What are the disadvantages for a company that does not claim nonbeverage drawback?
If you do not claim nonbeverage drawback, your cost of 190-proof alcohol is 13-times higher than your competitors who claim drawback! (Your raw material cost for the alcohol is an additional $3.775 per pound tax compared to 28 per pound tax after drawback. Therefore, a flavor or extract at 50% alcohol content costs your company at least $12 per gallon more to produce than your competitors who claim nonbeverage drawback.) Additionally, the risk of not filing nonbeverage formulas with the TTB lab is such that a manufacturer may unknowingly be manufacturing and selling flavors, extracts, or other products that are “fit for beverage use” and therefore would be violating the law for selling alcoholic beverages or potable alcoholic preparations without a permit and would be subject to fines and penalties.
