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Federal regulators feel wrath of Oregon over limits on refillable wine jugs

By Shelby Sebens

PORTLAND, Oregon (Reuters) - Federal regulators are feeling the wrath of the entire Oregon congressional delegation over a ruling that threatens to crush a new state law allowing grocery stores and restaurants to sell refillable wine jugs.

The U.S. Alcohol and Tobacco Tax and Trade Bureau ruled last month that Oregon businesses selling bulk wine on-the-go would have to apply for status as wine bottling houses, which would require them to label and keep the same records as large-scale wineries.

That rankled many in Oregon, which last year became one of the first U.S. states to allow consumers to buy wine in refillable jugs called wine growlers, said Jana McKamey, government affairs manager of the Oregon Winegrowers Association.

Tom Hogue, tax and trade bureau spokesman, said the agency was looking at the federal law to find a solution in the next couple of weeks, if not sooner.

"We actually share the Oregon delegation's concerns and we've got the same goal," he said. "It's very important that we get something out there for everybody to use," he said.

The governor of neighboring Washington state, Jay Inslee, signed a similar law last month that allows wineries to sell growlers off their premise.

Oregon has more than 500 wineries, making it fourth in the nation in wine production, and businesses had sought to take advantage of the lower cost of selling wine from a keg, building on a similar trend for beer. Under federal law, bars and stores can sell beer growlers without a bottling license.

Oregon's seven federal lawmakers sent a letter on Tuesday to the tax and trade bureau arguing that its guidance, taken in response to questions submitted by wineries and retailers seeking clarification on the rules, puts a burden on businesses and could stall a burgeoning new market. Six Democrats and one Republican represent the state.

"This creates an administrative and bureaucratic barrier to expanding the wine growler program," McKamey said, adding the Oregon program was in its infancy.

"That's why we're concerned that creating this additional layer of bureaucracy might disincentivize some of these smaller shops and restaurants from participating in the program," she added.

(Editing by Cynthia Johnston and Lisa Shumaker)

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