The shutdown at the federal government will inevitably create a logjam of permitting and approvals for the distilling industry in the short term, while the medium- and long-term impacts depend on how long the shutdown lasts and what comes after.
As of midnight October 1, federal agencies began to cease many of their operations as congressionally approved funding ran out and as Congress remained locked in a budgetary standoff.
Distillers interact with the TTB in a number of ways, and because the agency largely goes dark during a shutdown, it’s prudent to consider how to potentially move forward—at least in the short term.
The Specifics
According to the TTB’s contingency plans, accessed here on September 30 and dated October 1, the bureau plans to furlough 398 employees out of an estimated 459 on staff. Those 61 employees who will remain active at the TTB include 35 who are considered “necessary to protect life and property,” 25 who are “financed by resources other than annual appropriations,” and one who is “necessary to perform activities necessarily implied by law.”
According to the plan, “excepted activities” that are necessary for the safety of human life or the protection of property include:
- processing of tax returns that include remittances
- continuing the TTB’s computer operations, to prevent the loss of data in process
- protection of statute expiration, bankruptcy, liens, and seizure cases
- protection of federal property
- maintaining the staff necessary to handle excepted budget matters
- maintaining the minimum staff necessary to perform accounting functions and to prevent the loss of accounting data
- maintaining minimal personnel to maintain safe conditions for the essential personnel
- maintaining criminal law enforcement and undercover operations
- maintaining minimal staff necessary to secure TTB’s assets and to transition the shutdown of operations
Those shutdown operations include:
- shutdown-notification activities, such as the processing of furlough letters
- performing payroll functions for the period just before the shutdown
- completing inventories of property
- securing and storing equipment, records, files, and work in progress
None of the TTB’s other activities are excepted and must cease. These include:
- most administrative functions (i.e., those not related to the safety of life and protection of property)
- all noncriminal investigative activities, audit functions, examination of returns, and the processing of tax returns that don’t include remittances
- processing of permits, certificates of label approval (COLAs), formula approvals, and drawback claims of the manufacturers of nonbeverage products
- laboratory services
- information systems functions, except those needed to prevent loss of data in process and revenue collections
- planning, training, and professional development activities
Some Perspective
Mark Shilling has worked through multiple government shutdowns over the years. He ran headlong into one while trying to open Austin’s Revolution Spirits in 2013. He’s now president of Maverick Distilling in San Antonio and partner at the distillery consulting firm Big Thirst.
“We have seen this threat of a government shutdown almost every year since I’ve been in this business, going back nearly 20 years now,” Shilling says. “Almost every year, at some point, there’s a threat of a government shutdown. It always seems to happen this time of year, which is the hardest time of year for us because everybody’s got holiday releases and the crush of OND [October, November, December] they’re trying to deal with. If you’re trying to get something out—and you’re just now trying to get it done and thinking it should take a day for a formula and a couple of days for a label—then suddenly there’s nothing. So, you probably missed the entire season for your holiday release.”
As a would-be startup distiller in 2013, he says it was a white-knuckle experience.
“We’d just gotten into the business,” Shilling says. “We didn't know TTB very well. We didn’t know the process very well. And we were just getting open, so we didn’t really have anything in the market yet. At the time, it took us about nine months to get our permit approved. Back then, COLAs were taking roughly 30 days or so. For a new distillery to be able to operate, you have to have that stuff, and we didn’t have anything started yet.”
That shutdown didn’t last very long, “but it was very scary for us because we needed to be open, we needed to be selling something, we needed to be doing something, anything. And we were just sitting there waiting, and it was scary.”
Shilling says he’s learned to work ahead, and now he already has everything in place for the holidays at Maverick. However, an issue could always arise where they need to change something or work through a problem, and then they may find that there’s no one to reach.
A shutdown wouldn’t only delay distillers getting things like formula approvals and COLAs. It would also exacerbate any delays if the shutdown were to drag on.
“Everybody else is getting backed up,” Shilling says, “so when they do come back online, it’s just that much harder to get caught up.”
The Current Context
The Trump administration already has been trying to slash the federal workforce, freezing new hires, and it has threatened more layoffs—not just furloughs—in the event of a shutdown.
During a legislative fly-in for the American Craft Spirits Association, Shilling says, TTB staff told him that they were already operating with 20 percent fewer staff than before. He says he’s seen lead times on approvals grow slightly longer over the past year, but that a staffing shortage could compound delays after a shutdown.
Distillers still need to file their regular reports and taxes, but there might not be anyone at the agency to help with troubleshooting.
“When you have a question, who are you gonna call if there’s nobody there to answer the phone or return the email?” Shilling says. “It’s not like you get a free pass at paying taxes while the government's shut down.”
The shutdown could ultimately be a prelude to further hurdles in the TTB’s ability to perform its duties. Historically, federal workers furloughed during a government shutdown receive back pay once the government is funded. This time, however, the White House has directed federal agencies to prepare for widespread employee terminations.
“If they are directed to cut their workforce additionally, I think we’re going to see significant delays with everything,” Shilling says. “There’s more unpredictability than what we’ve seen [in previous shutdowns]. I think in the past, if you isolated any given member of Congress, they would say, ‘We are trying to find a solution that works for everybody and avert a shutdown.’ It feels like today, if you ask the same people, maybe they are not quite as interested in averting a shutdown as they are in winning their position—whatever that might be—or making their political point.”
He continues: “The question is, will more thoughtful and deliberate heads prevail? Or, like with DOGE, will there just be more wholesale slashing without any thought to what the benefits of those positions are or how they impact programs that directly impact us as consumers, as business owners, as distillers, etcetera?”
What Can You Do?
Shilling says he knows that being organized and getting paperwork done as far in advance as possible is no longer helpful advice, in the short term—but it’s still an important lesson to take away from a shutdown. He’s also a vocal advocate of being involved in trade organizations and state guilds and of being in direct contact with your elected representatives. By his offhand math, there are 2,500 to 3,000 small distillers in the United States, with an average of 10 employees and owners each.
“That’s a lot of people who are involved in this industry directly that could be making calls and [visiting] their state legislators and their congressional legislators to talk about issues like government shutdowns,” he says. “And when only 30 people out of that group are doing it, the impact is not as significant as what we need it to be. So, my challenge to everybody is: Get involved at some level in government, or government’s going to get involved in your business, and probably not in a good way. Make sure that the folks behind those desks up there understand what the impacts to your business are.”
Unfortunately, small businesses can’t escape a state of affairs where basic government functions become a bargaining chip in negotiations that affect a wide range of priorities.
“They get so far away from reality in Washington, D.C., that I don’t think that they really think about how a government shutdown is going to impact people directly,” Shilling says. “And frankly, it’s embarrassing that we live in the United States of America in 2025, and we have to deal with the threat of a government shutdown every year.”