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Collateral Damage

Craft beer is unsung casualty of government shutdown

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As I write this, we’re more than four weeks in, and the government shutdown shows no signs of letting up. As the Republicans and Democrats squabble over the issue of a border wall, 800,000 government workers are scrambling to make ends meet. And they’re not the only ones suffering. There are also civilian workers who depend on government projects and contracts. The shutdown is even impacting craft brewers, which in turn involves craft beer consumers.

For a brewery to bottle or can the beer it makes, it must have an approved label. The agency that approves those labels—the Alcohol & Tobacco Tax & Trade Bureau (TTB)—reviews proposed labels for alcohol content, government warnings, UPC and name and style of the beer. The agency also looks at the label’s artwork to make sure it’s appropriate. Due to the shutdown, though, that agency is closed until further notice.

While an unapproved label may seem like a minor issue, it’s important to understand the implications of this setback. Craft beer is an ever-evolving medium. Core beers like Intuition Ale Works’ I-10 IPA or Veterans United’s Raging Blonde aren’t really affected, because their labels were approved long ago. New beers? Not so much. Brewers can’t package and release any new product until they get a label approved. This holdup can cause real issues when a brewer has a tankful of a new beer that can’t be packaged due to label restrictions. And that can mean a huge loss of income.

Another way the shutdown affects craft brewers: It’s delaying the openings of new breweries. These need state and federal licenses to operate but, yes, the TTB is still closed. This can cause incredible hardship. Labors of love, new breweries often get their seed capital right out of brewers’ pockets. They’re born eyeballs-deep in debt and need to start pouring for profit as soon as possible.

At least one operation, Washington, D.C.’s Atlas Brew Works, has filed suit against the federal government, arguing that the shutdown is denying the brewery’s right to free speech.

“We are asking the court to allow us to speak to our customers during this shutdown by permitting Atlas to sell our beer to out-of-state consumers,” wrote founder and CEO Justin Cox in an email to CNN. The allegedly abridged speech is his company’s ability to communicate with its customers through the labels on its beer.

U.S. Senator Michael Bennet (D-Colorado) has entered the fray as well by addressing a letter to Treasury Secretary Steven Mnuchin on behalf of Colorado’s breweries. The shutdown, Bennet says, concerns more than 400 breweries in his state and 7,000 nationwide.

Breweries are not the only businesses in the beer industry tangled up in this, either. Farmers who supply barley and hops, yeast producers, bottle and can manufacturers—they’re all under the gun, too. The economic impact that breweries have on the nation is more than $76.2 billion.

There’s no real way to know how long the shutdown will last. One thing is sure, though: Until it ends, breweries face difficult choices. To paraphrase a famous line: “The beer must flow!”

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