paul@mbroland.com

I know that we have hit on this to some degree in other postings, but maybe we can put this (white) dog to rest with a discussion about our experiences with the TTB. I have been back and forth with formulation on the topic of unaged grain distillate. And, based on what they have told me, to include my latest formula approval, it seems that an unaged grain spirit (that has never touched the inside of an 'oak container') that does not fulfill the criteria of a corn whiskey (at least 80% corn, and if aged must be aged in used, charred or toasted oak, distilled at or below 160 proof) is a spirit and is NOT a whiskey until it goes into the barrel. For example, if you make a grain distillate that is made of 100% malted barley, distilled at or below 160 proof, and then is bottled at 80 proof or above, it would be "spirits distilled from grain" (and, in this case, you could also use "spirits distilled from malted barley"). Based on what the regs say, this does make sense to me and I am favoring that conclusion. However, in discussing this with other sources who have had similar discussions with formulation, I'm being told that they are able to use the term "whiskey" on the label after submitting a similar formula and it too is an unaged product. If you have had any experience with TTB ALFD Formulation personnel and have heard either way, please let me/us know your experience as I would like to try to ensure that all of us are understanding this correctly, specifically if we make an unaged grain distillate.

The issue that you may encounter is having a distillery (dsp) in conjunction with a residence. This is a topic that can be very gray with the TTB and it's going to be based on what you propose, how you propose it, and WHO you propose it to. I wish there was an easy answer to this matter, but that has been my experience. Be as detailed as possible with any diagrams/proposals and, if you're going to have a residence on the property, you need to show a clear line of separation (a fence or border of some sort) and SEPARATE entrances to the dsp and residence. Again, how crazy it gets is going to ride largely on who you are dealing with at TTB.

So you're blending the bourbon and corn whiskey and making one single product, or the bourbon is one product and the corn whiskey is another?

Think of it this way. The federal government is a machine. It has no heart, no soul, no feelings. When you work with/speak to the "system," it replies based on the way it is programmed, like a machine (computer). If you think it needs reprogramming, contact your congressman. Right now we (micro/craft distillers) already have enough on their plate with HR 777, so throwing more at them is probably a battle for another day. With regards to why you're being told what you are, someone in the system is trying to take the current regs that do not take into account what is going on with clear grain-based spirits that can or can't legally be called a whiskey. It's basically doing like Number Johnny 5 and they're screaming "malfunction!" Therefore, they're doing what they can with their existing system/regs and trying to make it make sense. You may not agree, but you're not in charge. I think we all would agree that some of the regs need some fine-tuning. However, until then, this is the world we live/work in. I don't blame the TTB, they're understaffed and trying to make sense of something that cannot properly be dealt with until the laws are rewritten.

As far as the federal govt goes, when you're talking about distilled spirits, the TTB plays the role of FDA. Therefore, unless this bill (which, full disclosure, I haven't read) covers the TTB as well, it shouldn't affect us. I'm no expert, just giving my immediate reaction.

According to the TTB, for spirits you are not allowed to have more than 8% headspace of the volume of the bottle (at least that's what they said at the Expo last month).

Well don't call that number because Colleen doesn't have control of that equipment. Does anyone know who to contact and/or if the equipment is still up for sale? Paul

I've been working on this for over two years, full-time for a year now. Bottom line, it can be done if you want to make it happen. Now, that being said, you may have to make some severe sacrifices as far as equipment that'll require more labor and/or starting as a micro micro distillery. I'm not sure what your situation is or what you want your focus to be as far as type of spirit, but you can probably mash your own stuff and it'll be economical. You're probably attempting to start too big if you can't make the numbers work (just my humble opinion). Call me if you have any specific questions, lord knows I've called a whole host of folks on this forum and blown past many roadblocks because of that. Paul (931) 302-5245

Ladies & Gents, After about a year of planning and doing the "magical mystery tour" of seeking funding, looks like I just may get this show on the road. However, I'm trying to see if I can avoid my building (a 4800 sq ft pole barn) for distilling (gift shop will be in a different building) being classified as an H-2 or 3. I don't know how many of you out there who have recently been through the process of setting up who've encountered issues with this. My main concern is that I'm in the country and doing a sprinkler system and the like would substantially eat into my budget. Furthermore, I'm talking very small scale production (a 100-gal still). I'm trying to find any info in the IBC that may help me avoid being classified as hazardous materials. The best I've found thus far is table 307.1, but that's still a little vague. I'm simply talking about the production facility, not storage (ie barrels and the like). Any help would be greatly appreciated. Paul

That depends on a lot of things, but here goes (based on my experience). If you can sell from your distillery, you can offer them a special "investor's rate" when they buy. You can get their mouths watering about how you'll have scheduled "by invitation only" tastings for experimental batches and the like. You can offer them barrels "at cost" (meaning they'll pay for the raw materials, production costs, taxes, bottling, etc), probably most would want smaller barrels or something of that nature. If you plan on having scheduled events at the distillery (music events, wedding receptions, etc), you can allow them to have an event there at cost once a year. All of this, of course, is dependant on how much they invest. As far as equity goes, Bill always says do the 80/20 split as an LLP and when things break even, it flops to 20/80 (ask him about it if I just confused you). If you have a corporation, I wouldn't advise selling more than 49%, just don't give yourself a very big salary, ha ha. Clear as mud?