Letter to the Alcohol and Tobacco Tax and Trade Bureau - Schumer Calls on TTB to Immediately Clear Massive Log Jam & Approve Genesee's Applications

Letter

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:

To the extent possible, redirect additional staff to process the backlogged label, formula, and permit applications until TTB has reached its processing time goal
Authorize additional overtime until TTB is able to again meet its ten-day service standard for formula and label approvals
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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