(Londonderry, NH) – Who is furious about the government shutdown? Among many, the nation’s alcoholic beverage manufacturers.

The Alcohol and Tobacco Tax and Trade Bureau (TTB) regulates alcoholic beverages. As we were quick to point out both last week and on Monday, the government shutdown has left the TTB without funding to carry on regulatory activities. Two of those activities are issuance of brewers notices for new breweries opening up (which we won’t get into in this post) and issuance of approvals for new alcoholic beverage labels intended to be sold across state lines.

Some states require TTB approval in order to process in-state applications. Not to mention, TTB label submissions are frequently used as a tool in defense of trademarks so, even when not required, there is reason for breweries to always submit them anyway.

This means that the approximately 400 applications for ‘Certificates of Label Approvals’ (COLAs) that normally get submitted daily to the TTB aren’t going through until the government re-opens and an equal number of COLAs that normally get issued daily aren’t coming either.

Through September 27th, the TTB had received 111,090 applications from breweries, wineries and distilleries. That is on par with last year’s totals. Through October 5, 2012, the agency had received 123,482 labels YTD.

All breweries that submitted applications for COLAs on/after September 21st (and even some breweries that submitted before that date) have to wait for those to be approved. As of September 30th, malt beverage labels were averaging a 12-day turnaround time compared to a 9-day turnaround as of exactly one year ago.

Somewhat unbelievably, one TTB agent approves all of the COLAs, 14,000 in a ten-month span. It would seem unlikely that the agent is going to be able to ‘catch up’ on the hundreds or thousands of labels that are and will be further backlogged once the government re-opens.

Other alc. bev. producers have it tough as well. Wine labels have gone from 15 to 25 days from one year ago. Spirits labels have gone from 23 to 38 days.

On top of the 12 days of COLA processing, breweries that put in certain special ingredients, like coffee and barrel-aging, also have to submit a formula for those beers before submitting the COLA application. The average processing time for formula applications is currently 45 days and like COLAs, also rising.

That is two months of processing time for a ‘specialty’ beer.

The TTB, by law, can take up to 90 days to process a label, and in some cases, the agency is issuing notices that it may take up to 75 days to review a formula application.

Take Modern Times Beer’s example…

According to founder, Jacob McKean, three of its labels went through without a problem but Black House Stout uses coffee so it required a formula application. The total processing time was 56 days.

The number of days it took before the formula application was reviewed by an agent was 55 (along with at least ten hours of phone time logged by McKean).

The number of days it took to review the formula application itself was one.

The end result of those 56 days was one straightforward statement that appears on the can: “beer with coffee added.”

This resulted in a delay of canning Modern Times beers by two months since the company had to order the Black House along with the other brands. It also forced the company to delay hiring five employees to manage can production by two months.

With the TTB being stretched increasingly thin from a resources perspective, it would seem as though we could be heading to over two weeks of processing time for COLAs and over two months of processing time for formulas…or eventually, a full three months for label processing for those specialty beers.

How will this impact innovation going forward?

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Back to the shutdown…some companies are still just finding out that this impacts their TTB label submissions.

Moonlight Meadery posted this message on its Facebook page on Wednesday:

“YOU HAVE GOT TO BE KIDDING ME!!! As Michael tries to log into the TTB website for formulas and labels, he’s greeted with: APPROPRIATIONS LAPSE NOTICE:CESSATION OF TTB OPERATIONS.

So no “Bad Apple” label being submitted any time soon, nor can we submit any new recipes. Our government is broken, it’s up to us to do something about it!”

The TTB has no funding available to respond for comment on this story.