More than 200 distillers met virtually with lawmakers last week to address critical issues in the spirits industry, including asking legislators to ease direct-to-consumer shipping and the U.S. Alcohol and Tobacco Tax and Trade Bureau (TTB) for regulatory efficiencies. Also top of the discussion was the TTB’s proposed rulemaking that would add American single malt whiskey to the standards of identity for distilled spirits.
The annual Public Policy Conference is hosted by the American Craft Spirits Association (ACSA) and the Distilled Spirits Council of the United States (DISCUS), two industry groups that have joint-advocated for legislation in the past. The two parties previously collaborated on the permanent reduction of the federal excise tax, signed into law at the end of 2020 after a years-long push for passage of the Craft Beverage Modernization and Tax Reform Act. Distillers from all 50 states joined this year’s conference.
“It is critical that legislators see the impact their local distillers have not only on the spirits industry, but for farming, manufacturing, tourism and so much more,” said Christine LoCascio, chief of public policy at DISCUS.
Distillers advocated for more freedom to ship directly to consumers by supporting the United States Postal Service (USPS) Shipping Equity Act, a bipartisan bill that would end the prohibition-era ban preventing the USPS from shipping alcoholic beverages to consumers. The act would allow the USPS to ship alcoholic drinks directly from licensed producers and retailers to consumers over the age of 21, in accordance with state and local shipping regulations. If approved, USPS will have two years to develop regulations and implement the law, and develop procedures to prevent underage access.
On the state level, seven states plus the District of Columbia currently allow distillers to ship direct-to-consumer (DTC), and a bill is making its way through the California Legislature.
“This legislation helps create a more competitive marketplace by supporting consumer choice, businesses that have suffered during the pandemic, and the USPS alike,” said LoCascio.
Proponents argue that the bill will be a boon for distillers and could generate an estimated $190 million in annual revenue for the USPS. The Shipping Equity Act was introduced in spring 2021, and currently has 46 house cosponsors and four senate cosponsors. The focus during the conference was to increase those numbers, according to LoCascio.
Producers also discussed the TTB’s proposed rule that would add American single malt whiskey to the standards of identity for distilled spirits. Backers of the move, such as the American Single Malt Whiskey Commission, are banking on the rule elevating the young category’s status and amplifying its recognition with consumers in order to compete with traditional whiskey categories.
“This new standard will establish trust in the category, clarify label declarations, and equip consumers with the necessary information to make informed purchasing decisions,” said LoCascio.
The rule was proposed in late July, and the window for public comment closes on September 27, after which the TTB will review all submissions and make their determinations for the final rule, likely to be released next year. The new standards would specify that American single malt whiskeys must be distilled entirely at one U.S. distiller and must be mashed, distilled, and aged in the U.S. They must also be made of 100% malted barley, stored in an oak barrel of 700 liters or under, and be bottled at 40% ABV or higher. Allowable coloring, flavoring, and blending materials would be permitted.
“Establishing this definition will also place an important marker down around the industry that will inspire competition between all tiers of producers, as they seek to innovate and create the next great American Single Malt Whisky brand,” said LoCascio.
Producers also met with members of TTB’s leadership team, which expressed commitment to increase label consistency and certainty for industry members. The agency is targeting a 70% reduction in filing burdens, and the new “My TTB” initiative aims to create a one-stop-shop online portal that will enable distillers to access all of their accounts and conduct all of their TTB-related business in a single place.