Government shutdown puts stopper in SC craft beer boom

10/08/2013 10:48 PM

10/08/2013 10:49 PM

COLUMBIA, SC Just when you thought the federal government shutdown couldn’t get any worse, we learn this: It’s messing with our beer supply.

Columbia is on the cusp of a craft beer boom with three new breweries bubbling up southeast of the city around Williams-Brice Stadium. But the shutdown, now in its ninth day, threatens to cut off the flow of new brews. It is pushing back the opening of two breweries – River Rat and Swamp Cabbage – and delaying bottling operations at the third, Conquest.

“Our permits are just sitting on someone’s desk right now,” said Mike Tourville as he watched his tall, conical stainless steel fermenting tanks being installed in the new River Rat brewery at 1231 Shop Road. “Every week it stays shut down, we lose a week. We can’t even do test runs. Until the feds say so, you can’t brew alcohol.”

Breweries differ from brew pubs like Hunter-Gatherer in Columbia and Aiken Brewing Co. in that brew pubs can serve beer, as well as food, but can’t distribute alcohol outside of the pub. A brewery can distribute its product either in bottles, cans and kegs both statewide and nationally.

The federal entity most responsible for the regulation of breweries is the Alcohol and Tobacco Tax and Trade Bureau, which is a part of the Department of Treasury. The bureau, referred to as the TTB, approves brewery licenses. It also reviews and approves beer labels and deals with excise taxes on beer, wine and spirits.

Right now, its employees have lots of time to enjoy craft beer, because they aren’t working due to the federal shutdown. As a result, no new brewery licenses are being issued and established breweries can’t roll out their fall seasonal bottled beers because they can’t get their new labels approved.

The government reviews the labels to ensure that they have proper government warnings and ingredient information, as well as ensuring they aren’t pornographic, promoting drunkenness or is in some other way socially unacceptable.

It normally takes about two months to get a license approved, said Brook Bristow, a self-described “beer lawyer” in Greenville who is helping River Rat and Swamp Cabbage work their way through both the federal and state permitting processes. Labels take about two weeks.

“And right now, there is a pretty big backlog that’s growing,” said Bristow, a 2003 University of South Carolina graduate who also writes the craft beer blog and crafted South Carolina’s recently passed pint law. “It’s going to take longer once the government opens again. And then you still have to get your state license.”

It’s the same with the Small Business Administration, which many new brewers use to get seed loans to get their operations up and running.

“No loans, no new breweries. No labels, no new beer,” Bristow said. “It certainly is stifling innovation when it comes to new beers.”

The problem is being felt nationally, but is especially acute in South Carolina, where the craft brewery industry is just starting.

The General Assembly this past spring passed the “pint law,” which increased the amount of beer customers can consume in craft brewery tasting rooms to 48 ounces – or three pints – from four 4-ounce samples. It also allows patrons to purchase up to 288 ounces (the equivalent of a case of beer) that patrons can buy in large jugs, called growlers.

That made craft breweries more profitable, and as a result they are popping up all over the Palmetto State … until now.

There are presently 12 breweries up and running in the state, and another 11 or so waiting for permits, Bristow said.

Ed Boyd of Swamp Cabbage is one of the 11 on hold. He is expecting his tanks and other equipment Oct. 25, but can’t fire them up until he gets a permit, which he planned to apply for last week. Bad timing.

“As soon as we got everything together, the government shut down,” he said from his brewery location at 801 Brookwood Drive.

Technical issues pushed his opening date from August to December. Now the shutdown will push it back some more. “We’re hoping for January,” he said.

The only bright spot is that Boyd and his partner and brother, Douglas, secured a loan from a lender/investor who is working with them, “So we aren’t making payments while we’re not making money.”

But even at breweries that are already up and running, there are problems.

In its brewery in an industrial warehouse at 947 Stadium Road, the folks at Conquest Brewery say the shutdown is delaying the rollout of their first bottled beer. Although they can make the beer, they can’t put any labels on the bottles until they are approved by the TTB – a time frame that is very much up in the air.

“The federal government does strange things sometimes,” said brewer Matthew Ellisor. “We’ll just have to wait.”

For Bristow, though, waiting is interrupting the flow of the craft brewer’s art and delaying a new industry. All for a partisan fight over a budget. Surely there’s a way to solve this.

“It would be nice if both sides could come together over a couple pints of beer and work this out,” he said.

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