BATF out of hell.

• Author: Sullum, Jacob
• Position: Bureau of Alcohol, Tobacco and Firearms

Even before Waco, people in the booze business were afraid of the Bureau of Alcohol, Tobacco, and Firearms.

A 12-ounce bottle of Grant's Scottish Ale contains 170 percent of the U.S. Recommended Daily Allowance for vitamin B-12. I can legally tell you this because I don't make beer for a living. But Bert Grant, creator of Grant's Scottish Ale, can't.

In January 1993, a few months after Grant and his wife, Sherry, started putting nutritional information on six-pack cartons of the beer, David Dunbar, an inspector with the Bureau of Alcohol, Tobacco, and Firearms, visited their Yakima, Washington, brewery. Dunbar told them that Yakima Brewing & Malting is not allowed to inform consumers about the vitamins and minerals in a bottle of beer. This surprised the Grants, because neither the Federal Alcohol Administration Act nor the regulations issued under it address nutritional information. The regulations do, however, forbid false or misleading claims about "curative or therapeutic effects," and the BATF cited a 1954 regulatory interpretation that says "any reference to vitamin content in the advertising of malt beverages would mislead a substantial number of persons to believe that consumption of the product would produce curative or therapeutic effects."

The Grants had to stop using the Scottish Ale six-pack cartons and drop plans to put nutritional information on the packaging of their other beers. But the rule seemed silly to them. So Sherry Grant wrote a press release about the BATF's order and sent it to some trade journals. "We felt it should be brought out, because we wanted the law changed," Bert explains. The story eventually attracted attention from the mainstream press, including Playboy and radio commentator Charles Osgood, as well as industry publications. The coverage was sympathetic to the Grants and critical of the BATF. An editorial in the Vancouver Columbian, for example, called the BATF policy "hypocritical on its face" and argued that "more information, not less, is the way to encourage better choices."

"Then the coincidences started," Bert recalls. Dunbar, the BATF agent, came back several times to look at the Grants' records and grill the couple and their employees, spending a total of three weeks at the brewery. Sherry says Dunbar, who declines to comment on the case, had an intimidating, confrontational manner. "It scared me, because in the back of |my~ mind, there was always this picture of Waco," she says. "And then I got really, really angry, because I thought, 'This is wrong. I should not have to be afraid of my own government."'

During 1993, Bert estimates, the Grants had to devote about a fifth of their time to dealing with one regulatory problem after another. Among other things, the BATF said they had to get the label for Grant's Celtic Ale reapproved because of a change in color. And the bureau decided that Grant's Spiced Ale, which the brewery had been producing since 1985, had a "frivolous" name that required a genetic description--"A Fermented Ale with Added Spices and Honey"--in letters as big as the name.

Worst of all, the alchemists at the BATF transformed Grant's Cider, which the company had been producing since 1984, into a wine by bureaucratic edict. The financial consequences of that trick are serious. Under federal law, hard cider is exempt from excise taxes, but wine is taxed at $1.07 a gallon. The BATF claims that the Grants owe back taxes on the cider-cum-wine for nine years, plus the annual occupational tax for wineries, plus interest, plus penalties.

The bureau has not yet informed the Grants what all that will come to, but it could be hundreds of thousands of dollars. For a small business like Yakima Brewing & Malting, which produces about 9,000 barrels a year, that would be a significant hit. And the tax liability is in addition to some $100,000 in legal fees and lost sales that Bert estimates the hassles with the BATF have already cost the brewery.

The Grants feel they are being punished for criticizing the bureau's censorship. "It doesn't matter what you do for a living," Sherry says. "You still have a right to free speech. And I shouldn't have to worry about the government coming down on me for what I think or say."

The BATF denies any link between the Grants' recent troubles and the conflict over nutritional information. "There is no...