SCHUMER REVEALS: AS A RESULT OF THE GOVERNMENT SHUTDOWN, FED BACKLOG OF NEW BEER APPLICATIONS PUTS LABATT USA & OTHERS AT RISK OF LOSING MILLIONS; SENATOR CALLS ON TTB TO IMMEDIATELY CLEAR MASSIVE LOG JAM & APPROVE LABATT USA’S APPLICATIONS – TO AVOID LOSING MILLIONS IN REVENUE & HURTING WESTERN NEW YORK ECONOMY
With TTB Shuttered For Over A Month During Last Month’s Shutdown, Western New York Brewers, Distillers & Winemakers – Including Labatt USA – 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 Labatt USA’s Applications In The CLINK Of An Eye
Standing at the Labatt Brew House in Buffalo, 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 Western New York 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 that hundreds of New York State’s beer, wine and distilling businesses, including Labatt USA and multiple others in Western New York, 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. Schumer urged, with a potential government shutdown looming, that TTB immediately exercise its discretion, as it has done in the past following exceptional events, to clear the backlog and expeditiously process applications from Western New York businesses.
“It’s no secret that the alcoholic beverage industry in Western New York is booming. However, like so many other industries across New York, this industry has been hurt by the recent government shutdown. With TTB shuttered for over a month during the unnecessary shutdown, a major backlog of new product applications from Western New York breweries, including 42 from Labatt USA and their parent company, is 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 Labatt USA and other Western New York 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 Labatt and other Western New York 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, Labatt USA is 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 the many applications the brewery filed prior to the shutdown. Specifically, Schumer explained that Labatt’s summer lines are at risk right now because they are unable to get TTB approval on new labeling as part of a brand refresh. Schumer said that this could delay the release of the 12oz. bottle and 16oz. and 24oz. cans of Blue Light Lime, the 12oz. bottle and 16oz. can of Blue Light Grapefruit, and the 12oz. bottle of Blue Light Blood Orange, potentially jeopardizing millions of dollars in revenue.
Additionally, Schumer explained that the impact of TTB being shut down isn’t limited to breweries. The Southern Tier Distillery, an off-shoot of the original brewery in Chautauqua County, is facing a delay on three different packaging configurations in their newest product. Originally sent to TTB in December, the Southern Tier Distillery’s application, which normally has a two-week turnaround time, has now gone unacted-on for nine weeks. Schumer said that the Southern Tier Distiller is now six weeks behind schedule with the new product, with each day that passes representing another day of lost revenue.
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.
Schumer was joined by Labatt USA Director of Corporate Relations Mary Beth Popp, and Labatt Brewmaster Ryan Brady.
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 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
Thank you for your attention to this urgent matter.
Sincerely,
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