The Craft Beverage Modernization Act (CBMA) allows substantially reduced tax rates or credits for both foreign and United States alcohol producers. Some of this was temporary and cumbersome during the past few years, but now that these tax changes appear to be long term, TTB has developed an online system to administer this. Most foreign producers should register with TTB if their alcohol products will be imported into the US.

This tax savings opportunity is coming up very fast, and begins in 2023. TTB is allowing signups beginning in late 2022. In the past, TTB had a much different system to handle the rules around this tax reduction.

The excise tax savings can amount to hundreds of thousands of dollars per year per distillery. Upon a proper registration, the excise tax could drop from $13.50 per proof gallon to as low as $2.70. This is an 80% reduction and would take a typical bottle of vodka from $2.14 in federal excise tax to 43 cents. This seems well worth the extra time and expense, for all but the very smallest producers. The tax reductions apply to beer and wine also.

Effective January 1, 2023, foreign alcohol producers who wish to qualify for reduced rates or credits will need to register their plant using the myTTB website. A company authorized representative will use their personal access account to log in and complete the foreign plant registration. If the company representative doesn’t currently have an access account, they can use the myTTB page to create a new access account.

Once logged in, the company representative will provide the foreign producer’s name, country, plant address and mailing address. The representative must also provide a company contact person’s name and contact information and provide information regarding any person or entity that holds 10% or more voting interest in the foreign plant. The representative must also provide the plant’s FDA Food Facility Registration ID(s).

If the plant qualifies as a control group due to common ownership between their plant and another foreign or US alcohol producer, the reduced tax rates or credits will be based on the total production of all control group members, and the lower tax rates must be divided between the members of the control group.

The foreign plant representative will enter the amount of alcohol and the eligible tax rate they have assigned to each person or entity importing their alcohol into the US. They will also provide documentation of that assignment to the alcohol importer. A new assignment of the amount of alcohol and eligible tax rate must be made each year.

Our firm can help foreign and US producers, as well as US importers, to qualify for these tax opportunities properly. In addition, we can help with the FDA food facility registration parts of this program. We represent hundreds of alcohol beverage producers outside the US, and we also have long-time experience with FDA food facility registration.  Daryl Polley has substantial experience with TTB tax issues, from his many decades at TTB, and various attorneys at the firm work closely with Daryl. If you need help in these areas, contact Daryl or Robert.

The post Foreign Producers Should Get Ready for Big CBMA Tax Benefits appeared first on Lehrman Beverage Law.

Unlike in the case of say Justice Kavanaugh, it not clear that Putin likes beer. But it’s increasingly clear that beer does not like Putin. We are still looking for the pro-Putin label that may have slipped through.

Two of the above labels seem to refer to Putin Huilo. Wiki says it means:

“Putin – khuylo!” (Russian: Пу́тин — хуйло́, IPA: [ˈputʲɪn xʊjˈlo]; Ukrainian: Пу́тін — хуйло́, IPA: [ˈput⁽ʲ⁾in xʊjˈlɔ]; commonly translated as “Putin is a dickhead”)[1] is a Ukrainian, Belarusian and Russian slogan deriding Russian President Vladimir Putin. It originated in Ukraine in 2014 having grown from a football chant first performed by FC Metalist Kharkiv ultras and Shaktar Donetsk ultras in March 2014 on the onset of the Russo-Ukrainian War. The phrase has become a protest song and is very widespread throughout Ukraine among supporters of Ukrainian sovereignty and territorial integrity, and, more generally, those who opposed Vladimir Putin in both Russia and Ukraine.

In order, the above labels are:

• Russian Warship Vodka
• Rogue F*#K Putin Ale
• Icarus Putin Huylo Ale with Coriander

Let us know if you see other good ones.

The post No Beer for Putin appeared first on Lehrman Beverage Law.

Join Marshall’s talk on TTB label and formula issues, coming up soon. This event is hosted by the Brewers Association on January 13, for BA Members only. The sign-up details are here and the webinar will cover the following:

In this BA Collab Hour webinar, we will discuss common mistakes made during the Alcohol and Tobacco Tax and Trade Bureau (TTB) label and formula submission processes, and go over some tips and (compliant) tricks that may make your submissions and interactions with TTB a less frustrating process.

The webinar will focus largely on beer, seltzer and malt beverage issues. Marshall is drawing on experience from thousands of label and formula approvals (as well as “a few” rejections and needs corrections) handled by himself and his colleagues, and most attendees should learn at least a few practical tips along the way.

The post Join Marshall Fawley’s BA Collab Hour appeared first on Lehrman Beverage Law.

At the outset of the COVID-19 pandemic, many in the alcohol beverage industry recognized a significant problem facing our communities and pivoted their production to alcohol-based hand sanitizer. These products were donated to first responders and provided to the public-at-large to provide a resource that quickly became a scarce commodity in the fight against the spread of COVID-19. In response to this desire to help, the Food and Drug Administration (“FDA”) issued several temporary policies beginning in March 2020 to help regulate the production of alcohol-based hand sanitizer.

As mass-produced commercial hand sanitizer became more widely available, we believe a majority of alcohol beverage producers returned to doing what they do best, producing high-quality craft products. However, if there are any producers still manufacturing alcohol-based hand sanitizer, this post is for you.

In tomorrow’s (October 13, 2021) Federal Register, the FDA will announce the withdrawal of the temporary guidance related to alcohol-based hand sanitizer production. Essentially, FDA has determined that there is plenty of available hand-sanitizer in the market and thus no need for continued use of alcohol in hand sanitizer production.

If you are currently manufacturing alcohol-based hand sanitizer following the FDA’s temporary guidance, you must cease production by December 31, 2021. Similarly, distribution of these products under FDA’s temporary rules must end by March 31, 2022. After December 31, 2021, alcohol-based hand sanitizers may still be produced and distributed, however producers and distributors must follow FDA rules and regulations for tentative final monograph (“TFM”) category III drugs and any other applicable requirements. These requirements and regulations, include, but are not limited to, producing the drugs based on good manufacturing practices, pre-sale drug testing, and drug facility registration. Failure to follow all relevant drug manufacturing requirements may result in enforcement action from FDA.

You can find the full unpublished text of FDA’s notice here. As of October 13, 2021, the previous link will take you to the official, published FDA notice.

The post FDA to Withdraw Temporary Alcohol-Based Hand Sanitizer Guidance appeared first on Lehrman Beverage Law.