What the TTB Giveth, the LCB Taketh Away

by / Wednesday, 20 August 2014 / Published in Blog

TTB LOGOIt is hard to believe that it has already been nearly a year since the government shutdown prevented brewers and other alcohol manufacturers from receiving label approvals and permits, among other necessary documents.  In light of the backlog of Certificates of Label Approval (COLAs) created by the shutdown, questions arose as to whether certain breweries even needed to obtain label approval if they were only distributing their beer within their home state.

Earlier in 2013, the Tobacco Tax and Trade Bureau (TTB) issued Ruling 2013-1, “Malt Beverages Sold Exclusively in Intrastate Commerce.”  In this Ruling, the TTB was asked to clarify whether brewers were required to obtain a COLA for beer that would be sold exclusively in the state in which it was brewed.  The TTB began by noting that the Federal Alcohol Administration Act generally referred to labeling with respect to interstate and foreign commerce, not intrastate commerce and specifically defined a policy whereby a brewer could request exemption from the label approval requirement if it could prove that its products would not be placed in interstate commerce.  The TTB also examined its own regulations and noted that COLAs are only required if the beer is for shipment, delivery, or sale in another state (even if a COLA is not required, brewers are still required to follow the rules regarding labeling, including the health warning statement).  Accordingly, it held “bottlers of malt beverages are not required to obtain either a certificate of label approval or a certificate of exemption for malt beverages that will be sold exclusively within the State where the bottling brewery is located.”  (Ruling 2013-1).

Amid all of the other paperwork required of breweries, one less thing is good news, right?  Unfortunately, for Pennsylvania-based brewers, Ruling 2013-1 doesn’t change a thing.  Pennsylvania requires any malt or brewed beverage sold within its boundaries to be registered with the Liquor Control Board.  In addition to an application and filing fee, in order to register a brand with the LCB, an approved COLA form must also be included with the registration application.  The LCB affirmed that a COLA was still required for brand registration in an Advisory Opinion issued last month, despite the TTB’s Ruling.  Perhaps, in light of the TTB’s position, the LCB will amend its regulations in the near future, but for now all brewers in Pennsylvania must still obtain a COLA from the TTB even if they only sell their beer in Pennsylvania.