RTD with multiple alcohol sources

[Brewstilla]

Our sister company is a brewery with a taproom (full liquor license), and we serve cocktails from the taproom. One of the cocktails that has gained favor with patrons is a gin and tonic with simple syrup made from the brewery's very popular double ipa. We would like to can this as an RTD, and submitted the formula to the TTB and it was declined because "finished IPA cannot be used in the production of this product"

My question is, is there wording to get around this, or is this a no go with finished beer (even tho the alcohol is evaporated off when making the syrup). Our other option that we will trial is simply making a simple syrup out of the wort of that beer. 

Thanks

[Silk City Distillers]

Interesting, there are a number of Manhattan RTDs that I would have guessed contained Vermouth.

[adamOVD]

Yeah this seams like nonsense. Unless it is specifically beer that is the problem. We got RTD with multiple liquors in it approved. Maybe try submitting again from the beginning, and hope for a different agent.

[dhdunbar]

I had to think about this for awhile, but I think TTB can site a reason for the conclusion they reach.  However, when they tell you something like this, always ask them to tell you the section of law or regulation in which they are relying.  It saves a lot of bafflement.  The simple statement that something is not allowed points in no useful direction.  

So, TTB is probably objecting to the use of beer as an ingredient that is marketed with the designation "Manhattan," since I find, on the Interent, which can never mislead, "regardless of all the options, there is only one classic Manhattan: two parts whiskey, one part sweet vermouth and bitters. Mix one (stirred, never shaken), and you’ll see why this storied drink has remained a favorite since its inception." 

I think TTB probably is not objecting to the use of beer in a canned cocktail, it is probably objecting to the designation "Manhattan,." for which there is no standard of identity in §5.22 and so must be labelled under the provisions for specialties in §5.35.   

§5.35(b)(1)  -Products designated in accordance with trade and consumer understanding. In the case of products designated in accordance with trade and consumer understanding, a statement of the classes and types of distilled spirits used in the manufacture thereof shall be deemed a sufficient statement of composition in the case of highballs, cocktails, and similar prepared specialties when the designation adequately indicates to the consumer the general character of the product.

So, TTB has likely concluded that a product labeled with the designation "Manhattan" which either, (1) does not contain vermouth (yours may) , or (2) contains, instead of or in addition to bitters, a hoppy IPA, is not a drink that the consumer would expect when buying a Manhattan.

I think those are probably what court would call reasonable grounds for the statement you can't use "finished IPA" in a specialty product designated only as a "Manhattan."  [The "finished" part led me down dead-end trails].  But that does not prevent you from making the product with the ingredients you list.  I would conclude that you may still market the product, but that under §5.35, you would need to designate the product by a fanciful name (I'm not clever enough to imagine a good one, so let's say "IPaHATTEN," and truthful and adequate statement of composition, i.e., bourbon and IPA simple syrup." You could then add a statement about how a "Manhattan like cocktail made"  with IPA based simple sugar was all the rage in your tasting room, etc.

 

 

[Brewstilla]

Thank you for that @dhdunbar. For clarification, we are not trying to make a canned Manhatten, we are trying to make a canned gin and tonic that contains an IPA based simple syrup. Silk used a canned Manhatten as an example of a canned cocktail containing a base spirit with the addition of another alcoholic component.

[Silk City Distillers]

Perhaps the issue is the same - they expect the ingredients to be only gin and tonic?

[dhdunbar]

As Silk City says, I think the issues probably are the same.  I see from the internet that the cocktail can contain simple syrup, so TTB may be saying that if you make your simple syrup with IPA, it is not simple syrup to them. 

The recent rulemaking on labeling and advertising contains some basic information on TTB policy on the labeling of cocktails under §5.35.  The Beverage Alcohol Manual , a document I deplore because it greatly complicates matters, lists 30 or so recognized cocktails and provides a brief description of each, which states what TTB has determined, how I do not know, what a cocktail must contain, but does not list optional ingredients (https://www.ttb.gov/images/pdfs/spirits_bam/chapter4.pdf).  It lists "Manhattan," but not "gin and tonic."    In the case of those that are listed, the requirted class and type designation is the name of the cocktail with a declaration of the distilled spirits component(s) of the product, e.g., “Screwdriver Made With Vodka." In general, the list is one of cocktails your father (or I) might have drank when driving an Oldsmobile.  Yea, I and it are that old.

TTB address that issue of the limited use of the BAM list  in the recent Treasury Decision it issued explaining the changes it did and did not make to labeling regulations after the recent rulemaking process.  It said:

• "TTB notes that in addition to the cocktails that are recognized in the Distilled Spirits BAM, TTB evaluates applications for label approval that include new cocktail names on a case-by-case basis to determine if the cocktails are recognized in bartender’s guides or other publications that reflect a widespread consensus on the composition of a cocktail (such as trade magazines)  [the emphasis is mine].  This review will, in turn, determine whether the designation adequately indicates to the consumer the general character of the product. TTB will consider the comments on updating the list of recognized cocktails as suggestions for future action." 

So the BAM list is not exhaustive.  Your recourse to denial would seem to be your own deep dive into publications that let you argue, "Hey, TTB, what we propose is within trade and consumer understanding and here is why."  

In spite of the support for an updated list of recognized cocktails, I would suggest not going there.  From my experience, you want to be careful what you ask for.  The more detailed things become, the more complicated the approval process becomes, and you also add, to the complications, the unpredictable complexity of individual TTB employees ideas about the complications.  In the Army we had a term that described what I think would ensue.  It was "SNAFU."  

Those who are interested can pursue this further at https://www.govinfo.gov/content/pkg/FR-2020-04-02/pdf/2020-05939.pdf.  The discussion begins on page 18713.  Here is a summary of the cocktail issue that I made for my own edification:

• In Notice No. 176, TTB proposed to amend its policies with regard to the use of cocktail names in statements of composition on distilled spirits labels.
• Under current regulations at 27 CFR 5.35(b)(1), and in guidance issued by TTB’s predecessor agency, the Bureau of Alcohol, Tobacco, and Firearms (see Compliance Matters 94–1, issued in 1994), distilled spirits cocktails with names recognized by consumers may be labeled with the cocktail name and an abbreviated, rather than a full, statement of composition.
• This abbreviated statement is a declaration of the spirits components of the cocktail, for example, ‘‘Screwdriver made with vodka.’’
• In Notice No. 176, TTB proposed to require a full statement of composition in such instances because, over the years, TTB has seen an increase in the number of cocktails recognized in bartenders’ recipe books as the industry continued to innovate.
• TTB was concerned about whether consumers are fully informed when a label has only a cocktail name and the component spirit(s) because of the vast array of cocktails.
• Accordingly, TTB proposed to require a full statement of composition on such specialty products, and those products could continue to be designated with the name of a cocktail.
• The TD then discusses several comments that it received on the proposal, including those of DICUS and ADSA, who opposed the proposal on the  the grounds that it would impose costs as a result of labeling and formulation changes without benefiting consumers, who might be confused by statements of composition that differed from what they were used to seeing on cocktail labels.
• Some of the commenters also addressed TTB’s current policy of including a list of ‘‘recognized cocktails’’ in the Beverage Alcohol Manual for Distilled Spirits (Distilled Spirits BAM; TTB P 5110.7) for purposes of administering this provision. T
• American Distilled Spirits Association commented that the regulation ‘‘should establish a framework for TTB to periodically publish, after seeking input from the industry and other sources, lists of cocktails it recognizes and the ingredients required for such cocktails.’’
• On the other hand, Sazerac commented that TTB should eliminate the list of recognized cocktails in the BAM, as the list is ‘‘outdated and not particularly relevant to consumers.’’
• Because of the industry opposition and the nature of the objections to the proposed rule, TTB did not finalizing its proposal.   It noted that, “In addition, a number of comments TTB received in response to Notice No. 176 proposed that TTB consider proposing ingredient labeling, which would obviate the need for the types of information TTB proposed to require. TTB agrees that ingredient labeling is worth consideration, and is reviewing such comments to determine next steps to obtain additional comment through further rulemaking.”
• POINT:  This issue is not dead, but rulemaking has the gestation period of elephants at best.
• Specifically, the final rule stated that TTB is not moving forward with the proposal to require a full statement of composition for cocktails. It agreed that  consumers are used to seeing the abbreviated statement of composition on cocktail labels and that   a full statement of composition is not necessary in cases where the cocktail name is well recognized and understood by consumers, and so determined that  the existing regulations and policies on abbreviated statements of composition for cocktails will continue in effect.
• It then stated that the BAM was not exhaustive, as I explain above.

 

 

So I've gone long again.  I seem to be incapable of doing otherwise.

[adamOVD]

What if instead of putting Beer as an ingredient in your syrup, you put malt and hops? 

[dhdunbar]

I recommend  calling the specialist who nixed the formula  and asking the specialist to explain what TTB wants.  What I said above was intended to give enough information that you know the rules and so can recognize reasoned positions from "shooting from the hip" B.S.   If you get BS, your rights to appeal the denial are set out in part 13.  I generally recommend not going that way unless it is an important product.  You will have to expend time and energy going through the hoops of the appeal, but so will TTB.

 

[SCLabGuy]

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.

The IRC allows a proprietor to transfer and receive spirits, wines, and industrial alcohol as provided in paragraphs (a) through (c) of this section.

(a) Spirits. Bulk spirits or denatured spirits may be transferred in bond between the bonded premises of plants qualified under 26 U.S.C. 5171 or 26 U.S.C. 5181 in accordance with §§ 19.403 and 19.733. However, spirits or denatured spirits produced from petroleum, natural gas, or coal may not be transferred to alcohol fuel plants.

(b) Wine. Wines may be transferred:

(1) From a bonded wine cellar to the bonded premises of a distilled spirits plant;

(2) From the bonded premises of a distilled spirits plant to a bonded wine cellar; and

(3) Between the bonded premises of distilled spirits plants.

(c) Alcohol for industrial purposes. Alcohol bottled for industrial purposes in accordance with § 19.366 and subpart S of this part, may be transferred between the bonded premises of distilled spirits plants in the same manner as provided in §§ 19.403 through 19.407 for bulk distilled spirits.

(26 U.S.C. 5181, 5212, 5362)

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

[glisade]

1 hour ago, SCLabGuy said:

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.

The IRC allows a proprietor to transfer and receive spirits, wines, and industrial alcohol as provided in paragraphs (a) through (c) of this section.

(a) Spirits. Bulk spirits or denatured spirits may be transferred in bond between the bonded premises of plants qualified under 26 U.S.C. 5171 or 26 U.S.C. 5181 in accordance with §§ 19.403 and 19.733. However, spirits or denatured spirits produced from petroleum, natural gas, or coal may not be transferred to alcohol fuel plants.

(b) Wine. Wines may be transferred:

(1) From a bonded wine cellar to the bonded premises of a distilled spirits plant;

(2) From the bonded premises of a distilled spirits plant to a bonded wine cellar; and

(3) Between the bonded premises of distilled spirits plants.

(c) Alcohol for industrial purposes. Alcohol bottled for industrial purposes in accordance with § 19.366 and subpart S of this part, may be transferred between the bonded premises of distilled spirits plants in the same manner as provided in §§ 19.403 through 19.407 for bulk distilled spirits.

(26 U.S.C. 5181, 5212, 5362)

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

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.

[SCLabGuy]

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.

[bluestar]

Well a good "test" of how this would be done would be a canned cocktail that is just beer and whiskey. In other words, a Boilermaker. I presume a brewery could NOT can this, since it requires transfer spirit in bond into the brewery. But the reverse, how would that be done? Since this is not beer being brought it as a raw material for distillation, but as alcohol for blending.