TTB PREMISES RULES FOR BREWERIES, WINERIES, AND DISTILLERIES
The federal regulations for setting up a brewery, winery, or distillery (referred to as a “distilled spirits plant” or DSP) outline strict requirements for the designated area approved for production operations, known as the “bonded premises.” The Alcoholic Beverages & Tobacco Tax & Trade Bureau (TTB) is responsible for enforcing these regulations.
Rules Governing the Bonded Premises
Each commodity must have an approved bonded premises by the TTB, ensuring security and efficient administration of federal regulations. The bonded premises must be accessible from an exterior door, although it can be indirectly reached via an alternation of premises. It is not permitted for access to be through non-bonded areas like a tasting room or gift shop.
There are additional requirements that apply to the bonded premises of breweries and DSPs specifically:
For Breweries:
- Location Restrictions: May not be in a dwelling house, on board any vessel or boat, or anywhere else that the TTB determines revenue will be jeopardized or administration hindered.
- Premises Configuration: Must consist of an unbroken premises, except that it may be separated by public passageways, streets, highways, waterways, or partitions.
- Usage Restrictions:
- May only be used for the production of beer unless other use is approved by the TTB.
- Operation of a tavern on the brewery premises is permissible. Specifically, this means that it is possible to run tap lines directly from tax-determination tanks in the manufacturing area to taps in the tavern.
For Distilled Spirits Plants (DSPs):
- Location Restrictions: May not be in a residence, shed, yard or enclosure connected to a residence, on any vessel or boat, where beer or wine is produced (subject to rules about alternation), or where liquors are sold at retail.
- Premises Configuration: Must be continuous except for separations by public waterways, roads, or carrier rights-of-way.
- Usage Restrictions: A retail tavern or tasting room is never considered part of the DSP premises.
Separation of Bonded Premises
The bonded premises for each commodity must be kept separate from each other. The TTB has the authority to determine the method of separation required between bonded premises. The current standard for separating beer and wine premises is physical separation sufficient to prevent items from moving between premises and to avoid products being placed incorrectly. Examples include walls, stanchions, and physical barriers. The requirement for DSP premises is more stringent, necessitating floor-to-ceiling walls.
Alternation of Premises by Extension and Curtailment
Even though bonded premises must be separated, alternation of premises is permitted. “Alternation of premises” refers to the arrangement by which a physical space may be used for production of different commodities. Alternation works on the basis of extension and curtailment. For example, to use the bonded premises assigned to one commodity (e.g., beer) for purposes of handling another commodity (e.g., wine), the brewery premises is temporarily curtailed, and the winery premises is temporarily extended.
Alternation of premises is permissible under federal rules, provided that it is approved in advance by the TTB. This can be approved on a limited basis, but it is more often the case to request permission to alternate use of the premises between commodities on an ongoing basis.
Untaxpaid and Taxpaid Commodities Must be Kept Separate
Untaxpaid commodities—that is, products for which the federal excise tax has not yet been determined—must be kept separate from one another. This separation can be by tanks, partitions, pallet stacks, or physical separation, with approval from the TTB.
Taxpaid products of any commodity may not be stored on a bonded premises, with some exceptions (such as running tap lines to the tavern on a brewery premises).
Do you have any questions about the federal regulations on alcohol manufacturing? Contact us to schedule a consultation with a beverage attorney.
Because we’re attorneys: Disclaimer. Originally posted 04/06/2025.
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