How the Government Shutdown Will Affect the Alcohol Industry

(Photo: Felipe Rodriguez / VWPics via AP Images)

The American government shutdown is affecting industries across the U.S., from air traffic control to health care to disaster aid and beyond — including alcohol.

This week, alcohol coalitions are decrying the shutdown and the impact it will have on the spirits industry.

How Will the Government Shutdown Affect the Alcohol Industry?

The alcohol industry will be directly affected by the government shutdown due to its effects on the The Alcohol and Tobacco Tax and Trade Bureau, which has scaled back to only essential staff. The TTB is the lead federal agency responsible for permitting, regulating and collecting taxes on alcoholic products.

As it scales back, the TTB is suspending Certificate of Label Approvals, formula approvals and other permitting functions until the agency is fully staffed again.

Producers can’t operate in the U.S. without a permit from the TTB, nor can they release new expressions before the labels that go on the bottle go through the TTB’s approval process. Many producers even need to have their formulas approved by the agency.

“Distillers, large and small, rely on timely approvals to remain competitive in the marketplace,” the Distilled Spirits Council of the United States wrote in a statement. “Any disruption to these services will directly hinder distillers’ ability to bring new products to market, expand into new states, or make necessary label changes.”

In 2023, the TTB received nearly 198,000 label applications and 27,000 formula submissions for beverage alcohol products, according to DISCUS.

Per to DISCUS’ statement, the shutdown will result in delayed product launches, missed market opportunities, revenue losses and “lasting harm to the wider hospitality industry, which contributes significantly to the U.S. economy.”

This season (sometimes referred to as OND, which stands for October, November, December) is the biggest time of the year for the spirits industry, with new releases dropping left and right ahead of the holidays.

“We urge Congress to act swiftly to resolve the shutdown and ensure uninterrupted operations at TTB to protect American consumers, distilleries of all sizes, and the broader U.S. economy,” DISCUS wrote.

The Brewers Association released a statement warning American brewers to prepare for approval delays even after the shutdown ends, as the TTB will likely have a significant backlog to get through once operations resume.