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Startup businesses are particularly challenging in industries with significant regulatory compliance burdens. With standards and regulations impacting international, national and state manufacturing, design, and distribution, many startups falter among the maze of regulatory compliance issues.


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5/29/2018
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Of particular density and complexity, startups in pharma, biotech engineering, financial services, oil and gas, construction, and maritime are all difficult and unwieldy. Compared to these industries, the American brewers, winery owners, and new distillers have a less complex road! But any new startup that is engaging in commercial production of a beverage with over 0.5% alcohol by volume has a specific and exacting road to follow to start a business that is in regulatory compliance.

Compliance issues regarding the production and sale of alcoholic beverages comes from the federal and state governments. Both have a set of regulatory guidance and standards. Some of these standards are related to selling alcohol, and some to selling a food product. Excise tax is collected for both the federal and state governments. Bottling and shipping alcoholic beverages across state lines has its own set of standards and required regulatory guidance. Selling alcohol, on premises, in stores, giving it as gifts, selling on the internet all have standards and guidance that requires specific written policies for a new startup to show transparency and prove regulatory compliance. 

For many who are starting a craft brewery or a specialty distillery, the passion for the product- both the process of making and the final result- means they are willing to go step-by-step through the complex and time-consuming procedures needed to remain in compliance with the state and federal government. Consultation with an expert who can help plan out a time-line may save both time and costly missteps.

The initial set-up for the business, both the legal structure, securing intellectual property, adequate insurance, and other standard business startup needs, can become more challenging in the arena of a product with excise taxes and significant regulations regarding shipping and sales. 

If you are considering a startup that will produce commercial alcoholic beverages, consultation with an expert in both small business startups and the regulatory environments of alcoholic beverages may help put the business on secure foundations. Please contact us for more information, or to make an appointment.



Category: Small Business General Counsel Services


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