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Distillery and Brewery?


Chuck

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Chuck,

haven't pressed the point withthe TTB but since we have to brew beer from mash to start distilling anyway, isn't anyone who starts from mash, a brewery and distillery by process? We don't pay takes at the brewing phase but it becomes a controlled and bonded product once we pitch yeast, correct?

I know, not the intent of your question but might be a fair arguing point.

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hi Truman, in conversations with my TTB agent, she said the tax attaches when it comes off the still. Of course, one finds differing interpretations from different TTB personnel.

Also, regarding your thought experiment that it's "beer," while I agree it's beer before it's whiskey, I think a distinction could be made in that it's not bottled, put in kegs, or sold as beer. So that would seem to be enough of a distinction not to consider a distillery a brewery.

As to a brewery and a distillery in the same building, my research suggests you either need to specify "alternating premises;" or separate your brewing and distilling areas. State and local laws may also completely block these possibilities as well.

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Chuck,

haven't pressed the point withthe TTB but since we have to brew beer from mash to start distilling anyway, isn't anyone who starts from mash, a brewery and distillery by process? We don't pay takes at the brewing phase but it becomes a controlled and bonded product once we pitch yeast, correct?

I know, not the intent of your question but might be a fair arguing point.

Yes, it's 'beer' or 'wine' before it's whickey or brandy. But it all depends on what stage you're selling at whether you're a 'brewery' or a 'distillery'.

This topic came up at a distillery couple of years back up in Michigan or Minn., can't remember exactly which state. The TTB inspector forced the distillery to get a winery license even though all the wine went to brandy. The owner didn't want to rock the boat but later questioned the TTB agent ruling; TTB found the agent wrong.

If the owner had questioned the decision up front it would have saved several thousands of dollars according to the article.

i don't have the link to the story, but I'm sure someone else here does.

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It was purely an academic quesiton as the TTB will tell us which liscenses to have. Correct me if I am worng but if we make a "beer" for distillation and lose it through spillage or other disaster, don't we have to acocunt for it? Tax attaches at the point of creation, as I thoght. can someone point out the regulations?

Truman

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  • 10 months later...

Just bumping this old thread. I am looking at leasing a space in a building that also contains a brewery. The areas are separated by walls and the Brewery is owned by another person. Can I assume under these circumstances that I would be in compliance with TTB? I am asking this based on the regulation below:

A person who intends to establish a distilled spirits plant may not locate it in any of the following places:

(a) In any residence, shed, yard, or enclosure connected to a residence;

(B) On any vessel or boat;

© Where beer or wine is produced;

(d) Where liquors are sold at retail; or

(e) Where any other business is conducted except as provided in §19.54.

Is anyone else actually doing this now? It seems like a natural synergy.

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A person who intends to establish a distilled spirits plant may not locate it in any of the following places:

(a) In any residence, shed, yard, or enclosure connected to a residence;

( B) On any vessel or boat;

© Where beer or wine is produced;

(d) Where liquors are sold at retail; or

(e) Where any other business is conducted except as provided in §19.54.

Is anyone else actually doing this now? It seems like a natural synergy.

If you read this carefully, you see that the DSP can't be a place where b,c,d, or e business is conducted. That is, the DSP has to be secured space where only the DSP activities occur. That does not mean that you can't be in the same building or in space adjacent to these activities, or that you can't conduct these activities in adjacent spaces. EXCEPT for item a, which specifically excludes adjacency for residences. Example, you can have a retail space or a space where you sell T-shirts, but it can not be in the DSP proper. It could be in the space next to it. And the DSP needs certain things, like its own access from the street, which means you can't go through these adjacent spaces to get to it (or at least, for one means of access). This confuses many, including us for our original layout.

I should point out that I have seen some places, in particular some breweries or brewpubs where the DSP can only be accessed through the brewery. I am not sure how these pass the TTB, except I suspect it has to do with a clever definition of general premise versus bonded premise for each.

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I asked this very specific question of the TTB regarding a distillery and a winery. What they told me was that it has to be walled off and have separate entrances. You can't walk through one to get to the other. Personally, I'd go ahead and shoot off an email to the TTB and ask specifically about your circumstances.

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I asked this very specific question of the TTB regarding a distillery and a winery. What they told me was that it has to be walled off and have separate entrances. You can't walk through one to get to the other. Personally, I'd go ahead and shoot off an email to the TTB and ask specifically about your circumstances.

You can walk through, but that can't be the primary egress/entrance, and it must be secured. I have seen an example where the distillery is in the brewery, but it has a "backdoor" to the out side that is legally the primary entrance. Depends on the TTB rep as to what they will accept. It was clear my DSP premise had to have a direct access to the street for my location, I could not even consider use of a public common entrance hall for that purpose.

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We're working on this sort of set up here in Pa. I've spoken to some folks doing both a brewery and distillery in the same space and it seems like they all seem to operate under an alternating proprietorship arrangement where one entity is renting from the other entity. That 's on the TTB level....the Pa. Liquor Control Board is another gnarly can of worms all together. Crossing fingers we can pull it off. Stay tuned!

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  • 2 months later...

Hi Steve

Do you have any specifics that you could steer me in the direction of regarding New York's allowing of co-location of wineries, breweries and distilleries? I was not aware of such allowances in New York and we're knee deep in this very topic with the good folks at the Pa. LCB. Any info would be grrrrreatly appreciated.

Thanks,

Your Brethren to the South in Pa.

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If you check out Ballast Point brewery in San Diego they have their still in an area enclosed by a chain link fence within the brewery. So you could say it is separate but included in the brewery. Some other craft breweries have similar set ups with only a token separation between the brewing and distilling operations and most don't have totally separate entrances. Must be some flexibility for the TTB agent to decide.

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The Governor of NY met with producers last week in Albany at the GOVERNOR'S SUMMIT ON WINE, BEER & SPIRITS. He listened to comments on exactly this issue and by end of day he returned to the conference and announced a change in NY policy regarding shared facilities. The following link is the Advisory of the SLA announcing the change:

Advisory 2012-10 - Issuance of Multiple Manufacturing Licenses for the Same Location

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Just bumping this old thread. I am looking at leasing a space in a building that also contains a brewery. The areas are separated by walls and the Brewery is owned by another person. Can I assume under these circumstances that I would be in compliance with TTB? I am asking this based on the regulation below:

A person who intends to establish a distilled spirits plant may not locate it in any of the following places:

(a) In any residence, shed, yard, or enclosure connected to a residence;

( B) On any vessel or boat;

© Where beer or wine is produced;

(d) Where liquors are sold at retail; or

(e) Where any other business is conducted except as provided in §19.54.

Is anyone else actually doing this now? It seems like a natural synergy.

Your hypothetical exactly describes Koval here in Chicago. A dividing wall with separate entrances, no way to get from one space to the other without going outside, there's no issue. They're separate entities.

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Chuck:

While we do not have this approval yet, I'm assured by a DC attorney whose practice largely centers around the TTB that you can circumvent this restriction through the regulations allowing for Alternating Premises - essentially the same structure can be the distillery then can cease to be the distillery when it is functioning as the Winery, etc...See 27 CFR 25.81

Steve

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