The Alcohol and Tobacco Tax and Trade Bureau (TTB) has recently published Procedure Number 2023-1 shedding light on the transfer of beer without tax payment between breweries under separate ownership. The guidance came into effect on July 13, 2023 and was provided by McDermott Will & Emery.
As stated by the TTB, this directive is aimed at delivering clarity to brewers who have long been navigating the complex terrain of transferring beer without tax payment between breweries that aren’t under the same ownership structure. The updated guidance serves to streamline processes, reduce possible uncertainties and ensure compliance with existing regulations.
Although the full details of the document are not readily accessible, it is understood that the updated guidance could potentially impact a vast range of transactions including, but not limited to, contractual brewing arrangements, alternating brewery arrangements, and joint venture brewing arrangements.
Additional implications of this new procedure could reach even further; these include widely variegated licensee relations and other commercial relationships within the brewing industry. As such, all breweries should take the necessary steps to familiarize themselves with the new updates and adjust their operations accordingly to avoid potential legal difficulties.
Interested parties are advised to read the full updated guidance directly from the TTB’s Procedure Number 2023-1 announcement. Devoting a bit of time to understand the details of this procedure can save many difficulties and potential conflicts in the future.
Legal professionals working with or within breweries need to be alert and responsive to these changes to ensure their practices remain within the guidelines set forth by government regulatory bodies. As always, vigilance and knowledge are keys to successful legal compliance in any industry.