What Beers Need TTB Formula Approval?

When does your carefully craft brew require a TTB formula approval? It's not as straightforward as it seems.
When does your carefully crafted brew require a TTB formula approval? It’s not as straightforward as you might hope. Read on for important background on TTB formula approval requirements.

Government authorities are great at drawing confusing lines. One example is understanding what beers need a TTB formula approval. (Note that TTB, or the Alcohol and Tobacco Tax and Trade Bureau, is the primary federal regulatory authority over alcoholic beverages and producers.) Before getting to the question of which beers require TTB formula approvals, it helps to cover some background material, and the necessary rigmarole it takes to get one. What are they, what beers need them, when do you apply, how long does it take? Read on and we’ll roll through it.

What is a TTB formula approval?

When brewing certain kinds of beer with certain ingredients and processes, TTB requires that the agency first approve your formula (your recipe / process essentially) before it will consider your beer for a Certificate of Label Approval (COLA). That process is commonly referred to as a TTB formula approval. This is required for a range of beers, as we’ll cover soon.

When do I seek TTB formula approval?

The time to seek formula approval is when you’re planning to package and distribute a product across state lines. That’s when you’d need to get something else, called a Certificate of Label Approval (which authorizes you to move that beer across state lines). The formula approval is a prerequisite to the COLA for beers that need it. Here’s another scenario that’s important to know. If your state requires a COLA before packaging and selling your product even within the state, then you’ll need to go through the formula-approval process first. (Submitting your TTB COLA label approvals is technically required by the Washington State Liquor Control Board, for example, so you’d need your (1) TTB formula approval and then (2) TTB COLA label approval, before you have authority to sell packaged product in the state).

How long does it take to get a TTB formula approval?

TTB does a great job, but it’s not as fast as getting your COLA. You can view average TTB formula approval processing times at this website. At the time of writing, it’s taking TTB about 53 days (so almost two months) to issues its formula approvals. In part, TTB’s backlog is due to the increase in number of producers and, thereby, the beers hitting the market and crossing state lines. Sneak preview, though…Based on statements from TTB correspondents at the Craft Brewers Conference this year, they’d like to see the number of required formula approvals go down, and may be easing requirements even more, letting more beers through the gate without requiring approvals first. We’ll touch on that in a second. In any event, you will want to budget this time when planning to release any beer to market that requires a formula approval. And then you’ll want to keep in mind that, after the formula approval, it’s going to take some time to get your COLA as well. (Current TTB COLA approval wait times here. Battle Martin does a fantastic job getting through these. Yes, it’s one guy at TTB who does every beer label, and he’s refreshingly also most awesome to hear speak and to deal with.)

Which beers require a TTB formula approval?

Well, let’s be glad not all of them do. But, the line drawing here doesn’t make the most sense. TTB requires formula approval for any beer that is made using nontraditional processes. If you’re brewing up a traditional recipe, this doesn’t need to be on your radar. Water, malt, hops, and yeast? No worries. It does, however, come into play when you start using adjuncts or creative processes.

As a general rule, the kinds of beer recipes listed below require a TTB formula approval. However, there are very important exceptions to this rule which I’ll cover below.

To which flavors or other nonbeverage ingredients (other than hops extract) containing alcohol will be added;
To which coloring or natural or artificial flavors will be added;
To which fruit, fruit juice, fruit concentrate, herbs, spices, honey, maple syrup, or other food materials will be added; or
That is designated as saké, including flavored saké and sparkling saké.

Which beers are exempt from the general TTB formula approval rule?

Here’s a list of the exempt ingredients below (thanks to a ruling in 2014 relaxing the standards). This list came from urging by the Brewers Association, wanting to relax the onerous approval requirements for beer ingredients and processes that really were traditional. As you peruse the list, you’ll see that certain fruit additions are okay…but not others, at least right now. For example, coconut doesn’t make the cut. So if you’re using coconut in any beer, you need a TTB formula approval. Moreover, a multitude of spices got the green light, but if you’re using something creative like lemongrass in your wheat, it’s not going to pass muster. Last, and fortunately, ingredients like brown sugar, chocolate, coffee beans and grounds, honey, lactose, maple syrup, and the like are all okay. But, notably, if you’re brewing a batch of coffee and then using that brewed coffee in your beer process, that is not okay. Just the beans or grounds. Hmm.

Fruits (whole fruits, fruit juices, fruit puree or fruit concentrate)
apples
apricots
blackberries
blueberries
cherries
cranberries
juniper berries
lemons
oranges
peaches
pumpkins
raspberries
strawberries

Spices
allspice
anise
pepper/peppercorns
cardamom
cinnamon
clove
cocoa (powder or nibs)
coriander
ginger
nutmeg
orange or lemon peel or zest
star anise
vanilla (whole bean)

Other Exempted Ingredients
brown sugar*
candy (candi) sugar*
chili peppers
chocolate**
coffee (coffee beans or coffee grounds)
honey
maple sugar/syrup *
molasses/blackstrap molasses *
lactose

The below processes are also exempt. As you review the list, keep in mind that you can use woodchips (remember, though, you can’t say it’s a barrel-aged beer then or say on its label that it has barrel flavor, that gets to labeling issues), but you can’t soak those woodchips in alcohol.

  • Aging beer in plain barrels or with plain woodchips, spirals or staves made of any type of wood.
  • Aging beer in barrels, containing no discernible quantity of wine or distilled spirits, that were previously used in the production or storage of wine or distilled spirits.
  • Aging beer with woodchips, spirals or staves derived from barrels, containing no discernible quantity of wine or distilled spirits, that were previously used in the production or storage of wine or distilled spirits, or with woodchips, containing no discernible quantity of wine or distilled spirits, that were previously used in the aging of wine or distilled spirits.

In Conclusion, TTB Formula Approval: Moving Forward

Ultimately, based on comments from TTB authorities who attended the 2015 Craft Brewers Conference in Portland, TTB seems to be revisiting further ingredients / processes to include on the list. We’re hoping coconut and a multitude of other now-traditional ingredients make the cut. We’ll include them in a post whenever we get word. But, for now, as you make plans to expand into other territories, keep in mind that the COLA isn’t the first step for many of your creative beers. Instead, it’s TTB formula approval, then the important step of TTB COLA approval. Forgetting this, or doing them out of order, can add significant delays to your beer’s release time. If you have questions or concerns about your upcoming COLA or TTB formula approval needs, Doug and I can help, no matter where in the U.S. your brewery is located. Feel free to send us a note.

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Is Your Distributable Beer Brand Trademarkable?

Your beverage brand is racy, but it passes label muster thanks to the First Amendment. Can it be denied a trademark?

Can this Happy Bitch get a trademark? You bet, although the First Amendment's protections don't extend to every trademark application. Read on!
Can this Happy Bitch get a trademark? USPTO has said yes! Although the First Amendment’s protections don’t per se extend to every conceivable brand direction you may want to trademark.

Credit goes to my beer trademark law chum Alex Christian over at Davis Brown in Iowa for pointing out this nuance, which is worthy of a post of its own today. In the past, I’ve written about the issue of having a potentially trademarkable beer name or logo, yet not being able to distribute that beer because of Certificate of Label Approval (COLA) issues. That is, the Alcohol and Tobacco Tax and Trade Bureau (TTB) may control a brewery’s speech on labels when, for example, the label is misleading, touts the intoxicating effects of the beverage, or would be appealing to kids. More on that here. Essentially, in that scenario, a brewery might have an otherwise trademarkable piece of branding material, but be unable to obtain a COLA to put that label or beer name into interstate commerce.

Here’s a different scenario. Imagine your beer name itself is distributable. It isn’t misleading. It’s not touting the effects of alcohol. It’s not appealing to kids. Now, if the label has subjectively “racy” content, we know the First Amendment is going to kick in and protect that brewery’s speech on the label. See my post last week on the case of Flying Dog and its Raging Bitch beer label, which caused a bit of a stir with Michigan’s Liquor Control Commission, which had initially (and improperly) rejected the label, contrary to Flying Dog Brewery’s First Amendment rights.

Could it be that the reverse is also true? That is, can you have a distributable beer label or brand that is not trademarkable? Indeed. The United States Patent and Trademark Office (USPTO) operates under the framework of the Lanham Act. Bear in mind that within the Lanham Act, USPTO is to refuse a mark that “[c]onsists of or comprises immoral, deceptive, or scandalous matter . . . .” There are a few other grounds for refusal, outlined in 15 U.S.C. § 1052. In fact, readers might be aware of the ongoing matter involving the registrability of “Redskins.”

So, you might say, wait a minute. If the First Amendment protects the government from restricting labels with subjectively scandalous content, then how can USPTO refuse registrations on this sort of ground?  You might wonder, can USPTO, the Trademark Trial and Appeal Board (TTAB), and courts applying the law really do this, without affronting First Amendment rights? So far, they can. The distinction is that, by not granting a federal trademark, the government has not prevented the party’s use of the mark. You can speak on. The use would just not be granted the presumptions and protections connected with a federal trademark. A great case on point here was the matter of 1-800-JACK-OFF, a trademark sought for services it doesn’t take much imagination to determine.

So, in sum, some trademarkable beer names are not distributable. In the reverse, some distributable beer names are trademarkable. In the case of Flying Dog Brewery, however, they do have a trademark for their “Raging Bitch” brand of brew. In fact, I was surprised to see just how crowded the field of “Bitch” marks is on alcohol beverages. Among them, we have the pure and simple “BITCH” mark, as well as a battery of marks from different owners, with most of these bitches seeming to favor wine brands. You’ll find “HAPPY BITCH” but also “CRAZY BITCH”, “NASTY BITCH”, the nautical-themed “BEACH BITCH” and then “JEALOUS BITCH”, though that “RICH BITCH” is no longer protected.

At any rate, when developing a standout product for a brewery or beverage business, it can be fun to push the boundaries with creative ingredients and processes. To match the brew’s personality or create some pop on a crowded taplist or retail shelf, it can also be tempting to push the boundaries with the brand material itself. The First Amendment does kick in to protect a brewery’s speech on its labels, allowing all kinds of vulgar things to potentially come to market. Thanks, Bill of Rights! Nevertheless, so far, to develop a brand under the protections of a federal trademark, you’ll have to keep it a bit cleaner. In fairness, although it’s still a subjective call at the end of the day, the powers that be who review trademarks take a pretty measured approach in determining whether a mark warrants refusal for these reasons under the Lanham Act. Still, for any brand owner or marketer, it’s important to know the line exists.

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TTB Compliance: Brewery Tax-Determined Beer Notes

Complying with TTB's Brewery Tax-determined Beer requirements doesn't seem easy at first, but a review of the regulations will help you bring your operation into compliance.
Complying with TTB’s Brewery Tax-determined Beer requirements doesn’t seem easy at first (and it’s not a thrilling project), but a review of the regulations will help your brewery operation start off with TTB-compliant first steps.

Here’s an overview of some TTB brewery requirements related to tax determination. We regularly hear from start-up breweries concerned about complying with TTB’s tax-determination requirements and this is understandable, as the regulations and attendant record-keeping requirements are confusing. Beyond that, this is one of the areas where a homebrewer entering the commercial brewing environment for the first time has a lack of experience and skills. The notes here are no substitute for checking in with your brewery attorney, and potentially taking a cruise through the Code of Federal Regulations to get hip to all of this. Still, here’s an overview of what you’re looking at. More notes on record-keeping will be posted on the Brewery Law Blog before long.

TTB Tax-Determined Beer Overview

Keep in mind that TTB is the Alcohol and Tobacco, Tax and Trade Bureau. Tax is the biggie here. TTB is concerned about protecting the revenue, and they want to make sure you’re not evading tax by serving untaxed beer or miscalculating how much beer you’re producing.

1. Brewery Tax-determination Vessel

In your Brewers Notice, you’ll be asked to tell TTB how you’re measuring your tax-determined beer. For more breweries, this is through calibrated brite tanks. Your equipment supplier can help you understand how these work if you’re not familiar.

2. Calibrating Your Brewery Tax-Determined Beer Measuring System

Note that if you’re using a meter, gauge glass, or the like to measure your tax-determined beer, this is the sort of thing you’ll need to test periodically. This works both ways, no one wants to be overpaying taxes, and TTB doesn’t want to see you underpay, either. In accordance with 27 C.F.R. §25.42, you need to test it “periodically” and maintain the following records in the brewery available for inspection by TTB: (1) Date of test; (2) identity of the meter or the measuring device; (3) result of test; and (4) corrective action taken, if necessary. Note that the variation in the beer meter can’t exceed +/- .5 percent. If it does, that’s when you need to take corrective action to get it as close to zero variation as possible.

3. Using/Labeling Your Brewery’s Tax-Determination Tanks

Pursuant to 27 C.F.R. §25.25, TTB wants your tax-determination tanks labeled in a durable way with the words “tax-determination” tank. Bear in mind that the purpose of the tank is to determine tax every time you add beer to it, and TTB expressly forbids simultaneously pumping into and out of a tax-determination tank. And, note, while it’s always fun to have a “brewer’s tap” in back for the gang to sip on or to offer to visitors, if that’s your beer for consumption, that must be tax-determined beer.

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Washington Brewery Law Resources

When opening a brewery, all the laws and regulations can feel daunting. Here's a short list of key Washington Brewery Law Resources to help kickstart your understanding.
When opening a brewery, all the laws and regulations can feel daunting. Here’s a short list of key Washington Brewery Law Resources to help kickstart your understanding.

Opening and running a brewery is complicated, and Washington Brewery Law Resources aren’t necessarily all neatly gathered in one place. It can be hard to know where to look when your curiosity encourages you to start poking around. Today, I’ll do my best to help you start your research on how breweries in Washington State are regulated. There’s a bevy of laws/code/regs out there, that’s for sure. Here are some jumping off points for your legal excursions.

Keep in mind, these sources aren’t exactly written with readability as a primary objective. Important nuances pop up in all different places. That’s what we’re here for, if you’re ever not sure about something. Indeed, it’s through the code, and our understanding of it, that we can help answer all kinds of questions on the fly, such as: (1) Can my Washington brewery deliver beer to customers in Seattle?; (2) If I’m only selling beer within Washington’s borders, do I still need a Certificate of Label Approval?; (3) May those under the age of twenty-one come into my brewery without us having food service? The list of fun questions that vary from state to state goes on.

For anyone interested in checking out primary Washington Brewery Law Resources, here are some links along with my notes to help you navigate them.

Washington Brewery Law Resources – State Brewery Law

Revised Code of Washington. This is the law that the state legislature creates and revises. Primarily, you’re looking at the content in RCW 66, although keep in mind that other provisions relating to your business, potential distribution agreements, etc. all fall in other places in the code.

Washington Administrative Code. This is where administrative agencies put their regulations. In Washington, the primary administrative authority is the Washington State Liquor Control Board. They were created by the legislature by way of RCW 66 and given authority to do certain things relating to booze in Washington State. Any regulations they promulgate become part of the Washington Administrative Code. Unfortunately, this means that there are often provisions in RCW that address some of your questions, and then provisions in WAC that address other questions. It just depends on whether the legislature contemplated something or it’s LCB creating regulations by virtue of its authority.

Between those two, that’s the heart of Washington brewery law. Keep in mind there are some sanitation requirements set forth by the Washington State Department of Agriculture, and your compliance therewith is a part of maintaining your LCB microbrewery license. Further, there are some places where the County and your Municipality step in, particularly with respect to health codes and building codes.

Washington Brewery Law Resources – Federal Brewery Law

Of course, we all know that state and local government isn’t the final authority on breweries in Washington. Indeed, Uncle Sam, through the Alcohol and Tobacco Tax and Trade Bureau (TTB), has a say on a number of matters. When it comes to TTB, you’ve got to jump to the Code of Federal Regulations (CFR) to see all the regulations they’ve promulgated, and Title 27 is the place to go. Bear in mind, if you’re brewing off-the-wall beers, such as those without hops, the Food and Drug Administration (FDA) may be your labeling authority. And, very technically, FDA has concurrent authority over your brewing business—but TTB really is the place to go when you have questions of federal brewery law. Fortunately, they’ve put together helpful resources on their website to help you wade through labeling and advertising issues.

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New TTB Cider FAQ: TTB Clarifies Labeling and Other Regs for Cider Industry

TTB Cider FAQ: What Producers and Cider Start-ups Need to Know
New TTB Cider FAQ: What Producers and Cider Start-ups Need to Know, Straight from Uncle Sam.

There’s a new TTB Cider FAQ out. We’ve touched on Washington Cider Law in the past, but the feds play an important role in it too. Just today, TTB has provided helpful insight to the growing craft cider industry. Here’s a link to the new TTB Cider FAQ, with six bullet points from us below covering more notable stuff, especially for those comparing regs on the cider side with things on the beer side. Different worlds, but we help with both sides at Reiser Legal.

1. Cider is a wine, we know that. It’s not a malt beverage under the law.

2. From TTB’s labeling standpoint, to call a product just “cider” it has to come from fermented apples and optionally contain added sugar, water, or alcohol. Anything else, it’s not just “cider.” Fortunately, when you submit your formula, TTB will provide a suggested statement of composition to help you, and you can always designate a fanciful name on the label, so long as it’s not misleading.

3. If your cider contains less than 7% ABV, you do not need a COLA. This stems back from the TTB/FDA regulatory authority divide we’ve discussed in the past. If your cider is 7% to 24% ABV, you need that COLA to ship in interstate commerce, as you’re subject to TTB authority. Notably, Washington is going to want that COLA to get your project on the shelves here. Either way, even if you don’t need to obtain a COLA, if the cider leaves the premises, it still has to comply with certain basic labeling requirements.

4. Because cider is a wine, 7%+ ABV cider is subject to TTB’s standards of fill. That means 12oz packages (like the cans we know and love to see on the shelves) are no good for cider at that ABV. Below 7%, it’s all good. Notably also, as long as you’re shipping wine in containers above 18L (4.75G), you don’t have to comply with TTB’s standards of fill. Here are some standards of fill, which feel pretty arbitrary but it’s a reg so what do you expect:

  • 3 liters
  • 1.5 liters
  • 1 liter
  • 750 mL
  • 500 mL
  • 375 mL
  • 187 mL
  • 100 mL
  • 50 mL (just a sip at 1.6907!)

5. If you’re only making cider below 7% ABV, you don’t need a basic TTB permit. Keep in mind, you’re still subject to applicable federal authority, and your local liquor board (in Washington, the Liquor Control Board) more than likely has its own sets of permitting requirements and onerous regs.

6. If your cider has CO2 in it (technically about .392g CO2/100mL, be careful. If CO2 is coming from secondary fermentation in a closed vessel (like a bottle), it’s considered “sparkling.” But, if you’re injecting CO2, it’s artificially carbonated so it has to be labeled as such. Note that sparkling/carbonated wines are taxed at higher rates. Speaking of tax, there are all kinds of nuances with respect to how you’d be going about your cider business.

The takeaway on the TTB Cider FAQ:

Regulations are really confusing, inconsistent among industries, and you might be subject to a completely different set of regulations depending on how much alcohol is in your project. For anyone thinking about starting a cidery in Washington State, we’re happy to help you wade through these tricky regulations. We’ll post further resources for cideries on the blog soon.

 

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