Washington state's breweries' new beers held up by government shutdown

October 16, 2013 

BELLINGHAM - The federal government shutdown is starting to impact local beer and even next year's St. Patrick's Day parade.

Boundary Bay Brewery General Manager Janet Lightner was busy trying to roll out an aluminum can version of the brewery's Irish Red beer that would help promote the upcoming St. Patrick's Day parade, which she's been involved in organizing. But the rollout has stalled in a federal agency called the U.S. Tax and Trade Bureau, which approves labels on new craft beers.

Irish Red is a beer Boundary has made before and sold in a bottle, but the brewery needs a separate approval for a can label.

As long as the federal government remains partially shut down, Boundary's application is on hold. As of Tuesday, Oct. 15, Congress was debating proposals to reopen the government and raise the federal government's debt limit.

To make matters worse, Lightner is also waiting for the Internal Revenue Service to approve the parade group as a nonprofit organization, which would help with seeking sponsors.

Both of these problems are early in the process and are holding up work for others, according to Lightner. With the label in limbo, for example, the graphic designer is on hold, along with the aluminum can producer and a variety of others tied to the project.

"Here we are creating jobs, but the approvals aren't coming so everything is on hold. It's frustrating," Lightner said. "It's such a mixed message that we're getting from our government. With one message they are saying we don't need them, with the other they are saying we do."

It didn't appear that a short government shutdown would have much impact on craft breweries, an industry that increased its revenue by 17 percent last year, according to the Brewers Association. However, as the shutdown has lingered, breweries are becoming concerned as they try to introduce new seasonal ales to the market.

Chuckanut Brewery is getting ready to roll out five brands of bottled beers. It's a new product line for the company, which currently sells beer in kegs.

The plan is to submit label applications later this month, with the hope of having the bottled beer available to customers by either Thanksgiving or Christmas, said co-owner Mari Kemper. Even if the government shutdown ends in the coming days, she's concerned the backlog of label applications will mean a delay to Chuckanut's applications.

What concerns Lightner is the impact this is having on breweries and distilleries just trying to get started. Across the country, breweries that are attempting to get open are waiting for label approvals.

"How much capital do you have to have to keep paying rent without selling product?" Lightner asked.

The Brewers Association is seeing the impact, said Spencer Powlison, marketing coordinator. He noted that the Tax and Trade Bureau staff has shrunk in recent years, making approvals take up to 45 days before the shutdown.

"One could think of this shutdown as basically stopping business indefinitely for anyone who didn't have certain paperwork in place back in mid-August," Powlison said in an email. "We were on a track to have between 400 and 550 brewery openings in 2013. Those new jobs and future tax revenues are on hold indefinitely."

Lightner's concerns have been discussed with the office of U.S. Rep. Suzan DelBene, D-Bothell, whose district includes parts of Whatcom County.

"The harmful impact the government shutdown is having on our local brewers highlights why it is so important that Congress act immediately. Our small businesses deserve better than this," DelBene's office said in an email statement.

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