About | HeinOnline Law Journal Library | HeinOnline Law Journal Library | HeinOnline
LOG IN
LOG IN

1 1 (January 7, 2021)

handle is hein.crs/goveaml0001 and id is 1 raw text is: C $ I $~?an~h $erw~e fr~ m~ ~ h ~ ~ 9 Updated January 7, 2021 Craft Alcoholic Beverage Industry: Overview and Regulation American production of craft alcoholic beverages-whether beer, wine, liqueurs, distilled spirits, cider/perry, mead, or fermented drinks-has increased in recent years in response to rising demand. In 2019, there were an estimated 20,563 businesses producing craft beverages in the United States, with sales exceeding $36 billion annually (Table 1). The 116th Congress passed the Taxpayer Certainty and Dis aster TaxRelief Act of 2020 (Division EE of the Consolidated Appropriations Act, 2021; P.L. 116-260), which made permanent those temporary reductions in federal excise taxes on alcoholic beverages (Table 2). Aside fromtaxrelief, the U.S. beverage industries receive indirect federal support through agricultural research and farm support programs that are periodically updated by omnibus farmbill legislation. Definitions of Craft Beverages There is no statutory or universally agreed upon definition of what constitutes craft production in the U.S. beverage industry. The concept of what is considered craft is often controversial. In general, the craft beverage industry is characterized by small-scale production-usually by independent or startup companies-and by localized production and distribution, including direct-to-consumer sales. Often the termartisan is used to indicate small-batch production or the use of non-traditional ingredients (e.g., alternate grains, herbs, andbotanicals) in production. Some definitions also focus on the degree of innovation, on-site venues, and community involvement. Spirits The American Craft Spirits Association (ACSA) defines small-scale disti lledspirit plant as producing les s than 750,000 proofgallons, or about 394,314 cases (12750- milliliter bottles of80-proof spirits/case) annually. Based on this definition, ACSA reports there were 2,046 craft distillers in the United States in 2019. Retail sales of U.S. craft spirits totaled $4.8 billion, or about 6% of the total annuals ales. However, definitions of what constitutes a craft distillery differ. For example, the American Distilling Institute defines craft distillery as producing up to 100,000 proofgallons (about52,575 cases). Atthatlimit, craft distillers would comprise a smaller share of the market. Separate data are not available for craft liqueurs. Beer The Brewers Association defines craft brewer as producing annually fewer than 6million 31-gallon beer barrels-about 83 million cases (2412-ounce cans/case). In 2019, there were 8,386 craft breweries in the United States with retail s ales of $29 billion-about 25% of the U.S. beer market, according to the Brewers Association. By volume, craft beer accounted for about 14% of the total U.S. beer market, highlighting the relatively higher market value of craft beer. Table I. U.S. Craft Alcoholic Beverage Market, 20 1 9 Selected Craft Definition #Operations Sales ($bn) Spirits (<750,000 proof gal.) 2,046 4.8a Beer (<6 million beer barrels) 8,386 29.3 Wine (up to 49,999 cases) 10,131 2.3b Total 20,563 36.4b Source: CRS fromvarious industry sources, includingWines& Vines, Brewer's Association, ACSA, and the Artisan Spirit Magazine. Notes: Data will vary under different craft producer definitions. a. #Operations are as of Aug. 2019. Craft spirit sales reflect CY2018. b. Partial estimate, reflecting direct-to-consumer wine shipments only. Wine Small-scale wineries span a more diverse range of business sizes and product categories. Wines & Vines, an industry marketing company, defines a small vintneras onethat produces 5,000-49,999 cases of wine annually. A very small vintner is defined as one that produces 2,378-4,999 cases, and a limitedproduction vintner produces fewer than 1,000 cases. Wines & Vines reports there were 10,131 wineries in the United States producing up to 49,999 cases of wine in 2019. Direct-to-consumer shipments fromthese wineries were valued at $2 billion. (Totalretail sales data for this market segment are not readily available, likely understating total retail s ales for smaller-sized wineries.) Wine industry statistics includenot only grape and other fruit (orrice) wines butalso othertypes of agricultural wines, such as cider and perry (made with apples and pears, respectively) and mead (considered a honey wine). Depending on how it is produced and its alcohol content, some cider, perry, and mead may be considered to be more similar to beer. Separate industry statistics for cider, perry, and mead production are notreadily available, but many of these producers are likely smaller-sized operations. It is not clear, however, whether reported wine or beer sales include ciders, perry, and mead. Separate data are also not available for other types of fermented drinks, such as kombucha. Regulatory Oversight The Alcohol and Tobacco Taxand Trade Bureau (TTB), within the U.S. Department of Treasury, is the primary federal regulatory agency responsible for licensing, advertising, labeling, tax, and formulation of alcoholic beverages at distilleries, breweries, and wineries. TTB establishes standards and guidance on howthese beverages may be produced, labeled, and sold in the marketplace. TTB's principal authority is throughthe Federal Alcohol Administration Act (FAA, 27 U.S.C. § §201-219a). TTB regulations specify certain standards ofidentity for the severalclasses andtypes of distilled spirits (27 C.F.R

What Is HeinOnline?

HeinOnline is a subscription-based resource containing thousands of academic and legal journals from inception; complete coverage of government documents such as U.S. Statutes at Large, U.S. Code, Federal Register, Code of Federal Regulations, U.S. Reports, and much more. Documents are image-based, fully searchable PDFs with the authority of print combined with the accessibility of a user-friendly and powerful database. For more information, request a quote or trial for your organization below.



Short-term subscription options include 24 hours, 48 hours, or 1 week to HeinOnline.

Purchase Access

Already a HeinOnline Subscriber?

Log In

profiles profiles most