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WHAT THE GOVERNMENT SHUTDOWN MEANS FOR DISTILLERIES
Congress’ failure to pass an appropriations bill has triggered a government shutdown effective October 1, 2025, halting operations across several federal agencies, including the Alcohol and Tobacco Tax and Trade Bureau (TTB). So what does this government shut down mean for distilleries? For distilleries, this pause has direct implications on permitting, labeling, and compliance timelines.
How the government Shutdown Affects TTB Operations
When the government shuts down, TTB must suspend key functions such as Certificates of Label Approval (COLA), label exemptions, formula approvals, and permit applications or amendments. This interruption creates a backlog that extends well beyond the shutdown period, delaying approvals for weeks or even months.
In addition, communication with TTB staff will be severely limited. Most personnel are furloughed, meaning they cannot respond to inquiries or conduct regular field operations—including audits, investigations, and compliance reviews.
What Distilleries Should Do Now
To minimize disruptions, Distilled Spirits Plants (DSPs) should act quickly:
- Submit required documents early to get ahead of the backlog.
- Plan for delays in approvals and labeling clearances.
- Stay compliant with tax obligations—excise tax reporting and due dates remain unchanged.
Although most TTB operations pause, a limited number of essential employees will continue processing excise tax submissions.
Who Is Unaffected by the government Shutdown
Distilleries in Puerto Rico and the U.S. Virgin Islands are not impacted. The Puerto Rico branch of TTB operates under a separate funding stream supported by collected taxes rather than congressional appropriations. Additionally, a small number of Trade Investigation agents remain active since their funding comes from a distinct, multi-year appropriations bill.
Looking Ahead: Another Shutdown Possible in November
The temporary “stopgap” appropriations bill currently under debate would only fund the government and TTB through November 17, 2025. If Congress fails to reach a long-term agreement, another shutdown could occur later this year. Distilleries should remain alert and proactive, building flexibility into production and compliance schedules.
Staying Prepared During Uncertain Times
While this government shutdown may be temporary, its ripple effects on distilleries could last long after normal operations resume. By submitting documents early, maintaining compliance, and monitoring federal developments, DSPs can safeguard their business continuity amid uncertainty.
If you want to speak with a consultant to discuss your specific scenario or have more questions about what the shutdown means and what you can do now, reach out to our team now and we’ll get connect you with our network of distillery consultants.
For a broader understanding of government shutdowns and their economic impact, read What Is a Government Shutdown and Why Are We Likely to Have Another One? from The Brookings Institution.
