My family and I live on an Island with a slightly temperamental electrical grid. So about one to two times per year, when the wind blows strongly from the south and a few Douglas firs decide to give in to the incessant pull of gravity, we lose power. Most commonly the power is back on in a few hours. A few years back we were out for about a week. Usually this is charming. From time to time it is a meaningful inconvenience. Infrequently, it is infuriating.
But over the last few days I’ve been thinking about what would happen if the power – something we take for granted – stayed off for several weeks.
For many who rely on our federal government, this is basically the predicament they’re currently in. And for spirits companies, that rely on interactions with the TTB, we’ve moved from inconvenient to infuriating.
As you might expect, many of the good folks at the TTB who interact with the spirits community are considered “nonessential” personnel. As a result, things like label formula and label approvals are now impossible to achieve. This is a problem today.
But it would be a mistake to assume that the problem will simply go away once the lights come back on.
As we’ve discussed before, the TTB is pretty seriously underfunded and understaffed. And while they’ve made some meaningful strides in the past few years to get things like COLAs moving along at a good pace – I expect they will have a significant backlog to address once power is restored. That would be a problem in the ordinary course. But if the shutdown lasts long enough, it also seems likely that a meaningful number of TTB employees will begin to think about seeking employment in the – apparently now less risky – private sector. So on top of the backlog we could see a reduction in TTB headcount once the agency comes back online. Put those two together, and my guess is that we’re going to see a significant delay in formula and COLA approvals, new permit approvals, and basically any other items that require TTB discretion. My guess is that everything that doesn’t relate to collecting excise tax is going to be stuck in neutral for quite a while.
If you’re a spirits business that’s being impacted by the shutdown – shoot me a note and share your story. Let me know what you do while you’re waiting for the TTB’s lights to come back on. I’ll pick a good story – share it here – and send you a HoochLaw shirt for your efforts.