For businesses looking to produce, bottle, or store distilled spirits in the United States, one of the first and most critical steps is obtaining the proper federal authorization: a permit for a Distilled Spirits Plant (“DSP”). This permit, issued by the Alcohol and Tobacco Tax and Trade Bureau (“TTB”), is required for most operations involving distilled spirits. Whether you are starting a new distillery, planning to offer contract distilling services, or storing bulk spirits, understanding what a DSP is—and what it takes to qualify—is essential.
What Is a DSP?
A DSP is a federally authorized facility where certain distilled spirits operations may take place. This includes:
- Production: Distilling spirits from raw materials such as grains, fruits, or sugar.
- Processing: Bottling, blending, or flavoring distilled spirits. This can also be considered “rectification.”
- Warehousing: Storing distilled spirits in bulk or packaged form under bond.
If you intend to engage in any of these activities, you must first obtain a DSP permit from the TTB. Operating without the required permit can result in significant penalties, including fines and forfeiture of product.
Who Needs a DSP Permit?
A DSP permit is required for:
- Distilleries producing spirits for commercial sale.
- Companies blending and/or bottling spirits purchased in bulk.
- Businesses storing spirits under bond (often contract bottlers or storage facilities).
Certain activities, such as producing spirits for personal use (home distilling), are currently illegal under federal law, regardless of scale.
TTB Requirements for DSPs
TTB approval involves multiple steps and strict compliance requirements:
- Premises Control – You must have a dedicated, secure location for your DSP operations. Typically, this can be established through a lease or deed document. Additionally, the facility layout, security measures, and access controls are subject to TTB approval.
- Registration and Permitting – You must file a federal basic permit application, including detailed ownership information and business disclosures.
- Bond Requirements – Many DSPs must obtain a bond, depending on the type and amount of distilled spirits handled. As of several years ago, legislation eliminated the bond requirement for certain eligible taxpayers. Industry members should seek guidance from an alcohol beverage attorney to determine whether or not a bond is required.
- Recordkeeping and Reporting – DSPs must maintain detailed records of production, processing, storage, and tax payments, and submit periodic reports to TTB.
- Labeling and Formulas – Many distilled spirits products require TTB formula approval and label approval (“COLA”) before they can be sold.
- Registration as a Food Facility (if applicable) – Certain DSP operations may require FDA registration.
Benefits of a DSP Permit
For companies entering the spirits industry, a DSP permit offers flexibility and opportunity, such as the following:
- A DSP can produce and bottle spirits for its own brand(s).
- A DSP can generally store and process bulk spirits, including blending and flavoring.
- A DSP may have the ability to enter into unique business models, such as contract bottling or private-label production.
How Long Does It Take?
Processing times for a federal DSP permit vary based on application completeness and TTB workload, but often take several months. A well-prepared application can avoid costly delays and additional requests for information. Hiring an attorney with significant experience handling TTB applications ensures you benefit from their in-depth knowledge of regulatory requirements, proven strategies to avoid common pitfalls, and ability to streamline the process for faster, more efficient approval.
How Lindsey Zahn P.C. Can Help
At Lindsey Zahn P.C., we help distilleries, contract bottlers, and spirits producers nationwide navigate the complex federal and state regulatory framework for distilled spirits plants. Our firm can:
- Determine whether your operations require a DSP permit and advise on the best licensing approach;
- Prepare and submit your TTB DSP permit application;
- Provide guidance on bond requirements, premises control, and security measures;
- Assist with formula approvals, label compliance, and ongoing reporting obligations; and
- Advise on contract distilling, bulk spirits handling, and co-packing operations, and develop or review agreements for such arrangements.
If you are considering launching a new distillery, engaging in contract production, or expanding your operations, contact us today to schedule an initial consultation. We’ll help you understand exactly what is required so your business is compliant and ready to open its doors.
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