What is an Ingredient Specification Sheet?
An ingredient specification sheet (also called a spec sheet or technical data sheet (TDS)) is a document that lists or describes the contents of an ingredient used to make your alcohol beverage product. We use ingredient specification sheets to understand the ingredients in a formula, so we can complete a thorough application review. The omission of a spec sheet when applying for formula approval is one of the most common reasons that formula applications are returned for correction.
When submitting an alcohol beverage formula, you should include a specification sheet for each ingredient that is made from more than one component. For example, if your formula contains a fruit juice that was made from water, apples, and sugar, a specification sheet that lists those components should be submitted for the fruit juice.
There are several ways to obtain a specification sheet for the ingredient used in your alcohol beverage product, such as the ingredient listing on the product label or the manufacturer’s website.
See Ingredient Specification Sheet (Spec Sheet): Guidance and Examples for more information.
Is it a Custom Crush or an Alternating Proprietorship Arrangement?
 We frequently receive inquiries from wineries on the differences between custom crush and alternating proprietorship arrangements. There are important federal tax, reporting, and permitting differences between the two — be sure to know which arrangement you are in so that you can be compliant with the regulations!
ALTERNATING PROPRIETOR ARRANGEMENTS
An alternating proprietor arrangement consists of two or more persons or entities taking turns using the same space and equipment to produce wine. In almost all situations, an existing proprietor-owner of a bonded wine premises agrees to rent space and equipment to a new proprietor. Such an agreement allows existing wineries to use excess capacity and gives new entrants to the wine business an opportunity to begin on a small scale without investing in equipment.
These arrangements must be formally approved by TTB through an application and approval process. Anyone making wine for sale must qualify with us as proprietor of a bonded winery and register the premises with TTB. Winery premises may not be used by or shared with any other party unless the necessary alternation applications have been approved by TTB. Regulations governing alternating proprietor arrangements are contained in 27 CFR 24.136.
“CUSTOM CRUSH” ARRANGEMENTS
A “custom crush” arrangement involves an agreement or formal contract under which a customer pays a wine producer to produce wine to order, after which the customer markets the wine. It is not an alternating proprietor arrangement. In a custom crush arrangement, the wine producer is authorized by TTB to make wine and is entirely responsible for producing the wine and for all related processing steps and regulatory requirements, which may include tax payment (unless the wine is transferred in bond to other bonded wine premises for these activities). The customer has none of these responsibilities, even when the custom crush customer may be involved in business decisions made about the wine, such as its production style, the appearance of its label, etc. TTB holds the producer/bottler accountable, not the custom crush customer. Even if the customer owns the grapes used to produce the wine, TTB still treats the transfer of the finished wine from the producer to the customer as a sale of wine for compliance purposes.
For more information on the requirements for alternating proprietorships for wineries and the distinctions between custom crush and alternating proprietorship arrangements, see Industry Circular 08-04: Alternating Proprietors at Bonded Wine Premises.
(Note: Industry Circular 08-04 has not been updated to reflect the Craft Beverage Modernization Act wine tax credits.)
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