Fred Linneman

Regarding the notion of reshaping the Micro tax proposal so that the reduced rate applies to "the first 60,000 cases", rather than applying the maximum number proposed (60,000 production limit) ....

If I may, I think that we should be talking proof gallons of production. All the TTB calculations are in proof gallons, not cases, bottles or liters. The last thing I want is more calculations to determine something that could be avoided in the early stages.

Perhaps others think in terms of cases, but a case of 375's is different than a case of 1.5's. While it is very important to me to know my product mix on a business level, on a tax level I really want to keep the paper work down!

Perhaps I am mis-reading this. But, at 60,000 proof gallons of production, we do not need to classify if the product is at 30% ABV or 60% ABV as proof gallons will reduce this. We do not need to classify 60,000 cases of 50 ML's verses 60,000 of 750 ML's.

Just my two cents - take it or leave it.

Fred Linneman

Mystic Mountain Distillery

I saw some at Tricor Braun in Portland, Oregon, last week.

http://www.tricorbraun.com/

f

We talked with Tricor Braun - Denver Office - not a pleasing time.

Call Waterloo Container - they will give you a list of manufactures if they do not have what you want.

Waterloo seems (so far) to have great customer service.

Fred

Congrats!!

I signed up - sounds like an exciting adventure. I wish you all the best and success!

Fred

I agree - it is a new tax base, not a reduction. Keep on point. With lower taxes, more people will join in the production of spirits and we will all grow.

I would be interested in reviewing the co-op distribution system in Colorado, and seeing what that would look like.

We have tried a small distributor - working on our next. As people have said - they don't mind taking product and selling it, but they seem to really hate paying for the product! Just sent one distributor to collections.

We will still work on the self-distribution, but it is becoming more and more difficult to service accounts.

I'm agreed with Chuck's revision of the structure of the definition, let's focus on the following text and start to build concensus here:

Micro Spirit Producers may make no more than 65,000 proof gallons of product per year in a single licensed premises. Micro Spirit Producers use a variety of techniques which substantially change the character of the raw materials. Those techniques include but are not limited to: infusion, distillation, blending, and/or rectification. Micro Spirit Producers use agricultural raw materials including but not limited to grains and/or fruit.

....

Comments??

I suggest that we may want to do something so that a private label, made from a plant that produces thousands of gallons of hooch cannot market themselves as ‘small batch’ producers. We have several private labels here, being marketed as a local product, made out of state where the owners don't touch the product other than at the liquor store where the buy their own product. I do not know if this can be accomplished by limiting to 65,000 proof gallons or some other means.

What I do know is that a well-capitalized marketing firm can private label (contract) a brand and make it very difficult for a small distillery to overcome the marketing efforts to educate the public that the product is not local but made in another state. The above statement to me achieves this issue.

That said, unless someone has a better thought,

I am on board.

Fred

Craft comes into play while distilling in my alembic, making cuts, and secondary infusions (in the case of absinthe). It's utter BS to insist that what I do is not "craft."

I agree that there is "CRAFT" involved - I said that anyone that does not touch the product, other than at the liquor store!

We have a couple of Craft Vodka makers here in Colorado - made and bottled (basically a private label), yet they market themselves as a local distiller!

Chuck - This is an issue that I am glad someone is addressing. While there are a few of us 'Craft' Distilleries in the state of Colorado (very few), most buy their product in bulk, perhaps filter it, place it in a wonderful bottle, with the words 'made in Colorado' and sell it. Some don’t even bottle it here in the state! (I think that these guys should be termed ‘private label’!)

I am sure that their profit margins are much better than mine.

I think the real issue is how are we going to define the term ‘Craft Distillery’. Is a Craft Distillery one that starts with the grain and works it to the finished product or is a Craft distillery one that buys from ADM, filters, adds additives, flavoring and bottles?

It is not so much an issue for us as ‘distillers’, but could prove to be a major issue in the market place: consumer perception. This would help, down the road, to educate the public.

Many great products are out there, where one buys in bulk, mixes, blends and re-packages and there are just as many great products where one buys raw material, cooks, and package. But the definition can hurt as well as help in the market place. The guy that contracts his product from start to finish is a marketer, not a producer. In my experience, the marketer takes too many ‘short cuts’.

I don’t want to infringe on those that take wash, made to their specs, and begin the process of creating something fun and unique. But at the same time, one that has no control over the process, one that never touches the grain, mash, wash or bottle (other than in the liquor store) should not be classified as a Craft Distillery.

My two-cents anyway.

Fred Linneman

Mystic Mountain Distillery

Larkspur Colorado

Hello Rob;

I believe I spoke with you the other day, Mystic Mountain - nice to see you here! It is a good site

Fred Linneman

I read here that the TTB thinks that $2.70 is not a proper tax rate.

Before we develop points to support a reduction, I think that we should determine what a proper tax rate is. This will aid us in determining the numbers to utilize in order to justify a proposed tax rate and determine potential tax revenue lost.

It would also be helpful to determine the number of distillers, we can determine a forcast of new distilleries over the next five years. This would help the determination of potential tax revenue gain!

Also, does any one have any information on small distillery individual growth rates. What is an average that each small distillery grow at 10% per year, 50%? This information would also aid in the future projections of tax revenue gain

Fred

Count us in on this -

Let me know if there is something I need to do to help

Fred

Mystic Mountain Distillery

Thank you all - I will continue to work through this and see if we cannot figure something out.

Research is key and the suggestions of either a contract or written understanding is a good idea.

Does any one have a distributor's contract that I can review.

This is all so new, that I want to make sure that I am protected.

Hello all;

From Mystic Mountain in Larkspur Colorado - a magical place with all sorts of stuff; including a dragon! (Perhaps I have been sampling the wares a bit to much.) Quality Control and all that!

It is nice to have found a site like this, so much info and friendly people! It is my hope that Mystic Mountain will contribute as much back as we have gained from the information here.

Thank you again for allowing us the pleasure to interact with all of you.

Fred Linneman

I think easier forms are a great idea - Also agree with the higher proof gallon limits below

Fred

Our distributor is demanding the 50 ml - we cant keep up! It is very labor intensive and takes for ever to make a case of 120 units.

It must of been the airline industry that determined this was a good idea! I can't wait until we can afford the 40K for a little bottle (automated) machine. Then we will get caught up on demand.