I called TTB on this topic and they mainly care about the tax and reporting aspect. Record the 10-15 gals in Processing as packaged in bulk, put it in containers 1gal or larger, and pay your Fed excise tax on it.  State excise usually wouldn't apply, but you have to navigate two states' worth of laws, which may make the proposed transaction illegal in fact.  Might not be worth the risk/hassle for a small buy like that.

1 hour ago, glisade said:

You can bring in beer, wort or a fermented wort as a raw ingredient into your production account without a transfer in bond. We do this fairly often.

No doubt that's standard practice. But if you are not running that wort or beer through your still, what line would you use to report the beer transfer from production to processing, so you can use it as a blending ingredient?

You'll have to pay the spirits excise tax rate on the beer-contributed proof gallons. There's a way to get a refund for wine used in this way but not for beer. Which is another reason I wonder about the legality of mixing beer into a distilled spirits product.

Here's another angle to think about.

In order to use bulk beer as an ingredient in your distilled spirits product, you have to bring bulk beer into your Processing account.  I believe the CFRs only allow a DSP to bring in bonded wine from a licensed wine producer.  No mention of beer.

27 CFR § 19.402 - Authorized transfers in bond.

https://www.law.cornell.edu/cfr/text/27/19.402

Super interesting topic. Some bench trials are warranted for certain. Thanks to all who weighed in. 

I'm going to disagree with DrDistillation there and suggest that you:

- Ensure you are measuring starting proof precisely (good hydrometer, good thermometer, good lab procedure)

- Use AlcoDens software by meerkat to calculate, by weight, your cuts based on starting proof and starting weight (you can also go by volume)

- Add all the water you need to reach target proof at once and mix/agitate well for about 15 minutes

- Wait: For the next 60-90 mins the product will still be integrating (ethanol and water molecules getting together in their final interlocked configuration, spitting off heat in the process)

- Mix again for 15 minutes

- Measure proof to confirm

Taking a month to proof a cut batch is quite a luxury!

These steps are good for 50-350 gallon batches.  Smaller batches will integrate faster, larger batches will take longer & more mixing.

My mental shortcut is to think of the ethanol as if it's sand, getting dumped into water.  The "sand" needs to be completely evenly soaked with water (i.e. mixed) before you can proof it.  You can wait a month and capillary action will eventually distribute the water throughout the sand, but it wont be even (it'll be heavier at the bottom).  That's why I advocate strong mixing.  You have to force the issue, or you will wind up with a stratified tank that has substantially different proof on the bottom vs. the top, which leads to its own set of major problems (off proof product getting bottled, in particular).

I'm not a chemist but I've batched and proofed hundreds of thousands of gallons of product, personally.  These are my hard-won lessons

Anyone have any experience with Ethan they'd like to share?

I agree wholeheartedly with dhdunbar's analysis.  Thank you for taking the time to parse it.

4 hours ago, meerkat said:

For glycerol I come to 0.23 Proof per gram/L and for peroxide 0.29 Proof per gram/L. These would be specifically for an 80 % ABV alcohol content and would definitely vary with the alcohol strength. These numbers compare with the 0.4 Proof per gram/L the TTB gives for sugar in 80-100 proof spirits.

Glycerol at 1.45 v/v is equivalent to 18.3 gram/L so the obscuration would be 18.3 x 0.23 = 4.2 Proof. Peroxide at 0.125 v/v is equivalent to 0.181 gram/L, making the obscuration 0.181 x 0.29 = 0.05 proof and probably not worth worrying about.

Thanks for the very helpful shortcuts.

Two questions:

- Can you show your process for arriving at those obscuration numbers?

- Using that math, can you consider expanding AlcoDens LQ's "sugar syrup" functionality to be more flexible and allow the calculation of non-sugar obscuration for other ingredients like molasses & glycerine?

4 hours ago, meerkat said:

Hi @Jedd Haas  - please can you point me to the FDA recommendation that the alcohol content should be verified with a hydrometer.  I have not been following the sanitizer threads closely and am not up to speed on the regulations.

https://www.fda.gov/media/136289/download

Point #6 (I quoted it above)

The firm uses the most accurate method of analysis available at the site for verification of alcohol content in samples of the finished drug product before each batch is released for distribution.Methods can include gas chromatography (GC), alcoholmeter, hydrometer, or other chemical analysis of at least equivalent accuracy. The sample tested can be performed on in-process material before filling into the final containers to be distributed.

FDA wants you to proof batches before bottling.  This discussion is about that.  Designing a batch to land at 80% ABV as you describe, and objectively verifying the alcohol content, are two separate things.  Anyone can use hoochware or letsmakesomesanitizer.com and get a formula - that's the easy part.

On 4/6/2020 at 6:29 AM, John Bassett said:

I have been proofing as usual.   I too wonder what effect glycerin, hydrogen peroxide, denaturants, etc. have on actual proof.   The labs are behind 20+ days

Here's my guesses
- If you use 5% Isopropanol as your denaturant you will have a hard time proofing accurately using normal methods because Iso has a much lower density than ethyl and you've made a mixture. This renders traditionally-calibrated instruments like hydrometers and density meters pretty much useless without a fudge factor of some kind.

- If you use formula 40A/40B with denatonium benzoate the application rate is so low (1.7 grams per 100 gallons) that its effect on proof can be ignored safely

- Glycerine being much denser than ethyl will have an obscuring effect on the proof (just like sugar syrup or molasses would)

- H2O2 is in such a small quantity that I think it will have a very small effect on proof, if any

We'll be making a number of large batches in succession and I will test product at each step of the process in a density meter w/ refractometer.  If warranted, I will even bench distill a sample.  I'll share my findings.

FDA told us on the phone (but refused to go on record) that they chose the 80% ABV level because it is thought to be the most effective against COVID-19.  That motivates me to get the proof right, even though we do have a rather large window (+/- 5% ABV) as a practical matter.

6 hours ago, DrDistillation said:

TTB doc https://www.ttb.gov/public-guidance/ttb-pg-2020-1a

has a link to FDA document https://www.fda.gov/media/136289/download

Step 1 c. Hydrogen peroxide footnote 10

10 Hydrogen Peroxide Concentrate USP or Hydrogen Peroxide Topical Solution USP. Technical grade hydrogen peroxide falls within this policy if the concentration is within that of Hydrogen Peroxide Concentrate USP or Hydrogen Peroxide Topical Solution USP

-------

So not a loophole but specifically spelled out.  The loophole I was referring to was about selling the product as that is not mentioned in the docs.  Only NOT FOR SALE sanitizer.  Maybe the TTB/FDA don't care but the bulletins say otherwise. That DOES need clarification if you are thinking of trying to sell.

You're right. It was me that had the two guidance docs backwards.

1 hour ago, DrDistillation said:

Just follow the TTB directive and the linked FDA document for how to make hand sanitizer under the waiver and call it a day. Do each and every step.

Don't go looking for other documents to try and find "loop holes".  Just follow the directions as given or make phone calls for guidance.

Neither of the docs that you mention allow Technical Grade Hydrogen Peroxide.  My point is that I think YOU are the one that's looking for a loop hole in an "other" document.  Specifically the "Compounders" document, which nobody (i.e. TTB or FDA) has said applies to you.  

We have, of course, been making calls to FDA but they are skittish about going on the record.

I maintain that the distinction only matters (technical grade vs. USP h2o2) if you are selling the product, in which case I feel (morally and legally) you have a higher standard of accountability.  If you are donating it, I think we all know that the two are functionally equivalent in this particular use case.

1 hour ago, DrDistillation said:

the FDA document being provided to DSPs and forwarded by the TTB who you are licensed with

TTB guidance: https://www.ttb.gov/public-guidance/ttb-pg-2020-1a
Refers specifically to FDA doc 136289 ("firms" and not "compounders") and does so three times.
It does not refer to the "compounder" doc (136118) at all.
Do you have a source for this claim - that TTB is referring to the "compounding" doc (136118)?

Quote

if you are NOT selling the product

I agree that relatively small things would be overlooked in this case.  But some DSPs are trying to sell sanitizer in order to stay afloat... and those DSPs would, in my opinion, be wise to toe the line.

On 4/3/2020 at 10:49 AM, DrDistillation said:

I'd personally have no issue using H2O2 regardless of supplier if I could get it.  It should be cheaper to transport as well.  I see it available still from many suppliers.

It would be almost impossible for H2O2 not to fall into footnote 7 on the FDA document. https://www.fda.gov/media/136118/download

"Hydrogen Peroxide Concentrate USP or Hydrogen Peroxide Topical Solution USP. Technical grade hydrogen peroxide falls within this policy if the concentration is within that of Hydrogen Peroxide Concentrate USP or Hydrogen Peroxide Topical Solution USP."

This is confusing but I think we (DSPs) actually have to use USP. 

The "Technical grade" footnote you mentioned appears in an FDA document titled: "Policy for Temporary Compounding of Certain Alcohol-Based Hand Sanitizer Products During the Public Health Emergency Immediately in Effect Guidance for Industry" @ https://www.fda.gov/media/136118/download

I believe that guidance is for compounders (i.e. pharmacist-controlled) production facilities that do not normally make sanitizer, allowing them to make it with technical grade peroxide:

Quote

The Agency is issuing this guidance to communicate its policy for the temporary compounding of certain alcohol-based hand sanitizer products

by pharmacists in State-licensed pharmacies or Federal facilities and registered outsourcing facilities (referred to collectively in this guidance as compounders)

There is a similar but separate FDA guidance doc titled: "Temporary Policy for Preparation of Certain Alcohol-Based Hand Sanitizer Products During the Public Health Emergency (COVID-191 ) Guidance for Industry " @ https://www.fda.gov/media/136289/download

This one says: 

Quote

The Agency is issuing this guidance to communicate its policy for the temporary preparation of certain alcohol-based hand sanitizer products

by firms that register as over-the-counter (OTC) drug manufacturers to prepare alcohol-based hand sanitizers under the circumstances described in this guidance (“firms”) for the duration of the public health emergency declared by the Secretary of Health and Human Services (HHS) on January 31, 2020.

I don't think DSPs are Federal compounding facilities - I think they fall under the 2nd doc's umbrella of "firms" that register as OTC manufacturers.

Hence, we can only use USP, because the footnote in that doc is missing the technical grade exception.

Anyone else got another reading?

Just about an hour ago (weds night) they finally passed the bill and it includes some pretty nice language:

No federal excise tax for the entirety of 2020 spirit removals for hand sanitizer.

Even bigger is that all you have to do is follow WHO.  AND bulk sales / labeling requirements are waived.  For once - some decent legislation.  Thank goodness.

House is supposed to vote on this on Friday AM so CALL YOUR REPS although one would hope this is a no-brainer.

Source: https://files.taxfoundation.org/20200325223111/FINAL-FINAL-CARES-ACT.pdf (pg 212-213)

Just a thought... I am not a lawyer and this is not intended to be advice...

If you are a DSP who can produce or blend to ~82% ABV (164pf) you have an avenue to help that may be more appealing than actually making sanitizer.

Assuming your state law allows it, you can take an existing formula/COLA and print new labels with the proof set to 164 and everything else the same.  Batch / distill your product as usual except for the higher proof.  Bottle, label, record, pay excise and sell through normal (or non-normal) licensed channels.  At this point you are just delivering usual, taxpaid beverage alcohol to a licensee like any other day.  The fact that it is at a convenient proof for the end user to add a touch of glycerine and hydrogen peroxide and yield a formula that roughly matches WHO's guidelines is purely coincidental.

Bonus points for submitting a formula/COLA that includes Glycerine (a commonly used, food safe additive) at 1.45% to make it even easier.  But the method above can be implemented as quickly as you can acquire new labels, and you can probably get that done same-day if you really put your mind to it.

This idea, while having drawbacks and requiring the end user to pay at least your laid-in cost plus one cent, is at least free of uncertainty and excess liability.  (Handling/bottling 164pf product is dangerous, take proper precautions)

14 hours ago, daveflintstone said:

I think you are misreading the most recent FDA guidance.  That is for producing the alcohol to be used in the hand sanitizer formula

I think you are exactly right.  Insert excuses about long days and stress here.

From https://americancraftspirits.org/wp-content/uploads/2017/02/Ethanol-for-Hand-Sanitizer-FINAL-3.24.20.pdf :
 

Quote

 

Appendix C.

Formulas That May Be Used To Denature Alcohol Before It Is Used in Alcohol Based Hand Sanitizers (Antiseptic Hand Rubs)

Preferred Formula

27 CFR 21.76 Formula No. 40-B

To every 100 gallons of alcohol add: One-sixteenth avoirdupois ounce of denatonium benzoate, N.F., and 1⁄8 gallon of tert-butyl alcohol

Alternative Formula

27 CFR 21.75 Formula No. 40-A To every 100 gallons of alcohol add: One pound of sucrose octaacetate and 1⁄8 gallon of tert-butyl alcohol

 

So.  The former FDA guidance implied but did not state outright that denaturing must be done using Isopropyl alcohol.

The new FDA guidance gets specific about denaturing, and doesn't allow Isopropyl, but several questions remain:

* Are beverage (non-industrial) DSPs actually authorized to denature ethyl alcohol under TTB's emergency guidance? 

* How can you comply with TTB guidance and produce according to WHO formula, when FDA now specifically forbids any glycerine or hydrogen peroxide? 

Quote

Beyond alcohol, water, and denaturants (if added at the point of production), the alcohol production firm does not add other ingredients.

* Where in the )(*#$u&$# are we supposed to get denatonium benzoate, N.F. or the other agents?

* Is it even legal to sell (assuming you abide by anti-gouging laws) hand sanitizer to individuals and/or businesses?

Above all, I"m just very sad that we (DSPs) appear to be in a worse situation (under even more conflicting guidance) thanks to this updated FDA document.  I'm sure our friends at TTB are working hard on this problem, but the uncertainty is tough to bear amid so much other uncertainty.