Can I Operate Multiple Types of Alcohol Production (e.g., Beer and Spirits) Under One Facility?

A mixed-use facility, in the context of alcohol production, refers to a single premises where different types of alcohol beverages are produced. For example, a facility may produce both beer and distilled spirits, or wine and beer. These facilities require special consideration and compliance with TTB regulations to ensure legal operation. This article offers an overview of TTB regulations for mixed-use facilities.

A mixed-use facility must obtain the appropriate permits and licenses for each type of alcohol production conducted on the premises. This typically includes a Brewer's Notice for beer production, a Distilled Spirits Plant (DSP) Basic Permit for spirits production, and/or a Winery Basic Permit for wine production.

27 CFR 19.52 restricts the location of distilled spirits plants (“DSPs”). This includes, but is not limited to, any residence, retail business, and brewery and winery locations. Due to the regulations set forth in 27 CFR 19.52, to have a mixed-use facility, there typically must be operational separation between different production activities within a mixed-use facility. Separate areas or rooms may be designated for each type of production, with clear delineation of equipment, ingredients, and processes.

But how does this apply to a mixed-use facility with beer and wine production? In addition to the restriction on DSP locations, 27 CFR 25.23 restricts the use of breweries to certain operations. These operations do not include that of a winery. Therefore, to have a winery and brewery located at a mixed-use facility, they usually must be separated and covered by the proper corresponding permits.

However, if the mixed-use facility is not completely separated by operations, one must obtain TTB approval to vary from the regulations. 27 CFR 19.55 allows TTB to authorize the conduct of businesses other than a distiller, warehouseman, or processor on the DSP premises if the following conditions are met:

1. The business is not prohibited by 26 USC 5601 (a) (6).

2. The business will not jeopardize the revenue.

3. The business will not hinder TTB’s effective administration.

4. The business will not be contrary to the law.

Additionally, under 27 CFR 25.52, TTB allows breweries to vary from brewery requirements such as those stated in 27 CFR 25.23, which restricts the use of breweries to certain operations. For a brewery to obtain approval for the variance, they must show that the variance will meet the following requirements:

1. The variance will not hinder the protection of the revenue intended by the specification in 27 CFR Part 25.

2. The variance will not hinder the effective administration of 27 CFR Part 25.

3. The variance is not contrary to any provision of law.

Mixed-use facilities must maintain accurate records of production, inventory, and tax liabilities for each type of alcohol produced. Separate records may be required for beer, spirits, and wine production, as well as for excise tax calculations and reporting. Each type of alcohol produced at a mixed-use facility must comply with TTB labeling and packaging regulations.

TTB may conduct inspections and audits of mixed-use facilities to ensure compliance with regulatory requirements. Producers should be prepared to demonstrate operational separation, accurate recordkeeping, and compliance with all applicable regulations during inspections.

Compliance with TTB regulations can be complex, especially for mixed-use facilities producing multiple types of alcohol beverages. Maintaining separate records for each type of production can be challenging and requires careful organization and documentation. To better understand how to comply with TTB regulations for mixed-use facilities, visit TTB’s website (Home | TTB: Alcohol and Tobacco Tax and Trade Bureau), or contact an attorney who is familiar with TTB regulations.