Compliance and Licensing

The Regulatory Landscape

The US alcohol industry is one of the most heavily regulated sectors. Breweries must comply with federal, state, and local regulations simultaneously. Non-compliance can result in fines, license revocation, or criminal charges. Ignorance is not a defense.

Federal Requirements (TTB)

The Alcohol and Tobacco Tax and Trade Bureau (TTB) is the primary federal regulator for breweries.

Brewer's Notice

Every brewery needs a TTB Brewer's Notice before producing a single drop of beer. The application (TTB Form 5130.10) requires:

Ownership information — all owners, officers, and directors must pass background checks. Felony convictions (especially alcohol-related) can disqualify applicants. Premises description — detailed floor plan showing brewing, fermenting, packaging, and storage areas. Equipment list — description and capacity of all brewing and packaging equipment. Processing time — typically 75-120 days. Apply early; this is usually the longest lead-time item in your startup timeline.

Label Approval (COLA)

Beers sold across state lines require a Certificate of Label Approval (COLA) from the TTB for each unique product. The application specifies: brand name, class/type, alcohol content, net contents, name and address of brewer.

Processing time — 2-8 weeks. Submit well before your planned release date. The TTB's online COLA system has significantly streamlined the process.

Label requirements — mandatory information includes: brand name, class/type designation, alcohol content (for beers above 0.5% ABV), net contents, brewer name and address, and government health warning.

Excise Tax

Federal excise tax is due semi-monthly for most breweries. Current rates: $3.50 per barrel for the first 60,000 barrels (small brewery rate), $16.00 per barrel for production above 60,000 barrels. Record keeping must track production, taxpaid removals, and losses.

State Requirements

Every state has its own brewery licensing requirements, and they vary enormously:

Manufacturer's license — the primary state license permitting beer production. Requirements and costs vary from under $100 (some states) to several thousand dollars. Taproom/tasting room permit — separate from the manufacturing license in most states. May limit hours, serving sizes, or food service. Distribution license — required for self-distribution in states that permit it. Some states restrict self-distribution to certain volumes or geographic areas. Excise tax — state taxes are additional to federal, ranging from negligible to significant.

Local Requirements

Zoning — verify that your planned location is zoned for brewery use (typically industrial or commercial). Some jurisdictions have specific brewery zoning categories. Building permits — any construction or renovation requires permits and inspections. Health department — if serving food (even pretzels), a health inspection and food service permit may be required. Fire and safety — fire marshal inspection for occupancy and safety compliance.

Ongoing Compliance

Record keeping — TTB requires detailed production records: daily production logs, inventory records, taxpaid removals, and losses. Records must be maintained for 3 years. Operational reports — brewers report quarterly to the TTB on production volumes, tax payments, and inventory. Label changes — any change to an approved label requires a new COLA. Inspections — TTB inspectors can visit your brewery with reasonable notice. Maintaining organized records and clean operations ensures smooth inspections.

Get Legal Help

Beverage law is specialized. Hire an attorney experienced in alcohol regulation before submitting applications. The cost ($5K-15K for initial setup) is trivial compared to the cost of denied applications, compliance violations, or operating outside your license.