Laws and Regulations

hardeng(z9FL)October 31, 2012

Does anyone know or can advise me on the legalities involved in bottling and selling pepper sauce?

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ottawapepper

I found this post on another forum an interesting read. It's a bit of a rant but it does raise valid points and touches on some basic legal requirements.

FWIW,

Bill

Here is a link that might be useful: Legal Sauce -vs- Hobby Sauce

    Bookmark   October 31, 2012 at 8:52AM
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lorabell NC(8)

If you are serious, become a LLC (legal liability coorportion) is about the most important thing to do, not that expensive, legal zoom will do it for around 600.

But first, every state has different rules on home preperation for commercial items. About 20 states allow for certain items to be prepared at home.

Some states don't do inspections for certain Farmers Markets type items like jams etc (North Dakota and Arkansas for example)
Some states require a major inspection of home inside and out (North Carolina -Me)

Some states require a commercial kitchen in your home which can cost up to 20 thousand or so to convert (Nebraska as example) which makes it more cost effective to just rent a commercial kitchen such as a restaurant.

And some areas it's just not possible to convert a home into commercial like DC.

S0, after figuring out what your state lets you do at home, the next step is if they allow for Sauce that needs to be processed. Take me, I am allowed to dry peppers and such, grind and bag them as seasoning, and sell commercially. I am not allowed to actually mix those very seasonings with water, vinigar, whatever, process, and sell as hot sauce. If I every want to go that route, I would need to get another certification from State, then rent out commericial space. (Have done that before on other products, many smaller restaurants are glad to do that for extra monies during midnight hours)

Getting my licenses and permits in 8 or so states and a couple oversea tours has challanged my patience more then once. The bottom line is that most everything is possible, just not the way you might have first invisioned!
A couple classes, some certification, a little insurance, renting a commercial kitchen if home is not possible, a little business plan, and you can sell a national product with unlimited possibilities, or keep it small and local.

Just for the record, what I sell out of my home is jams/jellies/honey/breads/cakes/ etc I never have packaged peppers or spices - this is only my first year of hot peppers and anything other then bells.

Hope this helps.

    Bookmark   October 31, 2012 at 10:56AM
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DMForcier(8 DFW)

It is generally permitted on eBay. No business license or health certificate required. But there are a few requirements, like the package must be sealed (IIRC). Read about it there. Go to Customer Support and type in "sell food" or some similar.

    Bookmark   October 31, 2012 at 2:28PM
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lorabell NC(8)

EBAY's first line on customer service area of food selling policies:

Before listing food and healthcare items, be sure to familiarize yourself with federal and state laws and regulations.

Ebay might not require you to show proof of your permits, but that doesn't mean you still don't have to have them.

    Bookmark   October 31, 2012 at 3:32PM
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nc_crn

Without a proper legal setup (especially legally separating your business from yourself), making someone sick can cost you a -ton- of money...especially in the US with our healthcare costs.

Suing a business out of business is a different animal from suing your family out of a home, but if someone racks up $5000/$10000+ in expenses over a health scare and decide to come knocking on your door with a civil suit...it helps to have your paperwork in order.

If you sell across state lines you're opening up another door of liability (and protections you should take for both yourself and the consumer).

    Bookmark   October 31, 2012 at 5:20PM
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tsheets(5)

Never considered actually going into business myself. But, I'm a little surprised that it's ok to grind the peppers into powder, but, not to add water/vinegar/salt to make a pepper sauce. I can see there being less restriction on whole pods (fresh or dried)...it's produce only, no processing has been done. But, if they let you process them into powder, why not pureed fresh pods, or reconstituting the powder? Just seems like a weird place for them to draw the line.

Interesting thread!

    Bookmark   October 31, 2012 at 7:22PM
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lorabell NC(8)

nc-crn, absolutely right that one needs to have ducks in line. Some other sellers I know think that having Product Liability Insurance is enough when selling home produced goods(even with proper inspections), but if something was to go very wrong and someone does a civil suit, everything you own, and everything you make in the future can be in danger. If you're serious about selling, just do the LLC, then only what the business is worth can be sued, not your house, your car, your life insurance. And trust me, there are poeple out there willing to sue about anything!

Tsheets, it does get 'interesting' on what is allowed and what isn't. I do a Hot Pepper Jam, can't have any pepper pieces whatsoever added, but I can boil a hot pepper in a tight sieve/cheesecloth with the fruit to add the heat. Go figure.

And there are ways around the traditional. I've catered with a chef who had access to commercial kitchen in a state that I couldn't get my home processing license. Worked under his unbrella. Where there is a will, there's a way...Legally.

    Bookmark   October 31, 2012 at 9:19PM
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ottawapepper

tsheets,

I can understand your reasoning but fresh dried peppers are very different than canned (jarred) processed peppers. Processing (fermenting etc.) adds a whole new layer of complexity.

Purchased "sauces" are generally sold as a sauce safe for shelf storage. Clostridium botulinum thrives in a low oxygen, low acid warm environment... ex. bottled low acid sauce on a room temperature shelf. If not processed properly, it can kill.

Note: Clostridium botulinum food poisoning is not your survivable run of the mill salmonella - botulism kills 98% of the time!

FYI, here's an excerpt from a certified food preservation member on the Harvest forum on botulism.

Several conditions must be present for the germination and growth of Clostridium botulinum spores. Acid level is a primary factor. Acidity is measured on a pH scale of 0 to 14, with 7 considered neutral, 0 to 7 acidic and 7 to 14 alkaline. A pH near 7 or neutral favors the growth of Clostridium botulinum, while growth is inhibited at a pH of 4.6 or lower. The pH of a food also has an influence on the amount of heat necessary to kill the spores of Clostridium botulinum. The higher the pH (lower the acid level), the greater the amount of heat needed to kill the spores.

A second important factor affecting the growth and toxin production of Clostridium botulinum is temperature. Proteolytic types grow between temperatures of 55 and 122 degrees F, with most rapid growth occurring at 95 degrees F. Nonproteolytic types grow between 38 and 113 degrees F, with an optimum for growth and toxin production at about 86 degrees F. For these types, refrigeration above 38 degrees F may not be a complete safeguard against botulism.

As storage temperatures increase, the time required for toxin formation is significantly shortened.

FWIW,

Bill

    Bookmark   October 31, 2012 at 9:20PM
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marc813

I filed for a LLC for free. You do need to pay a fee for a business liscence and another fee to sell in you county but they are like 40 bucks total. You need a FEIN ( federal ID #) to be able to collect and to pay taxes. All seems pretty confusing but really is not. I did one for my business a couple of years ago and took about a week to be legal.

You could use legalzoom but there are HUGE fees that are paid that are not needed. Like I stated before... what legal zoom charges for can be acomplished with about 40 dollars.
Try sunbiz.org
and
the department of revenue (IRS)
http://dor.myflorida.com/dor/

This is just my 2c and is what I did to start a business in the state of Florida a couple of years ago.

    Bookmark   October 31, 2012 at 9:52PM
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rockguy(7a)

There is a USDA class that's mandatory if you sell across state lines, etc. It's given at different schools, takes a couple days. Here's one...(link below). Google for the one for your state. Usually only held a few times a year.

Here is a link that might be useful: Better process schools

    Bookmark   November 1, 2012 at 6:46AM
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hardeng(z9FL)

Okay, I can see this has become way more complex and expensive for a small-time farmer. How about this- who would I seek to do the bottling for me?

    Bookmark   November 1, 2012 at 6:58AM
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romy6(9)

Nothing is as easy at it seems. You could find someone that has a commercial kitchen and a liscense already and make a partnership.

    Bookmark   November 1, 2012 at 3:09PM
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lorabell NC(8)

This last weekend I attended a local craft show and there was a guy selling barbaque and hot sauses. Hummm, I thought. Started chit chating after tasting his sauses from hot to inferno without blinking an eye. He was impressed. Asked where he made his... a couple hours away and legit, just starting out. Got my attention. Asked if he grew his own peppers... not yet, but plans to someday. Really got my attention with my freezer full and my need to plant 300+ peppers next year whether I needed them or not.

Would you be interested...was my next sentence...he was. The next day I brought him a mixure of my late season and dehydrated peppers, and we will be doing business together.

Gotta put yourself out there, never hurts to ask. Never know what will fall in your lap.

    Bookmark   November 21, 2012 at 11:36AM
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DMForcier(8 DFW)

Way to go, Lorabell !!

Please let us know the guy's reaction when he gets a taste of the nuclears.

    Bookmark   November 21, 2012 at 3:13PM
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