October 10, 2013
Craft Beer Industry On Thin Ice During Government Shutdown
[ Watch the Video: Shutdown Is Even Affecting Craft Beer Brewers ]
Michael Harper for redOrbit.com - Your Universe OnlineThe ongoing partial shutdown of the government has affected our parks, our space program and our science, but things just got very real. Now the shutdown is affecting our beer.
The craft beer industry is booming; more than 2,500 are currently operating across the US while another 1,605 are in the planning stages. Yet it’s these breweries, especially the ones in the early paperwork stages, which are beginning to feel the effects of the shutdown in a very real way.
The Alcohol and Tobacco Tax and Trade Bureau, better known to brewers as TTB, is a seldom discussed department of the federal government. All new breweries must file paperwork with this arm of the Treasury Department before they can begin selling their liquid wares to thirsty patrons. Existing permit holders must also have any new beer label approved by this agency before they can bottle and sell it. Yet during the shutdown, the TTB will only be processing taxes from those with existing permits. They will not be processing any new requests, which means new breweries simply have to wait out this shutdown before they can open their doors.
This becomes particularly troubling for those who have been waiting to launch their business, especially those who have already invested the hundreds of thousands of dollars it costs to buy brewing equipment.
In an interview with the Associated Press (AP), Mike Brenner, a Milwaukee brewer hoping to open his own shop by December said. "My dream, this is six years in the making, is to open this brewery". Brenner says he has four labels stuck in limbo as a result of this shutdown. Without an approved label he cannot sell his beer and, if he’s not moving product through his building, he says he’ll lose $8,000 a month.
“I've been working so hard, and I find all these great investors. And now I can't get started because people are fighting over this or that in Washington. ... This is something people don't mess around with. Even in a bad economy, people drink beer," he told AP reporters Carrie Antlfinger and Todd Richmond.
Even existing craft breweries are feeling the effects of the shutdown. Tony Magee owns Lagunitas Brewing Co. in California, and took to Twitter to vent his frustrations with the shutdown.
"(Expletive) Feds are gonna shut down the already incompetent .Gov while hundreds of small breweries, including us, have labels pending. Nice."
One area where the craft beer boom can be readily seen (and tasted) is the Dallas Fort Worth Metroplex in North Texas. With 12 breweries in the area and many others in planning stages, North Texans have been introduced to a number of beer styles from a number of craft brewers. Chris Rigoulot, owner of brewery-in-planning Noble Rey Brewery in Dallas, TX, told redOrbit that he expects the effects of the shutdown will be felt long after the TTB returns to normal operations.
When asked if he had run into issues with a shutdown TTB, Rigoulot said “Not yet, but I suspect or I should say am concerned that it will create a backlog and therefore delay my filing longer than it’s anticipated to take.”
This sentiment is shared by another North Texas brewer, Ryan McWhorter with brewery-in-planning Wahoo Brewing Company.
“It'll slow us down even more now that we can't move forward with the paperwork,” said McWhorter in an interview with redOrbit. “I say we'll keep moving forward as much as we can. If it comes down to it, I'll go fill the paperwork my self,” he joked.
For now brewers, like many others in this country, have no other option than to sit and wait for the politicians in Washington to decide on a spending bill and end the shutdown. On the bright side, at least brewers have plenty of great beer to bide their time with.