Switching to sales of hand sanitizer questions

[navenjohnson]

Can any of you all tell us what needs to be done to move to sales of our hand sanitizer? 

To date we've donated around 60 gallons locally but the requests just keep on coming in. As we are short on small containers we are adding a bulk option.

Here is a good example we want to emulate for our region: https://www.allhandsmn.org/

Also, anyone used aloe vera gel instead of glycerol? Some of our most vulnerable populations are the nations prisons and they only take gel....(because inmates will apparently drink anything else. 

Cheers!

[Thatch]

12 minutes ago, navenjohnson said:

Also, anyone used aloe vera gel instead of glycerol? Some of our most vulnerable populations are the nations prisons and they only take gel....(because inmates will apparently drink anything else. 

Saw this on Facebook

Flatrock Distilling Company· We had a few questions about mineral oil in some distillery made sanitizers. Our hand sanitizer is made with Aloe Vera and essential oils. We do not add mineral oil to batches.  (419) 868-8114  

[DrDistillation]

Be careful as https://www.ttb.gov/public-guidance/ttb-pg-2020-1a says "not for resale" but it's worded poorly so it's hard to understand the true meaning.  I would make a phone call before selling.  Donations should not be a problem.

Do not substitute ingredients unless pre-approved here: https://www.fda.gov/media/136118/download

[navenjohnson]

3 minutes ago, Thatch said:

Saw this on Facebook

Flatrock Distilling Company· We had a few questions about mineral oil in some distillery made sanitizers. Our hand sanitizer is made with Aloe Vera and essential oils. We do not add mineral oil to batches.  (419) 868-8114  

We do not add mineral oil to our batches either. We vegetable glycerol. Perhaps you could share your aloe vera recipe? 

 

[navenjohnson]

7 minutes ago, DrDistillation said:

Be careful as https://www.ttb.gov/public-guidance/ttb-pg-2020-1a says "not for resale" but it's worded poorly so it's hard to understand the true meaning.  I would make a phone call before selling.  Donations should not be a problem.

Do not substitute ingredients unless pre-approved here: https://www.fda.gov/media/136118/download

Thanks DrD. We understand the rules laid out initially.

So how are Tattersal, Du Nord, and Justice Brothers now selling theirs? Is it through the FDA? TTB? They've produced and distributed 1500 gallons thus far. The prices are all laid out on their website so one might assume they sold those 1500 gallons! 

Also, has the FDA/ TTB commented on the need for sanitizer in federal prisons and if so has there been any comment on the addition of aloe vera/ gel so inmates won't consume it? 

 

[DrDistillation]

This is why I draw this conclusion.  Both below from https://www.ttb.gov/public-guidance/ttb-pg-2020-1a

"Alcohol, whether or not denatured, may be delivered tax-free to state and local governments for non-beverage purposes. The same is true for hospitals, blood banks, sanitariums, certain pathological laboratories, non-profit clinics, and qualifying educational institutions, if not for resale or use in the manufacture of any product for sale."

and

"In addition, any existing DSP may remove undenatured or denatured ethanol from bonded premises free of tax for use by hospitals, blood banks, sanitariums, certain pathological laboratories, non-profit clinics, and qualifying educational institutions seeking to use it to manufacture hand sanitizer, and not for resale or use in the manufacture of any product for sale."

Now that could just be poor wording, don't know, but a phone call should be able to give you a clear answer.

Of course you could give the sanitizer away for free and also take donations.  You could even mention those making donations go to the top of the list as their contributions help you fund making more product for the community.

[Thatch]

42 minutes ago, navenjohnson said:

We do not add mineral oil to our batches either. We vegetable glycerol. Perhaps you could share your aloe vera recipe? 

You've misunderstood.  That is not me, I simply gave you a contact to call to see if they would share their recipe.  I saw it on FB and gave you the contact info.  Call the number and see if the guy will talk to you.

[navenjohnson]

Thanks everyone for the input. 

As we understand it now, we may be able to sell it to businesses that are deemed essential. In our state that appears to be fairly broad. It seems that selling to the general public is where a line is drawn.

Truth is that we've run out of resources to do this for free but we continue to field about 20 calls a day regarding the hand sanitizer. We are not yet selling the stuff but we would like to.

As we learn more about this we will try and share our experience. 

 

[Pour Decisions]

"Alcohol, whether or not denatured, may be delivered tax-free to state and local governments for non-beverage purposes. The same is true for hospitals, blood banks, sanitariums, certain pathological laboratories, non-profit clinics, and qualifying educational institutions, if not for resale or use in the manufacture of any product for sale."

and

"In addition, any existing DSP may remove undenatured or denatured ethanol from bonded premises free of tax for use by hospitals, blood banks, sanitariums, certain pathological laboratories, non-profit clinics, and qualifying educational institutions seeking to use it to manufacture hand sanitizer, and not for resale or use in the manufacture of any product for sale."

 

 

These statement refer to tax free ethanol, no where does it state that you cannot remove tax accrued or tax paid alcohol for the production of hand sanitizer for sale. 

[Pour Decisions]

20 hours ago, navenjohnson said:

So how are Tattersal, Du Nord, and Justice Brothers now selling theirs? Is it through the FDA? TTB? They've produced and distributed 1500 gallons thus far. The prices are all laid out on their website so one might assume they sold those 1500 gallons! 

 

 

They are not technically selling, but requesting donations

 

 

[DrDistillation]

25 minutes ago, Madspeed said:

These statement refer to tax free ethanol, no where does it state that you cannot remove tax accrued or tax paid alcohol for the production of hand sanitizer for sale. 

No where does it say you can!  Other than this waiver you can only remove spirits for use in what you are bonded to normally do!

Well it states you can remove it tax free for use to make santizer but NOT for any product for sale.

So you can't remove it for use in a sold product under this TTB waiver to DSPs the way I read it.  If you are making a new product for sale at your DSP you better make sure you are bonded to do so.

If you see any wording that says you can optionally remove the Ethanol to use in a for paid for product and pay tax on it let us know.  Keep in mind without a specific waiver you need to abide by what your bond(s) covers.

[Pour Decisions]

26 U.S. Code § 5214

(a)Purposes Distilled spirits on which the internal revenue tax has not been paid or determined may, subject to such regulations as the Secretary shall prescribe, be withdrawn from the bonded premises of any distilled spirits plant in approved containers—

(1)free of tax after denaturation of such spirits in the manner prescribed by law for—

(A)

exportation;

(B)

use in the manufacture of ether, chloroform, or other definite chemical substance where such distilled spirits are changed into some other chemical substance and do not appear in the finished product; or

(C)

any other use in the arts and industries (except for uses prohibited by section 5273(b) or (d)) and for fuel, light, and power; or

(2)

free of tax by, and for the use of, the United States or any governmental agency thereof, any State, any political subdivision of a State, or the District of Columbia, for nonbeverage purposes; or

(3)free of tax for nonbeverage purposes and not for resale or use in the manufacture of any product for sale—

(A)

for the use of any educational organization described in section 170(b)(1)(A)(ii) which is exempt from income tax under section 501(a), or for the use of any scientific university or college of learning;

(B)

for any laboratory for use exclusively in scientific research;

(C)

for use at any hospital, blood bank, or sanitarium), (including use in making any analysis or test at such hospital, blood bank, or sanitarium), or at any pathological laboratory exclusively engaged in making analyses, or tests, for hospitals or sanitariums; or

(D)

for the use of any clinic operated for charity and not for profit (including use in the compounding of bona fide medicines for treatment outside of such clinics of patients thereof); or

(4)

without payment of tax for exportation, after making such application and entries, filing such bonds as are required by section 5175, and complying with such other requirements as may by regulations be prescribed; or

(5)

without payment of tax for use in wine production, as authorized by section 5373; or

(6)

without payment of tax for transfer to manufacturing bonded warehouses for manufacturing in such warehouses for export, as authorized by law; or

(7)

without payment of tax for use of certain vessels and aircraft, as authorized by law; or

(8)

without payment of tax for transfer to foreign-trade zones, as authorized by law; or

(9)

without payment of tax, for transfer (for the purpose of storage pending exportation) to any customs bonded warehouse from which distilled spirits may be exported, and distilled spirits transferred to a customs bonded warehouse under this paragraph shall be entered, stored, and accounted for under such regulations and bonds as the Secretary may prescribe; or

(10)

without payment of tax by a proprietor of bonded premises for use in research, development, or testing (other than consumer testing or other market analysis) of processes, systems, materials, or equipment, relating to distilled spirits or distilled spirits operations, under such limitations and conditions as to quantities, use, and accountability as the Secretary may by regulations require for the protection of the revenue; or

(11)

free of tax when contained in an article (within the meaning of section 5002(a)(14)); or

(12)

free of tax in the case of distilled spirits produced under section 5181; or

(13)

without payment of tax for use on bonded wine cellar premises in the production of wine or wine products which will be rendered unfit for beverage use and removed pursuant to section 5362(d).

(b)Cross references

(1)

For provisions relating to denaturation, see sections 5241 and 5242.

(2)

For provisions requiring permit for users of distilled spirits withdrawn free of tax and for users of specially denatured distilled spirits, see section 5271.

(3)

For provisions relating to withdrawal of distilled spirits without payment of tax for use of certain vessels and aircraft, as authorized by law, see 19 U.S.C. 1309.

(4)

For provisions relating to withdrawal of distilled spirits without payment of tax for manufacture in manufacturing bonded warehouse, see 19 U.S.C. 1311.

(5)

For provisions relating to foreign-trade zones, see 19 U.S.C. 81c.

(6)

For provisions authorizing regulations for withdrawal of distilled spirits free of tax for use of the United States, see section 7510.

(7)

For provisions authorizing removal of distillates to bonded wine cellars for use in the production of distilling material, see section 5373(c).

(8)

For provisions relating to distilled spirits for use of foreign embassies, legations, etc., see section 5066.

 

[Chris/Maine]

23 hours ago, navenjohnson said:

Can any of you all tell us what needs to be done to move to sales of our hand sanitizer? 

To date we've donated around 60 gallons locally but the requests just keep on coming in. As we are short on small containers we are adding a bulk option.

Here is a good example we want to emulate for our region: https://www.allhandsmn.org/

Also, anyone used aloe vera gel instead of glycerol? Some of our most vulnerable populations are the nations prisons and they only take gel....(because inmates will apparently drink anything else. 

Cheers!

These may be useful. 100% recyclable, lightweight, come fully sanitized, holds 20L.  My company sells them for: beer, wine-on-tap, cider, kombucha, cold-brew coffee. Let me know if you'd like further info.

[Pour Decisions]

26 U.S. Code § 5214

(a)Purposes Distilled spirits on which the internal revenue tax has not been paid or determined may, subject to such regulations as the Secretary shall prescribe, be withdrawn from the bonded premises of any distilled spirits plant in approved containers—

.... (11)

free of tax when contained in an article (within the meaning of section 5002(a)(14)); 

 

 

 

Whereas "article" is defined as

26 U.S. Code § 5002(a)(14)Article

Unless another meaning is distinctly expressed or manifestly intended, the term “article” means any substance in the manufacture of which denatured distilled spirits are used.

[DrDistillation]

Maxspeed, those are ONLY IRS regulations for TAX purposes.  This is not authority to just willy/nilly move alcohol around from bonded areas.  That is the GROSS regulations, not what applies specifically to you.  For that as a DSP you refer to TTB and the type of permit and Bond you have.

In the case of making hand sanitizer outside of our temporary waiver you need different bonding as well as FDA approval which takes time, like any other pharma product. About a year ago the FDA banned 28 ingredients from being used in sanitizer.  It's possible that ethyl alcohol will be banned in the next update.  Right now you have to register with the FDA to produce hand sanitizer but they are giving you instant approval via the current waiver.

[RBDistiller]

On 4/6/2020 at 3:24 PM, DrDistillation said:

Maxspeed, those are ONLY IRS regulations for TAX purposes.  This is not authority to just willy/nilly move alcohol around from bonded areas.  That is the GROSS regulations, not what applies specifically to you.  For that as a DSP you refer to TTB and the type of permit and Bond you have.

In the case of making hand sanitizer outside of our temporary waiver you need different bonding as well as FDA approval which takes time, like any other pharma product. About a year ago the FDA banned 28 ingredients from being used in sanitizer.  It's possible that ethyl alcohol will be banned in the next update.  Right now you have to register with the FDA to produce hand sanitizer but they are giving you instant approval via the current waiver.

I reached out to the DISCUS email Covid-19 hotline regarding the sales of hand sanitizer and their response to me was "there is no specific guidance that would prevent you from selling the hand sanitizer." I know their word is far from the final word on the topic so take however you feel necessary. 

[NKroencke]

Naven,

My name is Noah and I wanted to reach out because I am working with a couple manufacturers to get hand sanitizer out to everybody. I am talking with a bottle manufacturer who can get me 60 ml and 120 ml spray mist bottles. The issue is that the minimum order is 25,000 and I do not need that many. If you need small bottles, let me know and we can see what we can do. I also have finished hand sanitizer and tanker trucks of ethanol so it might be worth comparing pricing to see if my prices are affordable for you.

Thanks

Noah

[Whitney]

We have been selling hand sanitizer. I got our distillery registered as a drug manufacturing plant on CDER. We are using the WHO formulation 1 (denatured alcohol, hydrogen peroxide, glycerin, and water). 

[Pour Decisions]

2 hours ago, Whitney said:

We have been selling hand sanitizer. I got our distillery registered as a drug manufacturing plant on CDER. We are using the WHO formulation 1 (denatured alcohol, hydrogen peroxide, glycerin, and water). 

How was that process?