The ripple effects of the federal government shutdown, going on 20 days now, are being felt even among beer lovers and sellers.
Craft breweries across the country cannot sell their new IPAs or lagers in cans or bottles because an obscure agency within the Treasury Department, the Alcohol and Tobacco Tax and Trade Bureau, is shuttered.
That’s the entity that has to sign off on product labeling, making sure it includes the necessary details about alcohol content and health warnings and no unsubstantiated claims.
It’s usually a streamlined process that takes about three weeks. But with the partial government shutdown, those applications are piling up.
There are more than 6,300 craft breweries in the U.S., according to the Brewers Association, including 36 in Kansas and 91 in Missouri. With the backlog, labeling approval could take 45-60 days once the shutdown ends.
That is a particular problem for James Stutsman, a partner in City Barrel Brewing Company, which plans to open a new brewery and restaurant at 1740 Holmes St. in the Crossroads on Feb. 22.
“I have four beers that we were planning on releasing on opening day and I only got one of them approved through the system before the shutdown,” Stutsman said.
One whose labeling is not approved, a New England IPA to be called Rad AF, is in the tanks now.
“It was going to be a big part of our grand opening,” Stutsman said, “and now I can’t use it all.”
Nathan Heide, a Kansas City business consultant who works with clients who deal with the federal government, is familiar with Stutsman’s plight.
“The shutdown trickles down to folks like James and other breweries out there,” he said. “It’s affecting their businesses.”
Established breweries like Boulevard Brewing Co. can ride out the shutdown because they have products whose labeling has long been approved. But any brewer wanting to introduce a new product or make a change in an old one cannot package it without new labeling approval. The requirement does not apply to beers on tap.
Brent Anderson is a co-founder of Friction Beer Co., and hoped to get his federal approvals this month for a planned summer opening in the Crossroads. He, too, is stymied by the shutdown.
“Even if they reopen the offices tomorrow you don’t know how long the backlog will be,” Anderson said. “That could have a ripple effect on other approvals and licensing and construction. It’s been a drag for sure.”
Stutsman and his partners plan to sell their craft beers in cans for people to consume on-site or to take away. They invested $100,000 in a high-speed canning assembly line. But they can’t order the cans until their labeling is approved. Then it takes time for the cans to be delivered from the supplier.
Stutsman has 15 barrels of almost-ready New England IPA — about 500 gallons — that he calculates would be worth about $20,000 retail. But there’s a time problem.
“All beer is perishable but an IPA should be drank fresh,” Stutsman said.
He does not want to wait for the shutdown to end, for his labeling approval to go through and for his cans to arrive only to sell an inferior product. That’s no way to build clientele.
So Stutsman plans to just give the IPA away at private, ticketed events, including one on Jan. 26. He will invite federal employees affected by the shutdown to come an hour early.
“At least they can drink a beer on me,” Stutsman said. “Might as well serve it at its prime.”
Incidentally, Boulevard announced Thursday that it’s offering discounts to federal employees.
“For those bearing the brunt of the federal gov’t shutdown, we offer a little bit of solace,” the Boulevard Tours & Recreation Center tweeted. “Through the duration of the shutdown, show your valid US gov’t-issued employee ID for furloughed pricing on beer & discounted food — because you might need to get out & enjoy a beer.”