Marshall Fawley

While everyone in our industry struggles with the ramifications of the COVID-19 pandemic, distilled spirits plant (“DSP”) production of hand sanitizer or ethanol (whether denatured or not) for use in hand sanitizer is a particularly important topic. The Food and Drug Administration (“FDA”) and Alcohol and Tobacco Tax and Trade Bureau (“TTB”) are issuing guidance on a seemingly daily basis.

To that end, TTB released Public Guidance 2020-1A on Thursday March 26, 2020, updating its previous March 18^th guidance regarding the production of hand sanitizer. This new guidance contains several important points for DSPs moving forward and is valid until June 30, 2020 unless extended by TTB.

First, a DSP may manufacture hand sanitizer without obtaining TTB formula approval if the DSP uses a formula cited by FDA in its March 23, 2020 guidance titled Temporary Policy for Preparation of Certain Alcohol-Based Hand Sanitizer Products During the Public Health Emergency (COVID-19). Although TTB tries to approve non-beverage alcohol product formulas within 10 days or so, by utilizing one of the formulas identified by FDA, DSPs can start producing hand sanitizer as soon as practical. If this saves you even a few days it can go a long way toward helping health professionals and many others who need hand sanitizer.

Second, a DSP does not need to obtain any extra permits or bonds to manufacture or supply ethanol for use in the manufacture of hand sanitizer. Under normal conditions, when a DSP’s production reaches a point where a bond is required or an existing bond must be strengthened, a permit amendment must be filed with TTB. Under TTB’s new guidance, as long as the increase in production is for the purpose of making hand sanitizer (or the production of ethanol to ship to another DSP who will use it to make hand sanitizer), no new or strengthened bond will be required. If your increased production continues past the June 30, 2020 sunset date, presuming TTB does not extend these guidelines, you will be required to obtain a bond or a strengthening bond as you would in normal circumstances.

Finally, until June 30, 2020, and unless TTB extends this guidance, TTB is exempting DSPs from the requirements to request transfer in bond approvals and obtain additional bond coverage when receiving denatured or undenatured distilled spirits from another DSP. This provision is not currently tied to the production of hand sanitizer by a DSP. This applies to all DSPs receiving denatured or undenatured spirits for any use. Although DSPs do not have to submit Transfer In Bond forms to TTB under this guidance, DSPs must maintain records of the receipt of alcohol that include the information required on the Transfer in Bond form. These records must be maintained with other TTB mandated records and available for inspection by TTB personnel if requested.

We are getting lots of requests for help on sanitizer issues. We are here and working as best we can under difficult circumstances for all of us. To the extent you are working on sanitizer issues for non-profit purposes, let us know and we will see how we can best help.