Midwest Beer And Beverage Distributors: European Imports

MIDWEST BEER AND BEVERAGE DISTRIBUTION
Insert Your Name Here
Assignment 7
Elephant Consultants
University/College
BEER AND BEVERAGE IMPORT FEASIBILITY STUDY
Alcoholic and Beverage Import Requirements
To start importing and purchasing beer and beverage products from a European company, MBBD will have to obtain basic import permits from four federal agencies. These four agencies are Food and Drug Administration (FDA), the Alcohol and Tobacco Tax and Trade Bureau (TTB), the U.S. Department of Agriculture (USDA) and Customs and Border Protection (CBP). TTB requires that importers of alcoholic beverages such as wine and distilled spirits to obtain the Federal Basic Permit. MBBD will need to apply for the FBP online so as to fully comply with Federal Alcohol Administration Act (FAA). Although MBBD qualifies to get the Basic Import Permit, it may not be the cost effective option as compared to contracting an already licensed importer even though it can lead to cost savings in the long term. MBBD will also need a standard wholesaler’s permit, which can be easily obtained by registering on permits online.
The company must also check to ensure that its European trading partners are registered with the Food and Drug Administration (FDA) as per the U.S Alcohol import requirements and the Food Facility Registration Regulations. In addition a commercial invoice, packing list, bill of lading and an arrival notice are just but few of the mandatory import documents. The Federal import guidelines mandate every importer of Alcoholic beverages to obtain a Certificate of Label Approval (COLA) from TTB in order to comply with the FAA import regulations. The COLA certificate is issued for free even though pre-COLA authorization and evaluation is required based on content and tax classification. Pre-approval rules vary based on the type of drink and country of origin. Still, compliance with USDA organic regulations is mandatory.
Taxes, Duty and Import Fees
The import is also required to pay taxes, duties and other federal and state fees related to alcohol import. MBBD will therefore have to pay all taxes and duties as per alcohol import guidelines. Therefore compliance with the Internal Revenue Services (IRS) and CPB excise duty and taxes levied on Alcoholic beverages will require that MBBD be registered with IRS.
Direct importation from a European dealer would be the least cost option of procuring the products; however, considering the enormous regulatory and shipping requirements, it might not be the best option. The company must also check to ensure that it fully complies with the Miscellaneous Trade and Technical Corrections Act of 2004 for grape wines. To comply, MBBD will have to obtain the Natural Wine Certificate from the TTB. However, countries with enological practices are exempt from this requirement, most of which are EU countries.
Cargo originating from a European port will be shipped directly to the port of Milwaukee. The port is ideal due to logistical reasons such as proximity to Chicago, Illinois and the fact that it is served by a robust transport network. One shipping option from the port to Chicago will be by the Federal Interstate Highway system I-94/794. There is already an Interstate Highway linki...