Distillery Practice—Government Regulations

Follow along: IG @birectifier

A very unique mimeographed manuscript crossed my desk that was penned by a Seagram employee, likely in the late 1930’s or early 1940’s, but before the famous 1943 Seagram text called “Fundamentals of Distillery Practice” written by Herman F. Willkie and Joseph A. Prochaska. I’m not aware of any informally published manuscript like this having been found by the distilling field. It came to me from an individual who wanted to contribute to the education of the new generation of distillers.

The manuscript is a bit scattershot and not exactly in any kind of order and contains a ton of information from the era not seen in the 1943 text. This was likely intended as an internal training document. These were the kinds of jobs where once you were in, you were in for life so they took education seriously.

The section that follows is the very beginning of the manuscript and covers government regulations that may be presented to an employee on day one. I don’t think everyone will be interested in this section but there is a lot of fascinating nuance that reflects major changes from what we see today. Blended spirit laws were described as being much different than Canada or the United Kingdom. Blends also had to be disclosed on the back label of bottles. It appeared that excise officers called storekeeper-gaugers may have performed analysis procedures for supporting excise calculations that the distiller could have benefited from to improve their own operational performance. My take is that these “storekeepers” performed a lot of on the ground work that in their absence, a distillery of a certain scale would have had to perform themselves.

[I was told that the very intimate storekeeper relationship ended after Reagan era cost cutting which may elude that distiller’s benefited very significantly from having a storekeeper around.]

Among the last paragraphs we see some antagonism among distillers where one interested group is trying to create regulations damaging another where neutral spirits must be aged for a minimum of two years which would be a considerable expense to anyone that used it for blends. This kind of antagonism is currently seen in the rum industry as they create GI’s. As a thought exercise, what would it take to bring rum up to the standards of the late 1930’s presented here? Would producers be cool fully disclosing their blends on the back label? There is even a regulation where counting of aging stops when the original cooperage is changed. I have a feeling that such regulations did not last long, but I am not aware when exactly they changed.

[I was told an anecdote where many new American distillers had erred and not properly understood the age statement rule about removing spirits from original cooperage.]

I keep being surprised by what regulations are still in effect as I have read very little of the contemporary books on American whiskey. I really thought rye could be aged in used cooperage.

[A source for current regulations is the TTB BAM manual and there is a well regarded blog post by Josh Peters that translates them into practical English!]

[Blog friend Tyler Derheim of Five x 5 solutions lets us know that the double barrel counting rule came to be in TTB notice 176 of 2018 and the rule was finalized in 2020. Until then you could only take credit for time in the first barrel. I’m not aware of any double barrel Bourbons until very recently and that may explain why.]

Eric Witz, the great @aphonic (an IG must follow!), was kind enough to share from his collection this label from a post-repeal blend which shows on the back label the exact breakdown of the blend.

It is fascinating to think that if we collect as many of these blends as we can, simply from labels, brands may be able to resurrect a few as delicious marketing ploys—move over Shackleton whiskey, the ghost of Schenley is coming for you!

Government Regulations

Soon after the establishment  of the Federal Government in 1789, laws regulating the sale and manufacture of alcoholic liquors went into effect. These laws did not go uncontested due to the rugged individualism of certain objecting western Pennsylvanians who brought on the “Whiskey Rebellion” of 1794. This momentous uprising took place just three years after the first federal taxation on spirits, levied first from 1791 to 1802. Ending with this period no federal internal tax was levied on whiskey until after the war of 1812, when, during the period from 1813-1817 the federal government levied a similar tax. Once more, after the Civil War a tax on spiritous liquors was levied and such taxes have been in effect ever since.

The basic reason for federal regulation is to insure the government of the collection of the Internal Revenue Tax. This, of course, was not true during the Prohibition era when the government attempted to prohibit the manufacture and sale of alcoholic beverages. During this period the government had complete authority to regulate all phases of liquor. With the passage of the 21st amendment, which repealed the 18th amendment in its entirety, the federal government no longer had this constitutional authority. The so-called “police power” to regulate and even prohibit traffic in intoxicating liquors was returned to the states. In this chapter we will concern ourselves, in general, with federal regulation.

Government control is exercised mainly through two bureaus, the Federal Alcohol Administration known as the F.A.A., and the Alcohol Tax Unit, known as the A.T.U. The latter bureau, which has its main office at Washington, is concerned with the collection of the tax on alcohol. Directly under this office come the district supervisors, each of whom is assigned a district covering an area of states, the number of which is not necessarily fixed. These district offices in turn assign to various operating plants storekeeper-gaugers, whose duty it is to see that the regulations are complied with by the distillers. Storekeeper-gaugers are transferred to other plants ever six months, in keeping with government policy. It is with the workings of this bureau that we are chiefly concerned.

The second bureau, the Federal Alcohol Administration, is charged with protecting the consuming public. The F.A.A. controls advertising, containers, labels, printing, and standards of identity. The work of this bureau will be discussed briefly in a later section. For the present, let us consider the regulations concerning the production of spirits.

We must realize at the start that the basis of governmental regulation is to prevent the loss of a single cent of revenue, and the regulations of most interest to use are the ones designed to protect the federal revenue. These regulations provide, among other things, for the strict governmental supervisions of the various manufacturing units, the distillery, bonded warehouses and rectifying plants.

This brings use to the working relationship existing between the distiller on the one hand and the government on the other. It is of utmost importance that this relationship be understood. Let us start at the beginning and get a true perspective of this status, since without it we will be at a complete loss.

Let us assume that a group of people or a single person wishes to start a distillery. The first step consists in filing a notice of intention to operate. This notice, which is presented to the F.A.A. must contain complete information concerning the owners, description of buildings and equipment, and must be accompanied by a set of plans describing the premises in detail. A bond in the sum of $100,000.00 must also be filed to insure collection of all taxes and penalties. If approved, the F.A.A. issues a basic permit allowing the distiller to operate. However, these operations must be carried out under the direct supervision of the storekeeper-gauger assigned to the plant. Furthermore, the distiller is required to keep records showing the amount of grain mashed and the amount of spirits produced, This, of course, is to enable the government to check up to see that all tax due is collected. the tax collected is $2.25 per proof gallon and this tax attaches as soon as the alcohol comes into existence. Thus, if any of the alcohol or fermented mash is lost, the government assesses the distiller for the tax on alcohol lost. However, if this loss can be proved to be the result of an unavoidable accident, no tax is assessed.

This matter of “spillage” as it is called is of considerable importance and may best be illustrated by means of examples. Such a loss occurred at one of our plants due to the failure of an automatic steam control, regulating steam to a still column. The defective regulator cause a sudden variation of pressure within the column with the result that alcohol vapor and liquid was forced out release valves and condenser vents. This loss was unavoidable since it was shown that this steam regulator had previously functioned properly and that it was impossible to know before hand that it was defective. A loss similar to this occurred when a streamline fitting on a pipeline carrying alcohol parted. An investigation showed that the contractor had failed to sweat the fitting to the pipe in erecting the line. The connection had been sufficiently tight so that leakage had never occurred before and this evidence resulted in the loss being considered unavoidable.

An example of an avoidable accident would be the neglect of the operator to close a mash line valve leading to the sewer resulting in the loss of fermented mash. Again, it would be possible for a still operator to fail to close the drain valve on a kettle prior to charging with high wine resulting in the loss of alcohol. This accident would also be considered avoidable. Hence, it is apparent that certain losses due to mechanical failure may be unavoidable but that losses due to lack of operational skill are not.

It is important that a loss of alcohol be reported at once to one’s immediate superior no matter how small the loss may be, because serious blame will attach to the operator as representative of the distillery if the government detects negligence and subterfuge.

Every step in the establishment and operation of the distillery is regulated in detail by ruling of the A.T.U. This, in effect, results in the distillery being supervised by the government rather than by the company. Such a situation may seem strange but it is, nonetheless, true. The company builds the distillery, warehouses, and rectifying plant, but the government holds a lien on this property and the distilled spirits to the extent of the unpaid tax on whiskies held on the premises. This then, constitutes the actual relationship between the distiller and the government.

In the distillery, warehouses, and rectifying plant the employee comes into direct contact with the government regulations and the government’s representatives. For this reason it is important to understand the exact responsibilities of the employee in connection with this phase of his duties. In other words, what is the relationship of the employee to the company? We have already discussed the relationship between the company and the government, but in actual practice it is the employee who comes most directly in contact with the government representative. The answer to this question is that the company is responsible for all acts of its employees to the extent of their prescribed duties. So we see that the employee represents the company and should be considered the company’s agent. Any mistakes that the employee may make in this regard are considered to be the mistakes of the company. Circumvention of regulations or other irregularities may subject the company to a penalty, the most drastic of which is the complete forfeiture of the premises to the federal government. Withdrawal of a sample of spirits for analysis without government permission in the absence of a storekeeper-gauger, ord dropping the fermented mash to a beer well without informing the storekeeper-guager are just a few examples of infraction of regulations which must be guarded against. Such occurrence might result in the closing down of the plant. When this occurs the storekeeper-gauger lock the steam valves to all stills and removes any parts of the distillation equipment which he may deem necessary. Even if such stoppage of production lasted for only two days, the expense to the company is estimated at twelve thousand dollars. Consequently, the employee must understand the government regulations and remember at all times the responsibility invested in him by the company.

Let us consider the actual application of governmental supervision as it applies to the manufacture of whiskey. The process of manufacture may be divided into three subdivisions consisting of the distillery, warehouse, and rectifying plant.


Under this topic we will consider regulations relating directly to the processing of the grain. In other words, mashing, fermenting, and distilling. In theory the government is not interested in the process until alcohol is actually produced. In other words, the grain and unfermented mash are under the company’s supervision until yeast is added to the mash and alcohol actually produced. However, in practice, this distinction is not drawn very clearly since the government maintains supervision, to a certain extent, over bother the grain and unfermented mash. As an instance of this, the regulations specify that all meal bins be kept under government lock and seal during those periods when the plant is not allowed to operate. With certain exceptions the distillery is permitted to operate on all days except Sunday.

All pipe-lines carrying whiskey, alcohol, alcoholic vapors, mash, fermented mash, stillage, steam, water, fusel oil, or compressed air must be erected so that the lines may be easily traced, and the process of manufacture followed without undue difficulty. A further requirement is that all such pipe-lines be painted certain designated colors according to the material passing through them. These colors and the product carried are:

Red – Mash, beer, or other distilling material
Grey – Molasses, or other fermenting material
Black – Whiskey, alcohol, finished products
Blue – Vapor, high wine, low wine, or other unfinished spirits
Brown – Stillage
Yellow – Fusel oil
White – Water
Aluminum – Steam
Orange – Air
Gold Olive green – Carbon Dioxide (tentative)

Furthermore, all lines carrying spirits, of any kind, from the stills to the high wine room tanks must be so constructed that no material may be removed from the pipe-lines without special dispensation. All fittings, valves, etc., are under government seal and if the seal is broken the storekeeper-gauger is enabled to deduce that the lines have been tampered with. It goes without saying that all tanks containing spirits are under government lock and seal.

The company must keep accurate records of all grain mashed and the spirits produced. The government representative takes a sample from each tub of fermented mash before distillation. The alcoholic content of the fermented mash is determined by analysis of this sample. The government also takes sample of the still discharge so that loss in distillation may be taken into account. With this information, the storekeeper-gauger is enabled to calculate the quantity of alcohol that should be produced in any one day. The monthly average for this calculation is compared with the actual yield obtained over the same period giving the government a check on production.

[This is fascinating and needs further thought.]

No spirits may be disposed of or destroyed with the exception of heads and tails containing 0.5 percent or more aldehydes or 1.0 percent or more fusel oil. This regulation sometimes works a hardship on the distiller since he may withdraw a fraction of heads or tails for destruction, in order to improve the product, and then find that the alcohol to be destroyed or sold to a denaturing plant does not contain a sufficient quantity of aldehydes or fusel oil. Unfortunately, this is most liable for occur at plants producing the highest grade spirits. The regulations allow fusel oil to be disposed of or sold for solvent purposes.

The spirits from the high wine room are transferred to the cistern room for barreling or loading into tank cars.

Cistern Room – The cistern room or building is under the lock and seal of the storekeeper-gauger. The cistern room tanks must be erected according to certain regulations with open spaces at the top, bottom, and sides. The whiskey or spirits is reduced to the proper proof by the addition of pure water and drawn off into barrels or transferred to tank cars, under government supervision. If drawn off into barrels the whiskey is gauged, and the barrel marked and branded with the information required. The tare, gross weight, net weight, proof, date, serial number, proof gallons, and wine gallons are cut onto the bung stave. The brand which is placed on the one head of the barrel gives the name of the distiller, address, district, kind of contents, serial number, dated filled, and distillation proof. The name of the storekeeper-gauger is also stenciled into the head. The barrel is now ready to be shipped in bond or stored in the warehouse for maturing.

Bonded Warehouses

If the whiskey is to be stored in bond it must be placed in an Internal Revenue Bonded Warehouse. As the name implies, such warehouses are under bond, which in this case is for $200,000.00. A warehouse to be acceptable for this purpose must be designed in such a manner that no one may enter in the absence of the storekeeper-gauger. The warehouses are left open from sunrise to sunset, which has been taken to be from about 7:30 A.M. to 3:30 P.M.

From time to time the government officials inspect the barrels of maturing whiskey, and if any barrels are found to show an excessive loss, the government may require the distiller to taxpay such barrels and remove them from the bonded premises. The reason for this may seem somewhat obscure at first; however, the following example should clarify this point. Let us assume that the contents of a barrel is completely lost, through leakage, on the same day that it is placed in the warehouse. If the government  required the barrel to be taxpaid on the same day the distiller would pay a tax only slightly less than if the barrel were still completely full. However, if government allowed the distiller to keep the empty barrel in the bonded warehouse for the maximum period allowed before requesting taxpayment, the amount of tax collected would be considerably less due to allowances for soakage, leakage and evaporation. This is an extreme case not likely to actually occur and is merely used to illustrate this point. Barrels which have remained in the warehouse for a period of eight years are forced out of bond; that is, the whiskey must be removed from the bonded premises and taxpaid.

Tax payment – When whiskey is withdrawn from the warehouse for tax payment, an application to make a regauge is submitted to the district supervisor. The regauge is then carried out under the supervision of the storekeeper-gauger. Each barrel is weighed and the proof measured. The average tare is determined by emptying a certain number of barrels, at least one out of each five, and weighing the empty barrel. From this data the number of proof gallons contained in each barrel is computed. Since considerable loss is experienced in the maturing of whiskies, the government has established what is known as an allowance table. Any barrel showing a loss greater than that allowed in the allowance table is considered an excess loss barrel. The tax on such a barrel is based on the allowance rather than the gallons actually contained. In all other cases, where the gallonage exceeds the minimum allowed, the tax is levied on the actually proof gallons contained. Unfortunately, the allowance tables are not quite adequate and all distillers must pay tax on whiskey which they do not possess. Further data are marked on the barrel and the taxpayment stamp is glued to the barrel and immediately cancelled by the storekeeper-gauger. After taxpayment the barrel must be moved from the warehouse to either the bottling plant, rectifying plant, or taxpaid warehouse.

Rectifying plant

If the whiskey is to be transferred to a bottling house it will be dumped and bottled according to the regulations covering such bottling houses. Since most of our products are blends, we are principally interested in the regulations covering rectifying. Starting such a plant requires a procedure very similar to that for a distillery. A notice of intention to begin operation must be filed with the government accompanied by an F.A.A. basic permit, corporate papers, plans of the premises, and a rectifier’s bond.

The rectifying plant by government regulation consists of three separate rooms:

1. A “receiving room” for the storage of product constituents
2. A “rectifying room” for the spirits in process (dumping, blending and bottling)
3. A “finished products room” for the storage of rectified spirits

These rooms may have connecting doors, but the rooms must be separated by partitions. All spirits must be received in the “receiving room” and held there until permission to dump is received from the district supervisor. As soon as this permission is received, the cancelled taxpayment stamps are removed from the barrels, and the whiskey dumped and rectification begun. The regulations require that the process of rectification be completed within ten days from the time of beginning the process. The finished blend is drawn from the processing tank into a bottling tank which is locked with a government lock and gauged for taxpayment. The rectification tax is assessed at the rate of thirty cents per proof gallon. After taxpayment the whiskey is ready to be bottled. A government strip stamp, indicating tax payment, is affixed to each bottle and the finished cases removed to the finished products room.

Throughout the various steps of rectifying and bottling, the company must keep accurate records so that ever drop of whiskey dumped is accounted for.

The Federal Alcohol Administration, as pointed out previously, is principally interested in protecting the consuming public. The F.A.A makes an effort to see that the consumer gets what they call for. To the detriment of both the distiller and the consumer these efforts are nullified because the standards of identity do not and cannot describe the quality of the whiskey, and it is these arbitrary definitions which determine what description may be placed on the label. However, from this it must not be inferred that the F.A.A. does not render a definite service to both the industry and the consumer, especially as regards unfair trade practices and advertising. The F.A.A. issues definitions covering each type of whiskey or spirits marketed. These standards of identity define each product on the basis of the mash bill, distillation proof, proof drawn from the cistern room, type of cooperage, bottling proof, and age at the time of bottling. Some of these standards of identity which more particularly interest us we give below:

Grain neutral spirits – Grain neutral spirits are spirits distilled from a fermented mash of grain at or above 190° proof, and reduced in the cistern room not to exceed 159° proof.

Distilled gin – Distilled gin is a distillate obtained by original distillation from mash, or by the redistillation of distilled spirits, over or with juniper berries and other aromatics customarily used in the production of gin, and deriving its main characteristic flavor from juniper berries and reduced at time of bottling to not less than 80° proof, and includes mixtures of such distillates.

Whiskey – Whiskey is an alcoholic distillate from a fermented mash of grain distilled at less than 190° proof in such a manner that the distillate possesses the taste, aroma, and characteristics generally attributed to whiskey and withdrawn from the cistern room of the distillery at not more than 110° and not less than 80° proof, whether or not such proof is further reduced prior to bottling to not less than 80° proof; and also includes mixtures of such distillates for which no other standards of identity are prescribed.

Rye whiskey – Rye whiskey is whiskey which has been distilled at not exceeding 160° proof from a fermented mash of not less than 51% rye grain, and stored in charred new oak containers (if distilled on or after March 1, 1938).

Bourbon whiskey – Bourbon whiskey is whiskey which has been distilled at not exceeding 160° proof from a fermented mash of not less than 51% corn grain, and stored in charred new oak containers (if distilled on or after March 1, 1938).

Corn whiskey – Corn whiskey is whiskey which has been distilled at not exceeding 160° proof from a fermented mash of not less than 80% corn and stored in uncharred or used barrels.

Straight whiskey – Straight whiskey is an alcoholic distillate from a fermented mash of grain distilled at not exceeding 160° proof and withdrawn from the cistern room of the distillery at not more than 110° and not less than 80° proof, whether or not such proof is further reduced prior to bottling to not less than 80° proof, and is aged for not less than twenty-four calendar months.

Straight rye whiskey – Straight rye whiskey is straight whiskey distilled from a fermented mash of grain of which not less than 51% is rye grain.

Straight bourbon whiskey – Straight bourbon whiskey is straight whiskey distilled from a fermented mash of grain of which not less than 51% is corn grain.

Blended whiskey – Blended whiskey is a mixture which contains at least 20% by volume of 100 proof straight whiskey and, separately or in combination, whiskey or neutral spirits, if such mixture at the time of bottling is not less than 80° proof.

Blended rye whiskey – Blended rye whiskey, blended Bourbon whiskey or blended corn whiskey is blended whiskey which contains not less than 51% by volume of straight rye whiskey, straight Bourbon whiskey or straight corn whiskey.

Age may be claimed only for certain types of whiskey and only if stored under certain conditions. Present regulations require that all American type whiskies, other than corn whiskey, must be stored in new charred oak barrels before any age may be claimed on it. Age continues only as long as the whiskey remains in the original package. No age may be claimed on neutral spirits regardless of the type of cooperage used or length of maturation. This is in sharp distinction to the regulations of the United Kingdom and Canada. Both of these countries allow high proof distillates to be called “whisky” and permit age to be claimed on them. At present, certain interested groups are bringing pressure to bear to pass a regulation requiring all grain neutral spirits to be aged for two years. This requirement has economic significance for producers of spirits blends only, who would be required to expand their cooperage and warehouse facilities considerably.

The F.A.A. requires that all whiskey bottles be labeled and the labels must contain certain information. The bottle may use one or more labels. Usually two are used, a face label and a back label. The front label is known as the brand label while the back label is known as the Government label. The kind of whiskey, age, proof, etc., are placed on the label. If the whiskey is a blend, the different kind of whiskey and percentages must appear on the label. All bottles used for packaging distilled spirits must have the working “Federal law forbids sale or re-use of this bottle” blown into the shoulder of the bottle.

The government regulations concerning the distilling industry are so exacting and wide in scope that we have tried to give only the general picture. With this general outline, it should be possible to obtain more specific information when necessary.

Proof Spirit

The strength of alcoholic liquids is expressed for fiscal and other purposes in relations to a standard of diluted alcohol known as “proof spirits”.

A story of the origin of the terms proof and proof spirit is given in “The Carbohydrates and Alcohol” by Samuel Rideall (D. Van Nostrand Company, 1920; pp 176, 177). “The excise formerly tested the strength of spirits by pouring a certain amount on gunpowder. A light was then applied. If the spirit was above a certain strength ‘proof’ the gunpowder ultimately inflamed, but if weaker, the gunpowder was to must moistened by the water to be capable of explosion, and the sample was said to be under proof.”

Although a proof spirit standard is used both in England and in the United States, the two standards are not the same. British proof spirit is that mixture of alcohol and water which at the temperature of 51°F weighs exactly 12/13 of an equal measure of distilled water also at 51°F. It contains 49.28% of alcohol by weight and at 60°F it contains 57.10% of alcohol by volume and has a specific gravity of .991976.

In the United States, the proof spirit is considerably weaker than in England, being only 42.52% alcohol by weight and at 60°F, 50.0% by volume. It has a specific gravity of .993426.

The method relating the alcoholic strength of the liquid measured to the arbitrary standard also differs in British and in United States’ practice. In the former, spirits weaker than the standard are described as being so many degrees or so many percent under proof (U.P.). Thus by the term 20 percent or 20 degrees under proof is meant a liquid containing at 60°F as much alcohol in 100 volumes as 100-20 or 80 volumes of proof spirit. Pure water is 100° under proof. A spirit stronger than the standard is termed over proof (O.P.). A spirit of 50° O.P. is one of such strength that in 100 volumes it contains as much alcohol as 150 volumes of proof spirit.

As at 60°F, United States’ proof spirit is 50.0% alcohol by volume, proof of spirits is conveniently expressed here by multiplying by two the percentage of alcohol by volume. Proof spirit, the base of reference, is then 100° proof. Absolute or 100 percent alcohol is 200° proof.

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