Brewer's Notice and The TTB Interview

In the beginning of February we received an unexpected call from the TTB.  The analyst assigned to our application was calling to conduct the phone interview portion of the Brewer’s Notice approval process. 

The interview took about 30 minutes and went well.  Surprisingly enough, our application was basically correct.  We numbered one of our forms incorrectly, so she fixed that for us and we needed to submit a statement regarding a speeding ticket that was received back in 2003.  Apparently speeding is a misdemeanor in North Carolina.  Those were really the only two issues. 
  

With the application reviewed and the interview completed, it’s our understanding that the remaining steps in the federal licensing process are just waiting for a few signatures.  The analyst said it could take two or three weeks to get the application processed and potentially another two or three weeks to get the appropriate signatures, but then we would be issued our license.
  

We were a little surprised by the time of the call because we didn’t expect it so soon.  We were told the application process would take about 90 to 100 days.  We submitted our application on December 21, 2010.  Since it was 43 days from submission to interview, and we were told that the application should be signed in about 28 to 42 days following the interview, the total processing time would be in the range of 71 to 85 days.            

Of course this is great news and we appreciate the speed that TTB is able to process our application considering the large volume they are processing and the fact that we submitted our application right before the holidays.  Our analyst said our application was pretty well organized and complete, so we think that helped the process.  Now we just need to keep on track with the rest of the process.  
  

What kinds of questions do they ask?  Hess Brewing in California recently went through the process and posted the questions they were asked during their interview at http://hessbrewing.blogspot.com/2010/01/ttb-brewery-approval.html.  

Our questions were basically the same ones that Hess was asked.  There were a few differences so we listed the questions we were asked below.  These are not the exact questions, but you get the idea.              

1.  Am I taking over an existing business?
2.  What is my prior business experience?
3.  When do I plan to start brewing; what is my timeline?
4.  Is my equipment on premise and is my building construction complete?
5.  What type of materials are the following constructed of: building walls, roof, floors?
6.  Describe the equipment that will be installed or that has been ordered?
7.  Describe security at the facility?
8.  Are there any windows that can be opened in the facility?
9.  Are you leasing the building; if so does the owner know you will be brewing beer?
10.  Will there be a tasting room / hospitality suite on site?
11.  How is the tasting room secure from the brewing area?
12.  Will there be a fee to enter the tasting room or for parking at the site?
13.  Are there any shared services on your site; i.e., will any other businesses be operating out of your space?
14.  Will any of our production take place at another site?
15.  Will there be a gift shop on site?
16.  How are you separated from adjacent businesses?
17.  Is the building more than 50 years old?
18.  Are you aware that TTB agents have the right of entry to your site?
19.  What type of products will you be making?
20.  Will you be selling product in other states?
21.  Will you be exporting or importing any products?
22.  Will you be participating in alternative premise brewing?
23.  Are you aware the brewer’s bond expires every 4 years?
24.  Are you aware the federal excise tax is $7.00 a barrel?
25.  Where will your records be kept?
26.  Will these records be examinable by agency representatives?
27.  Are you aware of the when and how taxes are to be filed?
28.  Are you compliant with state and local zoning requirements?
29.  How you met with your local fire marshal to review the site?
30.  Are you aware you need to register with the FDA as a food facility?
31.  Do you or any owners own stock in companies that licensed by the TTB?
32.  Are any of your responsible parties associated with other companies licensed by the TTB?
33.  Does anyone other that you have a financial interest in the business
34.  Are there any other parties that will partake in the profits?
35.  Has anyone associated with the business lived in a foreign country in the past 10 years?
36.  How much money has been invested in the business?
37.  What is the source of these funds?
38.  What is the source of your working capital?
39.  Have you received any loans to fund the business?
40.  Will you have cash flow sufficient to cover excise tax responsibilities?
41.  Will you have cash flow sufficient to pay the premium on your bond as long as you are operating?
42.  Are you aware of the pay.gov site?
43.  Are you aware of the COLA system?
44.  Do we give them permission to make any small changes to the documentation?

Death By A Thousand Paper Cuts

We placed a call a few weeks ago to the TTB (Alcohol and Tobacco Tax and Trade Bureau) in order to check on the status of our Brewer’s Notice application that we filed just before Christmas.  We were told that our application was received; it appeared to be complete and is being processed by one of their analysts.  The current process time for the Brewer’s Notice is between 90 and 100 days, so we should be in a position to be approved in late March.  All of which is good news.      

The reason we mention this is that we’ve been asked a number of times why it takes so long to get a brewery opened.  The above photo is one of the reasons.  It is a 4 inch high stack of all the paperwork we have submitted so far to various parties regarding licensing and funding.  If you are planning to open a brewery my advice would be to brush up on your organizational skills and be prepared to fill out a tremendous amount of paperwork.      

Outside of the typical paperwork associated with starting a new business (applying for an employee identification number, submitting formation documents, filing for local business permits, etc.), additional applications need to be submitted and licenses need to be issued on both the federal and state levels to operate a brewery.  The federal application is, obviously, standardized regardless of where you open; however, each state has its own set of laws and regulations that apply to brewing.

 

The federal license is called the Brewer’s Notice and is managed through the TTB.  Their website, www.ttb.gov, is a useful resource for information on the process and details all the requirements necessary for approval of the application.  Getting Started in the Brewing Industry (www.ttb.gov/industry-startup/beer/beer-startup.shtml) will walk you through the process and is very informative to anyone looking to open a brewery.  Most importantly the analysts that I have spoken with at the TTB regarding the process and my application have been very helpful in answering questions about the paperwork. 

What surprised us the most was the amount of supporting documentation that is required with the application.  For example, you need to submit supporting documents for all the funds used to start the brewery, including copies of checks and account statements.

Once the paperwork has been processed one of the final steps in approval (at least from what we’re told) is a phone interview between the applicant and the TTB.  Not sure exactly what that entails, but we can get back to you with that information.  We were told that the entire process takes between 90 and 100 days.    

The permitting process for the State of New Jersey is managed by the Division of Alcohol Beverage Control.  The ABC requires an Application for Manufacturer and Wholesale License be completed and approved in order to operate as a brewery in New Jersey.  As a production brewery we filed for a Limited Brewery license.  We were told that it could take up to six months to process this application. 

The ABC’s website (www.nj.gov/oag/abc/index.html) has some useful information about the different licenses the state issues; however the application for these licenses is not available online for download.  Anyone interested in this application has to contact the ABC directly and a copy will be mailed out by the state.  In addition to the 12 page application, supplemental document, including source of funding, is also required for approval.

This information was based entirely on our experience with these agencies and may vary from others’ experiences going through this process.  There are a number of law firms that specialize in this process and will file both applications on behalf of the breweries, however we decided to handle all of these applications ourselves.  Of course since neither of our applications has yet to be approved, we will see if that was the way to go.