SCHUMER REVEALS: AS A RESULT OF THE GOVERNMENT SHUTDOWN, FED BACKLOG OF NEW BEER APPLICATIONS PUTS GENESEE BREWERY & OTHERS AT RISK OF LOSING MILLIONS; SENATOR CALLS ON TTB TO IMMEDIATELY CLEAR MASSIVE LOG JAM & APPROVE GENESEE’S APPLICATIONS – TO AVOID LOSING MILLIONS IN REVENUE & HURTING ROCHESTER ECONOMY

With TTB Shuttered For Over A Month During Last Month’s Shutdown, Rochester-Finger Lakes Breweries, Distilleries & Wineries – Including Genesee Brewery – Were Unable To Secure Crucial Labeling & Other Approvals For New & Current Products, Placing Businesses At Risk of Costly Loss

With The Critical Summer Selling Season Fast Approaching & Another Potential Government Shutdown Looming, Schumer Urges TTB To Quickly Intervene & Process Approvals, Before Operations Lose Millions 

Schumer To Feds: It’s Time For TTB To Approve ALE Of Genesee’s Applications In The CLINK Of An Eye

Standing at Genesee Brewing Company in Rochester, U.S. Senator Charles E. Schumer today called on the Alcohol and Tobacco Tax and Trade Bureau (TTB) to expedite the new product application process for Rochester-Finger Lakes breweries, distilleries and wineries that are currently at risk of missing out on selling new, seasonal products during the booming summer sales months. Schumer explained hundreds of New York State’s beer, wine and distilling businesses, including multiple in the Rochester-Finger Lakes Region, are now facing significant financial loss due to delays in obtaining routine approvals from TTB -- a result of the thirty-five day government shutdown last month, including Genesee Brewing Company. Schumer urged that with another government shutdown potentially looming, TTB immediately exercise its discretion, as it has done in the past following exceptional events, to clear the backlog and expeditiously process applications from Rochester-Finger Lakes businesses.

“It’s no secret that the alcoholic beverage industry in the Rochester-Finger Lakes Region is booming, however, like so many other industries across New York, has been hurt by the recent government shutdown. With TTB shuttered for over a month during this unnecessary shutdown, a major backlog of new product applications from Rochester-Finger Lakes Breweries, including 42 from Genesee Brewery, built up, putting these companies in jeopardy of being unable to sell new products during the extremely profitable summer months,” said Senator Schumer. “So today I’m calling on TTB to intervene and expeditiously clear the backlog of approvals, including for Genesee Brewery and other Rochester-Finger Lakes alcoholic beverage companies, as failure to do so could dry out these businesses and the regional economy. I’ll do everything I can to push through this log jam so Genesee and other Rochester-Finger Lakes businesses can get their new and innovative products to market.”

Specifically, Schumer called on TTB to do the following:

1.     To the extent possible, redirect additional staff to process the backlogged label, formula, and permit applications until TTB has reached its processing time goals

2.     Authorize additional overtime until TTB is able to again meet its ten-day service standard for formula and label approvals

3.     Use its enforcement discretion with businesses in good standing who continued business activity during the shutdown to stay in business

Schumer said that TTB approvals are required for nearly every pivotal step in establishing and operating a brewery, winery or distillery. Additionally, he noted that approvals are required before a business can open, make a new product or label products.

Schumer explained that TTB’s backlog due to the government shutdown impacted producers large and small in New York’s beer industry, which includes over 420 breweries producing over $4 billion in annual economic impact. Schumer said that breweries have been especially harmed by the shutdown, as many rely on quickly securing TTB labeling approvals to sell new products, including seasonal beers. According to a recent press release from TTB, the label approvals backlog doubled during the shutdown to nearly 10,000 label approval requests.

Schumer said that delays in bringing these beers to market cause significant opportunity costs to brewers. For example, Genesee Brewery, the state’s oldest brewery that employs over 500 workers in Rochester, NY as well as Labatt USA and the Labatt Brew House in Buffalo, NY are at risk of losing millions in sales during the upcoming peak summer selling season, which accounts for 60% of annual commercial volume, unless TTB acts on 42 applications the brewery filed prior to the shutdown. Schumer explained that the approval of the 42 product registrations on-hold prevents Genesee and Labatt from bringing these products to market during the crucial summer selling season. Among the products in limbo are new products that took years to develop and are planned to be launched wide in 40 states starting this summer.

Similarly, Schumer said that several of New York’s small craft breweries, such as Three Heads Brewing in Rochester, have been forced to delay the launch of their new products, creating costly losses for the smaller businesses.  Three Heads had been planning for months to go into production with their seasonal summer beers in early 2019 but have now been forced to scrap those plans because their TTB applications are in limbo.  This backlog has created a domino effect that in turn creates additional delays of up to six weeks for packaging and labeling of new beers.  The result is that Three Heads has not been able to produce new types of packaged beers for February and March.  

New York’s burgeoning alcohol beverage industry makes up 420 breweries, 400 wineries, 40 cideries and 100 distilleries and, with Schumer noting its status as a major economic driver that hinges on TTB support. In recent years, Schumer has pushed for increased funding for TTB to hire additional federal inspectors to review applications and worked to implement policies that streamline approvals needed by distilleries, breweries and wineries. Unfortunately, Schumer said, the backlog caused by the recent government shutdown puts small and large businesses alike at a major disadvantage. So, Schumer asked that TTB take the necessary steps to quickly move through the backlog, so that the alcohol beverage industry can continue to thrive.

A copy of Schumer’s letter to TTB appears below.

I write on behalf of New York State’s hundreds of beer, wine, and distilling businesses that are now facing significant financial loss due to delays in obtaining routine approvals from the Alcohol and Tobacco Tax and Trade Bureau (TTB) as a result of the thirty-five day government shutdown last month. Many of these businesses are confronting financial jeopardy if TTB is unable to expeditiously clear its approval backlog now that government has reopened.  As the potential for another government shutdown looms, I urge TTB to exercise its discretion, as TTB has done before following exceptional events, to clear the backlog and quickly process applications from these businesses. 

TTB approvals are required for nearly every pivotal step in establishing and operating a brewery, winery or distillery and are vital for a business to open and make or label a new product. However, TTB’s backlog due to the government shutdown impacted producers large and small in New York’s beer industry, which includes over 420 breweries producing over $4 billion in annual economic impact. Breweries have been especially harmed by the shutdown, as many rely on quickly securing TTB labeling approvals to sell new products, including seasonal beers. TTB’s most recent press release indicates that the label approvals backlog doubled during the shutdown to nearly 10,000 label approval requests. Delays in bringing these beers to market cause significant opportunity costs to brewers.  For example, Genesee Brewery, the state’s oldest brewery that employs over 500 workers in Rochester, NY as well as Labatt USA and the Labatt Brew House in Buffalo, NY are at risk of losing millions in sales during the upcoming peak summer selling season, which accounts for 60% of annual commercial volume, unless TTB acts on 42 applications the brewery filed prior to the shutdown.  The lack of TTB approval of the 42 product registrations on-hold prevents Genesee and Labatt from bringing these products to market during the crucial summer selling season. Among the products in limbo are new products that took years to develop and are planned to be launched wide in 40 states starting this summer. 

Similarly, several of New York’s small craft breweries have been forced to delay the launch of their products, creating costly losses. Homer Hops Brewing in Cortland County, New York is awaiting a federal operating permit from TTB needed to launch a multi-barrel brewery and tasting room. The family-and-friends-owned business will produce over 15 beer recipes made from local ingredients under New York State’s Farm Brewery program. Homer Hops Brewing submitted its application for a federal operating permit in November 2018, but has already canceled events they were set to participate in or host as its permit approval has been delayed.

New York’s alcohol beverage industry makes up 420 breweries, 400 wineries, 40 cideries and 100 distilleries and is a major economic driver that hinges on TTB support. In recent years I have pushed for increased funding for the TTB to hire additional federal inspectors to review applications and worked to implement policies that streamline approvals needed by distilleries, breweries, and wineries. Unfortunately, the backlog caused by the recent government shutdown disadvantages small and large businesses alike. I ask that you take the necessary steps to quickly move through the backlog so that the industry can continue to thrive.

Specifically, I ask that TTB:

1. To the extent possible, redirect additional staff to process the backlogged label, formula, and permit applications until TTB has reached its processing time goal
2. Authorize additional overtime until TTB is able to again meet its ten-day service standard for formula and label approvals
3. Use its enforcement discretion with businesses in good standing who continued business activity during the shutdown to stay in business  

Thank you for your attention to this urgent matter.

Sincerely,

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