The main federal agencies that govern the distillery industry are the Tax and Trade Bureau (TTB), and the Food and Drug Administration (FDA). On the state level, distilleries need to comply with the Department of Alcohol Beverage Control regulations in order to have the appropriate permits and licenses needed to operate a distillery business.
The Tax and Trade Bureau (TTB) does the following:
- Issues the federal permits necessary to produce, import, and wholesale alcohol (note: retailers do not need to be federally licensed);
- Issues pre-approvals for spirit labels (commonly called COLAs);
- Approves formulas for non-traditional spirits;
- Collects excise taxes from alcohol producers;
- Issues rulings affecting industry members; and
- Regulates trade practices.
The Food and Drug Administration is also responsible for the regulatory framework as it promulgates strict labeling regulations, determines safe food additives, and conducts facility inspections, among other things.
Generally, alcohol beverages are regulated by TTB (for labeling, licensing, formulation, tax, etc.). However, the FDA regulates issuance of some alcohol labels. The FDA has jurisdiction over the following matters for all alcohol products:
- Food safety (i.e., FDA has interest in making sure all food products introduced into the market are safe and not adulterated or produced/packaged/processed/held under unsanitary conditions);
- Food Facility Registration; and
- Food additives and GRAS (i.e., anything intentionally added to a food product must be GRAS, or “safe”).
Most small businesses selling alcohol can avoid the Nutrition Facts Panel labeling requirement as they often qualify for a Small Business Nutrition Labeling Exemption. The exception applies when a business sells less than 100,000 units of the product in the U.S. during a 12-month period, and must employ less than 100 full time employees.