Beverage Alcohol Trade Groups Ask Senate Appropriations Committee to Increase TTB Funding
Beer industry trade groups are calling on the leaders of the U.S. Senate appropriations committee to allocate additional funds to the Department of the Treasury’s Alcohol and Tobacco Tax and Trade Bureau’s (TTB) 2022 fiscal year budget.
In a letter to Sen. Patrick Leahy (D-VT) and Sen. Richard Shelby (R-AL) — chairman and vice chairman of the appropriations committee, respectively — 13 trade groups have asked that the Fiscal Year 2022 Financial Services and General Government appropriations bill include $149.3 million for the TTB, an increase from the $131.3 million the groups advocated for in June.
The coalition — which includes the Brewers Association (BA), Beer Institute (BI) and National Beer Wholesalers Association (NBWA) — is asking for the TTB’s budget to get a boost in light of the Department of Treasury’s (DOT) recommendation that the TTB take over some responsibilities from U.S. Customs and Border Patrol (CPB) pertaining to imported beverage alcohol products beginning January 1, 2023.
The trade groups are asking that $18 million of the TTB’s funding be earmarked for its preparation to assume import-related duties from the CPB.
“TTB will need to begin its preparations well in advance to perform these new responsibilities by the stated deadline,” the groups wrote.
The DOT expects that the TTB will need $12-18 million and 34-45 full-time employees to assume the import claims program. Ensuring that the TTB has enough funding to take on the new work is essentially to keep the organization afloat in its other duties, BA director of federal affairs Katie Marisic wrote in a post.
“It is imperative to our industry that TTB be able to effectively maintain its functions as the primary regulator of alcohol as it hires and trains new employees necessary to take on these new responsibilities,” she wrote. “An increase in budget will allow them to start the process of hiring staff and ensure that TTB is not forced to draw funding from existing areas critical to the brewing industry, including permitting, labeling, advertising, and trade practice enforcement.”
Other beverage alcohol trade organizations that have signed the letter include the Wine Institute, Wine America, Distilled Spirits Council of the United States (DISCUS), Wine & Spirits Wholesalers of America, American Beverage Licensees, American Craft Spirits Association, American Distilled Spirits Alliance, National Association of Beverage Importers, American Mead Makers Association and American Cider Association.
Bw166: TTB New Product Approvals Increase 4.9%
The TTB has approved 178,500 new products between September 2020 and August 2021, a +4.9% increase over the previous year, according to bw166, a Santa Rosa, California-based beverage alcohol consulting firm.
In the beer category, the TTB approved 41,800 new products in that time period, a +3.3% increase over the previous year. The spirits category had the largest increase in new products, with 21,600 new products approved, marking a +20.2% increase. There were 115,000 new wine products approved, a +3% increase.
In the last three months through August 2021, new products approvals across all three beverage alcohol categories have accelerated:
- Beer — +13.6%;
- Wine — +7.8%;
- Spirits — +23.4%.
Approvals for domestic (+5.2%) and imported (+4.5%) new products have increased at similar rates between September 2020 and August 2021, but imports (+16%) have accelerated at a higher rate than domestics (+6.6%) in the last three months.
Iowa Beverage Systems to Pay $325K Offer in Compromise for State Fair Sponsorship Trade Practice Violations
Des Moines-based Iowa Beverage Systems (IBEV) has agreed to pay an offer in compromise (OIC) for alleged trade practice violations in connection to its sponsorship of the Iowa State Fair, the Department of the Treasury’s Alcohol and Tobacco Tax and Trade Bureau (TTB) announced September 3.
The TTB alleges that the wholesaler violated its federal permit and the tied house and exclusive outlet prohibitions of the Federal Alcohol Administration Act as part of its sponsorship of the Iowa State Fair between 2017 and 2019. IBEV has agreed to pay $325,000 for the alleged infractions.
“One feature of the sponsorship agreement was that in exchange for $100,000, IBEV was guaranteed a certain number of malt beverage ‘tap handles’ at the Iowa State Fair Grandstand,” the TTB wrote.
In addition, IBEV allegedly made payments to another beverage alcohol retailer at the fair in 2017, 2018 and 2019.
“The payments were made, in part, to guarantee the retailer only purchased IBEV malt beverage products,” the TTB wrote.
IBEV’s portfolio includes offerings from Molson Coors, Heineken, Boston Beer Company, Mark Anthony Brands and CANarchy.
FDA and CDC Warn Consumers of Delta-8 THC Risks
The Food and Drug Administration (FDA) and Centers for Disease Control and Prevention (CDC) issued warnings this week about the potential risks of Delta-8 — a form of the psychoactive cannabinoid tetrahydrocannabinol (THC).
“The health effects of Delta-8 THC have not yet been researched extensively and are not well-understood,” the CDC said in a Health Alert Network (HAN) Health Advisory Tuesday. “However, Delta-8 THC is psychoactive and may have similar risks of impairment as Delta-9 THC. As such, products that contain delta-8 THC but are labeled with only delta-9 THC content rather than with total THC content likely underestimate the psychoactive potential of these products for consumers.”
In the 2018 Farm Bill (also known as the Agricultural Improvement Act or AIA), signed into law in December 2018, hemp and hemp products were removed from the list of schedule one controlled substances — a list that includes heroin, LSD, ecstasy, and marijuana. The law defines hemp as cannabinoids that contain less than 0.3% of Delta-9 THC on a dry weight basis (an amount considered too small to have a psychoactive effect), but does not clarify any restrictions on the amount of nearly 100 other minor cannabinoids naturally occurring in cannabis, including Delta-8.
As a result, many products containing Delta-8 THC have begun entering the marketplace, including infused beverages. Unlike CBD, Delta-8 can have mind-altering effects when consumed, but it is estimated to be 50-75% as psychoactive as Delta-9 THC, according to the CDC.
While there are small quantities of Delta-9 that naturally exist in cannabis plants, it can also be “synthetically” converted from CBD with “a solvent, acid, and heat” to produce higher concentrations. It’s this process that the CDC warned could create “harmful by-products that are not well-characterized.”
“Because testing methods for products like synthetically derived Delta-8 THC are still being developed, Delta-8 THC products may not be tested systematically for contaminants such as heavy metals, solvents, or pesticides that may have adverse health effects,” the CDC warned.
“In addition, the sale of Delta-8 THC products is not limited to regulated marijuana dispensaries in states, territories, or tribal nations where marketplaces operate under law,” it continued. “Rather, Delta-8 THC products are sold by a wide range of businesses that sell hemp. As a result, Delta-8 THC products may also have the potential to be confused with hemp or CBD products that are not intoxicating. Consumers who use these products may therefore experience unexpected or increased THC intoxication.”
From January 1 to July 31, 2021, the American Association of Poison Control Centers (AAPCC) recorded 660 Delta-8 THC exposures in its National Poison Data System (NPDS). 18% of exposures require hospitalization, and 39% involved pediatric patients (patients under the age of 18).
In its own warning, the FDA emphasized that products containing Delta-9 and labeled as hemp cause consumer confusion and lead some to assume the product is “non-psychoactive.” Of the 22 reports the FDA received from December 2020 to July 2021 involving the consumption of Delta-8 THC products, 14 patients seeked hospital or emergency care. Nineteen of the reports cited “adverse events” — including vomiting, hallucinations, and loss of consciousness — specifically from ingesting Delta-8 food products, such as gummies.
“It is important for consumers to be aware that delta-8 THC products have not been evaluated or approved by the FDA for safe use in any context,” the FDA said in its report. “They may be marketed in ways that put the public health at risk and should especially be kept out of reach of children and pets.”