Money & Business

Kombucha Industry Grappling With Regulatory Fight

By / Sep 29, 2015 (katyenka/ThinkStock)

Should the fermented tea drink be considered an alcoholic beverage? That question is driving a heated debate between brewers and regulators while they wait for improved testing methods.

It seems like a simple yes or no question: Is kombucha an alcoholic beverage?

The Alcohol and Tobacco Tax and Trade Bureau (TTB) thinks so, under certain circumstances. As explained on the agency’s website: “Under federal law, if the alcohol content of kombucha is 0.5 percent or more alcohol by volume, at any time during production, when bottled, or at any time after bottling, the kombucha is an alcohol beverage and is subject to TTB regulations.”

The kombucha industry is growing, as consumer demand for the fermented drink made from black or green tea increases (the market is expected to generate $1.8 billion by 2020), according to a recent MicroMarket Monitor report. That’s prompting regulators to keep a closer eye on producers to ensure that they’re adhering to the 0.5 percent limit.

But industry experts say TTB’s methods for determining alcohol percentage are outdated and inaccurate.

“From what we understand, the testing method that the Alcohol and Tobacco Tax and Trade Bureau is using is from 1935,” Kombucha Brewers International cofounder Hannah Crum told The Colorado Independent. “Obviously, kombucha as a product wasn’t around or was a product that they were even aware of at that time.”

The debate is partly due to the unique nature of the drink, which, when brewed properly, remains under the 0.5 percent alcohol limit under cold conditions. But some kombucha products contain active yeast, which can ferment and increase alcohol levels over time. Numerous other factors, like fermentation practices, bacterial activity, and ingredients can have an impact on the percentage of alcohol in the drink.

Tensions Are Brewing

Opposition to TTB’s current approach to regulation is gaining momentum, and members of the kombucha industry have won the support of at least one member of Congress.

Earlier this month, Rep. Jared Polis (D-CO) sent a letter to TTB administrator John J. Manfreda, requesting that the agency abstain from hitting kombucha brewers with any enforcement actions until more effective testing measures are established.

Those measures, which are being worked on by the Association of Organic Analytical Chemists, as well as Kombucha Brewers International and five of its member breweries, are expected to be ready in the second half of 2016.

Meanwhile, in letters from TTB, kombucha producers are being told that they must either register their drinks as alcoholic beverages or alter their recipes to avoid being fined.

“None of these options are acceptable considering the current product is not an alcohol and any change would destroy the integrity of the product,” Polis wrote.

TTB spokesman Tom Hogue told The Denver Post that proper labeling is essential to make customers aware of the possible contents of the beverage, and testing is needed to preserve a “level playing field” for those producers that comply with government standards.

Morgan Little

Morgan Little is a contributor to Associations Now. More »

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