The first government shutdown in 17 years is certain to impact plenty of people. If you happen to be affected by the shutdown, you might drink a beer or two to take some of the edge off. Beyond the immediate impact on government workers, Tuesday’s government shutdown has a ripple effect, and it might just hit your favorite brewery.
The sale and taxation of alcoholic beverages falls under a division of the Treasury department known as the Alcohol and Tobacco Tax and Trade Bureau (TTB). The TTB makes sure that breweries comply with every federally-mandated step in the alcohol production and distribution process. A government shutdown brings the TTB approval process to a halt, which means approval delays for two major things: labels and formulas.
Look at the label of your favorite beer. The federal government requires all beer labels to include certain information, and if you’re sadistic enough you can read all label requirements here. Jacob McKean, CEO and Founder of Point Loma’s Modern Times Beer, spells out how a government shutdown can stifle the innovation process in the beer industry. “For better or worse, the TTB regulates a lot of what smaller breweries do, including approving labels for new beers. Without labels moving through the approval process, many breweries won’t be able to release new beers, which is terrible news for brewers and beer drinkers alike.”
Much like labels, the TTB must approve all beer formulas that don’t adhere strictly to federally-defined “traditional processes.” Again, the sicker among us can read all about the formulation approval process in glorious government speak on the TTB website. If the government can’t approve your beer, your beer isn’t brewed.
While operational breweries may take a hit during the government shutdown, the consequences for prospective breweries could be much more severe. “The TTB also approves new Brewers Notices, which a brewery can’t operate without,” says McKean. “A TTB shutdown means new breweries can’t operate if they’re waiting on their notice. That could mean financial ruin for some start-ups.”
So what does a government shutdown mean for the average beer drinker? If you’re awaiting a new beer from your favorite brewery, that process grinds to a halt until the label for that beer finally gets approval. If you’re looking forward to the opening of a new neighborhood brewery, you might be stuck waiting for a while as their paperwork sits idly on the desk of a furloughed worker. If you’re perfectly content with what’s out there right now, you can still tie one on with gusto.
It’s unclear how long the government shutdown will last, but the 1995-96 shutdown totaled 28 days. No matter how long this shutdown lasts, the craft beer innovation process is shut down as well. In case you were wondering, the TTB is still collecting taxes during the government shutdown. Politicians are crazy, not stupid.
