Close Menu

US shutdown affects beer industry

The shutdown of the US government means that a backlog of new beer labels and recipes unable to be approved by the authorities has built up.

According to USA Today, all new beer in the US must be approved by the Alcohol and Tobacco Tax and Trade Bureau (or TTB as it is known), especially if the beer uses non-traditional ingredients as many seasonal beers do.

Despite the deadlock between the Democrats and Republicans now being at an end, a backlog has developed in the office – although it continued to collect brewery taxes during the two week standoff.

Speaking to USA Today, a spokeswoman for Brooklyn Brewery in New York, Carla Villa, explained: “Any delays in approvals create a “domino effect. It’s this one thing that then affects all these other things.

“We can’t launch beers on time, which means our distributors can’t sell it, which means our customers can’t buy it.”

Although breweries with previously approved labels can still sell beer, any new breweries that were seeking to begin selling their products now have to wait until the deadlock is broken, and even then they will have to wait until the backlog clears.

One brewery, New Belgium in Fort Collins, Colorado is apparently waiting for approval on five new labels and three new beers.

Spokesman Bryan Simpson warned that without approval the autumn/winter brews will could run out without a spring offering to replace them – which means the brewery will have to pay extra to rush labels through the printers and get the beer onto the market when they are eventually accepted.

The situation is equally dire for the wine industry for the same reasons. The Boston Business Review highlighted the case of Latitude Beverage in the city, which is waiting approval on a new label.

Until it is approved, and this is unlikely before Christmas, the store will be without 17,000 cases of wine.

The shutdown in the US was triggered by a failure in Congress to approve a new budget on 1 October last week.

The Republican controlled house has refused to pass a new budget that does not include at least some amendments to President Barack Obama’s universal health care plan (Obamacare) – long a bone of contention between the two parties.

With the Democrats also intransigent, the government has essentially run out of money and no funds will be released until an agreement is reached.

As such, all “non-essential” government workers were told to go home.

It is the first shutdown in 17 years and has seen 700,000 public sector workers sent home on unpaid leave – 400,000 from the Department of Defense alone.

All National Parks have been closed including the Statue of Liberty, Alcatraz and Yosemite as have the 19 national monuments, memorials and museums in Washington DC that comprose the Smithsonian Institution.

The last shutdown cost the US government over $1 billion and this episode is likely to cost at least double that, particularly as the government will owe back pay to those who were left, effectively, unemployed for its duration.

The most recent news this morning (11 October) is that talks between the two parties have failed.

It looks like you're in Asia, would you like to be redirected to the Drinks Business Asia edition?

Yes, take me to the Asia edition No