Resources
Your Partner in Alcoholic Beverage Solutions
Federal Compliance
Federal Basic Permits
Securing the appropriate permits is a critical initial step for brands intending to sell alcoholic beverages in the United States. A Federal Basic Permit is essential for businesses to legally earn revenue from alcohol sales. For brands importing alcoholic beverages into the U.S. from abroad for commercial reasons, obtaining a Federal Basic Import Permit is necessary.
These permits are issued by the Alcohol and Tobacco Tax and Trade Bureau (TTB), the federal body responsible for regulating alcohol.
Dos Agaves can handle the application process for Federal Import Permits on behalf of clients through its Federal Regulatory Compliance department.
Formula Approval
Determining if your brand’s alcoholic beverage requires formula approval from the TTB is the next step. This is crucial for identifying non-standard production methods or ingredients, ensuring ingredients comply with the FDA’s safety standards for consumption, and clarifying the product’s composition for labeling and taxation.
If needed, the TTB will request documents such as a complete ingredient list, manufacturing process, and a Flavor Ingredient Data Sheet for third-party flavors. A product sample may also be required for lab analysis. Once approved, the formula remains valid for a decade.
Certificate of Label Approval
The TTB mandates a Certificate of Label Approval (COLA) for wines over 7% ABV and for spirits or malt beverages over 0.5% ABV. This regulation ensures labels do not contain misleading statements and provide adequate information about the product’s identity and quality.
It’s advisable to refrain from printing labels until receiving the final COLA, as revisions may be requested by the TTB.
State Compliance
Registering in States
Before market entry, it’s crucial to understand that alcohol regulation is managed individually by each U.S. state, operating under either open or control models. Open states permit private businesses to trade alcohol following state laws, mainly through a licensing system. Control states, however, often see government agencies overseeing wholesale operations, sometimes extending to retail.
Be mindful of state-specific regulations, including registration fees and price posting requirements, which aim to ensure fair customer treatment.
Selecting a Distributor
In most states, passing through a distributor is necessary. Proper research and due diligence are crucial before finalizing any partnership agreements.
Evaluating potential distributors involves consulting local suppliers, reviewing their portfolio and structure, and understanding their expectations from your brand.
After entering an agreement, fostering strong relationships with the distributor’s sales team is key, as they play a significant role in marketing your products to retailers.
Federal Excise Taxes
All imported alcoholic beverages intended for the U.S. market are subjected to federal excise taxes. However, potential savings can be explored through the Craft Beverage and Modernization Act (CBMA), which prevents significant increases in FET rates for beer, wine, and spirits brands.