Can you think of a good reason why federal bureaucrats should approve beer labels or the opening of breweries? Neither can I.
Among the victims of the government shutdown were brewers in Colorado and across the nation, whose product was held up by delays in government action.
Part of the problem, as Hope Kirwan reports for NPR, is that the Alcohol and Tobacco Tax and Trade Bureau, or TTB, approves all labels for beer sold across state lines. During the shutdown, TTB stopped approving labels. No beer labels, no beer.
Dave Taylor of Oskar Blues told Jessica Porter of the Denver Channel (this was in the middle of the shutdown): “We are pushed to innovate constantly, and right now we probably have 12 to 15 beers that are on hold because of the shutdown.”
Andres Zaldana, executive director of the Colorado Brewers Guild, said several dozen breweries in Colorado ship beer across state lines.
Justin Cox of Atlas Brew Works, who sued with the help of civil rights attorney Alan Gura, told the DCist, “We see our labels as a form of speech, that’s how we speak to our consumers.”
The lawsuit claims, “Because, as a matter of law, no mechanism exists by which brewers might obtain a Certificate of Label Approval for their beer, criminalizing the publication of unapproved beer labels violates the First Amendment right of free speech on its face” (again via the DCist).
The labeling is not the only problem, Zaldana points out. The TTB also approves the opening or moving of breweries, even ones that sell beer exclusively within Colorado.
Zaldana said Westminster Brewing Company “right now is trying to reopen” after shutting down due to financial problems. Until the TTB catches up and issues the relevant paperwork, the brewer “can’t reopen, because they’re not getting their notice from TTB.” (Details may change by the time this column is published.)
The brewery posted to Facebook on Jan. 12, “Unfortunately the circumstances surrounding the current government shutdown has postponed our reopening, as our paperwork is in the approval loop. Although disappointing, we assure you that we will begin brewing and serving great craft beer as soon as the paperwork becomes approved.”
Even moving from one location to another requires TTB approval. “For example, Spice Trade in Arvada is trying to move into a new location” to expand, “and they’re prohibited from doing so until TTB signs off on it,” Zaldana said.
These business regulations are ridiculous, especially in the context of a government shutdown. So I contacted Colorado’s congressional delegation, including the senators, to ask what they planned to do about it.
Rep. Scott Tipton replied by my due date. Tipton “is certainly open to exploring legislation that would alleviate regulatory burdens faced by brewers and other businesses,” his office said on Jan. 24.
Also, Sen. Michael Bennet issued a sympathetic letter about the problem. But, as far as I’ve seen, no one has committed to concrete reforms.
At a minimum, Congress should exempt all brewers from these regulations during any government shutdown. But Congress should do more and relieve brewers from these absurd regulatory burdens, permanently.
Jim Caruso of Flying Dog Brewery, who has been involved in important free-speech battles involving beer both in Colorado and in Michigan, offered a solid proposal: “The government can create clear guidelines for beer labels and penalize brewers who don’t follow them. The TTB’s pre-approval of beer labels not only results in unnecessary additional costs to taxpayers and consumers, it has also resulted in repeated violations of brewers’ First Amendment rights.”
Caruso added, “Consumers already have plenty of protection against businesses that engage in deceptive or fraudulent practices on labels or in any other aspect of their interactions with consumers without the TTB’s added involvement.”
Eric Seufert of 105 West Brewing so far sells beer only within Colorado, but he said he might want to sell beer across state lines someday. He asked of the TTB label review, “What exactly is the point? There are plenty of alcoholic beverages produced in state with no label review.”
Like Caruso, Seufert believes, “A simple requirement to follow the regulations, with penalties ranging from time to come into compliance to a fine should be sufficient.”
Seufert also says the redundant approval of new breweries — by the state and federal governments — is pointless. “The TTB is not remotely good at this with application times exceeding six months and some horror stories of twelve months,” he said.
Seufert concluded, “We’re Americans, and we want to innovate and be free to be productive. The federal government licensing is a high burden to our liberty. To paraphrase Thomas Jefferson: Those that wish to produce, should not ask permission from those who produce nothing.”
Congress, take note.
Ari Armstrong (@ariarmstrong) publishes the Colorado Freedom Report and is the author of Reclaiming Liberalism.