Importing distilled spirits and liquors into the United States involves a multi-step process and requires compliance with strict regulations enforced by federal agencies like the Alcohol and Tobacco Tax and Trade Bureau (“TTB”), U.S. Customs and Border Protection (“CBP”), and the Food and Drug Administration (“FDA”). These agencies regulate alcohol for safety, labeling, packaging, taxes, and public health to ensure that imported products meet U.S. standards. Here’s an overview of how to import distilled spirits and liquors.
Obtain an Importer’s Permit
To legally import distilled spirits and liquors into the U.S., you must first obtain an importer’s permit from the TTB. The TTB is responsible for regulating alcoholic beverages and ensuring compliance with U.S. laws. To apply for this permit, you’ll need to:
- Submit an application for a federal basic permit.
- Provide documentation about your business, including source of funds and ownership structure.
- Obtain a Letter of Intent from a foreign supplier.
This is not an exhaustive list. Our firm has handled many importer applications before the TTB and can generate a checklist of items required for your company to apply for the federal basic permit application.
Ensure Compliance with FDA Regulations
The FDA oversees the safety of food and beverages, including alcohol beverages like distilled spirits and liquors. When importing distilled spirits and liquors, the product must meet FDA requirements, such as ingredient safety and proper labeling. This includes:
- Ensuring the distilled spirits are free of harmful contaminants.
- Verifying that the spirits supplier must also obtain an FDA food facility registration and maintain a U.S.-based agent.
Customs and Border Protection Clearance
Once the spirits arrive at the U.S. border, they must go through U.S. Customs and Border Protection (CBP) for clearance. This process includes:
- Filing an import entry with CBP, submitting documents such as the commercial invoice, packing list, and bill of lading.
- Paying any required duties and taxes based on the spirits’ volume and value.
- CBP will inspect the shipment to confirm compliance with federal regulations before clearing the goods.
TTB Label Approval for Distilled Spirits
Before you can distribute distilled spirits in the U.S., you must obtain TTB approval for the product’s label. The label must contain the following key information:
- Product name and type.
- Alcohol by volume (ABV).
- The name and address of the importer.
- A health warning label (if applicable).
- Any claims (e.g., organic, gluten-free) must be substantiated.
Distilled spirits importers must submit the labels for approval via the TTB’s COLAs online system.
State-Level Compliance
In addition to federal regulations, each state has specific laws governing the sale and distribution of alcohol. These include:
- State-level permits required for alcohol sale.
- Importation procedures that vary by state.
- Different excise tax rates based on the state.
State regulations can significantly differ, so it’s crucial to consult each state’s alcohol control board or commission to ensure your company is compliant with local laws.
Taxes and Duties
Both federal excise taxes (imposed by the TTB) and state excise taxes apply to imported distilled spirits. The federal tax is generally calculated based on proof gallon, and additional duties are imposed at the port of entry by U.S. Customs and Border Protection. These taxes and duties must be accurately calculated and paid to ensure legal importation.
Contracts Needed Between the Importer and Producer
When importing distilled spirits or liquors, the U.S. importer will need to establish several contracts with the producer to ensure smooth and legal transactions. These contracts protect both parties and clarify responsibilities:
- Importation Agreement: This contract defines the terms of importing the spirits, including pricing, delivery, and quality control standards. It should specify details like product pricing, delivery terms, quality control standards, and responsibilities for obtaining permits and licenses. It will also define the payment terms, such as upfront payments, shipment schedules, and freight costs.
- Exclusive Distribution Agreement (if applicable): If the importer is granted exclusive rights to distribute the spirits in specific regions, this agreement should outline geographic exclusivity, minimum purchase commitments, and the term of exclusivity.
- Shipping and Freight Agreement: This agreement outlines the terms of transporting the spirits, including shipping costs, insurance, and risk management, especially from the producer’s country to the U.S.
These contracts are critical to ensure the legality of the transaction, maintain clear expectations between parties, and protect the interests of both the importer and the producer.
Selling Alcohol Through the Three-Tier System
In the U.S., the alcohol industry operates under a three-tier distribution system designed to separate production, distribution, and retail. The system was established after the 21st Amendment repealed Prohibition, to regulate the sale and distribution of alcohol beverages and prevent monopolistic practices. This system ensures fair competition and helps prevent monopolies. Here’s how it affects importers:
- Tier 1 – Producers: This is where spirits are manufactured by the producer, which typically will be a distillery in another country. In some cases, the producer may be responsible for obtaining necessary certifications, labels, and permits in their country before sending the spirits to the U.S..
- Tier 2 – Importers and Distributors: After the spirits arrive in the U.S., the importer assumes the role of bringing the product to market. However, under the three-tier system, importers generally cannot directly sell alcohol to consumers. Instead, they must sell their imported spirits to a wholesaler or distributor, who then sells the product to retailers (including restaurants, bars, package stores, and other licensed businesses). This tier often involves wholesale agreements that specify pricing, quantities, and delivery schedules between the importer and distributors.
- Tier 3 – Retailers and Consumers: The final tier consists of retailers who sell the distilled spirit product to consumers. This can include liquor stores, restaurants, and bars that hold the necessary licenses to sell alcohol. Importantly, retailers are responsible for complying with local, state, and federal laws regarding the sale of alcohol, including age verification, hours of sale, and advertising.
The three-tier system is designed to maintain a separation between the production, distribution, and retailing of alcohol. This separation helps prevent any one entity from controlling the entire process, promoting fairness and preventing monopolies. Importers must ensure they work within this system, as bypassing the system or selling directly to consumers can lead to serious legal consequences.
How Can Lindsey Zahn P.C. Help Your Distilled Spirits Importer Company?
Importing distilled spirits into the U.S. involves navigating a complex regulatory landscape, including obtaining permits from the TTB, ensuring FDA compliance, clearing customs, obtaining label approval, and understanding state laws. Because these requirements are subject to frequent updates and can vary significantly depending on the state or even the type of distilled spirit being imported, working with an experienced alcohol beverage attorney can help ensure that all requirements are met, and the process is smooth.
Contact Lindsey Zahn P.C. to schedule an introductory meeting to discuss your needs and products and to learn more about how we can help: info@zahnlawpc.com or (929) ZAHNLAW (929-924-6529).