How the US government shutdown is affecting drinks companies

The US is now in its third week of a government shutdown, and while thousands of government workers are struggling to make ends meet without their salaries, the extended recess is having an unexpected affect on drinks makers.

Key parts of the US government shut down on 22 December after President Donald Trump and lawmakers failed to reach a deal to allocate $5 billion to fund the construction of a Mexican border wall.

The shutdown, which ends funding for around 25% of federal services and leaves 800,000 members of staff without pay, means that government agencies must postpone all non-essential work until the government is restored.

While many members of transportation authority staff are calling in sick rather than working without pay and national parks are beginning to deteriorate without funding, the shutdown has had a knock-on effect for America’s craft brewers.

The shutdown also includes the Alcohol and Tobacco Tax and Trade Bureau, which regulates the drinks sector. New breweries must apply for a permit from the bureau before they can begin trading, while every new beer must also be approved by the ATTTB before it enters the market.

This means that many breweries are unable to release new lines while their paperwork is in purgatory.

Independent breweries have taken to Twitter, a social network to which the US President appears to dedicate most of his attention, to air their concerns.

“We are an American-owned company and we want to distribute a new beer, but the shutdown includes the Alcohol and Tobacco Tax and Trade Bureau… so we currently can’t move forward,” said Oklahoma-based Prairie Artisan Ales.

Prairie was hoping to roll out its brownie flavoured beer, Oh Fudge, to the off-trade in the US, but to do so it needs to register the label with the bureau and acquire a Certificate of Label Approval (COLA), something which is impossible when the department is closed.

“Please help. The people want the beer.”

Other small businesses have also been impacted. One wine importer responded to Prairie’s tweet claiming that he was still waiting for COLA waivers for perishable samples to bring into the US.

“The government shutdown affects every industry in some capacity and small and independent brewers are no exception,” the Brewers Association told the drinks business in an emailed statement.

“Most notably, because the Alcohol and Tobacco Tax and Trade Bureau (TTB) is closed, it will not approve labels or process permits.

“Breweries across the country need to be prepared for the process to take longer and, once the government is funded again, there could be a backlog.

“The craft beer industry accounts for more than 23 percent of the $111.4 billion U.S. beer market, and small breweries and beermakers introduce new and seasonal products with less lead time than larger breweries, making delays in permits are particularly impactful.”

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