The new TTB Final Rule that was released in the Federal Register on August 20, 2016 will partially streamline the use of non-beverage alcohol products in the US. While statutory requirements do not permit TTB to completely de-regulate the distribution and sale of denatured alcohol, the attached rule, among other things:
- Reclassifies a number of “specially denatured alcohol” (“SDA”) formulas as “completely denatured alcohol” (“CDA”). As the regulatory requirements for distributing CDA are much less stringent than those that apply to SDA, these reclassifications amount to a lessening of regulatory burdens for companies dealing in such products.
- Establishes additional “general use formulas,” which permit the production of SDA products without the need for a specific TTB formula approval.
- Exempts distilled spirits plant (“DSP”) operators from the requirements to obtain an additional permit to produce and handle SDA products within the bonded premises of a DSP.
- Makes a variety of technical changes and deletions to the regulations in order to meet what TTB views as current industry practice.
While the TTB reforms do not deregulate SDA use to the extent that most producers and users would like, the Final Rule represents a welcome step in the direction of deregulation and simplification. A substantially more radical deregulation of such products would require statutory changes and therefore are beyond the realm of what TTB can accomplish on its own.