- The Washington Times - Tuesday, January 15, 2019

Now the partial government shutdown is affecting the country’s craft beer supply.

A brewer in the District of Columbia says kegs of Precious One, its seasonal India pale ale, are unable to be distributed beyond the city because the federal agency in charge of approving labels is on furlough.

Atlas Brew Works on Tuesday asked a federal court to step in, saying its free speech rights — as embodied in the label — are being violated by having to wait on government approval, which it can’t get because of the shutdown.

“This court may be unable to solve the political branches’ budgetary standoff, but it remains in the business of securing fundamental rights,” the company said in its lawsuit. “The bottom line is that Atlas suffers a categorical prohibition of its constitutionally protected speech.”

At issue is the Certificate of Label Approval that the Treasury Department’s Alcohol and Tobacco Tax and Trade Bureau issues to signify that beer can be shipped across state lines.



The labels list information such as brand name, beverage size, alcoholic content and health warnings. The government vets the labels for false or misleading claims.

Atlas got labels approved for cans of Precious One before the shutdown, but the work stoppage hit just days after the company submitted its label request for kegs.

Without the label, Atlas can ship the Precious One inside the District — but it can’t get its kegs to neighboring Virginia and Maryland or Tennessee, said Alan Gura, a lawyer representing the company.

“The situation is unacceptable,” the company said in its court filing.

While much of the government was already funded for fiscal 2019, the Treasury Department is one of nine departments whose 2019 budgets haven’t been approved by Congress.

The department didn’t respond to a request for comment Tuesday, but an automated message said the shutdown had cut the staff available to reply to media inquiries.

The Justice Department, which represents Treasury in court cases, declined to comment.

Justice attorneys are fighting a host of other shutdown cases, including workers kept on the job demanding their pay immediately and workers who want permission to leave their essential jobs until they are paid.

Atlas’ complaint trods different ground with its free speech argument.

Mr. Gura said the label amounts to speech and Atlas can’t speak freely without a label because of the way the law is set up.

“The issue here is that it would take an act of Congress to allow Atlas to publish its labels, and if the First Amendment means anything, it means we don’t have to wait around for Congress to pass a law telling us we can speak,” Mr. Gura said.

It takes roughly three weeks to get labeling applications approved, according to the court papers.

Atlas says the seasonal beer is sold only from February through April and it stands to lose more than $5,000.

Mr. Gura said all alcoholic beverage companies looking to get products approved are facing the problem.

“If Atlas can’t make new labels, it’s going to have a very severe impact on the business. If this continues for how long — six months, a year — who knows how long this is going to take?” Mr. Gura said.

Breweries in Virginia, New Jersey and Pennsylvania also have begun speaking out.

Fred Maier, a spokesman for Susquehanna Brewing Co., said he is frustrated that his company’s spring beers have been grounded.

“To turn around and have something so out of your control and you could be a month delayed, and our goal is to have it on the market for customers to buy for Memorial Day,” Mr. Maier told WNEP.

Bart Watson, chief economist with the Brewers Association, told the trade publication VinePair that the economic impact shouldn’t be too significant for breweries waiting for label signoffs because they can substitute with other beers already properly labeled.

“But consumers will feel the effects in terms of little to no innovation [or] no new beers in wider distribution,” he said.

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