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Distillery in Malt Plant

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We are building a malt plant and wish to have a distillery in the same building.  Can the malt plant be part of the bonded area?  We will be making all malt whiskey.  I have searched the TTB site and there is nothing that seems to address this issue.

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You shouldn't need the malting operations areas to be part of the bonded portion of the DSP. The TTB does not regulate malt production, which is why you won't find anything from them. If you are doing floor malting than you could use a separate building (or part of the main building) and not designate it as bonded area in your permit application.

I believe you COULD include it in your bonded area if you really want to though. Or put up a separation and not include it.

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Hey Blockader,

Thanks for replying to my poorly worded post.  Let me take another shot.

I have a building which houses a malt plant.  I have enough space to add a distillery.  The malt plant is quite secure and if we put the distillery into the malt plant the spirits would also be secure.  So here's my question:  What separation will I have to have to make TTB happy?  

I have visited several distilleries and there is no separation between the distilling equipment the aging and the finished goods.  Therefore I assume that the entire DSP is bonded area.   If this is the case, then declaring the entire malt house as bonded area would seem to be the best way to satisfy the TTB requirements.

I do understand that TTB does not regulate malt.

I appreciate any comments

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Gotcha, I misunderstood somewhat. 

Your distillation, barrel storage, and finished goods storage are always bonded area so generally would not be separated from one another securely. 

If you chose to house the DSP in the same building as your maltings you could separate that bonded area from non bonded malt works with something as simple as a chain link fence. 

This isn't really my area of expertise so hopefully someone can chime in detailing the various downsides of bonding the whole building. It may still be your best option. 

You will also find some discrepancy between what the TTB deems acceptable from one plant to another, which throws in a fun extra wrinkle.

Good luck with your venture, it sounds pretty rad. 

 

 

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Hey Thatch,

Really curious to see what you find out here. We are doing something similar except headed from a different direction. We are adding a malt plant to our existing DSP. Based on some initial conversations with some different folks we are thinking that the malting facility can be included in the bonded area which, if true, would add a little flexibility. It's always nice to be able to store barrels wherever possible!

Cheers!

Adam

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Just to be clear here - the issue is not malting in the DSP - this is irrelevant - and a typical distillery process.

This issue is running another business as part of the DSP, no?

 

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56 minutes ago, Silk City Distillers said:

Just to be clear here - the issue is not malting in the DSP - this is irrelevant - and a typical distillery process.

This issue is running another business as part of the DSP, no?

 

Exactly right...sorry, forgot to add that piece. If the malt plant falls under the same business (corp, llc, etc) as the DSP, then no issue as it is considered "support equipment". IF you set the malting business and the DSP up as separate businesses, then things become more complicated, requiring the standard separation process...walls, fence, locks, etc.

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Thanks Guys,

Very helpful.  I'm not sure if I have a problem.  I stopped by Defiant (Blue Ridge Mountain Distillery) Friday and the distiller thought I might have a problem.  The regs are not very clear, posted below.  Subpart D does not seem to be applicable. I guess the best approach is to have an beverage attorney interpret the regs. I'll post the ruling once I get it. 

Sec. 19.133 Use of distilled spirits plant premises.

(a) General. No business or operation shall be conducted on the 
premises of a distilled spirits plant other than those authorized in 
accordance with subpart D of this part or those authorized to be carried 
on or conducted by the notice of registration.
(b) Bonded premises. Bonded premises shall be used exclusively for 
distilled spirits operations. Spirits in packages, cases, or other 
portable containers on bonded premises shall be stored in a room or 
building. However, upon application by the proprietor, the regional 
director (compliance) may approve an alternative method of storage of 
such spirits if such method is suitable for the protection of the 
revenue and the effective administration of this part.
(c) General premises. General premises are any portion of the 
distilled spirits plant described in the notice of registration other 
than bonded premises. General premises may not be used for any of the 
operations required to be conducted on bonded premises. Business offices 
and service facilities may be included as a part of general premises.

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Which would be why you exclude the malting facility from the bond and put up a barrier to designate different businesses. So long as the distillery and malt house have separate entrances, they can be considered separate premises. Depending on the mood of your agent, you may even be able to get dispensation to use a shared entrance. We were able to use a shared bay door with the brewery and only needed railings between the bonded premises.

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Thanks Robert, we're in the process of getting our application together.  I'll post something once we find out what we're allowed to do.  

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You did not say if the malt house will be producing malt for anyone else. That is the key issue here. If not, it can all be in the DSP (but it does not have to be bonded, it could be general premises). On the other hand, if you are going to be regularly selling malt to other people, it SHOULD NOT be in the DSP, not even as general premises. That is because of the provision stated, that only DSP business should occur in the DSP. But ALSO because the TTB has you track what goods are brought into the DSP for fermentation (malt and grain) in your production report, and you would need some sort of physical separation to indicate what was moved into the DSP and what was not. Now, it could be a tape on the floor, and you could even use that separation for the separation of the general premise of the DSP from the rest of the malt house. But since you will have to separate the bonded area from the rest of the malt house by secure structure anyway, you might want to do that for all.

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Thanks Bluestar,  We will be selling to others.  We hope to submit our application soon using one of the folks that contributes here regularly.  Once I find out the results, I'll post them.

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Good luck. But as I said, if you are going to be selling to others, you would need to separate the DSP from the general malt house operations.

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Got our permit to have a DSP and malt plant in the same building without any partition or wall between.  Dave Dunbar did all the work on this one.  This is allowed by the regulations but as Dave told me from the start of this application (took 46 days) the TTB does not have to grant permission.  If you want to understand how he did it, please contact Dave directly.  Dave is a constant contributor to this forum.

David Dunbar's profile photo
dhdunbar1@gmail.com
Ellensburg, WA

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On 12/3/2017 at 6:23 AM, Thatch said:

Got our permit to have a DSP and malt plant in the same building without any partition or wall between.  Dave Dunbar did all the work on this one.  This is allowed by the regulations but as Dave told me from the start of this application (took 46 days) the TTB does not have to grant permission.  If you want to understand how he did it, please contact Dave directly.  Dave is a constant contributor to this forum.

And you are selling malt to others?

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bluestar - Yes, we will be.  This was fully disclosed in the application.

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22 hours ago, Thatch said:

bluestar - Yes, we will be.  This was fully disclosed in the application.

Of course, each TTB reviewer will give their own opinion, but we had extensive discussions about using the distillery for non-distilling activities, and in the end, they convinced us that we had to not only separate bonded premise from general premise, but that there needed to be a separation between general premise and non-distillery space, although it did not require the same level of security as the bonded premise. In the end, this makes sense, since you are required to report the acceptance of the malt into the distillery for production as a separate activity from malt being sold outside or used for another purpose. Similarly, any grains brought into the distillery would have to be reported on your production report, and that becomes ambiguous if the grain might not be used for distillation. The reporting and tracking of raw materials brought onto distillery premises and its security is part of how the TTB assures you are not "cheating". Now, I would presume you could sell malt from the distillery, but to do so, you would have to report all the grain coming in and all the malt going out somewhere in your monthly reports. Otherwise, you would have to show a way that you physically separate the malt and grain accepted for production, so that only malt used for production goes into the monthly report.

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Thanks Bluestar - we will do whatever is necessary to make the TTB happy.   Dave Dunbar has been a very good source of information for us to date.

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