dhdunbar

Look at the regulations, not the BAM. Where the regulations give a clear answer, do not go beyond them. They give a clear answer here. The limit on sugar additions to vodka are given at 27 CFR 5.23. It provides, "vodka may be treated with sugar in an amount not to exceed 2 grams per liter and a trace amount of citric acid." From the regulation it is clear that this is a weight per volume limitation. Can it be converted to volume to volume?. Probably. The wine regulations say, "the quantity of sugar used will be determined either by measuring the increase in volume or by considering that each 13.5 pounds of pure dry sugar results in a volumetric increase of one gallon" (See 24.181). But why bother making these sorts of conversions, when the regulations tell you that you can add not more than 2 grams of sugar per liter of vodka and still have vodka? Exceed 2 grams per liter and you have changed the class and type. 5.23 is a very simple statement as far as the sugar limit is concerned. Finally, someone above tried to extrapolate citric limits from sugar limits. The citric limit is unrelated to the sugar limit. I have discussed this in this thread already. The regulation is vague, because it uses the term "trace amount" to define the limit. So we turn to a ruling, which is an official interpretation of the term "trace amount." By ATF Ruling 97-1, TTB says, albeit it reluctantly,that a trace amount means not more than 1000 parts per million. There is no reason to go beyond 5.23 and Ruling 97-1 to determine the sugar and acid limits. There is no reason to unduly complicate these things.

I think you will find that TTB is not telling you to jump into the ring of those who file industrial alcohol processing reports if you are not qualified as an industrial alcohol plant. You must file reports only for operations that you are authorized to conduct. But I will write to TTB and ask them to confirm this, then post again.

You cannot transfer spirits in bond to a brewery. A brewer cannot receive spirits on its brewery premises, even if the spirits are taxpaid. A brewer cannot produce hop extract on the brewery premises. If it wants to make hop extract, it must do so off the brewery premises. Assuming that the brewer does not want to use taxpaid spirits to make the hop extract, it would have to qualify as a manufacturer of non beverage products. It could then acquire taxpaid spirits from a distillery qualified to produce industrial alcohol - you probably are not so qualified and would have to amend your registration and obtain an operating permit. The brewer would have to file a formula to allow TTB to determine that the extract it made was not fit for beverage use. If TTB approved the formula, the brewer could then make the hop extract - but not on brewery premises - and could file a claim for drawback of excise taxes paid on the spirits. If approved, TTB would refund the taxes less $1.00 per proof gallon. The brewer may use hop extracts without filing a formula. See 27 CFR 25.55(a)(2) and RR 2014-4. TTB does limit the percentage of alcohol in the beer that may be derived from the extract. However, I am not familiar with the actual requirements for the use of hop extract, as opposed to say blackberry extract. Although I speak with a seeming air of authority, this is the sort of advice you should confirm with TTB. Finally, you should talk with the state authorities about their separate requirements. They may have special licensing requirements for persons who receive spirits in bulk, even if the spirits are taxpaid.

TTB says: "The purpose of TTB Form 5110.43 is for Industrial Distilled Spirits Plants that are authorized to denature spirits and/or manufacture articles to report their monthly denaturing activity." [My emphasis]. See: http://www.ttb.gov/forms_tutorials/pdf/f511043_printable_checklist.pdf. TTB calls beverage spirits "non-industrial" spirits." Unless you qualify as an industrial alcohol plant, and to do so, you must ask that TTB qualify you for the the production of industrial alcohol, you are not an industrial distilled spirits plant and need not file this form. Section 19.632 is the appropriate section of the regulations. It provides: (a) Each proprietor must submit monthly reports of its distilled spirits plant operations [my emphasis again] to TTB in accordance with paragraph ( of this section. The proprietor must submit the original reports to TTB and must retain a copy for its records. The required monthly report forms are as follows: (1) Monthly Report of Production Operations, form TTB F 5110.40, except that no report is required when production operations are suspended as provided in §19.292; (2) Monthly Report of Storage Operations, form TTB F 5110.11; (3) Monthly Report of Processing Operations, form TTB F 5110.28; and (4) Monthly Report of Processing (Denaturing) Operations, form TTB F 5110.43. ( Each proprietor must submit the monthly reports specified in paragraph (a) of this section to the Director, National Revenue Center, not later than the 15th day of the month following the close of the reporting period. A proprietor may submit monthly reports in either paper format or electronically via TTB Pay.gov. The regulation would be clearer if it stated, "Each proprietor must submit monthly reports of the distilled spirits plant operations that it is authorized to conduct." That is what it means. For example, if you are only authorized to warehouse spirits, then the monthly report of storage operations is the only report you are required to submit. If you are authorized to distill and process, but not store, then you need to submit the report of production operations and the report of processing operations. Similarly, if you are processing either industrial or non-industrial alcohol, you prepare Parts I and II of Form 5110.28 (Report of Processing Operations), to record the proof gallons of beverage and/or industrial alcohol processed. This provides TTB with tax information. If you are processing non-industrial alcohol, you also complete Part IV, Processing of Beverage (nonindustrial) Spirits, which records detailed information, in wine gallons, about the beverage alcohol you processed that month. You do not complete Part IV if you are processing industrial alcohol. You complete Form 5110.43 instead. Form 5110.43 provides detailed information, in wine gallons, about the kinds of industrial alcohol you produce.

Bluestar is spot on in his comments on TTB's requirements. Perhaps the most important point is that a statement of age is mandatory on all whiskey aged less than four years, that the statement can understate but may not overstate the age, and that the statement must be accurate and in a form "aged three minutes," if that is the actual time in oak. Again, if you do not age for at least four years - and remember that the requirement for bourbon, wheat, rye, and malt whiskies is that age reflects the time in new charred oak cooperage - you must have an age statement. TTB appears to be serious about this. Today's newsletter (1/16) featured the following announcement: NEW FAQS ABOUT AGE STATEMENTS ON WHISKY LABELSWe recently published a series of frequently asked questions (FAQs) that provide guidance on age statements on whisky labels. See "S11: FAQs regarding age statements on whisky labels" at our Distilled Spirits FAQs page to review the entire list of questions and answers. The news FAQs cover such topics as: Is an age statement required on a whisky label? What is the "age" of a whisky? What information must be included in an age statement? I'd bet dollars to the proverbial donuts that TTB investigators will be looking into this matter if they make inquiry into whether your labels comply with the requirements. Review what is required and be ready to make the changes necessary to come into compliance. Hint - if you have been in business less than four years and claim that you distilled and bottled a whiskey but don't show an age on the label its pretty much a slam dunk that you are not in compliance.

For purposes of the standards of identity,neutral spirits is a class and vodka is a type of neutral spirits. If you do not designate the origin al distillate as vodka when you make the production gauge, which you can do, but which few do, an d instead call the distillate neutral spirits, then you must do something to the spirits you have designated as neutral to convert them to vodka. If you are thinking, "If persons can designate half a distillation run of a neutral distillate (190 and above) as vodka and need do nothing more to it to sell it as vodka, why would that person need to do anything at all to the other half of the run to make the claim vodka, since the spirits are the same - you are asking one of those questions that have no logical answer. In the case you propose, if the distiller from whom you buy the spirits designates it as vodka,then you would not have to do anything to it, but the catch is that you would not then be the producer and your mandatory name and address on the label could only state "Bottled by MaskCraft," which is a red flag that you did nothing at all to it. So you will buy neutral spirits and convert them to vodka in the production account by either, (1) redistilling them (in which case you may state "Distilled and Bottled by MaskCraft) or filtering them (in which case you may claim "Produced and bottled by MaskCraft). Here is what the regulations say: §5.27 Formulas.Formulas are required for distilled spirits operations which change the character, composition, class or type of spirits as follows:(l) The production of vodka by— (1) Treatment of neutral spirits with not less than one ounce of activated carbon per 100 wine gallons of spirits; (2) Redistillation of pure spirits so as to be without distinctive character, aroma, taste, or color; That is straight forward. However, you do not need to submit a formula to get approval for a vodka label unless you add harmless coloring, flavoring or blending materials. Such additions are limited by Section 5.23 to sugar and citric acid within the limits prescribed by that section - see http://www.ttb.gov/industry_circulars/archives/2007/pre-cola_eval_spirits.pdf, for the complete list of products requiring precola evaluations. But do not misinterpret this to mean that a formula is not required to make vodka out of neutral spirits. Under 5.27 a formula is required to do it, but you need not submit the formula with the application for label approval. Now, before taking my word as gospel on this, even with the citations I offer, ask TTB to affirm your understanding. Here are my rules for asking questions of TTB. First, if possible, know the answer before you ask, which allows you to argue with bad answers. Second, even if you think you know the answer, ask TTB to confirm your understanding. Third, if it is really important and if the answer they gave is not in writing, after they have answered, send an email stating that you would like them to confirm what they told you orally and save that response. ,

Here is the best advice I can give - ask the State ABC. They are there to answer your questions. For California, first read the document "DIRECT SHIPMENTS AND INTERNET SALES OF ALCOHOLIC BEVERAGES, dated in April of 2014, on the Department of Alcoholic Beverage Control web site, at https://www.abc.ca.gov/FORMS/ABC409.pdf. Then call and ask if this is still current. In general, states do not allow a "wine club model." When it comes to restrictions on distribution, spirits live under a dark, black cloud. This goes back to practices in the late 1800's, when distillers sold spirits to wholesalers in bulk and the wholesalers, some of whom where less than responsible citizens, rectified them with all sorts of substances, including methanol. When the federal government took the first steps to regulate foods and drugs, in the early 1900's, the issue of the "evils" of bulk spirits and rectification played a large role in the general arguments on purity - the legislation was called the Pure Food and Drug Act of 1906 - and included, by the way, the first discussion of the subject of what products should be allowed to claim that they were whiskey. Then, after repeal, the federal laws and regulations where written to prevent "the excesses" that lead to prohibition, which were attributed to tied-houses, that is, the vertical integration of the distribution system. At the state level, this became, in some instances, monopoly distribution, and in others, three tier distribution, unless ,of course, local options continued prohibition, which some still do. These schemes remain prominent, and the attitude that spirits require special provisions not necessary for beer and wine, still prevails in the way in which states regulate how spirits are distributed. Thus, although they may allow distribution of wine outside of the three tier structure, spirits are another matter. Finally, in 2000, TTB issued a ruling stating its position on interstate shipments made in violation of state laws. You can find it at http://ttb.gov/rulings/2000-1.htm. In brief, TTB held that: (1) the Webb-Kenyon Act is a law relating to the enforcement of the Twenty-first Amendment and is a condition of the basic permit under 27 U.S.C. § 204(d) for violations of which ATF [now TTB] may suspend or revoke the basic permit. (2) Under these provisions of law, ATF could under appropriate circumstances take administrative action against a basic permit where a basic permittee ships alcoholic beverages into a State in violation of the laws of that State. ATF will intervene when it is determined that there is a continuing, material, adverse impact upon a State through the actions of a basic permittee located outside the boundaries of the affected State. However, while ATF is vested with authority to regulate interstate commerce in alcoholic beverages pursuant to the FAA Act, the extent of this authority does not extend to situations where an out-of-State retailer is making the shipment into the State of the consumer.

I'm glad someone else asked. I've got to keep reminding myself not to venture outside of my area of expertise. That does not include the merits of one brand of scale vs. another. Good luck.

TTB says it requires a formula for any product designated as only as "whiskey," as opposed to rye whiskey or wheat whiskey, etc. I called and asked, "So you want a formula for just plain whiskey, but not bourbon, or whiskey distilled from malt mash, or corn whiskey, but of its just whiskey, you want a formula?" They said yes,and without further prompting, "Because of all the white whiskey out there." Okay. You can tell whether you need a formula or not by looking at the TTB website. It is pretty straight forward. You still must have on file a statement of production procedures, which takes you from the grain bill to the distillate on which you make your production gauge. That means amending your registration for every new grain bill. That = ying to make your grain bills as broad as possible. But you need not describe, on a formula or in the statement of process, the type of storage that you use. If you are claiming a designation that requires storage in new charred oak, your storage account records will have to show that you stored the product in new charred oak. If you are making whiskey distilled from malt mash, the same records will have to show that you stored in in reused oak. That is, where the manner of storage is a part of the standard of identity, you will have to have records that show that the product meets the standard. Generally, but not always, the formula requirement comes into play when you change class and type within the processing account (redistiling NSG over juniper and other botanicals to make gin; putting peach flavor in vodka; concocting a cordial; breathing cinnamon fire into bourbon; making a a premixed cocktail. etc.. Whiskey is my not always exception and there may be more if you dig. The best advice is to just fly byt he book of BAM and remember advice I give when I teach about regulation of the alcohol industry in SIPS classes in Seattle - If someone asks "why?" the only and best answer is, "It is because they say it is." That saves a lot of fretting over fantastic frustrations and stupidities and frees you to go about the actual business of distilling. So we have a sort of thumb nail guide. Statements of process for everything you do in the production account, which are a part of your registration, so amend the registration on permits on line. Neither a statement of process or formula for what you legally do within the storage account - exception just plain whiskey as described above and I'll bet TTB won't ask for formulas in most cases anyway; and formuals for changes of class and type within the processing account.

Vanilla extract is an FDA standard of identity product. You make it by the maceration of vanilla beans in alcohol. To be classified as a nonbeverage product it must meet the FDA standards of identity for vanilla extract. Here is an example of the sort of regulatory morass into which you propose to wade. If after reading it, you still want to give it a short - I don't know why you would since the product must be nonbeverage and so cannot possibly promote your beverage alcohol sales, please contact your local TTB office and let them scratch their heads over the advice to give you. Vanilla extracts and vanilla flavors are covered within the U.S. Food and Drug Administration’s regulations in 21 CFR 169.175 through 169.181. It is important to note that a standard of identity vanilla product must adhere to the criteria outlined in the CFR. If a product does not meet the standard of identity, it will be treated as any other flavor. A few key points regarding the standard of identity are listed below: 1 unit of vanilla beans: 13.35 oz. of beans at 25% moisture 1X vanilla extract: 1 unit per gallon of finished product with a minimum 35% ethanol by volume. The lower end of the range in item 10 defines the minimum. vanilla flavor: 1 unit per gallon of finished product (ethanol < 35% by volume) concentrated vanilla extract: 2 or more units per gallon with a minimum 35% ethanol by volume. The lower end of the range in item 10 defines the minimum. concentrated vanilla flavor: 2 or more units per gallon (ethanol < 35% by volume) Other ingredients that may be used in a vanilla extract: glycerin propylene glycol (please quantify) sugar (including invert sugar) dextrose corn syrup If any other ingredients are used then the product does not meet the standard of identity. When submitting formulas for vanilla extracts/flavorings, bear the following in mind: Information regarding moisture content of the beans, manufacturing yield, fold, extraction steps, recovered ethanol, and disposal of the spent beans must be included on your submission. We cannot process formula submissions with incomplete information. We subject 1 or 2 fold vanilla extracts to the organoleptic evaluation if they contain greater than 45% (by volume) alcohol. This is because the amount of alcohol is more than is necessary to extract all of the odorous and sapid materials from the vanilla beans. When submitting vanilla extracts, please send a 2 oz sample for chemical analysis.

If you are like me and things break when you walk into a laboratory, determining the obscuration by distillation or evaporation is a guaranteed disaster. If I were doing it, I'd send to a reliable lab and let them do the work., I'll leave it to those more inclined toward chemistry to describe how difficult it is for someone who is competent in the presence of my nemesis the lab still.

I agree that determining the quantity by weight is easier than determining the quantity by volume, but remember, as others have said, that you must determine the proof accurately if you want accurately to determine the quantity by weight, since water and alcohol have different specific gravities. That means that you have to have an accurate way of measuring the proof. For tax determination purposes, you will not be able to use a densometer, at least not one that you can afford. That means you must use the hydrometer and thermometer. In turn, that means you are going to end up looking at those dreaded tables in the gauging manual anyway and learning how to interpolate. When you qualify as a DSP, TTB sends you a welcoming letter. That letter includes a worksheet designed to take you through the steps in determining the proof using a hydrometer and thermometer. Note that it includes an entry for correction factors. Correction factors are determined when a lab calibrates your instruments. Hydrometers and thermometers are not accurate out of the box – all of the government hydrometers I ever used had graphs showing the correction factor to apply at different readings. The error does change over the range that the hydrometer reads. Important - people are often more concerned about the accuracy of the hydrometer than they are about the accuracy of the thermometer, but the thermometer must be accurate as well. As someone said, when you determine tax of bulk spirits, you must do so by weight. That is true. See 27 CFR § 30.36 – “The quantity determination of distilled spirits that are withdrawn from bond in bulk upon tax determination or payment shall be by weight”. But you have to know your definitions. “Bulk spirits” are spirits in containers of greater than one gallon capacity and you can’t remove beverage alcohol in bulk containers to retailers or wholesalers. So, let me ask, when are you ever going to tax determine spirits in bulk? In all likelihood, the answer is never. You will be tax determining spirits in cases. That is not done by weight. As someone else pointed out, when you determine taxes on bottled goods, you use the stated label proof, bottle size, and number of bottles per case. They cited the correct regulation. Again, this means that you must accurately determine the proof of the spirits in the bottling tank and the fill you are getting in the bottles. And again, you have to have accurate measurement by thermometer and hydrometer, even if you are determining bottle fill by weight rather than by fill flask. TTB allows a .15% by volume drop in proof when you bottle, because there is often a proof loss when you do so, but there is no tolerance on the proof you have in the bottling tank. If the label says 40% (80 proof) then it must be 40% in the tank. The cut to bottling proof is probably the hardest gauge you will have to make and being able to do so by weight is a lot easier than by volume because you don’t have to allow for the shrinkage in volume as a result of the water molecules fitting between the alcohol molecules. The cut is like pouring a gallon of sand into a gallon of golf balls; you end up with less than two gallons. One hundred gallons of fifty percent alcohol by volume contains 53.73 gallons of water and 50 gallons of alcohol. Weighing is the easiest way to go, but you still must deal with those tables again. I have never made adjustments for altitude or any difference in air pressure. When you determine alcohol content in wine using an ebulliometer, which we used to do when making wine spirits additions, a change in pressure can throw you off, because you are using the difference between the boiling point of water and the boiling point of the wine to determine how much alcohol is in it. But the specific gravity of 40% alcohol is .93426 in air and .93418 in a vacuum, so the difference is 0.00008, which is negligible. If you wanted to be that precise, then Table 6 of the gauging manual will tell you the figures, but I’m going to guess that the error in your calibrated instruments is greater than any error attributable to differences in air pressure. Such calculations are not included in the steps for determine either the alcohol content or the volume of a liquid.

You must submit the COLA application. Look at the form. It is an application that includes a certificate of exemption from label approval. That is only good if you sell only intrastate. But the point is that you have to get the exemption approved before you can label the product. Here is the regulation: §5.55 Certificates of label approval.(a) Requirement. Distilled spirits shall not be bottled or removed from a plant, except as provided in paragraph ( of this section, unless the proprietor possesses a certificate of label approval, TTB Form 5100.31, covering the labels on the bottle, issued by the appropriate TTB officer pursuant to application on such form. Application for certificates of label approval covering labels for imported gin bearing the word “distilled” as a part of the designation shall be accompanied by a statement prepared by the manufacturer setting forth a step-by-step description of the manufacturing process. (Exemption. Any bottler of distilled spirits shall be exempt from the requirements in paragraph (a) of this section and §5.56 if the bottler possesses a certificate of exemption from label approval, TTB Form 5100.31, issued by the appropriate TTB officer pursuant to application on that Form showing that the distilled spirits to be bottled are not to be sold, offered for sale, or shipped or delivered for shipment, or otherwise introduced into interstate or foreign commerce. Here is the Part 19 provision: §19.516 Certificate of label approval or exemption.A proprietor must obtain a certificate of label approval or an exemption from label approval under part 5 of this chapter on form TTB F 5100.31 for any label that the proprietor will use on bottles of spirits for domestic use. Upon request by the appropriate TTB officer, the proprietor must provide evidence of label approval, or of exemption from label approval, for a label used on a bottle of spirits for domestic use. For procedures regarding the issuance, denial and revocation of certificates of label approval and certificates of exemption from label approval, as well as appeal procedures, see part 13 of this chapter. I do not know the answer to the obvious questions, but I suspect that an application for exemption goes into the same pile as an application for approval. Ask TTB about that. And remember, if you get a certificate of exemption, you must include a statement on the label that the product is "For Sale in - insert name of the state in which bottled - only."

Quantity discounts. This is a matter of tied house law in many instances, but in many cases a retailer can obtain a quantity discount if it purchases a certain quantity of spirits. Needless to say, a grocery chain that centrally warehouse, where allowed, or purchased directly from a producer, where allowed, buys in significantly grater quantities than does a bar or restaurant and can command a quantity discount, where allowed. Think Costco pr Safeway or Kruger. The business buying a thousand cases pays less than a business buying a single case. Because of delivery costs, this can mean that a neighborhood bar can end up paying a distributor more for the product than it could buy it for at a chain outlet and the numbers can crunch in a way that justifies both prices. Costco is a wholesaler to small businesses where this is allowed. However, this is the economics of large scale producers and volume retailers. It is not the economics of small distillers whose products do not sell in sufficient quantities to make volume discounts possible.

This is a federal issue. The issue of bulk sales - sales of spirits in containers of greater than one gallon - goes back to political battles waged in the early 1900's. Historically, whiskey had been sold in barrels, often unaged, with the barrel serving as only as a container, just as it did for all sorts of other products, to wholesalers who rectified the product, that is, added ingredients to give it a flavor profile. Some of the more unscrupulous wholesalers were less than diligent about what they flavored the whiskey with, and instances of blindness or death led to battles over whether anyone other than a distillery should be allowed to concoct products. Those who favored prohibiting bulk sales, carried the day. The federal laws and regulations written in the 1930's, after prohibition, adopted the same approach, and bulk sale were and still are prohibited. You can find the regulations on bulk sales in 27 CFR Part 1, beginning at section 1.80, which provides, "It is unlawful for any person to sell, offer to sell, contract to sell, or otherwise dispose of distilled spirits in bulk, for nonindustrial use, except for export or to the classes of persons enumerated in §§1.82, 1.83, and 1.84." The persons enumerated in those sections are DSP's, customs bonded warehouses, wineries for use in wine product, and the United States, or of any State or political subdivision thereof. That is it. The rules make no other exceptions. Similarly, section 1,90 provides, "By the terms of the Act (27 U.S.C. 206), all warehouse receipts for distilled spirits in bulk must require that the warehouseman shall package such distilled spirits, before delivery, in bottles labeled and marked in accordance with law, or deliver such distilled spirits in bulk only to persons to whom it is lawful to sell or otherwise dispose of distilled spirits in bulk." What are bulk spirits? By definition, "In bulk " means "Distilled spirits in containers having a capacity in excess of one wine gallon." So that is the definitive answer to the question. I keep preaching that it pays to consult the regulations and to have some sense of the history of how requirements have evolved. You can find a lot of the history of the FAA Act in an on-line document dealing with the legislative history of the act. It is deadly dull reading for those who are not possessed of an interest in such matters, but it gives a foundation on which arguments can stand. The need to search regulations for answers is obvious.

Okay - my apologies for the way the above post appears. The table looked fine until I pushed the post button. To see it in better form, go to the TTB web site and look at changes you can make to labels without getting a new COLA.

The commentators are correct. You can change the stated label proof if you follow the basic rules. Change the mandatory statement of alcohol content, as long as the change is consistent with the labeled class and type designation, and all other labeling statements. YES YES YES (Flavored Malt Beverages Only) For example, you may change the alcohol content of a grape wine labeled with a varietal designation from 13 percent to 15 percent alcohol by volume, even though it results in a change to the product’s tax classification. However, if the product was designated and labeled as a “table wine,” an alcohol content of 15 percent alcohol by volume would be inconsistent with the rules for use of that designation, so this change would not be permitted. Similarly, a label bearing a “rum” designation may not be changed to state an alcohol content of less than 40 percent alcohol by volume. The revised alcohol content statement must be consistent with all other mandatory or optional labeling statements. However. I know of no requirement that says labels must be printed. I think the regulations do not prohibit hand drawn labels. However, all mandatory information is subject to "type size" requirements found in 27 CFR 5.33. In fact, if you have not read that section, I recommend that you do so. There you will find, for example, the following: (5) Statements required by this subpart, except brand names, shall be in script, type, or printing not smaller than 2 millimeters (or 8-point gothic until January 1, 1983), except that, in the case of labels on bottles of 200 milliliters or less capacity, such script, type, or printing shall not be smaller than 1 millimeter (or 6-point gothic until January 1, 1983). (6) When net contents are stated either in metric measures or in both metric and U.S. fluid measures, statements required by the subpart, except brand names, shall be in script, type, or printing not smaller than 2 millimeters (or 8-point gothic until January 1, 1983), except that, in the case of labels on bottles of 200 milliliters or less capacity such script, type, or printing shall not be smaller than 1 millimeter (or 6-point gothic until January 1, 1983). So, when a TTB specialist says you cannot have hand written statements on labels, ask them to explain the "script, type OR printing reference" in these sections of the regulation. That said, I do not advise that you take my word for this. Get TTB to commit in writing to any claim that you may or may not have handwritten entries on labels.

It seems to me that you face three problems. The first is the wide variety of products that distillers produce. This adds bulk to any record system. Consider all of the cells that you find on the three TTB operational reports. If you automate a system, and want to be able to generate those reports, you have to have a program that can accumulate all of that data and dump it into the correct cells. Next, there is the information that does not make it into the reports. You have the required gauge records, the proof and fill records, the dump and batch records, the bond account records, etc. The thing takes on a life of its own, especially if you add the quality control information that a distiller might want to keep for his own purposes. About that I know nothing. Second, the number of records you must be able to produce generates a steep learning curve for the user. It almost demands that you provide a way that a distiller can pick out the records he needs, for the operations he conducts, and the transactions in which he engages, and ignore the rest. It is easier if the distiller can personalize the database. But, since you are selling the system, you want to ensure, perhaps through some sort of question and answer process, that the distiller actually keeps the records that are required, i.e.can identify and pluck from the system those records needed. Is it possible to create a modular system, where a distiller answers questions about what he does and then receives (downloads) only the records he needs? For example, could you produce a basic record module (gauge records, etc) and sell it for $200; a "vodka" module and charge $100 for that; a gin module and charge $100; a whiskey module and charge $275. Then a growing distillery could import and pay for additional modules as needed. That would reduce up front costs and perhaps make it easier to learn to use the system. That addes a fourth problem, which is obvious, but which I did not count in the beginning. Someone has to write the manuals. I don't know if any of this is feasible, It is just an idea of a possible way to keep costs down, keep the system manageable, simplify manuals, and create a system where the learning curve is less of an impediment to use. The third problem is updating the system. For example, TTB is going to go, eventually, to a single operating report. Say you have 53 customers for the database you have developed to create three reports, each month.. You now must update that database to create one quarterly report. How long do you want to commit to remaining in the business of doing that? Given the interest that people are expressing, I think that the problems create barriers to entry, but that the barriers create, in turn, an opportunity for those who can negotiate their way through the problems. A lot of this is probably obvious, but I think it is worth saying, just in case .... Good luck..

TTB certainly expects losses, and this sounds like the advice that some TTB employees might give orally, but the regulations do require reporting of spirits destroyed in the production account before a production gauge is made. The provision is fairly well hidden in the requirement that you keep production records: Sec. 19.585 (a) (2) A proprietor must maintain daily records of spirits lost or destroyed prior to the production gauge; The general rule is that you must account for "every drop," to borrow a phrase from TTB's Expo presentation, of the spirits that come off the still. Is it something they enforce? I think some TTB employees may and some may not. But the requirement is there and I try to make people aware of what is required. What they do with the information is up to them.

Meant to say gin that was aged. I was late.

Oh, as a former regulator I've got to chime in here - you can remove spirits (adn heads are spirits) from the distillery only for certain specific reasons and not incur taxes. I'm not going to lecture on this because I'm not going to lecture on it. My point is simple: don't tell TTB you use them to power the tractor. You'll end up paying taxes. And industrial alcohol may sound like a fine idea, but be careful there too. If you are going to put it in window cleaner, for example, you need to be aware that only certain denatured products can be used without incurring liability. Know the rules. What other ideas did I see ... Listen, do what you are going to do, but remember this, you are suppose to gauge the heads (oh god I'm lecturing) that you produce and that means that your records have to account for what you do with them. You can destroy them. I think that is about it. And you've got to name the person who did the destruction. For some in TTB its "no harm, no foul." But for others .... What was the line in Hill Street Blues, "Be careful out there." End of my non- lecture.

By the way, if anyone can explain why I seem to smile so often, I'd like to know. Would I be less happy if I used Explorer rather than Chrome? It seems when I quote the regs, smiles appear. I don't find them that entertaining, but I get paid to read them.

You account for the production of the heads and tails in your production records. If you put the tails back into the next run, you make a record of that. You can destroy the heads. It is a destruction. You can destroy it on or off premises, but different rules apply: Sec. 19.459 Voluntary destruction. (a) General. A proprietor may voluntarily destroy spirits, denatured spirits, articles, or wines on bonded premises as provided in this section. There is no tax liability on spirits, denatured spirits,articles, or wines destroyed in accordance with this section. ( Wine notice. A proprietor may destroy wine held on bonded premises only after the proprietor has filed a notice of intent to destroy with the appropriate TTB officer stating the kind and quantity of wine to be destroyed and the date and manner in which the wine is to be destroyed. The wine may be destroyed after the filing of the notice. © Gauging. A proprietor must gauge all spirits, denatured spirits, articles, or wines to be destroyed. The proprietor may establish the gauge of spirits in bottles on the basis of legible case markings and label information in accordance with Sec. 19.286. The proprietor must individually count bottles in partial cases. (d) Destruction off bonded premises. If a proprietor intends to remove spirits, denatured spirits, articles, or wines from bonded premises in order to destroy them at a location off bonded premises, the proprietor must file a consent of surety to cover the removal. When the destruction takes place off plant premises, the proprietor must comply with applicable Federal, State, and local environmental laws and regulations. (e) Record of destruction. The proprietor must record the destruction of spirits, denatured spirits, articles, or wines as provided in Sec. 19.617. Just make sure you do it properly. Read and understand 19.617: Sec. 19.617 Destruction records. Each time that a proprietor voluntarily destroys spirits, denatured spirits, articles, or wines, the proprietor must prepare a record of the destruction that sets forth: (a) The identification of the spirits, denatured spirits, articles, or wines, including kind, quantity, elements of gauge, name and permit number of the producer, warehouseman or processor, and identity and type of container; ( The date, time, place and manner of the destruction; © A statement that the spirits had, or had not, previously been withdrawn and returned to bond; and (d) The name and title of any representative of the proprietor who accomplished or supervised the destruction. That is pretty much it. For some reason I'm now sleepy.

I consult. But I tell people I won't consult on labels. Ask me about Sorgjum Ru and I'm going to tell you if it ain't cane sugar - beets sugar doesn't count, sorghum doesn't count - and then your going to find that TTB approved a rum that wasn't cane sugar. Or is a rum that is aged. Or is a whiskey that isn't aged. My GUESS is that TTB will not object to the "substitute for your favorite rum" statement. You are not disparaging a competitors product. You are plainly saying its not rum. Any statement about being a substitute for something else is going to be - or should be - taken as puffery. So submit two COLA's, one with the substitute statement and one without. See what happens. I don't think you are scamming the system. If you knew it wasn't correct, that would be different. But you don't know and the only way to get TTB to comment these days is to submit a label for approval and see what they say.

I have no experience with this, but will take a flier and assume that you go into the stack just like everyone else. I assume that if it is a product for which you have to have pe-COLA analysis, i.e., a formula, that you have that already, but if it is a label that requires pre-COLA analysis, and if I you do not have it, then add the time for formula approval to the time for label approval. TTB processes labels in the order received. As of 7/2 they are processing label approvals received on 5/15 and formulas received on 4/30. So, unless they make some improvements in the processing times, you are guaranteed that even flawless formulas are backed up 63 days and labels 48 days, because the web site says that unless you submitted before the date shown, TTB has not looked at your application. That means that they cannot have taken any action on it. Here is the curious part of TTB's statistics: TTB says that formulas are averaging 63 days and the labels 47 days before they are approved or rejected. But how can that be the case, if they are not even first looking at the formula for 63 days and the COLA app for 48 days? Assuming that some formulas and labels have problems and that the applicants get a chance to correct them before rejection, then either the vast majority get corrected within one day, allowing TTB to approve or reject, on average, on the same day it first looks at the application, or the average days figure is misstated. Or maybe it is just the confluence of two trend lines. Who knows? In any case, you know that if you submitted the formula 4/30, you have a built in wait of 63 days plus whatever time it takes for TTB to approve after they first look at it, and 48 days if you submitted the COLA in mid -May. These are moving differences, so that does not say how long a wait you will have if you submit today, and the averages are both moving and suspect, so it's Nike time, "Just do it." What will be will be.