Niekamp & Associates, LLC is a law firm that primarily focuses on federal alcohol and tobacco tax and regulation. Their clients range from small independent craft breweries and distilleries to tobacco manufacturers and importers. This father and son duo helps their clients cut through the bureaucratic process to get their product to market and stay compliant with the laws that govern their product.
(Photo courtesy of Tom Niekamp)
“Having worked in the industry from the government side for over 25 years, I am often asked about the agency and its jurisdiction. The Alcohol and Tobacco Tax and Trade Bureau (TTB) is a very small agency within the United States Department of the Treasury. Up and until 2003, TTB was a part of the Bureau of Alcohol, Tobacco and Firearms (ATF). However, in 2003, TTB became its own agency, and since that time has been responsible for enforcing many federal laws that relate to the production, taxation, importation and distribution of alcohol and tobacco products. The agency has its headquarters’ operations in Washington D.C., and field locations throughout the country,” said Tom Niekamp, the senior partner of the firm.
“As part of my involvement with the law firm, I spend a lot of time helping new craft distilleries get federal permit approval. It is an interesting area that few people are familiar with. One of the first questions I often get from a distillery-in-planning is whether they can experiment with making alcohol for non-retail purposes before obtaining a federal permit. The answer to this is a definite ‘no.’ Although you can make limited amounts of beer and wine at home for personal use, making distilled spirits without a permit is strictly prohibited by the federal government. I will advise that you can learn the process through contract-distilling, but you would have to arrange that through an approved distiller,” said James Niekamp, the junior partner in the firm.
The firm fields questions from distilleries regarding having a tasting room inside the distillery. James Niekamp said, “These arrangements are becoming more and more popular, as visitors want to get a close look at distilling equipment and the overall process. TTB regulates the industry and highly scrutinizes such arrangements. A floor-to-ceiling wall must completely separate a tasting room/bar area from any area where distilling takes place. Many of our clients accommodate this rule by installing large windows in separation walls to give an inside look at the distilling operations.”
“If there is one other piece of wisdom I try to offer, it is to understand that state and local requirements vary greatly. Some counties entirely prohibit the production of alcohol, and others are so unfamiliar with the practice that they have to write the rules as they go once they learn a new distillery or brewery is in planning. Often these legal hurdles can be incredibly frustrating, so I always tell our clients to go into it with an open mind and expect setbacks, as they are almost certainly guaranteed,” said James Niekamp.
This article was written by Robin D. Everson for Small Business Pulse