TTB Changes Course on Oregon's Wine Growler Law

by Davis Wright Tremaine LLP
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On April 25, 2014, the Alcohol & Tobacco Tax & Trade Bureau (TTB), the federal agency that regulates and taxes alcohol producers, suspended a March 2014 wine growler ruling that would have unnecessarily required wineries and retailers to register as federal taxpaid wine bottling houses before selling refillable wine containers. For wineries and restaurants looking to sell customers to-go wine growlers, the ruling would have created new registration, recordkeeping and labelling requirements despite the fact that there are no similar federal requirements for beer growlers or for glasses or carafes of wine.

TTB’s wine growler ruling came under attack almost immediately. Several wine industry leaders, along with Senator Ron Wyden (D-OR) and other members of the Oregon Congressional delegation, wrote to the TTB, asking them to reconsider their position. Much of the groundwork was laid by DWT client, the Oregon Winegrowers Association (OWA). Senator Wyden, of Portland, argued that TTB should give the market latitude to innovate and should distinguish between traditional taxpaid wine bottling operations and consumer-oriented sales of wine growlers.

OWA’s concerns arose out of their support for a wine growler law passed unanimously by the Oregon legislature in 2013. The 2013 Oregon wine growler law was written to accommodate federal tax and regulatory policy. Ultimately, that state law was vindicated as the correct application of federal policy with TTB’s suspension of its wine growler ruling. Most, if not all, of the businesses currently selling wine growlers in Oregon are not TTB approved taxpaid wine bottling houses.

In suspending the ruling, TTB stated, “TTB recognizes that our existing regulations were intended to cover traditional taxpaid wine bottling activities, rather than the filling of wine growlers.” TTB has promised follow up notice and comment rulemaking.

For now, Oregon retailers who recently added infrastructure and began advertising aimed at wine growler sales can continue to do business without unnecessary federal intrusion. While Oregon’s “growler” law was the first of its kind in the United States, other states have expressed interest in drafting and passing similar legislation. Such states, like Washington State, would be smart to ensure that their laws conform to federal policy.

Davis Wright Tremaine LLP partner Jesse Lyon was a primary contributor to the drafting and passing of Oregon’s growler law. DWT attorney Cary Greene represented OWA in the matter relating to the request to the TTB to suspend its ruling.

 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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