Alcohol category trends show consumers in the United States love to learn more about the world through discovering new beverage alcohol products. Some even take the initiative to bring the product to the U.S. to sell.
If this rings true for you, or if you already own a brand you’re considering expanding into the U.S. market, we have put together a step-by-step guide on how to import beverage alcohol into the U.S. and some best practices that can be implemented in the process.
Federal Compliance
Federal Basic Permits
One of the first steps a brand must take before selling their beverage alcohol in the United States is securing the proper permits.
A Federal Basic Permit allows a business to make money from the sale of alcohol. For brands looking to import beverage alcohol products into the U.S. from other countries for commercial purposes, a Federal Basic Import Permit is required.
These permits are obtained through the government agency that oversees alcohol regulation, the Alcohol and Tobacco Tax and Trade Bureau (TTB).
As part of its services, Park Street Companies can file applications for Federal Import Permits on behalf of clients via its Federal Regulatory Compliance department.
More Resources on the Requirements for a Federal Basic Import Permit:
Formula Approval
The next step would be to find out if your brand’s beverage alcohol product requires formula approval from the TTB. This step is required when the agency is looking to identify non-traditional methods or ingredients, verify ingredients meet the FDA’s safety requirements for human consumption, or to better understand the product’s makeup for labeling and tax purposes.
If your product requires a formula approval, the TTB will ask for some documents including a complete list of ingredients, a method of manufacture (a description of the steps taken to create the product), and a Flavor Ingredient Data Sheet for any flavors produced by a third-party. The TTB may also ask that a sample of the product be sent for lab analysis. Once the formula is approved, it is valid for 10 years.
More Resources on Beverage Alcohol Formula Approvals:
Certificate of Label Approval
The TTB requires a Certificate of Label Approval (COLA) for any wine above 7% ABV and spirits or malts above 0.5% ABV. Beverage alcohol labels are regulated by the TTB in order to prohibit the use of misleading statements and to assure that there is adequate information regarding the identity and quality of the product. These labeling requirements must be met for all alcoholic beverages applicable with the ABV percentages mentioned above.
It is common for the TTB to request revisions to a label after review so a good rule of thumb is to avoid printing labels before receiving your final COLA. Brands must secure a COLA for the labels of each unique product they are aiming to import into the United States.
More Resources for COLAs:
State Compliance
Registering in States
Before entering the U.S. market, it’s important to note that each of the 50 states in the U.S. regulates its own alcohol market individually. Generally, there are two types of regulatory frameworks that states use: open or control.
Open states allow private businesses to buy and sell alcohol in accordance with state laws. Regulation is primarily achieved through a licensing system, in which licenses are granted to private enterprises allowing the buying and selling of alcohol at the state’s discretion.
In control states, government agencies often handle the wholesale aspect of the system and then deliver products to privately held off-premise retailers or, in many cases, the state also owns the off-premise retail aspect of the system.
Beyond these two general frameworks, states may have further regulations including fees for registration or required notice of pricing prior to sales taking place. Price posting is intended to eliminate discrimination among customers. It’s important to be aware of a state’s registration fees, registration timelines, and potential price posting deadlines before starting the registration process.
More Resources on State Regulations:
Selecting a Distributor
The vast majority of states require beverage alcohol products to go through a distributor and, before entering a state, it’s important to select the right distributor. Be sure to research any potential partners before entering an agreement.
The easiest way to learn more about a distribution partner is to ask local suppliers, review the distributor’s current portfolio, and organizational structure, and most importantly try to get an idea of what your target distribution partner is looking for.
Once you’ve signed a distribution agreement, it is also crucial to build relationships with the distributor’s sales representatives. These representatives will be assisting in selling your products to retailers, so it’s important to connect with them and ensure they are engaged with your brand.
More Resources on Distributor Relations:
- Park Street’s Roundup of Distribution How-To’s for Suppliers
- The Keys to A Successful U.S. Brand Launch
International Shipments (Foreign Country Importation)
Federal Excise Taxes
All beverage alcohol products that are imported into the U.S. market for commercial purposes are subject to federal excise taxes (FET), but it’s important to know about potential savings that can be found for your brand through the Craft Beverage and Modernization Act (CBMA).
CBMA was passed as a temporary measure in 2017 and made permanent in 2021, sparing beer, wine, and spirit brands from as much as a 400% increase in FET rates. To apply for CBMA relief, brands must submit the CBMA Spreadsheet, Controlled Group Spreadsheet, and an Assignment Certification Document. Park Street Companies assists clients with this process through its dedicated Craft Beverage Modernization and Tax Reform team.
More resources on FET and CBMA:
- TTB Tax Rate Information
- Understanding The Craft Beverage Modernization and Reform Act
- Necessary Documentation for CBMA
Shipping Into The U.S.
It’s more important than ever to work with a trusted freight forwarder and have everything in order before preparing your brand for entry into the USA, as the globe continues to struggle with supply chain disruptions. Be sure to work with your freight forwarding company to arrange shipment all the way to the final destination rather than just the port of entry.
Along the way, it’s recommended to keep an open line of communication with the freight team to stay on top of any changes to your shipment’s scheduled arrival. When budgeting, also ensure that you are accounting for potential additional expenses that may come in the form of storage fees, rate increases, or other additional fees.
More Resources for Shipping:
Conclusion
Importing any alcoholic beverage from a foreign country into the United States can be tricky. This is why we’re here to support beverage brand owners who need help. As experts, we can help guide you through the state laws, rules, and federal regulations to make the whole importation process smoother and safe. Whether you’re looking to import beer, wine, or spirits, should you have any other questions or concerns, please feel free to reach out to our Park Street Team for more information.
Free Guide to Getting Started in The US Market
Before launching your brand in the US, make this download your first stop for understanding how the US alcohol system is set up and the initial steps required to begin selling your alcohol product here.