According to the Brewers Association, Craft Brewers have succeeded in establishing high levels of quality, consistency and innovation, expanding the minds of the beer consumer and creating the most diverse brewing culture in the world. The number of craft brewers have expanded dramatically in just the last few years and according to Brewers Association there are over 2,300 craft brewers in the U.S. in 2012 with 1,500 breweries in development in the U.S. as of June 2013!
The movement is described as revolutionary. That’s an accurate portrayal. But when something is so “hot,” attention may come in ways that are not always welcome. Now is a time for those in the business or getting into the business to make sure they plan to not only produce a quality product, but plan for the high expectations that will be placed upon them by the federal government.
The alcohol industry remains very close to its post prohibition roots in many ways. What hasn’t changed for decades is the government’s desire to tax the production of alcohol. Taxation of course is based on volume produced and so the accuracy of calculating volume has always been of high interest to the government.
As a matter of fact, up until 1970, internal revenue officers would test brewer’s beer meters for accuracy. One can imagine the repercussions of failing to “protect the revenue,” aka failure to properly measure the brewery’s beer production and thus failure to pay proper taxes. In 1970, breweries began to ask for permission to have meter manufacturers run meter tests to substantiate accuracy of meter results. The federal government found the results to be satisfactory and at that point basically re-wrote the rules associated with meter testing.
The evolution of beer meter testing ultimately resulted in the law today. The U.S. code requires all breweries to install “meters, tanks, pipes, or any other apparatus for the purpose of protecting the revenue.” Further, the expense of doing so rests soundly with the brewery. Any brewery that refuses to install such items shall “not be permitted to conduct business on such premises.” The statute doesn’t even talk about a fine – rather, it speaks in terms of prohibiting the brewer to brew!
Needless to say, it is important to take these provisions seriously! The regulations relating to meters indicate that the “brewer shall accurately and reliably measure the quantity of beer transferred from the brewery cellars for bottling and for racking. The brewer may use a measuring device, such as a meter or gauge glass, or any other suitable method.”
The brewer is periodically required to test the devices used to measure the quantity of beer it is transferring, and adjust or repair the device if necessary. The allowable variation for beer meters as established by testing may not exceed +/- 0.5%. If a meter test discloses an error in excess of the allowable variation, “the brewer shall immediately adjust or repair the meter,” according to the regulations. And the adjustment must reduce the error to as near zero as practicable.
Further, the brewer must keep records of the tests it makes periodically. The records must include:
1) Date of test;
2) Identity of meter or measuring device;
3) Result of test; and
4) Corrective action taken, if necessary.
As one might assume, these records should be readily available in the event TTB schedules an on-site audit of the brewery.
Opening your own Craft Brewery and hadn’t thought about the above yet? Feel free to give us a call and we’ll help you through this and many other operational requirements expected by the government. Pre-planning is highly advantageous in this industry.