Brewery Alternating Proprietorships

An “alternating proprietorship” is a term used to describe an arrangement in which two or more people take turns using the physical premises of a brewery.  Generally, the proprietor of an existing brewery, the “host brewery”, agrees to rent space and equipment to a new “tenant brewer”.  The tenant qualifies as a brewer by filing the appropriate documents with TTB.   The tenant produces beer, keeps appropriate brewery records, labels the beer with its own name and address, obtains the necessary COLAs, and pays tax at the appropriate rate upon removal of its beer from the brewery.  The tenant brewer has title to the beer at all stages of the brewing process.  Alternating brewery proprietorships allow existing breweries to use excess capacity and give new entrants to the beer business an opportunity to begin on a small scale, without investing in premises and equipment. 

TTB Industry Circular 2005-2, Alternating Proprietors at Brewery Premises, was issued on August 12, 2005.  This industry circular:

• outlines what documents must be filed to qualify as a brewery alternating proprietor by both parties,
• provides guidelines for the operation of brewery alternating proprietorships by both the host and tenant breweries
• provides information on what officials from TTB will use in making determinations regarding approval of alternating proprietorship arrangements.  

The industry circular also advises brewery proprietors who were already approved as alternators prior to August 12, 2005, of the requirement to resubmit applications for alternate methods of operation if they intend to continue operating as an alternating brewery after August 31, 2006.  On September 1, 2006, TTB will rescind all approved applications of alternate method allowing breweries to vary from the regulations that were approved for brewery alternating proprietorships prior to August 12, 2005.   Alternating tenant breweries that fail to submit the required documentation by August 31, 2006 will not have approval to conduct brewing operations.  Alternating host breweries that fail to submit the required documentation by August 31, 2006 will not be allowed to use their brewery premise to alternate with any tenant breweries.

For further information on brewery alternating proprietorship operations, you may access Industry Circular 2005-2 at:

http://www.ttb.gov/industry_circulars/ic2005_02.html

For samples of the alternate method applications often submitted for brewery alternating proprietorships, click here.

Alternate Proprietors at Brewery Premise Deadline