You Can’t Produce Non-Spirits Products at a DSP

It is common for distilleries to make products like mixers, soda, syrups, shrubs and more. Folks that are in Maple Syrup country naturally want to use an empty bourbon barrel to finish some maple syrup; same goes for distillers in bee country with honey.

All of these ideas are wonderful, but come with a giant caveat: it generally isn’t legal to produce these items in your Distillery (DSP) premises.

This fact surprises most of my clients. After all, you’re producing a beverage already, so why can’t you produce a mixer to go with your spirits? 

The answer lies in the specific way that DSPs are regulated. I call it Regulation by Inclusion to contrast it with the customary Regulation by Exclusion. Let me illustrate with an example:

If you are a bookstore, and you decide that you want to start selling potted plants and knickknacks, all you really have to do is put those items on your shelves and start selling. You can engage in any profit-making business activity, aside from those excluded by the law. You can get creative, but you can’t sell contraband, because regulations exclude that.

In contrast, a DSP in the US is only permitted to engage in specific, itemized operations. Any profit-making activity that isn’t specifically authorized in 27 CFR 19 is illegal unless you have specific TTB permission. You can’t get creative: you must stay in the regulatory swim lanes.  In fact, the regs are even more detailed: they specify your allowed operations in terms of each liquid account (Production, Storage & Processing). For details, see:

1. Subpart L—Production of Distilled Spirits (§§ 19.291 – 19.316)
2. Subpart M—Storage of Distilled Spirits (§§ 19.321 – 19.333)
3. Subpart N—Processing of Distilled Spirits (§§ 19.341 – 19.372)

Finally, you might be wondering: “what’s the workaround?”

Much like the workaround for selling “kegged cocktails”, the key here is to produce your non-spirit products in your tasting room. Your tasting room cannot form part of your DSP premises; DSP regulations do not apply to tasting rooms. If you can produce your non-spirit product entirely in your tasting room, you can avoid violating the Federal regulations.

However, we’ve only spoken to Federal regulations so far. Depending on your state and municipal laws, you may need additional permiting/licensing to produce non-spirit food products in your tasting room. It would be unwise to assume that it’s allowed without contacting your state and/or municipal regulators, first.