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Feds consider steps to clamp down on growler sales

Beer news — Federal rules would require merchants to be registered as wine bottling houses


Filling up a wine growler at area businesses could soon prove more challenging if a federal ruling isn’t reversed.

The Treasury Department’s Alcohol and Tobacco Tax and Trade Bureau ruled in mid-March that businesses filling wine growlers must be approved as wine bottling houses. That means retailers would need to seek federal approval on labeling, undergo inspections and keep detailed records.

Oregon’s federal lawmakers worry the regulations will push retail outlets out of the growler business.

“(This ruling) threatens to undermine the Oregon Legislature’s intent and the winemaking industry by requiring retailers such as grocery stores and restaurants, to maintain labels, licenses and records as if they were bottling wine themselves,” Oregon’s congressional delegation wrote in a letter. “Such requirements would unnecessarily burden these businesses and limit sales of these fine products.”

The bureau’s decision is based on federal tax code, which requires any person who bottles, packages or repackages wine to have permission to operate as a “tax paid wine bottling house.”

Jim Bernau, who owns Willamette Valley Vineyards, called the requirement “unreasonable,” adding “The way to solve this problem is to make sure the producer (winery) is paying the tax properly in the container size that they are providing to the owner or to that retail outlet.”

In 2012, Oregon was the fourth-largest producer of wine in the country, with more than 900 vineyards and 515 wineries. And in 2013, the Legislature unanimously passed a bill allowing businesses with a state liquor license to fill and sell up to two-gallon growlers of wine.

“They’ve taken risks in their business; they’ve got employees to pay,” Bernau said. “We’ve just got to get it fixed before it really hurts people.”

Bernau’s vineyard has a handful of locations where it sells stainless steel kegs of its wine for growler fills, but it’s not a primary source of income. He thinks the ruling will hurt small, craft winemakers who are trying to get a toehold in the market.

“Sometimes some of our greatest producers started this way,” Bernau said. “We need public policy that encourages this incubation of small business development.”

He said he’s hopeful it can be changed through a process of public hearings and rule making and that the bureau would be open to having a conversation about how to ensure proper taxation without hampering business.

The alcohol beverage industry in the United States accounts for approximately 30 percent of the excise tax revenue collected by TTB. In FY 2013, TTB collected approximately $7.9 billion in revenue from United States wineries, breweries and distilleries, down slightly compared to the prior year.

Bernau and Oregon’s federal lawmakers pointed out that no such regulations exist for establishments that sell beer growlers.




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