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The government shutdown’s latest victim? Craft beer

By January 15, 2019No Comments

(This post originally appeared on The Guardian)

The US government shutdown, which is soon to enter its fourth week, is affecting travel, small business loan approvals, passport administration, national park services, food inspections and tax return processing. Most Americans can live with that at least for a while.

But there’s another consequence of the shutdown that could soon rattle American society: a disruption in the deliveries of craft beer. New beer labels must be approved in advance by the Alcohol and Tobacco Tax and Trade Bureau – which is part of the US treasury department – and because of the standstill in Washington this is not happening.

The result? Manufacturers of craft beers – many of whom are small businesses – are feeling the pinch. Thousands of applications are piling up and revenues are going, well, untapped.

“It hasn’t gotten to a critical point yet, but it’s enough that you’re noticing,” Geoff Dale, the self-proclaimed “minister of mayhem” at Three Heads Brewing told “We don’t want something that was supposed to be out in January to come out in April. You go for a bigger, heartier beer in winter.” (Warning to all those pols in Washington DC: you probably don’t want to mess with someone who goes by the name “minister of mayhem”.)

This is not just a growing crisis for craft brewers. Other liquor manufacturers are also having problems with the shutdown. Indiana-based Sun King Brewery, for example, has been gearing up for the production of a tequila-like drink next month and also has a new bourbon awaiting approval. Unfortunately, the standstill in Washington has halted these plans. “Oh my gosh, it’s going to impact us greatly,” one of the brewery’s founders said in a CBS4 report. “It’s not only affecting us, it’s affecting every distillery in Indiana and across the country.”

In addition to the suspension in new product offerings, some beer and alcohol producers are not able to get approval to sell their existing products across their state lines, and the owners of newer or expanding breweries may be forced to sign leases on buildings not knowing when they will eventually be able to manufacture their product.

Some may roll their eyes and say what’s the difference, it’s just craft beer, how significant can it be? Pretty significant, as it turns out.

According to a New York Times report, this is a $76bn industry and the more than 7,000 breweries that make it up not only rely on government permission for their livelihoods but also provide the livelihoods for tens of other small business owners and their families that are part of their supply chain. It’s yet another reasons why businesses – particularly smaller firms with less resources – always need to have a savings cushion to help them navigate through unexpected challenges – be it a broken piece of equipment, a burst water pipe, bad weather or a something as avoidable as a government shutdown.

“So many lives are affected by this shutdown at all different levels,” John Harris, brewmaster and owner of Ecliptic Brewing said in a report on a Portland, Oregon, television station. “Not just the people who aren’t getting paychecks but also the businesses being hamstrung by this shutdown, so the government really needs to get together and work this out.”

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