workload. Bottom line, effective government liaison of the type Lassiter employed is a solution for individuals if most do not use it; it is not a solution to the real problem of the general increase in processing times.. Here is an observation. The question that ADI should be addressing - and here I am making a judgement - in its role as an advocate for the small distiller and its dues paying members, is what can ADI do to help implement a strategy that leads to more applications being approved more quickly.
  11. You cannot dispose of spirits in bulk containers (more than one gallon) from the DSP unless it is for transfer in bond to another DSP, industrial use, use in wine production, or government use. Doing so is contrary to both law and regulation. If you bottle the spirits, you could remove them upon payment of tax, without violating federal law, but states generally want to collect their taxes, so they want the spirits to enter the commerce stream in a way that ensures that the state tax is paid on them. §1.80 Sales of distilled spirits in bulk. It is unlawful for any person to sell, offer to sell, contract to sell, or otherwise dispose of distilled spirits in bulk, for nonindustrial use, except for export or to the classes of persons enumerated in §§1.82, 1.83, and 1.84. §1.82 Acquiring or receiving distilled spirits in bulk for redistillation, processing, rectification, warehousing, or warehousing and bottling. (a) Proprietors of distilled spirits plants. Persons holding basic permits (issued under subpart B of this part) authorizing the distilling, processing, rectifying, or warehousing and bottling of distilled spirits, or operating permits (issued under §19.91 and succeeding sections of this chapter) may acquire or receive in bulk and redistill, warehouse, or process distilled spirits, so far as permitted by law. ( Proprietors of class 8 customs bonded warehouses. If the permittee operates a class 8 customs bonded warehouse, the permittee may acquire or receive in bulk, and warehouse and bottle, imported distilled spirits, so far as permitted by the customs laws. §1.83 Acquiring or receiving distilled spirits in bulk for addition to wine. Persons holding permits as producers and blenders of wine, may, pursuant to such permit, acquire or receive in bulk alcohol or brandy for addition to wines. §1.84 Acquisition of distilled spirits in bulk by Government agencies. Any agency of the United States, or of any State or political subdivision thereof, may acquire or receive in bulk, and warehouse and bottle, imported and domestic distilled spirits in conformity with the internal revenue laws. I keep reciting the mantra - look tot the regulations for answers.
  12. Lassiter's experience is not the common experience. In fact, I'd call it unheard of these days. TTB does not invent 166 day averages, which has been about the same for the last three months for which they have published data. The permit goes through three stages. Triage (do you send everything you need), which is usually, but not always a short time. That's chesterBQZ's experience, above. Next it goes to a specialist. Most specialists will not even look at the application for two months. How do I know that? Because when they look at it, they either request a correction or, if they find nothing wrong, submit it for management review. They post either to the contacts permits on line page, so as an application contact, I know when things move. No posting at all tells you that it is still sitting in the stack of work that the specialist will will do when they get around to it. When the specialist is satisfied, they send it for management disposition. Management review alone can take a month. That has become common. Again, if they find anything wrong, after two specialists have already looked at it, they will return it to the specialist for correction, which also tells about how long it takes some in management to look at the damned thing after the specialist sends it to them. Again, no posting = no action. These time frames hold even when TTB does not ask for any correction or any additional information. So congratulations, but as a consultant who helps people qualify with TTB, I would never represent that I had a shot in the world of getting the application through the process in 30 days. That is beyond my experience, even with a flawless application to which TTB makes no objection. As to objections, it is my experience that specialists can sometimes invent one that no one has ever voiced before, or which is actually in direct contradiction to what the written instructions require. I've said it before and I'll say it again. It is a freakin' lottery.
  13. You must get a basic permit and you must register as a distilled spirits plant. If you plan to bottle, you need to register as a processor and warehouseman, since by rule a processor must also be qualified to either produce or store. You will also need a bond to cover the storage and processing operations, at a minimum of $5,000 for each operation, or $10,000 total, plus a removals bond. Any spirits transferred to you by someone else must be transfered in bond and your operations bond has to be sufficient to cover that liability plus the liability on any other spirits on your DSP premises. Further, it is illegal under the FAA Act to transfer, sell, etc, any beverage spirits in bulk (in containers of more than one gallon) to anyone who is not a distilled spirits plant. Always look to the regulations for your answers. Who knows, I could be inventing everything I say here or misstating what the regulations require. So: Sec. 19.71 Registration and permits in general. Except as otherwise provided in this part, a person may only conduct operations as a distiller, warehouseman, or processor of distilled spirits on the bonded premises of a distilled spirits plant. In order to establish a distilled spirits plant, a person must register the plant with TTB and obtain an operating permit and/or a basic permit. This subpart covers the requirements for registering a plant and obtaining an operating permit under the IRC (you do not need an operating permit unless you are dealing in industrial alcohol) . Part 1 of this chapter covers the requirements for obtaining a basic permit under the Federal Alcohol Administration Act. (26 U.S.C. 5171) Requirements for Registering a Plant Sec. 19.72 General requirements for registration. (a) Establishment. A person who wishes to establish a distilled spirits plant must intend to conduct operations as a distiller, as a warehouseman, or both. A person cannot establish a distilled spirits plant solely for the processing of spirits. ( Registration. Before beginning operations as a distilled spirits plant, a person must submit an application for registration and receive approval from TTB. §1.21 Domestic producers, rectifiers, blenders, and warehousemen. No person, except pursuant to a basic permit issued under the Act, shall: (a) Engage in the business of distilling distilled spirits .. or blending distilled spirits ... or bottling, or warehousing and bottling, distilled spirits; or ( While so engaged, sell, offer or deliver for sale, contract to sell, or ship, in interstate or foreign commerce, directly or indirectly or through an affiliate, distilled spirits or wine so distilled, produced, rectified, blended, or bottled, or warehoused and bottled. You do not short cut federal requirements by doing away with the still, but as others observe, you might lose privileges that the state extends to persons they deem to be small or craft. The basic permit alone is never enough unless you are having someone contract bottle for you, in which case you would purchase the bottled spirits for resale and would need a wholesaler's basic permit.
  14. The problem - TTB finds 26% of the distilled spirits products it tests in the market basket sample are ovenproof. Another 5% are under-proof. That's nearly 1/3rd out of tolerance. The reason for the difference between the over and under percentages would seem to be that there is a tolerance for a drop below label proof, but no tolerance for proof above label proof, so any any over-proofing is an error. Small distillers are assuredly the persons whose products fall outisidee of tolerance. The big guys are not giving product away, so I conclude a lot of you guys are. And the 33% error rate is 33% of the total number of samples pulled. Now, I don't know the how those samples are distributed between small and large producers, but since I assume that the large producers get things correct, that means that the percentage of errors among small producers is greater than 33%. The reason is simple. Many small producers don't read the instruments correctly. Any calculations you make, by whatever method you choose, are going to depend on the accuracy of your readings of the apparent temperature and proof. You then make the adjustments to convert apparent to actually. I know from experience that you can learn to proof accurately with a hydrometer, because I learned to do it and I'm hopeless about such things. I walk into a lab and things break. I had to "book" my experiments in high school chemistry and then throw in an error to make it appear my experiment had succeeded. So if I can do it, you too can learn to get accurate readings of the apparent proof. But until people learn to do that, errors are going to continue, no matter how you choose to determine the amount of water you need to make your cut. Pardon the pun, but there are no short cuts around accurate readings.
  15. How to get in trouble with craft distillers? Talk honestly about vodka. Vodka is colorless, odorless, tasteless, without distinctive character. Vodka with character is an oxymoron. There is nothing a craft distillery can do to make vodka that is really is vodka that a large, industrial distillery cannot do better. The vodka denotes a product that cannot stand out from any other. Craft in vodka therefore connotes small and local production. If people are willing to pay a price for small and local, then craft vodka will have a market. Grey Goose succeeded by taking the same vodka that sold for $19 a bottle, which was the same vodka, in a different label, that sold for even less than that, and raising the price by $10 a bottle over the premium competitors to $29. Vodka is marketing plain and simple. Grey Goose and Absolute are both losing share. The reasons people buy products changes over time. I went into a distillery one time, as a tourist. Made no claims about anything. They said taste our vodka. I asked why I would ever want to do that, since it shouldn't have a taste. They said, oh, but we put a little bit of rye whiskey in it. I said don't tell TTB. What they had was probably a blended whiskey. It is the sort of thing that causes craft people to point their nose toward the sky. Who would want to dilute whiskey with NSG? It seems someone wanting to craft vodka with character. So, do it and call it vodka and you are a craft distiller. Do it and call it whiskey and your peddling diluted product. It makes perfect sense to me.
  16. I assume that you are dealing the National Revenue Center. The "agent" language seems strange. There are specialists there who handle address changes and I cannot imagine that it has been assigned to a field officer. Although the regulations use change of address to mean a change in the physical location of a DSP, the NRC makes a distinction between a change of location and a change of address. To the NRC, a change of address is a change in the post office address assigned to an unchanged physical location. A change of location is a move of the business from one location to another. Here are the rules: §1.29 Individual plant or premises - An application for a basic permit must be filed, and permit issued, to cover each individual plant or premises where any of the businesses specified in section 103 of the Act is engaged in. §1.41 Change of address. In the event of a change in address the permittee must file application Form 5100.18 for an amended basic permit. The "paper" form of the application includes the following instruction; In general, criminal or admiistrative actions may be taken against persons operating without a valid FAA Act permit. Before you conduct any operations with any change specified in items 4 through 7 (a change in post office address and a change in physical location are found in item 6) you must apply for, and receive, an approved permit. That said, there are no security requirements, as there are with DSPs, so there is absolutely nothing for the specialist to do but verify that the address exists, rubber stamp the application, make whatever changes are necessary to the database, and prepare the new forms. It what you describe is correct, delays of the sort you describe are unnecessary and, unjustified. they constitute an unconscionable burden on the wholesalers ability to do business, etc. But I agree, don't hire an attorney at $300 an hour to handle this. Call TTB and say we are going to hire an attorney and are going to write our congressman, but, before we do you either, we want to give TTB one more chance to approve the application without further delay. Have the wholesaler PM me if there is no satisfaction. I consult for a fee, but I'll talk about this for nothing as long as we keep it to 10 minutes are so. I've spent more than that already :-). Ten more minutes should suffice.
  17. I've said it about original applications and I'll say it about amended applications and transfers in bond and anything else you deposit into TTB's hopper. How long it is going to take is a lottery. We just got three one done in a few days. Was it because I was involved? No. My being involved had nothing to do with it. It was the luck of the draw. Look at the range of answers you are getting here.
  18. Go to your permits on line page on TTB's website, click on search your applications, click on the approved application, and you will get a tracking page. I don't know that it has a name. Drop down to and click on ""Supporting Documents and Attachments (Click arrow to view details). Your permit, registration, and bond will appear there. You should print these and put them in a permit file that you keep at the DSP premises for TTB to view if they wander in one day while out and about.
  19. Here is the rule that prevents doing what you would like to do: Sec. 19.351 Removals from processing. (a) Method of removal. A proprietor may remove spirits or wines from the processing account in any approved bulk container, by pipeline, or in bulk conveyances in compliance with the provisions of this part. Spirits may be bottled and cased for removal. ( Authorized removals from processing. A proprietor may remove from processing: (1) Spirits, upon tax determination or withdrawal under 26 U.S.C. 5214 or 26 U.S.C. 7510; (2) Spirits, to the production account at the same plant for redistillation; (3) Bulk spirits, by transfer in bond to production or processing account at another distilled spirits plant for redistillation or further processing; (4) Spirits or wines, for authorized voluntary destruction; or (5) Wines, by transfer in bond to a bonded wine cellar or to another distilled spirits plant. However, wine may not be removed from the bonded premises of a distilled spirits plant for consumption or sale as wine. © Exception. Except as provided in paragraph ((2) and (3) of this section, spirits may not be transferred from the processing account to the storage account. [All of the emphasis is mine.] So, although Section Sec. 19.322 allows you to "receive bulk spirits into the storage account .. by return to bulk storage," that appears to be limited, by 19.351,to instances in which the return is preparatory to redistillation or a removal in bond. The answer to your question, then, :"You can't because they say you can't." The "why" of "whydo they say you can't" is a mystery that I'm not about to tackle. If you want to do differently, apply for a variance that would allow you to do it. I've got no idea if TTB would approve. Without a variance, the bulk leftovers become part of the on hand end of month in bulk ingredients section of the monthly report of processing operations, get carried forward in that account into the on hand first of month figures for the next month, and hang around until you make some disposition of them that is captured in lines 9 to 24 of the bulk ingredients section of the processing report. Note that we are dealing with accounts here. Here hold spirits in accounts. There is no requirement that you keep containers that have spirits that are accounted for in storage separate and apart from spirits that are accounted for processing. The individual containers must be marked in a way that the records will establish what is in processing and what is in storage. TTB may not like that answer, but there is nothing in the regulations that requires that sort of physical segregation. Just don't put spirits from two accounts into the same container! I would guess that the question that you want to ask is why you can't return them to storage and mix them? To that the answer is, again, because TTB says so!
  20. You have to amend your registration to "extend" the distilled spirits plant into the adjacent space to the current space. It will involve new descriptions of the dsp premises and bonded premises, along with any changes to the general premises that may occur. If the space is actually adjacent, meaning touching, there is no problem with that. If it is not contiguous (continuous in TTB's terminology, then you may have to ask TTB's permission to include it within the existing DSP, depending on what falls between the current location and the space you want to add. You can send me a personal message if you want to discuss the particular circumstances. I don't like to give particular answers to particular questions because people may think their particular circumstances are identical to yours, when they are not, and, if they rely on what I say, end up doing something wrong because the devil was in the details that were different. See: Sec. 19.119 Change in premises. If the proprietor intends to extend or curtail any part of the plant premises, except under alternate operations that are covered by Sec. Sec. 19.142 and 19.143, the proprietor must file form TTB F 5110.41, Registration of Distilled Spirits Plant, to amend the registration. The proprietor must not extend or curtail any premises or equipment before the amended registration is approved. The form 5110.41 is the DSP registration in paper form. Use it if you originally field on paper, otherwise us permits on line. Ignore the alternate operations provisions unless you intend to operate a brewery or winery in the same space or let another proprietor establish a DSP in the area, none of which appear to be the case given what you ask.
  21. Todd: I should have read your question more carefully. Yod did not ask if you could acquire an interest in a retailer; you asked if a retailer could acquire an interest in your distillery. It is a quite different question. I don't have time tonight to unravel that issue tonight, but I did not want to leave my answer out their and subject to misunderstanding of the sort my misreading the question could occassion. I'll try to give a better answer in a couple of days.
  22. It is not just a state issue. It is also a federal issue. It's just that in practice, TTB does not have the resources to pursue violations. They are not easy to prove. I know, because I used to try to do that. States tend to either allow or prohibit ownership "per se," but the federal law is more complicated. The federal law requires that the government prove that you did something that it considers a prohibited inducement, but must also show that because of the prohibited inducement, the retailer purchased your products to the exclusion in whole or in part of similar products offered for sale by others in interstate commerce. Here are the principal provisions: 6.21 Application. Except as provided in subpart D, it is unlawful for any industry member to induce, directly or indirectly, any retailer to purchase any products from the industry member to the exclusion, in whole or in part, of such products sold or offered for sale by other persons in interstate or foreign commerce by any of the following means: (a) By acquiring or holding (after the expiration of any license held at the time the FAA Act was enacted) any interest in any license with respect to the premises of the retailer; ( By acquiring any interest in the real or personal property owned, occupied, or used by the retailer in the conduct of his business; © By furnishing, giving, renting, lending, or selling to the retailer, any equipment, fixtures, signs, supplies, money, services or other thing of value, subject to the exceptions contained in subpart D; (d) By paying or crediting the retailer for any advertising, display, or distribution service; (e) By guaranteeing any loan or the repayment of any financial obligation of the retailer; (f) By extending to the retailer credit for a period in excess of the credit period usual and customary to the industry for the particular class of transactions as prescribed in §6.65; or (g) By requiring the retailer to take and dispose of a certain quota of any such products. Interest in Retail License §6.25 General. The act by an industry member of acquiring or holding any interest in any license (State, county or municipal) with respect to the premises of a retailer constitutes a means to induce within the meaning of the Act. §6.26 Indirect interest. Industry member interest in retail licenses includes any interest acquired by corporate officials, partners, employees or other representatives of the industry member. Any interest in a retail license acquired by a separate corporation in which the industry member or its officials, hold ownership or are otherwise affiliated, is an interest in a retail license. §6.27 Proprietary interest. (a) Complete ownership. Outright ownership of a retail business by an industry member is not an interest which may result in a violation of section 105((1) of the Act. ( Partial ownership. Less than complete ownership of a retail business by an industry member constitutes an interest in a retail license within the meaning of the Act. Now, as you read that, remember that I said the government must prove other elements in order to establish a violation. It is not illegal, per se, for you to acquire or hold an interest in a retailer. The exclusion and interestate commerce nexus must also be established. Next, the rules are not only complicated, they are also complex, that is, the way in which TTB will enforce them at some time in the future is always gong to be an unknown. We can see what TTB is doing in regard to trade practice investigations; we cannot predict what they will do in the future by way of enforcing the trade practices legislation. Given TTB's current staffing, it is unlikely that it would take the time to investigate the activities of any small producer when it has, on its plate, the problem of major retailers, like Kroger, appointing Southern Wine and Spirits as the category captain for its alcoholic beverage sections. What you do or do not do is a pimple on the butt of that elephant. So the advice to look to the state first is sound, but if you want to know IF federal law applies, whether or not it is enforced, it does. Now, with everything I've said, any responsible answer to your question requires an understanding of the particulars of the situation. There is no boilerplate solution.
  23. The name that you use as the "required name and address" statement is the "bottling trade name". If it says, "Distilled and Bottled by "Goodfoods Restaurants," or" Produced and Bottled by Good Foords Restaurants," or simp;ly" Bottled by Goodfoods Restaurants," then "Good Food Restaurants" is the bottling trade name. The Brand name could also be "Goodfood Restaurants" and then the label would identify the class and type, i.e. Distilled Gin, or whatever. It could also be "Sink Water" Gin "Distilled and Bottled by Goodfoods Restaurants." Here is that label: Goodfood Restaurants Gin Produced and Bottled by Good Foods Restaurants, Slipshod MT If the brand name is GFR, then: GFR Gin Produced and Bottled by Good Food Restaurants, Slipshod MT Here is the label: You do not need to register brand names with TTB. But you do need to submit an amended application to add a bottling trade name. On the Vodka variation, you register the bottling trade name (Blue Bell Spirits) ,since again you are using one other than your operating trade name. And again, you do not register the brand name, but someone should be registering the trademark Blue Bell Spirits, and that should probably by the restaurant owner, if it wants to protect its interests, so that, for example, if could move production and bottling to the distilled spirits plant down the street. Finally, your customer is not a distilled spirits plant. If it acquires the spirits from you for resale at wholesaler, it would need a wholesaler's basic permit from TTB. If it acquires the spirits for resale at retail, it need only register with TTB (and since the demise of special occupational taxes on retailers, that is not a provision often enforced). These are general rules. If you have specific questions, then that requires specific answers, and I only give general answers on forums like this.
  24. The change of location can take just as long as the original application. It is a freaking lottery. Bluestone is correct. It is easier to prepare the application itself. You get a consent of surety on the bond, change the descriptions of the premises, submit the new lease, and draw and submit new diagrams. However, do NOT listen to what one person experienced and extrapolate from that. I know I can tell you that, but you still want to know, "How long does it take?" The two most recent changes of location in which I was involved, came before the current descent to 157 average to approval of new applications. I submitted the most recent one on March 16 and it was approved on May 20, which was about two months. I submitted the other on 12/23/2014 and it was not approved until 5/20/2015. That was about 5 months. But we had to convince the previous tenant, also a DSP, to curtail its premises before TTB could approve the move into that location, so there were complicating circumstances.. Do you toss the five month example and take the two month example as more likely? DO NOT DO THAT. Like someone sending out a prospectus on a mutual fund, I've got to provide a warning, "Past Performance is Not Necessarily Indicative of Future Results." I've seen that stated differently, "Past returns are not future returns. Past returns can be very misleading if there are reasons to believe that future market conditions are likely to be significantly different from those that shaped past returns." Such reasons to believe exist when dealing with TTB. Look at the move from 117 tp 157 days average on original applications. In fact, my experience tells me that current results are likely to be significantly different if we were to submit the same application, at the same time, if they ended up in the hands of two different specialists. That brings us to the bottom line - Moving instead of dealing with the landlord could result in more delays than dealing with the landlord will, but that is a business decision you need to make. I'm sorry that it is impossible to give you an answer that let's the decision be more informed. Note that in TTB's parlance, you are changing "location," not address. But that is splitting hairs as long as you check the right amendment when you go into permits on line (and I hope you use permits on line because it makes life a lot easier when you do amendments).
  25. Whiskeytango Your first statement is not an assumption. It's spot on to the standard. "As two your second statement - yup, it would seem that if they are used they can be charred, since "uncharred" clearly does not modify "used." I'd agree with that. But that last statement is a duzzie and I've got to confess that I'm without an answer. The best way to track that down, short of asking someone in TTB who probably doesn't know either, is to go back to when the corn standard was first incorporated into the regulations in the form we find her, look at the Federal Register discussing the adoption of the final rule and at the Notice of Proposed Rule making that set the process in motion, and see if TTB expresses its intent in the explanations they include in their discussions. I suspect that they allow used charred oak because the former aging has taken away the char character, so that charring a used barrel might not be permissible because it restores the ability to give the whiskey a charred character. That line of reasoning would be consistent with the prohibition against subjecting corn whiskey "in any manner to treatment with charred wood." I suspect that the "in any manner" means to prohibit more than just the use of charred chips, etc. Someday, if I'm really bored, I'll try to run down the rule making. One of the problems is that we only have online copies of the Federal Register going back about 20 years, so if you want to find older ones, you have to go to a government records depository or hook up with them through a subscription service like HeinOnline.
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