Expanding our Tasting Room

[thebottle]

We have a current DSP with our bonded areas marked off along with our tasting room and retail. We are located inside a mill complex and have one of the units. Recently another unit became available 10 feet down the hall from us and we are planning to expand into it. 

Our plan is to keep our current location and just use it for production and alcohol storage operations while moving our tasting room and retail into the new unit. Both units are located at the same address but have a different unit #.

What/how do I process this change with the TTB and what is the expected turnaround time?

Cheers

[Jedd Haas]

1. Obtain local government approval for the change in space occupied.

2. Obtain any state approvals needed.

3. Revise your floor plan and file an amendment to your DSP registration with TTB via Permits Online.

Amendments can take anywhere from days to several months.

[dhdunbar]

The tasting room and/or retail are for sales of liquors of any sort, may not be on DSP premises.  So you need not include, or mention them, in your description of the new arrangement.  TTB does require that you show the location on the diagram if they are adjacent to DSP premises.  In my opinion, ten feet away is not adjacent.  It is as good as a mile

If the area on which they are now located is not currently included in the DSP premises, and you want to change the area for use as bonded premises, then you must amend the descriptions and diagrams of the DSP premises and bonded premises.  You do that by filing an amendment.

If, when you qualified, you simply omitted mention of the fact that a portion of what you described as DSP premises was going to be used as tasting room, then you need not amend the application as long as it accurately describes the boundaries of the DSP under the new configuration, that is, there is no change in the boundaries of the bonded or any general premises you may have.

Now, you mention that the current area is "marked off."  That makes me squirm a bit, because TTB has recently opened a can or worms.

By policy, TTB has required floor to ceiling separation between the tasting and or retail area and the DSP.  If you have only a line on the floor, you are in an "ooops"position.  I know that is the case with some DSPs.  I've seen them.  If the area is separated by bless than floor to ceiling partitions, you still have an ooops problem. 

TTB has recently compounded the problem..  When you amend the application, it now requires that you affirm that you know that the division between the tasting/retail space must be a floor to ceiling wall (partition would be the better word given the way the regulation is written, but wall is the word TTB chose).   When you affirm that, you are record as knowing that the line or less floor to ceiling partition is not acceptable as separation.  When you know something is wrong and do not attempt to correct it, violations become willful.  If you only have an eight-foot high ceiling, that may not be a problem.  Build the wall and get Mexico to pay for it.  But if it is a 40 foot ceiling, whoa!.  Things are not so simple.  Mexico is apt to refuse to pay for that sort of partition.  That an eight foot partition in a space with 40 foot ceilings will be as effective as a 40 foot partition does not matter.  TTB's mantra is floor to ceiling and they have made that apparent in the affirmation they now require.

Do I see a few hands going up in the air?  When I asked about this, informally, because I sought not to cause a splash with ripples that could capsize, I got the answer that the NRC would not change the language of affirmation.  They have dug in their heels..  I now that this is going to cause problems for someone sometime.  I recommend that associations, not individuals, approach TTB about this to see if we can convince them that the floor to ceiling requirement is unnecessary, as long as there is a partition of sufficient height to prevent inadvertent movement of spirits onto and off the bonded premises.

So I'm hijacking this post to say if some association wants to do that, I'm on board, pro bono as it were, to figure out how best to frame the approach to TTB.  That's pro bono unless the organization is charging someone to make the approach.    In that case, I want my share of the charge.  But I prefer to do it for nothing, in return for the opportunity you guys give me to make a living consulting.   

[indyspirits]

@dhdunbar, can you provide the CFR, industry circular, or policy statement for this? I'm working with our internal counsel on a similar issue and she doesn't really care for it when I say, "Hey, I've read on the internet....".  I've seen this:

https://www.ttb.gov/ponl/ref-guide/03070.html

But I can't quite tease out in 27 CFR. Maybe 19.54/55?  Any pointers appreciated.

 

Edit: I think I found it in 26 U.S. Code § 5178

 

 

[dhdunbar]

Yup, 5178 is the section.  There are a couple of problems.  It says that you can't locate a DSP for production of spirits anywhere liquors of any kind are sold at retail.  

Section 19.52 pretty well parrots that, changing the prohibition to establishing a DSP at any location where liquors of any kind are sold at retail.  

TTB's most recent changes to the online, DSP commodity application say that you can have a tasting room on DSP general  premises, but that you cannot make retailer sales of liquors from that tasting room. 

That is in line with the language of the statute, but it will require an amendment of the registration to show general premises, if you have none, and approval of the other use under 19.54.and .55.  

Note that the Permits on Line application now requires that you affirm that you know that when you have a tasting room on general premises, the general premises must be separated from the bonded premises by a floor to ceiling wall.  They use the word wall, the regulation in general talks about partitions, which is the more appropriate term, I think.  I also think that they include the affirmation without reference to any section of the regulation, because they may be at a loss to find an appropriate section.  The nearest I  can come is the requirement that doors and other openings onto the bonded premises be secured when no one is on the premises.  That is fine, until one confronts the allowance for an outside tan k.  Where is the ceiling? But TTB bats last when it comes to interpreting the rules.

All things considered, taking the tasting room off from DSP premises is the simplest solution, provided the partitions reach floor to ceiling.

Hope this helps..