By: Xiong Maoling, Sun Ding, Gao Pan
Located in the community of Ivy City in northeastern Washington D.C., Justin Cox’s 12-feet-tall (around 3.66 meters tall) brewery has 14 production tanks, with a strong hop aroma filling the air.
His craft brewing business has been running smoothly for over five years until just recently. Without approved labels from the federal government, kegs of apricot-flavored India Pale Ale (IPA) have piled up in his warehouse, unable to be shipped out of the capital for sales.
“The clock is ticking on this beer now … With the very extreme version of that being, it goes down the drain,” Cox, founder and CEO of Atlas Brew Works, told Xinhua.
The newly brewed seasonable beer, scheduled to be released on Feb. 1, still awaits a keg label approval by the U.S. Treasury Department’s Alcohol and Tobacco Tax and Trade Bureau (TTB), which has halted most of its operations as a result of the already month-long government shutdown.
“Every day the shutdown continues, the losses multiply,” Cox said.
The IPA, called “The Precious One,” has a relatively high hop content and is “very perishable,” he said. The fermentation of the beer was done about a week ago, and it will lose its flavor in 120 days.
“We did not expect the shutdown to go on this long … and so we weren’t really expecting it to filter down all the way to a local craft brewery,” Cox said.
Federal law allows the brewery to distribute kegs in the Washington D.C. area without the label approval, but not over state lines. That means Cox couldn’t sell his new beer to Virginia, Maryland and Tennessee, the three major markets outside the capital, without approved can labels.
Cox expects a long waiting time for label approval even when the government reopens. “Once they open back up, the TTB will be sitting on probably very large backlog of applications,” Cox said.
“So it still could continue to have effects on our business and the rest of the craft brewing industry for months to come,” he said.
Craft brewing is considered a booming industry in the United States with more than 7,000 breweries operating across the nation in 2018, a 20 percent spike over 2017, according to data from the U.S. Brewers Association. The industry contributes over 70 billion U.S. dollars to the U.S. economy annually and supports 500,000 jobs.
Cox, a homebrewer-turned entrepreneur, said the industry boom came as people are increasingly drawn to fresh, local and flavorful beer. “When we first started in 2013, I think we sold about 1200 barrels of beer, and in 2018, we finished about 4,500 barrels.”
The burgeoning growth, however, is overshadowed by the shutdown. Along with disrupted approval for labels or permits, breweries are likely unable to proceed with their loan applications from a bank or credit union without necessary information from the federal government, and will not have access to federally assisted loans due to the closure of the Small Business Administration, the Brewers Association has warned.
In a letter sent to Treasury Secretary Steven Mnuchin last week, Colorado’s Democratic senator Michael Bennet said the shutdown has been “especially difficult” for his state, which boasts nearly 400 breweries.
“The uncertainty of a government shutdown is affecting these business owners’ ability to invest, hire, grow and hit revenue targets,” Bennet wrote, adding that the impacts spread to farmers and beyond.
For Cox’s brewery, the shutdown is not only delaying the launch of new products, but also dragging down the sales of existing products. “So everyone is not spending as much money on leisure activities like craft beer,” Cox said, noting that a lot of his customers are federal employees who have missed their paycheck after the shutdown.
“So our sales in the taproom were down; our sales out in the general market are down as well,” he said, adding that the lengthy government shutdown is very “frustrating.”
“We are caught in the middle of this shutdown along with a whole lot of other people,” he said. “We would just like to sell our beer, get back to work, pay our employees and provide for our families.”
Cox, once a federal employee himself, has joined a crowdfunding campaign called “Pay it Furloughed,” which allows anyone to donate a beer online for an impacted federal worker. In the first four days of the program, his brewery has given out about 145 free beers.
As of Tuesday midnight, the “Pay it Furloughed” website showed that more than 3,800 beers have been donated, over 1,600 of which have been “enjoyed.”
The shutdown, the longest in U.S. history, has affected a quarter of the federal government, forcing about 420,000 “essential” employees to work without pay, and 380,000 others to take unpaid leave.
Since the partial closure on Dec. 22, the White House and Democratic congressional leaders have held several rounds of negotiations over border security and wall funding, the sticking point in the shutdown, but appeared to get no closer to solving the budget impasse.
“We hope the shutdown would have ended yesterday if possible,” Cox said.