Modernization of the Labeling and Advertising Regulations for Distilled Spirits and Malt Beverages
| Published date | 09 February 2022 |
| Citation | 87 FR 7526 |
| Record Number | 2022-00841 |
| Section | Rules and Regulations |
| Court | Alcohol And Tobacco Tax And Trade Bureau |
Federal Register, Volume 87 Issue 27 (Wednesday, February 9, 2022)
[Federal Register Volume 87, Number 27 (Wednesday, February 9, 2022)]
[Rules and Regulations]
[Pages 7526-7622]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-00841]
[[Page 7525]]
Vol. 87
Wednesday,
No. 27
February 9, 2022
Part IIDepartment of the Treasury-----------------------------------------------------------------------Alcohol and Tobacco Tax and Trade Bureau-----------------------------------------------------------------------27 CFR Parts 5 and 7Modernization of the Labeling and Advertising Regulations for Distilled
Spirits and Malt Beverages; Final Rule
Federal Register / Vol. 87, No. 27 / Wednesday, February 9, 2022 /
Rules and Regulations
[[Page 7526]]
DEPARTMENT OF THE TREASURY
Alcohol and Tobacco Tax and Trade Bureau
27 CFR Parts 5 and 7
[Docket No. TTB-2018-0007; T.D. TTB-176; Ref: T.D. TTB-158 and Notice
Nos. 176 and 176A]
RIN 1513-AB54
Modernization of the Labeling and Advertising Regulations for
Distilled Spirits and Malt Beverages
AGENCY: Alcohol and Tobacco Tax and Trade Bureau, Treasury.
ACTION: Final rule; Treasury decision.
-----------------------------------------------------------------------
SUMMARY: The Alcohol and Tobacco Tax and Trade Bureau (TTB) is amending
certain of its regulations governing the labeling and advertising of
distilled spirits and malt beverages to address comments it received in
response to a notice of proposed rulemaking, Notice No. 176, published
on November 26, 2018. On April 2, 2020, TTB finalized certain labeling
amendments arising out of that proposed rule. This document finalizes
the reorganization of, and addresses the remaining issues related to,
the labeling of distilled spirits and malt beverages. Reorganizing the
wine labeling regulations, and addressing the remaining labeling issues
related to wine, as well as reorganizing and finalizing the regulations
related to the advertising of wine, distilled spirits, and malt
beverages, will be accomplished in future rulemaking. The regulatory
amendments in this document will not require industry members to make
changes to alcohol beverage labels or advertisements but instead
provide additional flexibility to make certain changes going forward.
DATES: This final rule is effective March 11, 2022.
FOR FURTHER INFORMATION CONTACT: Christopher M. Thiemann or Kara T.
Fontaine, Regulations and Rulings Division, Alcohol and Tobacco Tax and
Trade Bureau, 1310 G Street NW, Box 12, Washington, DC 20005; telephone
202-453-2265.
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Background
A. TTB's Statutory Authority
B. Notice No. 176
C. T.D. TTB-158
D. Scope of this Final Rule
E. Issues That Are Outside of the Scope of This Final Rule
F. Proposals Not Being Adopted
II. Discussion of Specific Comments Received and TTB Responses
A. Issues Affecting Multiple Commodities
B. Amendments Specific to 27 CFR part 5 (Distilled Spirits)
C. Amendments Specific to 27 CFR part 7 (Malt Beverages)
D. Amendments of the Advertising Regulations
E. Impact on Public Guidance Documents
III. Derivation Tables for Finalized Parts 5 and 7
IV. Regulatory Analyses and Notices
A. Regulatory Flexibility Act
B. Executive Order 12866
C. Paperwork Reduction Act
V. Drafting Information
List of Subjects
Authority and Issuance
I. Background
A. TTB's Statutory Authority
Sections 105(e) and 105(f) of the Federal Alcohol Administration
Act (FAA Act), 27 U.S.C. 205(e) and 205(f), set forth standards for the
regulation of the labeling and advertising of wine, distilled spirits,
and malt beverages (referred to elsewhere in this document as ``alcohol
beverages'').
The Alcohol and Tobacco Tax and Trade Bureau (TTB) administers the
FAA Act pursuant to section 1111(d) of the Homeland Security Act of
2002, codified at 6 U.S.C. 531(d). The Secretary of the Treasury (the
Secretary) has delegated to the TTB Administrator various functions and
duties in the administration and enforcement of this law through
Treasury Department Order 120-01. For a more in-depth discussion of
TTB's authority under the FAA Act regarding labeling, see Notice No.
176.
B. Notice No. 176
The TTB regulations concerning the labeling and advertising of
alcohol beverages are contained in 27 CFR part 4, Labeling and
Advertising of Wine; 27 CFR part 5, Labeling and Advertising of
Distilled Spirits; and 27 CFR part 7, Labeling and Advertising of Malt
Beverages. These 27 CFR parts are hereafter referred to as parts 4, 5,
and 7, respectively.
On November 26, 2018, TTB published in the Federal Register Notice
No. 176 (83 FR 60562), ``Modernization of the Labeling and Advertising
Regulations for Wine, Distilled Spirits, and Malt Beverages.'' The
principal goals of that proposed rule were to:
Make the regulations governing the labeling of alcohol
beverages easier to understand and easier to navigate. This included
clarifying requirements, as well as reorganizing the regulations in 27
CFR parts 4, 5, and 7 and consolidating TTB's alcohol beverage
advertising regulations in a new part, 27 CFR part 14.
Incorporate into the regulations TTB guidance documents
and current TTB policy, as well as changes in labeling standards that
have come about through statutory changes and international agreements.
Provide notice and the opportunity to comment on potential
new labeling policies and standards, and on certain internal policies
that had developed through the day-to-day practical application of the
regulations to the approximately 200,000 label applications that TTB
receives each year.
TTB requested comments from the public and all interested parties
on the regulatory proposals contained in Notice No. 176. TTB stated
that it was particularly interested in comments that address whether
the proposed revisions to the labeling and advertising regulations will
continue to protect the consumer by prohibiting false or misleading
statements and requiring that labels provide the consumer with adequate
information about the identity and quality of the product. Where TTB
proposed substantive changes, TTB sought comments on the proposals for
further appropriate improvements. With respect to the few proposed
changes in Notice No. 176 that might require changes in current
labeling or advertising practices, TTB sought comments on the impact
that the proposed changes would have on industry members and any
suggestions as to how to minimize any negative impact.
TTB also solicited comments from consumers, industry members, and
the public on whether such changes would adequately protect consumers.
Any regulatory proposals put forward by TTB on this issue would, of
course, have to be consistent with the statutory requirements of the
FAA Act.
The comment period for Notice No. 176 originally closed on March
26, 2019, but was reopened and extended at the request of commenters
(see Notice No. 176A, 84 FR 9990). The extended comment period ended on
June 26, 2019. TTB received and posted 1,143 comments in response to
Notice No. 176. Commenters included trade associations, consumer and
public interest groups, foreign entities, a Federally-recognized
American Indian tribe, State legislators and members of Congress,
industry members and related companies, and members of the public. The
vast majority of comments addressed proposals relating to distilled
spirits, with nearly 700 comments addressing the proposed amendment on
the size and shape of oak barrels used to age distilled spirits.
[[Page 7527]]
TTB is also taking into consideration for purposes of this
rulemaking earlier comments that were submitted to the Department of
the Treasury in response to a Request for Information (RFI) published
in the Federal Register on June 14, 2017 (82 FR 27212). The RFI invited
members of the public to submit views and recommendations for Treasury
Department regulations that could be eliminated, modified, or
streamlined to reduce burdens. The comment period for the RFI closed on
October 31, 2017.
Eight comments on the FAA Act labeling regulations, which included
28 specific recommendations, were submitted in response to the RFI. For
ease of reference, TTB has posted these comments in the docket for this
rulemaking. TTB is considering all of the relevant recommendations
submitted in response to the RFI either as comments to Notice No. 176
or as suggestions for separate agency action, as appropriate.
C. T.D. TTB-158
On April 2, 2020, TTB published T.D. TTB-158 in the Federal
Register (85 FR 18704), which finalized certain proposals from Notice
No. 176, and announced its decision not to move forward with certain
other proposals. Generally, the amendments that TTB adopted in T.D.
TTB-158 were well-supported by commenters, could be implemented
relatively quickly, and would either give more flexibility to industry
members or help industry members understand existing requirements,
while not requiring any current labels or advertisements to be changed.
TTB did not incorporate the proposed reorganization of the regulations
in T.D. TTB-158. Instead, amendments to the TTB regulations were made
within the framework of the existing regulations.
D. Scope of This Final Rule
In this rulemaking, TTB is finalizing the reorganization proposed
in Notice No. 176 for parts 5 and 7. This includes breaking up large
existing sections into smaller sections to improve clarity and
readability, resulting in a larger number of overall sections but not a
larger number of regulatory requirements. TTB is also adopting many
proposals that incorporate current policy into the regulations,
providing improved transparency for industry and facilitating overall
compliance. This final rule also addresses comments that TTB received
on the proposed regulatory provisions for all of parts 5 and 7 by
incorporating changes in the regulations; announcing that TTB will not
move forward with some proposed changes; and identifying proposals or
issues raised that will be considered for future rulemaking.
The document also includes liberalizing changes for distilled
spirits or malt beverages that are either unique to a single commodity
(such as the keg collar amendments, which are specific to malt
beverages), or which largely bring the distilled spirits and malt
beverage regulations into conformity with current policy already
adopted for wine labeling (such as the liberalizing changes that allow
information previously required to appear on a ``brand label'' to
appear anywhere on the container, as long as certain elements of
mandatory information appear in the same field of vision).
As previously indicated, this document does not contain any
amendments that will require changes to distilled spirits or malt
beverage labels or advertisements.
TTB is also adopting clarifying and liberalizing changes that will
remove certain outdated regulatory restrictions on labeling and
otherwise allow additional flexibility in labeling requirements that
were proposed in Notice No. 176. Examples include providing additional
flexibility in allowing the labeling of kegs with ``keg collars'' and
``tap covers'' that are not firmly affixed to the keg under certain
circumstances to facilitate the reuse of kegs by different brewers; and
removing some outdated restrictions on the use of ``disparaging''
statements on labels if such statements are truthful and non-
misleading.
In this final rule, TTB is not amending the labeling or advertising
regulations in part 4, which relate to wine. The comments on the
proposed amendments to part 4 raised several issues that are unique to
wine and require further analysis. Accordingly, TTB plans to address
these issues in a future rulemaking, which will reorganize part 4 in a
manner similar to the way in which parts 5 and 7 are being reorganized.
The future rulemaking on part 4 will also address the substantive
issues raised by the commenters on the labeling and advertising of
wine. At that time, TTB will also pursue the reorganization of the
advertising regulations pertaining to wine, distilled spirits, and malt
beverages in a new part 14, as proposed in Notice No. 176. In the
interim, existing policies will continue for wines.
E. Issues That Are Outside of the Scope of This Final Rule
TTB received some comments that either asked TTB to take action
with regard to separate rulemaking projects or petitioned for
rulemaking on specific issues. These comments are considered to be
outside of the scope of this rulemaking but will be evaluated as
suggestions for future rulemaking by TTB.
1. Separate Rulemaking Initiatives
In Notice 176, TTB identified several ongoing rulemaking
initiatives related to the labeling and advertising of alcohol
beverages that would be handled separately from the proposed rule,
stating as follows:
There are a number of ongoing rulemaking initiatives related to
labeling and advertising of alcohol beverages that will be handled
separately from this proposed rule due to their complexity. For
example, this document does not deal with ``Serving Facts''
statements, an issue that was the subject of a 2007 notice of
proposed rulemaking (see Notice No. 73, 72 FR 41860, July 31, 2007)
and TTB Ruling 2013-2. Nor does TTB address its current policy
requiring statements of average analysis on labels that include
nutrient content claims. Industry members should continue to rely on
TTB's published rulings and other guidance documents on these
issues. TTB's policy on gluten content statements is still an
interim one; therefore, that issue is not addressed in the proposed
rule (see TTB Ruling 2014-2). Substantive changes to allergen
labeling requirements are not addressed in this document. Standards
of fill requirements are not addressed in this document but TTB
plans to address them in a separate rulemaking document.
Subsequent to the publication of Notice No. 176, TTB published
Ruling 2020-2, which put into place updated policy on gluten content
statements. Accordingly, comments that TTB received on these issues
will either be treated as suggestions for future rulemaking or as
comments on other current rulemaking initiatives.
a. Serving Facts and Allergen Labeling
The Center for Science in the Public Interest (CSPI), the Consumer
Federation of America, and the National Consumers League submitted a
joint comment to the Secretary of the Treasury, which referenced prior
rulemaking initiatives relating to ``Serving Facts'' and allergen
labeling. The comment asked the Secretary to instruct TTB:
to withdraw the proposed rule and to issue a new proposal providing
a mandatory, standardized declaration covering alcohol content by
percentage and amount, serving size, calories, ingredients, allergen
information, and other information relevant to consumers. This rule
could be based on the prior regulatory dockets already underway and
would provide much-needed closure to those considerable efforts.
[[Page 7528]]
TTB received many other comments urging the adoption of mandatory
allergen labeling, mandatory ingredient labeling, and mandatory
nutrient labeling.
As noted above, TTB specifically identified these issues as being
outside the scope of Notice No. 176. Accordingly, TTB will consider
these comments as a suggestion for future rulemaking.
b. Standards of Fill
In Notice No. 176, TTB identified standard of fill requirements as
being outside of the scope of this rulemaking, and explained that TTB
planned to address standards of fill in a separate rulemaking document.
However, Notice No. 176 included a proposal to address ``aggregate''
standards of fill in a manner that is based on current policy. In 1988,
TTB's predecessor agency started permitting bottlers and importers of
wine and distilled spirits products to use containers that did not meet
a standard of fill provided that the non-standard of fill containers
were banded or wrapped together and sold as a single wine or distilled
spirits product that, in total, met an approved standard of fill. For
example, a wine or distilled spirits product sold in a package of
thirty 25 mL containers to meet an authorized standard of fill of 750
mL would be an aggregate package under this policy. While this type of
aggregate packaging has been permitted for some time, TTB's policy
(which includes several conditions that must be met to qualify for
treatment as an aggregate standard of fill) has not yet been codified
in the regulations. In Notice No. 176, TTB proposed to codify the
policy in the regulations, with certain revisions.
In response to Notice No. 176, TTB received 79 comments regarding
standards of fill. Only a few of these comments addressed aggregate
standards of fill. Instead, the comments generally focused on whether
standards of fill should be eliminated entirely, and if not, what new
standards of fill should be added to the wine and distilled spirits
regulations. Accordingly, TTB included these comments in the rulemaking
docket for its separate rulemaking project that focused on standards of
fill.
On July 1, 2019, TTB published two notices of proposed rulemaking
on standards of fill in the Federal Register. See Notice No. 182 (84 FR
31257) and Notice No. 183 (84 FR 31264). On December 29, 2020, after
reviewing the comments received in response to these notices, as well
as the 79 comments concerning standards of fill that were submitted in
response to Notice No. 176, TTB published in the Federal Register T.D.
TTB-165 (85 FR 85514), which amended the regulations in parts 4 and 5
to add seven new standards of fill for wine and distilled spirits. TTB
also stated that it will conduct rulemaking to propose the addition of
several new standards of fill for wine, including the 180, 300, 360,
550, 720 milliliters, and 1.8 L sizes.
TTB believes it would be premature to adopt final regulations on
aggregate standards of fill before TTB, the industry, and the public
have the opportunity to evaluate whether the expansion of the number of
standards of fill available to industry members affects the merits of
codifying in the regulations its aggregate standard of fill policy.
Accordingly, while TTB will continue to enforce its current policy on
aggregate standards of fill, it is not adopting regulations on this
issue at this time, but will instead evaluate the need for further
rulemaking on this question.
c. Petition on Agency Guidance
In response to Notice No. 176, TTB also received a petition from
the New Civil Liberties Alliance requesting that the Treasury
Department initiate a rulemaking process to promulgate regulations
prohibiting any departmental component from issuing, relying on, or
defending improper agency guidance. This petition is outside of the
scope of Notice No. 176.
d. Comments and Petitions on Standards of Identity for New Classes of
Distilled Spirits Products
TTB received several comments requesting the creation of new
standards of identity for various distilled spirits products that TTB
did not propose in Notice No. 176. For example, Privateer International
asked that the regulations be amended to create a standard of identity
for ``Straight rum.'' The comment stated that if TTB determined that
the proposal was not within the scope of Notice No. 176, it should be
considered as a petition under 27 CFR 70.701(c). Other commenters
requesting new standards of identity for various distilled spirits
products included E&J Gallo Winery (for Superior Grape Brandy), Desert
Door (for Sotol), the Irish Spirits Association (for Irish Cream
Liqueur), and Domeloz Spirits (for Somel).
After carefully reviewing these requests, TTB has determined that
it would not be appropriate to move forward on any of these issues
without first soliciting public comment on the proposed standards of
identity. Accordingly, TTB will treat these comments as a request for
further rulemaking and will evaluate them separately from this
rulemaking.
TTB also received comments in support of petitions that had
previously been filed with TTB but were not incorporated into the
proposed amendments in the notice. For example, the American Single
Malt Whiskey Commission submitted a comment in which it renewed its
petition to include ``Single malt whiskey'' as a standard of identity
in 27 CFR part 5. TTB received over 250 comments in support of this
petition. Similarly, Singani63 submitted comments in support of a
petition to establish a standard of identity for ``Singani,'' and
SpiritsNL submitted comments in support of a petition to establish
standards of identity for ``Genever.'' Because these issues were not
specifically put forward for comment in Notice No. 176, the public and
the industry were not given an opportunity to comment on the standards
of identity suggested by the petitioners. TTB has determined that
actions on these petitions would be premature without seeking public
comment on the petitioned-for standards of identity. Accordingly, TTB
will consider these comments for future rulemaking.
2. Other Issues Outside of the Scope
TTB also received comments on other topics that relate to
regulatory provisions that are not in parts 4, 5, or 7 (such as
Internal Revenue Code reporting requirements) or issues that were not
aired for comment (such as regulations on private labels). TTB will
treat these comments as suggestions for future rulemaking.
3. Label Approval Requirements
TTB also sought comments on whether more significant changes to the
label approval process, such as expanding the categories of optional
information that may be revised without TTB approval or limiting the
scope of TTB's prior review of labels to certain mandatory information,
should be considered. As noted earlier in this document, the FAA Act
generally requires the submission of applications for label approval
before bottlers or importers introduce their products into interstate
commerce. As part of its label review process, TTB reviews both
optional and mandatory information on labels. With regard to optional
information, TTB's main goal is to ensure that such information does
not mislead consumers.
While TTB received some comments with regard to the larger issue of
ways to streamline the label approval process, TTB has determined that
adoption of
[[Page 7529]]
any regulatory amendments in response to these comments is premature,
without providing industry members and the general public with the
opportunity to directly comment on such proposals.
F. Proposals Not Being Adopted
Some changes proposed in Notice No. 176 were opposed by commenters
who provided substantive comments suggesting that the proposed policies
required changes to existing labels, required industry members to incur
costs, or did not have the intended result within the purpose of the
FAA Act. As a result, TTB is not finalizing the following proposals:
An amendment that proposed to clarify and somewhat expand
existing requirements with regard to placing certain label information
on closed ``packaging'' of wine, distilled spirits, and malt beverage
containers.
An amendment that proposed to clarify and expand current
requirements that certain whisky products distilled in the United
States must include the State of distillation on the label, by
providing that a bottling address within the State does not suffice
unless it includes a representation as to distillation.
While the proposed amendments would have provided additional
information to consumers, some comments suggested that each of these
proposals might also impose regulatory burdens or costs on industry
members. TTB has concluded that the rulemaking record before it does
not provide an adequate basis for evaluating the costs and benefits of
the proposed revisions. Accordingly, TTB is not moving forward with
these proposals in this rulemaking but will instead clarify current
requirements with regard to labeling requirements for products in
sealed, opaque cartons and the labeling of certain whiskies with
information regarding the State of distillation. TTB will consider
amendments to current policies for future rulemaking.
There were also some proposed clarifying changes that industry
members interpreted as imposing new requirements, even where that was
not the intent of the amendment. In several cases, TTB decided it was
not necessary to adopt regulations on these issues. The failure to
codify these policies does not represent a change in policy, but does
reflect a determination by TTB that codification of these policies in
the manner proposed by Notice No. 176 could be confusing to the
industry and the public.
II. Discussion of Specific Comments Received and TTB Responses
For ease of navigation, TTB is setting forth the issues and
comments it is addressing in this document in the following order:
Issues affecting multiple commodities; amendments specific to 27 CFR
part 5 (distilled spirits); amendments specific to 27 CFR part 7 (malt
beverages); and amendments to the advertising regulations. Within each
discussion, the order reflects generally the order the sections appear
in the finalized regulations, which will aid readers in comparing the
explanations in the preamble with the subsequent section setting forth
the regulatory text.
The proposed changes from Notice No. 176 that were not addressed in
T.D. TTB-158, and that are not addressed specifically in this preamble,
are adopted without change in this final rule, and will not be
discussed in this section. See Notice No. 176 for further information
on those proposals.
A. Issues Affecting Multiple Commodities
1. Comments on the Need for Modernization and Reorganization
TTB received numerous comments from industry members and trade
associations supporting its overall goal to reorganize and recodify the
labeling regulations to simplify and clarify regulatory standards;
incorporate industry circulars, rulings, and current policy into the
regulations; and reduce the regulatory burden on industry members where
possible. A few industry members expressed support for the overall
modernization of the current regulations. For example, a comment from
Big Cypress Distillery called the proposed regulations ``a most welcome
and modernized improvement over the current regulations.'' A comment
from Altitude Spirits stated, ``I think your updates and effort to
modernize the regulations surrounding wine, beer, and spirits are a
great idea and current regulations are in many cases in need of an
update.'' Roulasion Distilling Company commented that the proposed
changes were generally ``a great stride towards transparency and an
improvement for many of my fellow producers.''
Several trade associations also praised the overall modernization
of the regulations. The comment from the Texas Whiskey Association,
which 117 other comments supported, stated that:
In general, we are very supportive of the proposed changes. We
think it clears up perceived ambiguities. We support a code for
producers that results in more transparency and truthfulness for
consumers.
The Brewers Association (BA) noted that the incorporation of
existing industry circulars, rulings, and policy ``is important to
achieve greater understanding and compliance among members of the BA
and the broader alcohol beverage industry.'' The National Association
of Beverage Importers (NABI) expressed its appreciation for the
``structure and parallelism of the three parts.'' Finally, Senator
Charles Schumer expressed support for the ``streamlining'' of the
regulations and urged TTB to finalize them.
Heaven Hill Brands commended TTB for taking on this project, but
also asked that TTB avoid taking a ``piecemeal approach to
modernization'' by finalizing the proposed rule ``in numerous''
documents. BA urged TTB ``to sustain the momentum and complete the
process initiated in Notice 176.'' Finally, some commenters, including
the Distilled Spirits Council of the United States (DISCUS) and Senator
John Kennedy, were more critical of the overall impact of the proposed
rule as well as the wording of certain clarifying language, but
supported certain regulatory amendments.
TTB Response
TTB agrees with the commenters who suggested that incorporating
industry circulars and rulings into the regulations promotes
transparency and consistency, and believes that transparency benefits
both industry members and consumers. TTB also plans to move forward
with the proposed reorganization and parallelism of the parts. TTB
continues to believe that proposed reorganization of the regulations
will make it easier for the public and industry members to find
relevant regulations and to compare regulations in the three parts.
TTB understands the concern that commenters expressed with regard
to an approach that would result in numerous final rules. Nonetheless,
for the reasons described earlier in this document, this final rule
will reorganize only the labeling provisions in parts 5 (distilled
spirits) and 7 (malt beverages). TTB believes it is important to
resolve all of the outstanding labeling issues relating to distilled
spirits and malt beverages in this document, while continuing to work
on the some of the complex issues that pertain specifically to wine.
The reorganization of the wine labeling regulations (in part 4) and the
advertising regulations for wine, distilled spirits, and malt beverages
(in
[[Page 7530]]
a new part 14) will not be addressed in this document, but will be
addressed in the future.
Accordingly, TTB plans to address the reorganization of the wine
labeling regulations in a future rulemaking, which will reorganize part
4 in a manner similar to the way in which TTB is reorganizing parts 5
and 7, and which also will address the substantive issues raised by the
commenters on the labeling and advertising of wine. At that time, TTB
will also pursue the reorganization of the advertising regulations
pertaining to wine, distilled spirits, and malt beverages in a new part
14, as proposed in Notice No. 176.
2. Subpart A--General Provisions
a. Definitions
In Notice No. 176, TTB proposed definitions for ``certificate
holder,'' ``container,'' ``distinctive or fanciful name,'' and
``person'' for consistency across the regulations for wine, distilled
spirits, and malt beverages.
Certificate holder: TTB proposed to add the definition of
``certificate holder'' to parts 4, 5, and 7 to read as follows: ``The
permittee or brewer whose name, address, and basic permit number, plant
registry number, or brewer's notice number appears on an approved TTB
Form 5100.31.'' TTB received one comment on this proposal, from DISCUS,
which expressed support for the addition of this definition to the part
5 regulations, but suggested the elimination of the use of the term
``brewer'' because ``such references should be to a specific alcohol
beverage category in its corresponding part.''
TTB Response
TTB believes that maintaining a single definition in the labeling
regulations for all of the alcohol beverage commodities aids in
understanding, particularly for the many industry members who engage in
business in several alcohol beverage commodities. TTB also notes that
the definitions of the term ``certificate of label approval'' in parts
4, 5 and 7, as amended by T.D. TTB-158, as well as the definition in
part 13, which was not amended by T.D. TTB-158, currently refer to
wine, distilled spirits, and malt beverages. Accordingly, TTB is
finalizing the term ``certificate holder'' as proposed in parts 5 and
7.
Container: TTB proposed to amend the definition of the term
``container'' in parts 4 and 7 and to add the definition to part 5 to
replace the definition of the term ``bottle.'' The proposed rule
defined ``container'' in parts 4 and 7 as any can, bottle, box with an
internal bladder, cask, keg, barrel, or other closed receptacle, in any
size or material, that is for use in the sale of wine or malt
beverages, respectively, at retail. Aside from editorial changes, this
differs from the current definitions in that it specifically
incorporates a box with an internal bladder, sometimes referred to as a
``bag in a box.''
Because of the restrictions on the size of distilled spirits
containers, the proposed definition in part 5 did not include
references to barrels. Furthermore, because there are prescribed
standards of fill for both wine and distilled spirits, the proposed
definitions in parts 4 and 5 included a cross reference to those
standard of fill regulations, to clarify that containers must be in
certain sizes.
TTB received one comment on these proposed amendments. DISCUS
stated that while it recognized ``that a definition including a broader
range of packages is necessary and generally agree[d] with the proposed
definition of ``container[,]'' it urged that the definition include a
cross[hyphen]reference to proposed Sec. 5.62 in order to clarify that
a ``closed receptacle'' should ``not be construed as including
secondary and tertiary packaging.''
TTB Response
TTB is finalizing the definition of ``container'' as proposed in
parts 5 and 7. Because of changes that are being made to the proposed
amendment regarding closed packaging, which will be discussed in
further detail in this document, TTB does not find it necessary to
include the cross reference suggested by DISCUS. TTB is also making a
minor change to the definition, by deleting the reference to internal
bladders, so that the definition covers all boxes, regardless of
whether they include a bladder. TTB notes that some boxes in use today
do not include bladders.
Distinctive or fanciful name: Under current regulations, the term
``distinctive or fanciful name'' refers to a name that must be used on
a distilled spirits label, when a statement of composition is required.
A distinctive or fanciful name is optional on other distilled spirits
or malt beverage products. A distinctive or fanciful name is also
optional for wine, whether or not it bears a statement of composition.
Current regulations use but do not define the term.
Consistent with current policy and use of the term elsewhere in the
regulations, TTB proposed to add a definition of ``distinctive or
fanciful name'' to the definitions section of parts 4, 5, and 7 for the
first time to mean a descriptive name or phrase chosen to identify a
product on the label. The proposed definition clarifies that the term
does not include a brand name, class or type designation, statement of
composition, or, in part 7 only, a designation known to the trade or
consumers.
Beverly Brewery Consultants supported the inclusion of the
definition of ``distinctive or fanciful'' name in the regulations.
However, the Brewers Association opposed the proposed definition of
``distinctive or fanciful name,'' stating that the definition, like
other proposed changes to the class and type regulations, was ``based
on longstanding concepts used in distilled spirits labeling and
advertising regulations. These concepts are not generally understood by
brewers and would necessitate many changes in existing labels and
advertisements.'' Instead, the Brewers Association requested that ``TTB
utilize the language currently found in Sec. 7.24 to address class and
type. If TTB sees the need to modify the current class and type
regulations for beer, those issues should be address[ed] in a separate
rulemaking.''
TTB Response
The Brewers Association commented that the proposed definition of
the term ``distinctive or fanciful name'' would require changes to
labels. However, the proposed definition simply codifies current policy
with regard to the meaning of this term, and thus would not require
changes to approved labels. Furthermore, as previously noted, the
requirement for a distinctive or fanciful name for certain malt
beverages and distilled spirits is in current regulations, and the
Brewers Association comment does not appear to object to the
requirement that such a name appear on labels for certain malt
beverages. See current Sec. Sec. 7.24(a), 7.29(a)(7)(iii), and
7.54(a)(8)(iii).
With regard to the suggestion from the Brewers Association that TTB
should not modify the current class and type regulations for beer, this
comment will be discussed in further detail below in Section II.C.6.a.
Person: TTB proposed to amend the definition of the term ``person''
in parts 4, 5, and 7 by adding ``limited liability company'' to
specifically reflect TTB's current position that limited liability
companies fall under the definition of a ``person.'' TTB also removed
the language pertaining to ``trade buyer'' that read ``and the term
`trade buyer' means any person who is a wholesaler or retailer'' from
the definition of ``person'' that was in part 5. The current definition
of a ``person'' in part 7 did
[[Page 7531]]
not include the definition of a ``trade buyer.''
DISCUS commented that it supported the proposed definition of a
``person'' but urged that the definition of ``trade buyer'' (as any
person who is a wholesaler or retailer) from the existing definition be
retained in some manner in the labeling and advertising regulations,
and that some definition of the term ``retailer'' be added. The DISCUS
comment included a suggested mark-up of the proposed regulations in
part 5, but it did not include regulatory language for this comment.
TTB Response
TTB removed the language pertaining to ``trade buyer'' from the
definition of ``person'' in part 5 because the term ``trade buyer''
does not appear anywhere else in the part 5 regulations. The purpose of
the ``Definitions'' section in each part is to define terms used
elsewhere in that part. Accordingly, TTB is not adopting this
suggestion from DISCUS.
3. Subpart B--Certificates of Label Approval (for Distilled Spirits and
Malt Beverages) and Certificates of Exemption From Label Approval (for
Distilled Spirits)
Notice No. 176 proposed a subpart B in parts 4, 5, and 7, which
contained TTB's regulations implementing the statutory requirement for
COLAs (for wine, distilled spirits and malt beverages) and certificates
of exemption (for wine and distilled spirits). Proposed subpart B also
contained three sections grouped under the heading of ``Administrative
Rules,'' which set forth requirements for: (1) Presenting COLAs to
Government officials; (2) submitting formulas, samples, and other
documentation related to obtaining or using COLAs; and (3) applying for
and obtaining permission to use personalized labels. TTB described
these proposals in more detail in Notice No. 176, Section II.B.2.
a. Explanation of What a Certificate of Label Approval (COLA)
Authorizes
In Notice No. 176, TTB proposed to reorganize for clarity the
regulations implementing the statutory requirement for certificates of
label approval (COLAs). TTB proposed to establish new Sec. Sec. 4.22,
4.25, 5.22, 5.25, 7.22, and 7.25 to set out these requirements. In
these sections, TTB also proposed to set forth what a COLA does and
does not authorize. This information does not appear in the current
regulations.
Specifically, the proposed regulations stated that a COLA, on an
approved TTB Form 5100.31, authorizes the bottling of wine, distilled
spirits, or malt beverages, or the importation of bottled wine,
distilled spirits, or malt beverages, with labels identical to labels
on the COLA or with changes authorized on the COLA or otherwise
authorized by TTB. See proposed Sec. Sec. 4.22(a), 4.25(a), 5.22(a),
5.25(a), 7.22(a), and 7.25(a). The proposed regulations in paragraph
(b) of each of the aforementioned sections provided that, among other
things, a COLA does not: (1) Confer trademark protection; (2) relieve
the certificate holder from its responsibility to ensure that all
ingredients used in the production of wine, distilled spirits, or malt
beverages comply with applicable requirements of the U.S. Food and Drug
Administration (FDA) with regard to ingredient safety; or (3) relieve
the certificate holder from liability for violations of the Federal
Alcohol Administration Act (FAA Act), the Alcoholic Beverage Labeling
Act (ABLA), the Internal Revenue Code (IRC), or related regulations and
rulings. Proposed paragraphs (c) and (d) of the aforementioned sections
discuss when a COLA must be obtained and how to apply for a COLA.
The proposed revisions reflected the longstanding policy of TTB and
its predecessor agencies. Furthermore, the COLA form (TTB Form 5100.31,
Application for and Certification/Exemption of Label/Bottle Approval),
currently specifically provides that the issuance of a COLA does not
confer trademark protection and does not relieve the applicant from
liability for violations of the FAA Act, the ABLA, the IRC, or related
regulations and rulings. TTB believed that adding this information to
the regulations would clarify this position for the public and industry
members.
TTB received several comments in response to the proposed
revisions. Some commenters, including WineAmerica and the United States
Association of Cider Makers (USACM), supported the proposed language
clarifying that the issuance of a COLA does not confer trademark
protection or relieve the certificate holder from its responsibility to
ensure that all of the ingredients used in the production of the
alcohol beverage comply with applicable requirements of the FDA with
regard to ingredient safety. Two commenters suggested revisions that
would require more information on the COLA application regarding
compliance with State law for appellations of origin. As previously
indicated, however, some comments raised concerns about whether TTB was
interpreting FDA regulations. TTB addressed these issues in T.D.TTB-
158.
However, TTB also received many comments in opposition to the
language relating to liability under the FAA Act, ABLA, and the IRC.
The Wine Institute made the following comment:
Wine Institute is concerned about the language found in Sec.
4.22(b)(3) and Sec. 4.25(b)(3), both of which indicate that a
Certificate of Label Approval (COLA) does not relieve the
certificate holder from liability for violations of the FAA Act, the
Alcohol Beverage Labeling Act, the Internal Revenue Code, or related
regulations and rulings. Wine Institute members rely on the COLA
review process to confirm that they have placed information onto
wine labels in compliance with the FAA Act, the Alcohol Beverage
Labeling Act, the Internal Revenue Code, and related federal
regulations and rulings. Wine Institute members understand it is
their responsibility to ensure they have adequate substantiation to
support the accuracy of information and claims made on labels.
However, Wine Institute is concerned that Sec. 4.22(b)(3), for wine
bottled in the United States, and Sec. 4.25(b)(3), for wine
imported in containers, could be used as the basis for a permit
enforcement action against a winery even when a label may have been
approved in error by TTB. Wine Institute would like to better
understand the implications for Wine Institute members with regard
to this provision.
DISCUS also urged TTB not to finalize proposed Sec. Sec. 5.22(b)
and 5.25(b), arguing that it is unnecessary to repeat the statement on
the COLA form that the COLA did not convey trademark protection and
making the following statement:
We urge the Bureau to expressly state that the issuance of a
COLA is confirmation of compliance with TTB's labeling requirements.
If TTB approves a label, misleading statements or representations
should not be present on that label. TTB labeling specialists have
reviewed the material and assessed it against the labeling
regulations and decided whether or not to approve, as well as if any
information needed to be changed. Suppliers need to be able to rely
on TTB approval in this regard.
The Vermont Hard Cider Company (VCC) urged TTB ``not to render the
Congressionally-mandated COLA process purely advisory and oppos[ed] any
changes that undermine the legal certainty of an approved COLA.''
Several commenters, including the American Distilled Spirits
Association (ADSA) and an attorney representing the USACM, suggested
that the revisions propose ``to utterly destroy the certainty provided
by [the] COLA, upending a system that has served both the public and
the industry well and rendering the entire process advisory.'' These
comments suggested that it would violate due process to punish industry
members for activity that was approved through the COLA process, and
that the
[[Page 7532]]
appropriate remedy in such a situation would be to follow the label
revocation procedures contained in part 13 of the TTB regulations. The
comments acknowledged, however, that a COLA would not protect an
industry member who put a product in a container that did not conform
to the product described on the label.
TTB Response
TTB is finalizing Sec. Sec. 5.22(a) and 7.22(a) as proposed, with
the clarifying changes that TTB has already adopted in T.D. TTB-158.
These changes provide that an approved TTB Form 5100.31 authorizes the
bottling of distilled spirits covered by the COLA, as long as the
container bears labels identical to the labels appearing on the face of
the COLA, or labels with changes authorized by TTB on the COLA or
otherwise (such as through the issuance of public guidance available on
the TTB website at https://www.ttb.gov).
The proposed regulatory amendments in Sec. Sec. 5.22(b) and
7.22(b) were intended to clarify current policy, not change the effect
of obtaining TTB approval of a COLA. TTB agrees that, subject to the
conditions set forth on the COLA form itself, TTB's approval of a COLA
represents a decision by the Bureau that the approved label complies,
on its face, with the requirements of the FAA Act, and industry members
are entitled to rely upon that approval unless and until TTB takes
appropriate action, under the provisions of 27 CFR part 13, to revoke
the approval. TTB also agrees that such reliance would not be a willful
violation of the FAA Act.
As previously noted, the language in the proposed sections simply
repeats language from the COLA form that explicitly sets forth the
conditions of a COLA. Some commenters agreed that a COLA does not
convey trademark protection, relieve the industry member from FDA
requirements regarding ingredient safety, or relieve the industry
member from liability for violations under the FAA Act arising from a
situation in which the approved COLA's language does not accurately
describe the product in the container.
Sections I and II of the COLA form expressly set out these
limitations, advising that the form does not constitute trademark
protection, and that the applicant must ensure that all of the
information on the application is ``true and correct.'' With regard to
mandatory type size requirements under the regulations implementing
both the FAA Act and ABLA, Section II of the COLA form also advises
that TTB:
does not routinely review submitted labels for compliance with
applicable requirements for mandatory label information regarding
type size, characters per inch or contrasting background. You must
ensure that the mandatory information on the actual labels is
legible and displayed in the correct type size, number of characters
per inch, and on a contrasting background in accordance with the TTB
labeling regulations, 27 CFR parts 4, 5, 7, and 16, as applicable.
TTB does reserve the right to review applications for compliance
with these requirements and to return non-compliant applications.
Thus, the COLA form itself expressly advises applicants that it is
their responsibility to ensure that the type size of mandatory
information complies with the regulatory requirements.
Furthermore, Section V of the COLA form sets out certain
``allowable revisions'' that may be made to approved labels without
obtaining a new COLA, subject to the condition that the new label
``must be in compliance with the applicable regulations in 27 CFR parts
4, 5, 7, and 16, and any other applicable provision of law or
regulation, including, but not limited to, the conditions set forth in
the `Comments' below.'' TTB does not approve those revisions on an
individual basis, and the industry member is responsible for ensuring
compliance with the regulations and the conditions set forth in Section
V.
Finally, as explained in T.D. TTB-158, it is TTB's position that if
FDA advises TTB that it has determined that distilled spirits, wines,
or malt beverages are adulterated under the Federal Food, Drug and
Cosmetic Act (FD&C Act), then those beverages are also mislabeled
within the meaning of the FAA Act, even if the bottler or importer of
the product in question has obtained a COLA or an approved formula for
the product in question. See Industry Circular 2010-8, dated November
23, 2010, entitled ``Alcohol Beverages Containing Added Caffeine.'' In
such a situation, it is the responsibility of industry members to take
appropriate action after TTB has notified them that their products are
mislabeled as a result of a determination by FDA that the products are
adulterated under the FD&C Act. Nonetheless, after carefully evaluating
the comments, TTB has concluded that it will not move forward with the
proposed Sec. Sec. 5.22(b), 5.25(b), 7.22(b), and 7.25(b). In the
final regulatory text below, these paragraphs are removed and
paragraphs (c) and (d) of each section as proposed are finalized as
paragraphs (b) and (c). While TTB intended the proposed revisions to be
clarifying, the revisions instead caused confusion among the
commenters. Thus, TTB will evaluate all of the comments on this issue
as suggestions for further action to more clearly address these issues
on the COLA form itself or in the regulations in 27 CFR part 13.
TTB's decision not to move forward with the proposed amendments
does not represent any change in TTB's current policy on this issue,
and the limitations and conditions referenced above will continue to
appear on the COLA form.
b. COLA Requirements for Alcohol Beverages Imported in Containers
In Notice No. 176, TTB proposed, consistent with current
regulations, that wine, distilled spirits, and malt beverages, imported
in containers, are not eligible for release from customs custody for
consumption unless the person removing the products has obtained and is
in possession of a COLA. The regulations allow importers, when filing
TTB data electronically, to file with U.S. Customs and Border
Protection (CBP) the COLA identification number(s) applicable to each
such product in lieu of filing a copy of each COLA with CBP. See
Sec. Sec. 4.24(c), 5.24(c), and 7.24(c). Proposed Sec. Sec. 4.25,
5.25, and 7.25, in addition to the provisions described above, state
that importers must obtain a COLA before removing alcohol beverages in
containers from customs custody for consumption.
Beverly Brewery Consultants commented that proposed Sec. 7.24,
relating to COLA requirements for malt beverages imported in
containers, was poorly organized and should be separated into two
sections.
TTB Response
After reviewing the editorial suggestions from Beverly Brewery
Consultants, TTB has decided that the proposed Sec. Sec. 5.24 and 7.24
clearly communicate requirements relating to distilled spirits and malt
beverages imported in containers, and there is no need to separate each
section into two sections. Accordingly, these sections are finalized,
but with minor changes to certain paragraphs discussed below.
c. Transfer of COLAs
Consistent with the FAA Act and current regulations, proposed
Sec. Sec. 4.24, 5.24, and 7.24 provide that wine, distilled spirits,
and malt beverages, imported in containers, are not eligible for
release from customs custody for consumption unless the person removing
the wine, distilled spirits, or malt beverages has obtained a COLA. The
current regulations, as amended by the final rule facilitating the use
of the International Trade Data System (ITDS)
[[Page 7533]]
(T.D. TTB-145, 81 FR 94186, December 22, 2016), provide importers with
two options for showing compliance with this requirement--they may file
with CBP the identification number assigned to the approved COLA, or
they may provide a copy of the COLA to CBP at the time of entry, as was
the case prior to the ITDS amendments.
As a general rule, only the importer to whom TTB issued a COLA may
use that COLA to withdraw bottled alcohol beverages from customs
custody for consumption. Other importers who intend to import the same
distilled spirits, wine, or malt beverages are responsible for
obtaining their own COLAs for such products, as approved labels bear
the name and address of the importer who obtained the COLA for the
product and who is responsible for compliance with the Federal labeling
regulations as part of the mandatory information. An exception to this
general rule is set forth in ATF Ruling 84-3 (which modified ATF Ruling
83-6), which describes circumstances in which an importer may use a
COLA issued to another importer. In general, an importer may use a COLA
issued to another importer if: (1) The importer to which the COLA was
issued has authorized such use, (2) each bottle or individual container
bears the name (or trade name) and address of the importer to which the
COLA was issued, and (3) the importer to which the COLA was issued
maintains records of the companies it has authorized to use its
certificate.
When TTB amended Sec. Sec. 4.40, 5.51, and 7.31 in T.D. TTB-145,
it incorporated text to reflect the provisions of ATF Ruling 84-3 and
provide that bottled wine, distilled spirits, or malt beverages may be
released to an importer who is authorized by a COLA holder to import
products covered by the COLA. Importers must provide proof of such
authorization if specifically requested. TTB noted in T.D. TTB-145 that
it did not supersede ATF Ruling 84-3 or its holding that the COLA
holder, who is the importer identified on the COLA, remains responsible
for the imported product and its distribution in the United States.
Readers should note that these requirements apply only in
situations in which a second importer wishes to use a COLA that was
issued to the first importer, to obtain the release of products bearing
labels that include the name of that first importer from customs
custody. TTB regulations do not prohibit several different importers
from obtaining a COLA for the same foreign wine, distilled spirits
product, or malt beverage, as long as the name of the responsible
importer appears on each label.
Comments from Wine Institute and DISCUS questioned why the proposed
regulations did not incorporate the language in our current regulations
and the ATF Rulings about COLA holders authorizing other importers to
remove from customs custody products covered by a COLA. Wine Institute
noted that this principle seemed to be partially addressed, and
suggested that the regulations be amended to refer to importations with
the COLA holder's authorization. DISCUS urged TTB to incorporate all of
the provisions of ATF Ruling 84-3 into the regulations, stating that
these provisions are critical to the proposed regulation.
TTB Response
As indicated by the comments from Wine Institute and DISCUS, TTB
failed to fully incorporate the regulations finalized by T.D. TTB-145
into Notice No. 176. Accordingly, TTB is adopting the comments from
Wine Institute and DISCUS to the extent that they reflect current
provisions that TTB added to the regulations in 2016 by T.D. TTB-145
regarding the use by one importer of another importer's COLA under
certain circumstances. It was not TTB's intent to modify this policy.
Accordingly, in this final rule, TTB is reinstating the language that
allows an importer to use another importer's COLA under certain
circumstances. This final rule does not supersede ATF Ruling 84-3 or
its holding that the COLA holder remains responsible for the imported
product and its distribution in the United States.
TTB is not adopting DISCUS's suggestion that TTB amend the
regulations to incorporate all of the requirements set forth in ATF
Ruling 84-3. TTB did not air that specific issue for comment in Notice
No. 176, and TTB believes it would be beneficial to solicit public
comments on the recordkeeping and other requirements associated with
adopting such regulatory amendments. TTB will evaluate whether it
should update the ruling in the future, and will treat the DISCUS
comment as a suggestion for future rulemaking.
d. COLA Requirements for Imported Alcohol Beverages Released ``for
Consumption''
Subject to certain exceptions, the FAA Act makes it unlawful for
anyone to remove ``from customs custody, in bottles, for sale or any
other commercial purpose, distilled spirits, wine, or malt beverages,
respectively'' unless the person has obtained and possesses ``a
certificate of label approval covering the distilled spirits, wine, or
malt beverages, issued by the Secretary in such manner and form as he
shall by regulations prescribe.'' [Emphasis added.] See 27 U.S.C.
205(e). That same law also provides that the substantive labeling
requirements of the FAA Act apply to importers who ``remove from
customs custody for consumption, any distilled spirits, wine, or malt
beverages in bottles . . .'' [Emphasis added.] The FAA Act defines the
term ``bottle'' to mean ``any container, irrespective of the material
from which made, for use for the sale of distilled spirits, wine, or
malt beverages at retail.'' See 27 U.S.C. 211(a)(8). TTB and its
predecessors have consistently interpreted these statutory provisions
to mean that (1) a COLA is required for imported alcohol beverages in
bottles only if they are released from customs custody for consumption
in the United States, and (2) that for such consumption entries, a COLA
is not required if the beverage is being imported for a purpose other
than for sale or any other commercial purpose.
NABI commented that the regulations in proposed Sec. Sec. 4.24 and
4.25, 5.24 and 5.25, and 7.24 and 7.25, should be revised to eliminate
references to requiring COLAs before wine, distilled spirits, or malt
beverages, respectively, are removed in containers from customs custody
``for consumption,'' and to instead include only a reference to
removals for ``sale or any other commercial purpose.'' NABI stated that
this revision would be consistent with the statutory language in 27
U.S.C. 205(e), and that the language about removals for consumption was
overly broad.
TTB Response
The final rule adopts the language of the proposed regulations on
this issue. As explained above, TTB views the statutory requirements of
the FAA Act, as implemented in the regulations since 1936, as imposing
two levels of inquiry. Initially, the substantive labeling requirements
of the FAA Act, as well as the COLA requirements for alcohol beverages
released from customs custody in containers, apply only to products
released ``for consumption'' from customs custody. Within the category
of products released for consumption, there is a subcategory of
products that are exempt from the COLA requirement because they are
being imported for a purpose other than sale or any other commercial
purpose.
Current TTB regulations at 27 CFR 4.40(a), 5.51(a), and 7.31(a), as
amended by T.D. TTB-145 (the final rule facilitating the use of ITDS)
include this
[[Page 7534]]
structure, and the final rule also includes this regulatory text in
Sec. Sec. 4.24(d), 5.24(d), and 7.24(d). Thus, the exemption from the
COLA requirement for products imported for a purpose other than sale or
any other commercial purpose is in addition to, not instead of, the
provision that applies the COLA requirements only to alcohol beverages
removed ``for consumption'' in containers from customs custody.
e. Electronic Filing of the COLA Identification Numbers
The proposed and current regulations allow importers, when filing
TTB data electronically with CBP along with the customs entry, to file
the identification number of the valid COLA applicable to each such
product in lieu of filing a copy of each COLA with CBP. See Sec. Sec.
4.24(c), 5.24(c), and 7.24(c).
NABI requested that TTB require only that approved COLAs be on file
for CBP or TTB inspection, citing the time burden of entering each
identification number for shipments that contain products covered by
numerous COLAs. NABI stated that its recommendation is consistent with
proposed regulations at 27 CFR 4.27, 5.27, and 7.27, which require the
importer to present a copy of the approved COLA upon request.
TTB Response
With regard to the electronic filing of the COLA identification
numbers, in 2016, TTB amended its regulations to provide for electronic
filing of an entry with CBP, so that an importer files an
identification number of the approved COLA when filing electronically,
rather than submitting the COLA to customs. See T.D. TTB-145, 81 FR
94186, December 22, 2016. The importer must provide a copy of the COLA
(either electronically or on paper) upon request. As stated in T.D.
TTB-145, these requirements ensure compliance with the FAA Act at 27
U.S.C. 205(e), which requires, with respect to imports, that no person
shall remove from customs custody, in bottles, for sale or any other
commercial purpose, distilled spirits, wine, or malt beverages, without
having obtained and being in possession of a COLA covering the
products. This rule finalizes this aspect of Sec. Sec. 5.24 and 7.24
in a manner consistent with current regulations.
TTB believes that submitting the identification numbers
corresponding to COLAs that cover the products intended for removal
from customs custody, represents the minimum requirement necessary to
support compliance with label requirements and a level playing field
for industry members. This approach also minimizes the number of
importers TTB and/or CBP potentially would need to contact directly to
identify the appropriate COLA intended to be used by the importer,
which supports compliance without unnecessarily impeding the
importation process.
f. Formula Requirements--Cross-cutting 27 CFR 5.28 and 7.28
Specific formula requirements for certain types of beer and wine
are found in TTB's regulations under the IRC. See 27 CFR part 24 for
wine and part 25 for beer. For distilled spirits, the specific formula
regulations are found in both the IRC regulations (part 19) and the FAA
Act regulations (part 5). However, when reviewing applications for
label approval, TTB often finds it necessary to obtain formulation
information about certain products (including imported alcohol
beverages) that are not otherwise subject to the specific formula
requirements in the regulations. TTB requires industry members to
obtain formula approval for certain unusual products to enable
appropriate classification of the product and ensure that producers do
not use prohibited ingredients in the product.
Accordingly, current regulations in Sec. Sec. 4.38(h), 5.33(g),
and 7.31(d) authorize TTB to request more information about the
contents of a wine, distilled spirits product, or malt beverage, but
the language in part 7 is different from the language in parts 4 and 5.
Sections 4.38(h) and 5.33(g) provide that, upon request of the
appropriate TTB officer, a complete and accurate statement of the
contents of any container to which labels are to be or have been
affixed shall be submitted. The regulations in Sec. 7.31(d) state that
the appropriate TTB officer may require an importer to submit a formula
for a malt beverage, or a sample of any malt beverage or ingredients
used in producing a malt beverage, prior to or in conjunction with the
filing of an application for a COLA.
The type of product evaluation required for a particular product
prior to issuance of a COLA depends on that product's formulation and
origin. TTB periodically updates its public guidance to include a list
of the domestic and imported products for which TTB currently requires
formulas or laboratory analysis prior to issuing a COLA.
In Notice No. 176, TTB proposed to standardize the regulatory
language in parts 4, 5, and 7 on this issue. Accordingly, proposed
Sec. Sec. 4.28(a), 5.28(a), and 7.28(a) provided that the appropriate
TTB officer may require a bottler or importer to submit a formula, the
results of laboratory testing, and samples of the product or
ingredients used in the final product, prior to or in conjunction with
the review of an application for label approval. The proposed
regulations also provided that TTB may request such information after
the issuance of a COLA, or in connection with any product that is
required to be covered by a COLA. Proposed Sec. Sec. 4.28(b), 5.28(b),
and 7.28(b) provided that, upon request of the appropriate TTB officer,
a bottler or importer must submit a full and accurate statement of the
contents of any container to which labels are to be or have been
affixed, as well as any other documentation on any issue pertaining to
whether the wine, distilled spirits, or malt beverage is labeled in
accordance with the TTB regulations.
Current TTB regulations and industry practice involve the
submission of alcohol beverage formulas in varying forms and formats
depending on the type of alcohol beverage and whether the product is
domestically produced or imported. TTB believes that this multiplicity
of procedures is unnecessarily complicated and burdensome for both the
regulated industries and TTB. Accordingly, TTB proposed in Notice No.
176 to amend the TTB regulations in parts 4, 5 and 7 to provide that
industry members may file a formula electronically by using Formulas
Online or submitted on paper on TTB Form 5100.51, ``Formula and Process
for Domestic and Imported Alcohol Beverages.'' TTB notes that the vast
majority of industry members now use Formulas Online to submit
formulas, and encourages all industry members to consider the
advantages of online filing.
WineAmerica and the New York Farm Bureau commented in support of
``formula standardization for ease of submission and approval.'' A law
student commented in favor of requiring more formulas to safeguard the
health of consumers. However, some commenters raised concerns that the
proposed regulations were too broad. For example, Wine Institute
commented that proposed Sec. 4.28(b), as drafted, attempted to expand
TTB's authority to demand information from wineries outside of a formal
investigation, and also noted that bottlers of wine may not always have
complete information about the ingredients in formula wine produced by
other wineries.
Some commenters focused on differences in laboratory analysis
requirements for imported alcohol beverages. The Mexican Chamber of the
Tequila Industry and DISCUS both noted that under current TTB policy
(which is not addressed in the current
[[Page 7535]]
or proposed regulations), formulas for domestic products have no
expiration date, while formulas for imported products expire after 10
years. They both urged TTB to eliminate the expiration date for
imported products and to relieve formula requirements regarding
samples. They also disagreed with granting authority to request
formulas, laboratory testing, or samples for products that are not
specifically required to submit formulas, noting that the formulation
of alcohol beverages is often a closely guarded trade secret.
Similarly, Federation des Exportateurs de Vins & Spiritueux de France
(FEVS) commented in support of all the efforts made by TTB to simplify
and streamline the pre-COLA evaluation process, especially for imported
products, and stated that it understood the need for TTB officers
sometimes to get more information on a specific product on a
case[hyphen]by[hyphen]case basis. However, FEVS encouraged TTB to
consider the economic costs and administrative burdens involved with
formula and other pre-COLA analysis, and asked TTB to not define
stricter ``Pre[hyphen]COLA Evaluation modalities for imported products
than those required for domestic products of the same category.'' As an
example, FEVS questioned why a laboratory analysis is still required
for imported flavored distilled spirits while domestic producers only
have to obtain the approval of their formulas. FEVS stated that this
situation creates extra costs and complexity for European Union (EU)
exporters, and that these burdens were not justified because these
products are also well regulated under the EU framework.
TTB Response
TTB is moving forward with its proposal to standardize in parts 5
and 7 the regulatory language regarding TTB's authority to require the
submission of formulas, laboratory testing results, or samples as part
of the label approval process. This is consistent with current policy
and reflects the need to sometimes request, on a case-by-case basis,
more information about a particular product prior to approval of a
label. The final rule also standardizes the language found in the
current distilled spirits regulations, which authorize TTB to require a
full and accurate statement of the contents of the container. TTB is
finalizing the clarifying language from the proposed rule, which
provides that this authority applies after the issuance of a COLA, or
with regard to any distilled spirits or malt beverages required to be
covered by a COLA.
After reviewing the comments on the issue of whether the additional
language in proposed Sec. Sec. 5.28(b) and 7.28(b) reflected an
intention by TTB to expand its authority to require information about
products, TTB has revised the language to mirror more closely the
language found in the current regulations. Thus, to avoid any confusion
on this issue, the final rule does not include language about
submission of other documentation at the time of formula submission
relating to whether the alcohol beverage products comply with labeling
regulations, although this change does not reflect a shift in current
TTB policy regarding its authority require such information.
Finally, with regard to the commenters who requested that imported
and domestic products be subject to the same requirements relating to
formulas and laboratory analysis, TTB notes that it did not specially
address the issues raised in the current or proposed regulations. As
explained in Industry Circular 2020-1, dated February 12, 2020, TTB
currently maintains guidance documents on its website, https://www.ttb.gov, which set forth current formula and laboratory analysis
requirements. TTB periodically updates that list to reflect changes in
TTB policy.
TTB will consider the comments on this issue as suggestions for
future changes to its policy. However, it has been the position of TTB
and its predecessor agencies that because TTB does not have access to
the production records of foreign producers, it must rely upon the
importer, whose basic permit is conditioned upon compliance with the
FAA Act, to provide the necessary information at the time of
importation. For this reason, the formula and laboratory analysis
requirements for imported products may sometimes differ from those
imposed on domestic products of the same class and type. TTB is
continually reviewing its formula and laboratory analysis requirements
to determine if it can reduce burdens on the regulated industry while
fulfilling its statutory mission to protect consumers. The final rule
allows TTB the flexibility to liberalize such requirements without
engaging in rulemaking each time it removes a formula requirement under
the FAA Act.
4. Subpart C--Alteration of Labels, Relabeling, and Adding Information
to Containers
Proposed subpart C of parts 4, 5, and 7 regulates the alteration of
labels, relabeling, and the addition of information to wine, distilled
spirit, and malt beverage labels for which TTB has already issued a
COLA. As stated in Notice No. 176, these regulations are intended to
implement the prohibition in section 105(e) of the FAA Act (27 U.S.C.
205(e)) that prohibits any person from altering, obliterating, or
removing any mark, brand, or label except as authorized by Federal law
or regulations implemented by the Secretary.
As previously noted, the COLA requirements of the FAA Act are
intended to prevent the sale or shipment or other introduction in
interstate or foreign commerce of distilled spirits, wine, or malt
beverages that are not bottled, packaged, or labeled in compliance with
the regulations. To ensure that products with proper labels are not
altered once such products have been removed from bond, section 105(e)
of the FAA Act (27 U.S.C. 205(e)) makes it unlawful for ``any person to
alter, mutilate, destroy, obliterate, or remove any mark, brand, or
label upon distilled spirits, wine, or malt beverages'' that are held
for sale in interstate or foreign commerce, or are held for sale after
shipment in interstate or foreign commerce, unless authorized by
Federal law or pursuant to regulations allowing relabeling for purposes
of compliance with either the FAA Act or State law.
Regulations that implement these provisions of the FAA Act, as they
relate to wine, distilled spirits, and malt beverages, are set forth in
parts 4, 5, and 7, respectively. Current Sec. Sec. 4.30 and 7.20
provide that someone wanting to relabel must receive prior written
permission from the appropriate TTB officer. Current Sec. 5.31 does
not require prior written approval for the relabeling of distilled
spirits, as long as such relabeling is done in accordance with an
approved COLA.
As described in more detail below, proposed subpart C of parts 4,
5, and 7, proposed conforming changes to the regulations that: (1)
Implement the statutory prohibition discussed above; (2) set out the
provisions allowing for relabeling without TTB authorization; (3) set
out the provisions allowing for relabeling only with TTB authorization;
and (4) provide for the use of stickers to identify the wholesaler and
retailer.
a. Alteration of Labels
Proposed Sec. Sec. 4.41(a), 5.41(a), and 7.41(a) set forth the
statutory prohibition under 27 U.S.C. 205(e) on the alteration of
labels. The proposed language provided that the prohibition applies to
any persons, including retailers, holding wine, distilled spirits, or
malt beverages for sale in (or after
[[Page 7536]]
shipment in) interstate or foreign commerce.
Proposed Sec. Sec. 4.41(b), 5.41(b), and 7.41(b) provided that for
purposes of the relabeling activities authorized by this subpart, the
term ``relabel'' includes the alteration, mutilation, destruction,
obliteration, or removal of any existing mark, brand, or label on the
container, as well as the addition of a new label (such as a sticker
that adds information about the product or information engraved on the
container) to the container, and the replacement of a label with a new
label bearing identical information.
Proposed Sec. Sec. 4.41(c), 5.41(c), and 7.41(c) contained new
language that provides that authorization to relabel in no way
authorizes the placement of labels on containers that do not accurately
reflect the brand, bottler, identity, or other characteristics of the
product; nor does it relieve the person conducting the relabeling
operations from any obligation to comply with the regulations in this
part and with State or local law, or to obtain permission from the
owner of the brand where otherwise required.
TTB received four comments of general support for proposed
Sec. Sec. 4.41, 5.41, and 7.41 from Beer Institute, Heaven Hill
Brands, Wine Institute, and DISCUS. However, DISCUS stated that
alteration of labels should only be done with the COLA holder's
approval.
TTB Response
TTB is finalizing proposed Sec. Sec. 5.41 and 7.41 without change.
These regulatory provisions implement the statutory language in a
clearer manner than the current regulations. With regard to the DISCUS
comment, TTB notes that Sec. Sec. 5.41(c) and 7.41(c) explicitly
provide that authorization to relabel under this subpart does not
authorize the placement of labels on containers that do not accurately
reflect the brand, bottler, or other characteristics or the product,
nor does it relieve the responsible person from any obligation to
comply with the TTB regulations and with State or local law, or to
obtain permission from the owner of the brand where required under
other laws. TTB believes this provision adequately addresses the
concerns raised by the DISCUS comment.
b. Authorized Relabeling Activities Without Prior Authorization From
TTB
The current regulations in parts 4 and 7 require persons wishing to
relabel to obtain written permission from TTB, with certain exceptions,
while the regulations in part 5 require persons wishing to relabel to
obtain a COLA from TTB. TTB proposed to update the regulations in parts
4, 5 and 7 for consistency, and to cover all of the situations in which
people need to relabel. The current regulations in part 5 allow persons
who are eligible to obtain COLAs, such as bottlers and importers, to
relabel the covered products even after their removal from bottling
premises or customs custody, respectively, without first obtaining
written approval from TTB. The proposed rule extended this provision to
parts 4 and 7.
Accordingly, the proposed regulations provided that proprietors of
bonded wine premises, distilled spirits plant premises, and breweries,
may relabel domestically bottled products prior to their removal from,
and after their return to bond at, the bottling premises, with labels
covered by a COLA, without obtaining separate permission from TTB for
the relabeling activity. See proposed Sec. Sec. 4.42(a), 5.42(a), and
7.42(a).
The proposed regulations also provided that proprietors of bonded
wine premises, distilled spirits plant premises, and breweries, may
relabel domestically bottled products after removal from the bottling
premises with labels covered by a COLA, without obtaining separate
permission from TTB for the relabeling activity. This would allow, for
example, a brewer to replace damaged labels on containers held at a
wholesaler's premises, as long as a COLA covers the labels, without
obtaining separate permission from TTB to remove the existing labels
and replace them with either identical or different approved labels.
See Sec. Sec. 4.42(b), 5.42(b), and 7.42(b).
The proposed regulations also provided that, under the supervision
of U.S. customs officers, imported wine, distilled spirits, and malt
beverages, in containers in customs custody may be relabeled without
obtaining separate permission from TTB for the relabeling activity.
Such containers must bear labels covered by a COLA when the products
are removed from customs custody for consumption. See Sec. Sec.
4.42(c) and (d), 5.42(c) and (d), and 7.42(c) and (d).
TTB received several comments of strong support in response to
TTB's efforts to bring consistency to the relabeling rules between
wine, distilled spirits, and malt beverages from NABI, Heaven Hill
Brands, the Beer Institute, ADSA, WineAmerica, and the New York Farm
Bureau.
In their comments, WineAmerica and the New York Farm Bureau noted
that these proposals would reduce the regulatory burden with regard to
wine. Heaven Hill Brands and ADSA expressed support for equal treatment
with regard to relabeling activities between wine, distilled spirits,
and malt beverages. NABI stated its appreciation for provisions that
allow importers to relabel products without separate permission. The
Beer Institute recommended ``that TTB allow additional flexibility in
the proposed rule so that `authorized agents' (such as distributors or
co-packers) of breweries and importers are also authorized to make such
changes without having to obtain approval from TTB.''
TTB Response
TTB is finalizing Sec. Sec. 5.42, and 7.42 as proposed, with the
modification that a domestic proprietor who enjoys these privileges
must also be the certificate holder for the COLA (which, in the case of
domestically bottled products, would be the bottler).
In response to the comment from Beer Institute, which suggested
allowing relabeling by ``authorized agents'' of the COLA holder, TTB
notes that nothing in the regulation precludes COLA holders from using
either employees or ``authorized agents'' to physically conduct
relabeling activities, as long as the relabeling is being done at the
direction of the COLA holder. To clarify this point, the regulatory
text in sections 7.42(b) and 5.42(b) is revised to provide that
proprietors may relabel (or direct the relabeling of) domestically
bottled products after removal with labels covered by a COLA, without
obtaining separate permission from TTB for the relabeling activity,
provided that the proprietor is the certificate holder (and bottler).
c. Relabeling Activities That Require Separate Written Authorization
In Notice No. 176, TTB stated that the language in current parts 4
and 7 allow persons who are not eligible to obtain COLAs, such as
retailers, to obtain written permission from TTB to relabel products
that are in the marketplace when unusual circumstances exist. The
proposed rule extended this provision to part 5. It is rare that
someone other than the original bottler or importer will need to
relabel the product, but these situations sometimes occur. For example,
sometimes bottles packed in a shipping carton break, causing damage to
labels of unbroken bottles.
Thus, the proposed regulations allowed persons who are not eligible
to obtain a COLA (such as retailers or permittees other than the
bottler) to obtain written authorization for relabeling if the request
demonstrates that the relabeling was for the purpose of compliance with
the requirements of
[[Page 7537]]
this part or of State law. The proposed regulations provided that the
written application must include copies of the original and proposed
new labels; the circumstances of the request, including the reason for
relabeling; the number of containers to be relabeled; the location
where the relabeling will take place; and the name and address of the
person who will be conducting the relabeling operations.
TTB intended that the proposed regulations enable permittees,
brewers, and retailers to relabel alcohol beverage containers in the
marketplace when there is a permissible reason to do so. TTB sought
comments from industry on whether the proposed regulations would
protect the integrity of labels in the marketplace without imposing
undue burdens on the industry.
WineAmerica, NABI, Heaven Hill Brands, Williams Compliance and
Consulting Group (the Williams Group), Wine Institute, and DISCUS
expressed general support for these provisions.
In its comment, Heaven Hill Brands expressed support for equal
treatment between wine, distilled spirits, and malt beverage
regulations. In addition to providing their support for the proposed
regulations, Wine Institute and DISCUS suggested that any persons
engaged in relabeling who are not eligible to obtain a COLA (retailers,
wholesalers, or proprietors other than the bottler) should be required
to obtain authorization from the COLA holder in addition to written
authorization from TTB. DISCUS commented that its suggested ``revision
will provide greater certainty to industry members regarding their
brand equity and the power to control what happens to their brand
labels once in the marketplace.''
TTB Response
TTB is finalizing proposed Sec. Sec. 5.43 and 7.43 with the
clarification that those who must obtain written authorization to
relabel distilled spirits and malt beverages are wholesalers and
permittees other than the original bottler, not retailers. In response
to DISCUS's concerns about the power of producers to control what
happens to their brand labels once in the marketplace, and the comments
from Wine Institute and DISCUS requesting that TTB require that persons
performing relabeling activities obtain COLA holder approval, TTB is
only authorizing permittees (wholesalers and proprietors other than the
original bottler) to apply for authorization to relabel; however, TTB
is not requiring that the applicant first obtain approval from the COLA
holder. Adopting the comments from Wine Institute and DISCUS that TTB
should require the person performing the relabeling activities to
obtain authorization from the original COLA holder would be more
restrictive than current regulations, and was not specifically aired
for comment. TTB notes that distillers are also subject to the
relabeling regulations under the IRC in 27 CFR part 19, which require
proprietors to retain a statement of authorization to relabel products
that they did not originally bottle; there is no such requirement for
wine under the IRC regulations in 27 CFR part 24.
d. Adding a Label or Other Information to a Container That Identifies
the Wholesaler, Retailer, or Consumer
Consistent with current regulations for wine and distilled spirits,
and an intention to liberalize regulatory requirements for malt
beverages, TTB proposed to allow the addition of a label identifying
the wholesaler, retailer, or consumer as long as the label does not
reference the characteristics of the product, does not violate the
labeling regulations, and does not obscure any existing labels. The
proprietor may add information identifying the wholesaler, retailer, or
consumer before the wine, distilled spirit, or malt beverage leaves the
premises. The wholesaler, retailers, or an agent may make such
additions of information prior to the release of a product from customs
custody. See proposed Sec. Sec. 4.44, 5.44, and 7.44.
NABI, Heaven Hill Brands, Wine Institute, and DISCUS expressed
support for proposed Sec. Sec. 4.44, 5.44, and 7.44. In addition to
expressing support, Wine Institute requested that any alteration of the
label be conducted only with the authorization of the COLA holder and
indicates that consumers could be confused about such stickers.
TTB Response
TTB will finalize Sec. Sec. 5.44 and 7.44 without change. In
response to Wine Institute's request that authorization from the COLA
holder should be required prior to any alteration of a label, TTB notes
that the proposal is consistent with current regulation, and that under
this section, only information regarding the wholesaler, retailer, or
consumer is being applied to the container (rather than the replacement
of an entire label). The adoption of Wine Institute's request would be
a significant restriction and would require rulemaking. Also, TTB has
not received comments from consumers or consumer groups that stickers
identifying the names of wholesalers, retailers, or consumers are
confusing.
5. Subpart D--Label Standards
In Notice No. 176, TTB proposed a new subpart D in each of parts 4,
5, and 7, governing legibility of labels, type size, and language
requirements for mandatory information on labels. The provisions were
predominantly derived from and consistent with current regulations.
a. Affixing Labels
Proposed Sec. Sec. 4.51, 5.51, and 7.51 provided, consistent with
current requirements, that labels must be affixed such that they cannot
be removed without the thorough application of water or other solvents.
DISCUS expressed support for these provisions, but they suggested
amending the regulations so that only mandatory information would be
subject to the ``firmly affixed'' requirement, and to allow ``any part
of the label without mandatory information to be peeled off.'' NABI
recommended that the regulations allow a label to be affixed to a
container over another label ``provided both labels are firmly affixed
to the container and the overlapping label does not obscure any
mandatory information.'' NABI suggested that this amendment would
reflect current TTB policy.
TTB Response
With the exception of the keg collar exemption discussed in the
part 7-specific discussion below, TTB is finalizing Sec. Sec. 5.51 and
7.51 as proposed. Adoption of the DISCUS comment, which would allow
optional information to be included on a peel-off label, would require
broader changes to the definition of a label, which currently includes
both optional and mandatory information. TTB will consider this comment
as a suggestion for future rulemaking. In response to the NABI comment,
TTB notes that, currently, it does not allow a bottler to place one
label over another label on a container. Instead, TTB sometimes allows
this as a temporary solution in a ``use-up'' situation, where
circumstances do not allow another feasible solution. TTB does not
believe that it should extend that option beyond temporary ``use-up''
situations, because the practice could be subject to abuse.
Accordingly, TTB will not adopt the NABI suggestion at this time, but
will consider the comment as a suggestion for further rulemaking on
this issue.
b. Legibility and Other Requirements for Mandatory Information on
Labels
The regulations in proposed Sec. Sec. 4.52, 5.52, and 7.52
governing legibility of labels, type size, and language
[[Page 7538]]
requirements were largely based on the requirements currently found in
Sec. Sec. 4.38, 5.33, and 7.28. The proposed regulations clarified
existing regulations and policy.
TTB set out in proposed Sec. Sec. 4.52(b), 5.52(b), and 7.52(b)
current regulations and existing policy that require mandatory
information to be separate and apart from additional information. The
proposed rule provided a few exceptions to this general rule. First,
brand names are exempt from this requirement. Second, this provision
would not preclude the addition of brief optional phrases as part of
the class and type designation (such as ``premium malt beverage''), the
name and address statement (such as ``Proudly distilled and bottled by
ABC Distilling Company, Atlanta, GA, for over 30 years''), or other
information required by the regulations, as long as the additional
information does not detract from the prominence of the mandatory
information.
Beverly Brewery Consultants, Wine Institute, WineAmerica, the New
York Farm Bureau, and ADSA supported this proposal. Beverly Brewery
Consultants also suggested that TTB should consider adding a
requirement that mandatory information be conspicuous in addition to
being separate and apart from other information on the label. This
comment referred to current requirements in 27 CFR 7.28, which provide
that if ``contained among other descriptive or explanatory information,
the script, type, or printing of all mandatory information shall be of
a size substantially more conspicuous than that of the descriptive or
explanatory information.'' Wine Institute stated that it ``supports the
ability to include brief optional phrases of additional information in
conjunction with mandatory information.'' DISCUS opposed the
requirement that mandatory information be separate and apart from
additional information, but did not provide its rationale for this
position. The Mexican Chamber of the Tequila Industry proposed that TTB
establish specific parameters for the meaning of ``separate and
apart.''
NABI stated that TTB's proposal to allow additional information to
appear with mandatory information provided the ``additional information
does not detract from the prominence of the mandatory information''
represented a vague standard. NABI requested that TTB replace this
standard with one that prohibits additional information from creating a
``misleading impression inconsistent with the mandatory information.''
NABI stated that, under the ``commercial speech'' doctrine developed by
the U.S. Supreme Court, the government may prevent misleading speech,
but not ``detracting speech.''
TTB Response
TTB is finalizing in Sec. Sec. 5.52(b) and 7.52(b) the proposed
provisions requiring mandatory information to be separate and apart
from additional information with the exceptions set forth in the
proposed regulations and as discussed above. However, in response to
the comments, we are clarifying that this new standard does not
represent a change in TTB's current labeling policy. Accordingly, we
are incorporating language in the regulation for greater consistency
with existing regulatory standards in Sec. Sec. 4.38, 5.33, and 7.28.
Instead of requiring that the additional information does not ``detract
from the prominence of the mandatory information,'' the final rule
provides that if contained among other descriptive or explanatory
information, the script, type, or printing of all mandatory information
shall be substantially more conspicuous than that of the descriptive or
explanatory information. While these determinations are made on a case-
by-case basis, current TTB policy considers mandatory information
(other than aspartame) to be substantially more conspicuous if the type
size is at least twice the type size of the surrounding information, or
if the mandatory information is otherwise substantially more
conspicuous because of, for example, the boldness or color of the font.
The final rule provides for distilled spirits labels, and continues to
provide for malt beverage labels, that aspartame declarations must be
separate and apart from all other information.
In response to the Mexican Chamber of the Tequila Industry, TTB
notes that establishing specific parameters for ``separate and apart''
would result in more strict rules than what is currently in place,
potentially requiring industry members to change current labels. This
would also place a significant administrative burden on TTB without a
clear benefit.
In response to NABI, TTB notes that requirements with regard to
mandatory statements are issued pursuant to TTB's authority to ensure
that labels provide consumers with adequate information about the
identity and quality of the product. Requiring that such information be
sufficiently conspicuous on the label is well within TTB's statutory
authority.
c. Contrasting Background
Consistent with current regulations, proposed Sec. Sec. 4.52(c),
5.52(c), and 7.52(c) set forth the existing regulation that states the
requirement that mandatory information must appear on a ``contrasting
background.'' The requirement for a contrasting background ensures that
mandatory information is readily legible to consumers; for example,
white letters on a white background will typically be difficult for
consumers to read. The proposed regulations provided new examples that
indicate how this requirement may be satisfied. The proposed
regulations specifically state that TTB considers black lettering
appearing on a white or cream background, or white or cream lettering
appearing on a black background, to be contrasting. The proposed
regulations do not restrict industry members to the use of black,
cream, or white for use on labels.
Beverly Brewery Consultants and the New York Farm Bureau supported
this proposal. DISCUS opposed this requirement, commenting in favor of
retaining the current language from which TTB derived this provision.
DISCUS suggested that by providing examples of what constitutes a
contrasting background, TTB is requiring, for example, black text to
appear on a white or cream background. DISCUS also suggested that TTB
had determined in 2002 that regulations regarding contrasting
background were not necessary. DISCUS pointed to an advance notice of
proposed rulemaking to support this claim (Notice No. 917, May 22,
2001, 66 FR 28135).
TTB Response
TTB is finalizing proposed Sec. Sec. 5.52(c), and 7.52(c) without
change. The advance notice of proposed rulemaking that DISCUS refers to
pertains to the placement, noticeability, and legibility of the Health
Warning Statement under the Alcoholic Beverage Labeling Act, and TTB
did not propose further amendments in response to that advance notice.
TTB believes that the examples in the final rule are useful points of
reference that act as guide rails for industry members. However, the
regulations do not require mandatory information to appear in specific
colors, nor do they require a contrasting background to be of a
specific color. Industry members will remain free to select type colors
and backgrounds for their labels other than black, white, or cream as
long as the background is contrasting in the judgment of the
appropriate TTB officer.
d. Type Size Requirements for Mandatory Information
Proposed Sec. Sec. 4.53, 5.53, and 7.53 set out the type size
requirements for mandatory information under the
[[Page 7539]]
regulations and incorporated existing policy, which provides that the
minimum type size requirements apply to both capital and lowercase
letters. For malt beverages, these requirements were consistent with
current Sec. 7.28(b)(3), including the requirement that alcohol
content statements not exceed four millimeters on containers larger
than forty fluid ounces.
WineAmerica and FEVS expressed support for the incorporation of
TTB's current policy that minimum type size requirements apply to
capital and lowercase letters. The European Union indicated that it
understood the proposed minimum type size requirements for mandatory
information to be ``fixed,'' that is, that type size cannot exceed the
minimum type sizes set forth in the current and proposed regulations.
The European Union stated that such ``requirements may possibly create
unnecessary obstacles to international trade'' for wine and distilled
spirits.
Beverly Brewery Consultants stated that proposed Sec. 7.53 should
clearly state whether it applies to mandatory or optional alcohol
content statements, or both. In response to the Treasury Department's
Request for Information (RFI), published in the Federal Register on
June 14, 2017 (82 FR 27212), the Brewers Association requested that TTB
remove the maximum type size restriction for alcohol content
statements, stating that such statements have been permitted for more
than 20 years and that there is no compelling reason to restrict the
type size.
TTB Response
TTB is finalizing proposed Sec. Sec. 5.53, and 7.53 as set forth
in Notice No. 176, with a clarifying change to Sec. 7.53, as discussed
below.
In response to the European Union's concern, TTB emphasizes that,
like the current requirements for type size of mandatory information,
the proposed requirements--with the exception of alcohol content
statements--are minimum type size requirements. That is, mandatory
information may appear in type size that is larger than the minimum
type size requirements. Given that these provisions are not new, TTB
does not believe that the requirement poses any potential barriers to
international trade.
Regarding Sec. 7.53, TTB permits, but does not require, alcohol
content statements on malt beverage labels, unless the malt beverage
``contain[s] any alcohol derived from added flavors or other added
nonbeverage ingredients (other than hops extract) containing alcohol,''
in which case an alcohol content statement is required. See Sec. Sec.
7.63(a)(3) and 7.65(a), as finalized below, and T.D. TTB-21, 70 FR 194,
January 3, 2005. Section 7.53(a) provides for minimum type size
requirements for mandatory information on malt beverage labels. In
response to the comment from Beverly Brewery Consultants, TTB is adding
to this section a reference to Sec. 7.63(a)(3) to clarify that these
requirements extend to mandatory statements of alcohol content.
Consistent with current policy, TTB is also clarifying that the maximum
type size limitations in Sec. 7.53(b) apply to all statements of
alcohol content.
Regarding the Brewers Association comment requesting that TTB
remove the maximum type size restriction for alcohol content statements
on malt beverages, which TTB has applied to both mandatory and optional
alcohol content labeling statements, TTB believes such a regulatory
change should not be adopted without providing more specific notice
(and an opportunity to comment) to interested parties. TTB did not
propose to remove the maximum type size requirements for alcohol
content statements on all alcohol beverages containers in Notice No.
176. TTB therefore declines in this rule to change the maximum type
size requirements. TTB may consider changes to this standard in a
future rulemaking. This final rule clarifies current policy with regard
to maximum type size requirements applying to alcohol content
statements.
e. Visibility of Mandatory Information
Proposed Sec. Sec. 4.54, 5.54, and 7.54 explicitly required that
mandatory information on labels must be readily visible and may not be
covered or obscured in whole or in part. DISCUS expressed support for
this proposal. Beverly Brewery Consultants commented that ``[i]n view
of TTB's proposal not to require certain mandatory information to
appear on a `brand label,' I strongly recommend that a `conspicuous'
requirement be added to sec. 7.54 to ensure consumers will be able to
distinguish mandatory label information from other information on the
label.''
TTB Response
TTB is finalizing Sec. Sec. 5.54 and 7.54 as proposed. In response
to the comment from Beverly Brewery Consultants suggesting that
mandatory information must be ``conspicuous,'' current regulations do
not impose such a requirement. Instead, both the current regulations
and the proposed regulations provide that mandatory information must be
``readily visible'' on distilled spirits and malt beverage labels. TTB
does not believe that the commenter supplied an adequate basis for
revising this requirement, and any such change might require revisions
to existing labels. Accordingly, TTB is not adopting this comment. See
Section II.C.4.a below for discussion of the removal of the requirement
that mandatory labeling information appear on the ``brand label'' of
malt beverages.
f. Language Requirements
Consistent with current regulations, proposed Sec. Sec. 4.55,
5.55, and 7.55 generally require mandatory information, other than the
brand name, to appear in the English language. Also consistent with
current malt beverage and distilled spirits requirements, but as a
liberalization for wine, the proposed regulations provided that all
mandatory information may appear solely in Spanish when products are
bottled for sale in the Commonwealth of Puerto Rico. The proposed
regulations allowed for additional statements in foreign languages,
including translations of mandatory information, and the country of
origin, when allowed by CBP regulations. DISCUS expressed support for
this proposal.
TTB Response
TTB is finalizing proposed Sec. Sec. 5.55 and 7.55 as set forth in
Notice No. 176.
g. Additional Information (Non-Mandatory Information) on Labels
Proposed Sec. Sec. 4.56, 5.56, and 7.56, set out current TTB
policy on the appearance of additional information on labels (that is,
information that is not mandatory information). Specifically, the
proposed provisions provided that additional information that is
truthful, accurate, and specific, and that does not violate the
restricted, prohibited, and prohibited if misleading provisions in
subparts F, G, or H of part 4, 5, or 7, for wine, distilled spirits, or
malt beverages, respectively, may appear on labels. Such additional
information may not conflict with, modify, qualify, or restrict
mandatory information in any manner.
NABI noted that proposed Sec. Sec. 4.56, 5.56, and 7.56 did not
specify type size requirements for additional information, but
suggested that, in the experience of its members, TTB specialists often
require the additional information to appear in uniform type size. NABI
stated that the regulations should ``codify clearly the fact that
uniformity is not required absent a TTB showing that the lack of
uniformity itself results in a statement or representation that
misleads the consumer.''
[[Page 7540]]
Beverly Brewery Consultants expressed concern about the provisions
in proposed Sec. 7.56, suggesting that the proposed regulation would
impose a new requirement that additional information be specific, and
providing examples of additional information that is not specific, such
as ``full of flavor'' and ``we have started a revolution with this
beer.''
DISCUS opined that proposed Sec. 5.56 should be struck on the
grounds that it is duplicative of proposed Sec. 5.122.
TTB Response
TTB is finalizing proposed Sec. Sec. 5.56 and 7.56 without change.
In response to the comment from NABI, TTB notes that neither the
current regulations nor the regulations adopted in this final rule
require that additional information be in a uniform type size. TTB does
not have a policy of requiring uniform type size on a general basis but
does sometimes evaluate the type size of additional information in
determining whether it qualifies mandatory information in a misleading
fashion. The prominence and type size of the optional information is
one factor in evaluating whether the information creates a misleading
impression as to the identity of the product. TTB will continue this
policy.
In response to the comment from Beverly Brewery Consultants, which
suggested that the proposed regulation would impose a new requirement
that additional information be specific, TTB emphasizes that the
regulations as finalized do not prohibit the inclusion of puffery (such
as ``full of flavor'') that is not specific. The proposed provisions in
Sec. Sec. 4.56, 5.56, and 7.56 authorize the use of additional
information that is truthful, accurate, and specific provided that it
is used in accordance with subparts F, G, and H. This does not prohibit
the use of non-specific ``puffery'' on labels.
In response to DISCUS, TTB does not agree that proposed Sec. Sec.
5.55 and 5.122 are duplicative. Proposed Sec. 5.55 is explicit in
authorizing the use of additional information, whereas proposed Sec.
5.122 sets out some of the parameters for all information on a
container, including additional information.
6. Subpart E--Mandatory Label Information
Proposed subpart E in parts 4, 5 and 7 sets forth the information
that is required to appear on alcohol beverage labels (otherwise known
as ``mandatory information''). This subpart also prescribes where and
how mandatory information must appear on such labels.
a. What Constitutes a Label
In Sec. Sec. 4.61, 5.61, and 7.61 TTB set out its current policy
specifying what is considered to be the ``label'' for purposes of
mandatory information placement.
DISCUS, WineAmerica, and the New York Farm Bureau expressed support
for the proposed provisions. NABI requested that TTB clarify in the
regulations whether or not TTB considers QR codes to be labeling or
advertising. They also suggested that TTB remove ``plastic film'' from
the proposed regulations that read ``[w]hen used in this part for
purposes of determining where mandatory information must appear, the
term ``label'' includes: (1) Material affixed to the container, whether
made of paper, plastic film, or other matter'' [emphasis added], and
replace it with ``plastic, metal * * *.''
TTB Response
TTB is finalizing Sec. Sec. 5.61, and 7.61 as proposed with the
exception that the finalized regulations will make clear that labels
can be made from plastic and/or metal, in addition to paper and ``other
matter.'' While a QR code itself is part of a label, TTB evaluates the
material it points to under its advertising regulations, as explained
in TTB Industry Circular 2013-1, ``Use of Social Media in the
Advertising of Alcohol Beverages,'' which provides as follows:
Industry members may also enable consumers to access content by
including a quick response code (or QR Code) on a label or
advertisement. Consumers can scan the QR Code with their mobile
device to access the additional content. Depending on the type of
media that is linked to by the QR Code (such as the industry
member's web page, mobile application, or blog), the relevant
regulations and TTB public guidance documents will apply. If, for
example, the QR code links to a document, such as a drink recipe
using an industry member's product, the recipe will be considered an
advertisement because it is a written or verbal statement,
illustration, or depiction that is in, or calculated to induce sales
in interstate or foreign commerce.
TTB believes that TTB Industry Circular 2013-1 covers this matter
adequately and there is no need to incorporate this policy into the
regulations.
b. Closed Packaging
Current regulations in Sec. Sec. 4.38a and 5.41 set out rules for
the placement of information on bottle cartons, booklets, and leaflets.
Briefly, these regulations provide that individual coverings, cartons,
or other containers of the bottle used for sale at retail (that is,
other than a shipping container), as well as any written, printed,
graphic, or other matter accompanying the bottle to the consumer shall
not contain any statement, design, device or graphic, pictorial, or
emblematic representation prohibited by the labeling regulations.
The current regulations also require the placement of mandatory
label information on sealed opaque coverings, cartons, or other
containers used for sale at retail (but not shipping containers).
Coverings, cartons, or other containers of the bottle used for sale at
retail that are designed so that the bottle is easily removable may
display any information that is not in conflict with the label on the
bottle contained therein. However, labels must display any brand names
or designations in their entirety, with any required modifications and/
or statements of composition.
Thus, the prohibited practices for labeling set forth in existing
Sec. Sec. 4.39(a) and 5.42(a) apply to bottles, labels on bottles, any
individual covering, carton, or other container of such bottles used
for sale at retail, and any written, printed, graphic, or other matter
accompanying such bottles to the consumer. The current labeling
regulations in part 7 do not include regulations similar to current
Sec. Sec. 4.38a and 5.41. However, as set forth at current Sec.
7.29(a) and (h), the prohibited practices in the labeling regulations
for malt beverages apply to containers, any labels on such containers,
or any cartons, cases, or individual coverings of such containers used
for sale at retail, as well as to any written, printed, graphic, or
other material accompanying malt beverage containers to the consumer.
In Notice No. 176, TTB stated that the existing regulations create
some confusion as to when a case constitutes labeling and when it
constitutes advertising. Accordingly, TTB proposed identical
regulations in proposed Sec. Sec. 4.62, 5.62, and 7.62 to address
packaging. The proposed regulations provided, consistent with existing
regulations in parts 4, 5 and 7, that packaging may not include any
statements or representations prohibited by the labeling regulations
from appearing on containers or labels. The proposed regulations also
provided, consistent with existing regulations in parts 4 and 5 but as
a new requirement for part 7, that closed packaging, including sealed
opaque coverings, cartons, cases, carriers, or other packaging used for
sale at retail, must include all mandatory information
[[Page 7541]]
required to appear on the label. The rationale for requiring mandatory
information on sealed opaque coverings is that the consumer is not able
to see the label on the container under normal conditions of retail
sale. This rationale would not extend to shipping containers that do
not accompany the container to the retail shelf.
Furthermore, the proposed regulations provided greater clarity than
the current provisions about when packaging is considered closed.
Proposed Sec. Sec. 4.62, 5.62, and 7.62 provide that packaging is
considered closed if the consumer must open, rip, untie, unzip, or
otherwise manipulate the package to remove the container in order to
view any of the mandatory information. Packaging is not considered
closed if a consumer could view all of the mandatory information on the
container by merely lifting the container up, or if the packaging is
transparent or designed in a way that all of the mandatory information
can easily be read by the consumer without having to open, rip, untie,
unzip, or otherwise manipulate the package. TTB sought comment on
whether TTB should require mandatory or dispelling information to
appear on open packaging when part of the label is obscured.
TTB solicited comments on whether the proposed rules would require
significant change to labels, containers, or packaging materials. TTB
also solicited comments on whether the proposed revisions would provide
better information to the consumer and make it easier to find mandatory
information on labels, containers, and packages.
The comments on this issue were split between those that supported
the proposed change and those that stated that the proposed amendments
would change TTB policies and impose new costs on industry members.
Some commenters, including the Oregon Winegrowers Association and the
Willamette Valley Wineries Association, supported the proposed
amendments and urged TTB to go even further, by providing that ``any
consumer facing information on a label or packaging cannot: (1) Be
misleading; and (2) convey any information that is unsupportable by the
label claims.''
The Williams Group supported the proposed provisions as providing
more information to consumers; however, they also indicated that the
amendments might require changes to some packaging.
The Brewers Association specifically expressed support for proposed
Sec. 7.62(c), which sets out provisions for closed packaging because
``[c]onsumers should be able to view the mandatory information at the
point of purchase.'' The Brewers Association further noted that many
brewers already place mandatory information on packaging.
The Beer Institute appeared to support proposed Sec. 7.62,
provided that ``TTB clarify the term `opaque packaging' as packaging
through which individual malt beverage bottles/cans (and mandatory
information contained thereon) cannot be seen by the consumer.''
However, other commenters, including Heavy Seas Beer, DISCUS, and
the Wine Institute, opposed proposed Sec. Sec. 4.62, 5.62, and 7.62,
on the basis that the new requirements would require changes to current
packaging and would thus impose financial burdens. Heavy Seas Beer
commented as follows:
[C]hanging all secondary packaging to meet label requirements,
meaning can wraps and mother cartons, this would be a significant
financial burden for smaller suppliers, as the origin plates would
need to be remade. The cost per plate can run from $1,500-$4,000 per
package. We estimate that the financial burden for this change would
cost our brewery about $75,000, which we simply don't have. If this
new section were to be put into place, we would need 2-4 years to
implement 100%.
Wine Institute and DISCUS argued, without providing specific data,
that the proposal would impose a financial burden. DISCUS argued that
the proposed amendments would ``adversely affect packaging such as gift
boxes, gift bags, tubes, etc.'' because this type of packaging would be
required to bear mandatory information. DISCUS further requested that--
if the proposed rule is adopted--TTB use the language ``sealed'' and
``otherwise manipulate'' rather than ``closed.'' Wine Institute
suggested that the proposed clarifications to TTB policy on what type
of packaging was ``closed'' represented a change in policy, and stated
that ``TTB should not change its policy on containers that can be
opened and restored to its original condition; in other words, without
breaking any type of seal, glue or similar type of permanent closure.''
The New York Farm Bureau, WineAmerica, Heavy Seas Beer, and a
member of the public raised concerns about the cost of having to place
mandatory information on ``shipping containers'' and ``mother
cartons,'' and also discussed the use of this type of packaging for
direct-to-consumer sales (such as sales by wine clubs). Beverly Brewery
Consultants made the observation that proposed Sec. 7.62 would result
in modification or redesign of packaging. Finally, Senator Kennedy
commented in opposition to this proposal as one of many that could be
confusing for consumers and lead to label resubmission.
TTB Response
After carefully considering the comments, it is TTB's conclusion
that the proposed amendment caused confusion on the part of industry
members with regard to whether the proposed amendment would apply to
shipping cartons; this was not the intent of the proposed revision.
However, based on the comments, TTB cannot determine with any certainty
the extent to which the proposed new requirements would require
industry members (in particular, brewers) to change their packaging
materials and incur new costs. TTB does not believe that this can be
resolved without undergoing additional notice and comment rulemaking on
a more specific proposal regarding this issue.
Accordingly, TTB will consider the new requirements for malt
beverages as suggestions for future rulemaking but will not adopt these
requirements at this time. Instead, TTB will retain the current
regulations with regard to parts 5 and 7, with minor modifications to
section 7.62 to clarify that the prohibition against statements or
representations that would be prohibited on a label would include
misleading brand names and class/type designations. This is consistent
with current TTB policy. TTB recognizes that this means the regulations
will not require malt beverages to display mandatory information on
closed cartons. However, malt beverage cartons, cases, or other
coverings of the container used for sale at retail will continue to be
subject to the prohibited practices provisions. With regard to
clarification of current policy as to what constitutes sealed packaging
for industry members, TTB is not changing its current interpretation of
the existing regulations.
c. Brand Names and Trademarks
Proposed Sec. Sec. 4.64, 5.64, and 7.64 set forth requirements for
brand names of wine, distilled spirits, and malt beverages,
respectively. The proposed regulations simply clarify the current
regulations by providing that a brand name is misleading if it creates
(by itself or in association with other printed or graphic matter) any
erroneous impression or inference as to the age, origin, identity, or
other characteristics of the distilled spirits. A brand name that would
otherwise be misleading may be qualified with the word ``brand'' or
[[Page 7542]]
with some other qualification, if the appropriate TTB officer
determines that the qualification dispels any misleading impression
that the label might otherwise create.
The Mexican Chamber of the Tequila Industry commented that proposed
Sec. 5.64 should be revised to include more specific criteria for
determining whether a brand name is misleading, and that legal or
administrative instruments should be established to resolve any
disagreement in this regard between the TTB official and the brand
owner.
TTB Response
TTB is finalizing Sec. Sec. 5.64 and 7.64 as proposed. TTB is not
making the change suggested by the Mexican Chamber of the Tequila
Industry regarding the inclusion of more specific criteria, and the
notice did not solicit comments on more specific language. TTB will
consider this comment as a suggestion for future action. With regard to
the process for resolving disagreements between TTB and brand owners,
TTB notes that the procedures in part 13 regarding administrative
appeals of the denial or revocation of label approval would apply to
brand name issues as well as any other labeling issue that an applicant
or certificate holder wishes to contest through the administrative
process.
d. Name and Address
In the regulations on the name and address of bottlers and
producers of domestically bottled wine, distilled spirits, and malt
beverages, Notice No. 176 proposed clarifying changes to existing
requirements.
The FAA Act provides that wine, distilled spirits, and malt
beverage labels must contain certain mandatory information, including
the name of the manufacturer, bottler, or importer of the product. See
27 U.S.C. 205(e)(2). Under current regulations, bottlers of distilled
spirits and malt beverages may list either the place of bottling, every
location at which the same industry member bottles the product, or,
under certain circumstances, the principal place of business of the
industry member that is bottling the product. Bottlers of distilled
spirits or malt beverages that utilize one of the latter two options
must mark the labels using a coding system that enables the bottler and
TTB to trace the actual place of bottling of each container. This both
protects the revenue and allows for the tracing of containers in the
event of a product recall.
In Notice No. 176, TTB noted that, with the growing number of craft
brewers and craft distillers in the marketplace, there may be more
interest among consumers as to where malt beverages are brewed and
where distilled spirits are distilled. On the other hand, TTB also
wished to provide industry members with flexibility in their labeling
statements, to accommodate the growing number of arrangements where
products are produced or bottled pursuant to contractual arrangements.
One of the major reasons for allowing the use of principal places of
business and multiple addresses on labels is to allow industry members
to use the same approved label for their products that are bottled or
imported at different locations rather than having to seek approval of
multiple labels. In Notice No. 176, TTB noted that, under both the
existing and proposed regulations, industry members are always free to
include optional statements that provide consumers with more
information about their production and bottling processes if they wish.
Accordingly, TTB sought comments from all interested parties, including
industry members and consumers, on whether the proposed labeling
requirements provided adequate information to the consumer while
avoiding undue burdens on industry members.
With regard to alcohol beverages imported in containers, the name
and address inform the consumer of the identity of the importer of the
alcohol beverage product and the location of the importer's principal
place of business. The current regulations at Sec. Sec. 4.35(b),
5.36(b), and 7.25(b) provide that, on labels of imported wines,
distilled spirits, and malt beverages, respectively, the words
``imported by,'' or a similar appropriate phrase, must be stated,
followed immediately by the name of the permittee who is the importer,
or exclusive agent, or sole distributor, or other person responsible
for the importation, together with the principal place of business in
the United States of such person.
Like the current regulations, the proposed regulations in
Sec. Sec. 4.68, 5.68, and 7.68 required the name and address of the
importer when the product is imported in containers. The proposed
regulations clarified that for purposes of these sections, the importer
is the holder of an importer's basic permit making the original customs
entry into the United States, or is the person for whom such entry is
made, or the holder of an importer's basic permit who is the agent,
distributor, or franchise holder for the particular brand of imported
alcohol beverages and who places the order abroad. These provisions
mirror the policy set forth in Revenue Ruling 71-535 with regard to the
name and address requirements applicable to importers.
Proposed Sec. Sec. 4.67, 5.67, and 7.67 addressed the labeling of
products bottled after importation, in a manner largely consistent with
current regulations. If the product is bottled after importation in
bulk, by or for the importer thereof, the proposed rules required an
``imported and bottled by'' or ``imported by and bottled for''
statement, as appropriate.
The proposed regulations in Sec. Sec. 4.67, 5.67, and 7.67
specifically addressed, for the first time, the name and address
requirements applicable to wine, distilled spirits, and malt beverages
that are imported in bulk and then subject to further production or
blending activities in the United States.
In section 1421 of the Taxpayer Relief Act of 1997, Public Law 105-
34, Congress enacted a new IRC provision that permits the transfer of
beer in bulk containers from customs custody to internal revenue bond
at a brewery. After transfer to internal revenue bond at a brewery,
imported beer may be bottled or packed without change or with only the
addition of water and carbon dioxide, or may be blended with domestic
or other imported beer and bottled or packed.
In ATF Procedure 98-1, TTB's predecessor agency provided guidance
to brewers and bottlers for the labeling of imported malt beverages
bottled in the United States. This guidance was necessary because the
existing regulations in part 7 do not address the labeling of imported
malt beverages that are bottled in the United States, or the labeling
of imported malt beverages that are blended with other imported malt
beverages or with domestic malt beverages, and then bottled or packed
in the United States.
Similarly, the current regulations in part 5 provide for the
labeling of distilled spirits bottled after importation, but do not
provide rules concerning the labeling of spirits that were subject to
production activities in the United States after importation.
Thus, proposed Sec. Sec. 4.67, 5.67, and 7.67 provide rules for
the labeling of wine, distilled spirits, and malt beverages,
respectively, that are imported in bulk and are then blended with wine,
distilled spirits, or malt beverages of a different country of origin,
or subjected to production activities in the United States that would
alter the class or type of the product. The proposed rules provide that
such products must be labeled with a ``bottled by'' statement, rather
than an ``imported by'' statement.
[[Page 7543]]
The proposed regulations also included new provisions on the use of
trade names, and the name and address requirements for ``contract
bottling'' situations, in which products are produced and/or bottled by
a third party pursuant to a contact with the brand owner. While these
provisions were new to the regulations, they reflect current TTB
policy. Finally, to reflect current TTB policy, TTB proposed new
language in the regulations regarding the use of misleading trade
names.
In response to the proposed regulations, TTB received comments from
various interested parties, including alcohol beverage producers, trade
associations, and individual commenters. Some of the commenters
addressed wine-specific issues, which TTB is not addressing in this
document.
e. Organization and General Comments
Regarding the reorganization of existing 27 CFR 5.36 into three
distinct sections, DISCUS stated that it opposed the proposed
Sec. Sec. 5.66, 5.67, and 5.68 because ``[t]here is no reason to
divide the existing rule into three separate proposals'' and that the
proposed regulations ``are convoluted and inconsistent with the
direction of providing essential, understandable information for
consumers.'' DISCUS also stated that current Sec. 5.36(a)(6) and
current Sec. 5.36(b)(2)(iii) sufficed for purposes of identifying the
proprietor and importer, respectively, and their principal place of
business.
With regard to proposed 27 CFR 5.66, specifically, DISCUS opposed
the proposal on the ground that it ``not only fails to modernize the
labeling and advertising rules but also is out of sync with historic
industry practices and today's economy. There is no evidence to suggest
that consumers are confused with the existing name and address rules
and this new proposal only would serve to further confuse consumers.''
The Beer Institute commented that it was ``generally concerned
about the changes proposed,'' as TTB did not explain why current
regulations are inadequate and that ``speculation that more activity in
the malt beverage sector `may' lead consumers to want more information
about where malt beverages are brewed simply isn't enough to justify
regulatory change.'' The Beer Institute noted that industry members may
choose to provide consumers with more information about their
production and bottling process and urged TTB to allow market and
consumer demands ``to dictate the level of specificity.''
TTB Response
In response to the DISCUS comment regarding TTB's proposed division
of Sec. 5.36 into three distinct sections, TTB notes that the proposed
regulations are intended to more clearly distinguish between the
regulatory requirements for domestically produced distilled spirits,
distilled spirits imported in containers, and distilled spirits bottled
after importation by separating the current name and address section
into three separate sections. TTB believes that setting out these
requirements in separate sections promotes ease of compliance for
industry members.
Furthermore, the new regulations offer greater clarity and promote
compliance by incorporating previously issued guidance documents. For
instance, the proposed regulations clarify what is meant by
``importer'' for purposes of these sections by incorporating Revenue
Ruling 71-535 into the regulations. The new regulations offer further
clarity by setting out new regulatory requirements for distilled
spirits that were bottled after importation and that were subject to
further production or blending activities in the United States.
f. Distinguishing Between Imported and Domestic Products
NABI expressed its support for proposed 27 CFR 4.68. 5.68, and 7.68
and stated that the proposed sections are ``helpful'' because they
provide ``greater specificity of the parties that may appear on the
label [and] names of the importer in the `imported by' statement than
does the current sections 4.25(b)(1), 5.36(b)(1), and 7.25(b).''
Concerning proposed 27 CFR 7.67, Beverly Brewery Consultants expressed
its support for the incorporation of TTB Procedure 98-1 in the
regulations, as it ``has existed far too long without being
incorporated into the CFR.''
However, DISCUS raised objections to the introduction of the term
``wholly made'' when referring to products made in the United States
without imported distilled spirits, commenting as follows:
The existing name and address rule has worked well for industry
members and the introduction of the term ``wholly made'' only serves
to confuse matters. TTB requests comments regarding whether these
proposals provide adequate information to consumers and avoid undue
burdens on industry members--we respectfully submit that the
existing language better balances these concerns.
With regard to proposed 27 CFR 5.67, alcohol beverage attorney
Steven Masket commented as follows:
Both Section 5.67(a) and Section 5.69 reflect the intention of
the TTB to defer to [CBP] with respect to country of origin marking,
but the bald enumeration of processes in 5.67(c), results in the
possibility that a product of foreign origin will be marked as
domestic. I ask that the TTB further clarify that a product that is
foreign should be treated and marked as imported and not considered
domestic by the sheer action of simply blending or production
activities conducted after importation in bulk, unless those
activities meet the [CBP] rules related to country of origin
marking.
Mr. Masket suggested that TTB revise the regulations to either
distinguish between imported products that TTB considers to have
undergone a substantial transformation in the United States under CBP
rules and those that have not. Or, alternatively, Mr. Masket suggests
that, if TTB ``does not believe that the identity of the importer is
relevant after any of those certain processing activities enumerated in
Sec. 5.67(c) are conducted in the United States, whether substantial
transformation [has occurred] or not under CBP regulations,'' that TTB
should amend section 5.67(c) to add a reference to the CBP marking
requirements.
TTB Response
In response to the DISCUS comment, TTB believes that the proposed
regulatory text regarding products that are ``wholly made'' in the
United States without imported distilled spirits clearly distinguishes
those products from domestic distilled spirits that are blended with
imported distilled spirits. TTB addresses the latter category of
products in the section pertaining to imported spirits that are blended
with domestic spirits after importation.
In response to Mr. Masket's comments on Sec. 5.67(c), TTB does not
believe it is necessary to revise the proposed Sec. 5.67(c) to
distinguish between products that have undergone a substantial
transformation under CBP rules and those that have not. The TTB
regulation does not require the use of the term ``imported by'' to
describe beverages that have undergone production activities in the
United States. This in no way implies that such products may not be
considered to have a foreign country of origin under CBP rules, and in
fact consistent with current regulations, the regulations at Sec. 5.69
include a cross-reference to CBP regulations regarding country of
origin marking requirements at 19 CFR parts 102 and 134. This section
reflects TTB's intention to defer to CBP on the determination of
whether a country of origin statement is required to appear on
distilled spirits bottled after importation that are subject to further
production or blending activities in the United States
[[Page 7544]]
and, if a statement is required, on determinations of the appropriate
country of origin. Accordingly, when CBP requires a country of origin
statement to appear on a distilled spirits container, such labeling
statements must be consistent with CBP regulations.
As to Mr. Masket's comment on Sec. 5.67(c)'s prohibition on
placing an ``imported by'' statement on a label of distilled spirits
bottled after importation and subject to certain processes in the
United States, it is TTB's position that a ``bottled by'' statement is
more appropriate for the labeling of such products in order to
adequately distinguish such products from alcohol beverages that are
imported in containers.
g. Comments in Favor of Imposing New Requirements With Regard to Names
and Addresses on Labels
In addition to comments on the proposed regulations, several
comments provided suggestions for further amendments to the
regulations. The Brewers Association requested that TTB require labels
to disclose whether brewers are part of a controlled group, as defined
in 26 U.S.C. 5051(a) if the name of the controlled group is different
from the brewery or its trade name as it appears on the label. As a
basis for this proposal, the Brewers Association stated that disclosing
brewery ownership is fundamental to TTB's responsibilities in
implementing the FAA Act and that current regulations allow large
companies to hide their ownership and control over multiple brands.
NBWA commented in favor of strengthening transparency with regard to
the identity of alcohol beverage producers.
TTB Response
In response to comments that advocate for new regulatory
requirements within the name and address sections, TTB considers such
comments as outside the scope of this rulemaking as Notice No. 176 did
not solicit comments from industry or the general public on these
specific proposals. For example, the Brewers Association comment in
favor of requiring brewers to identify whether they are members of
``controlled groups'' under tax laws would represent a new requirement.
Such a requirement would go beyond the longstanding policy of TTB and
its predecessor agencies to allow the use of trade names, rather than
the actual corporate names of bottlers or importers (much less the
status of such companies as members of controlled groups) in the
labeling of alcohol beverages. TTB's statutory mandate is to ensure
that the labels identify the bottler or importer of the product.
Accordingly, TTB is not adopting regulations that would go beyond the
identification of the bottler or importer by requiring additional
information about producers, bottlers, or importers in the name and
address regulations.
h. Misleading Trade Names
The Beer Institute expressed its concern about TTB's proposal to
prohibit the use of trade names that would create a misleading
impression as to the age, origin, or identify of the product. The Beer
Institute stated that TTB did not provide a specific explanation of the
need for this proposal and that it ``would be a dramatic change to the
long-standing practice for contract production brewers to adopt and use
the customer's name/trade name on the labels.'' DISCUS also raised
concerns about the provisions regarding the use of trade names,
commenting as follows:
The requirement in subsection (g)(2) regarding trade names is
unnecessary. Some trade names have been used for years and could be
impacted solely because TTB deems them to be misleading
(irrespective of whether consumers are misled). TTB has limited
resources and is not equipped to make determinations as to what is
and is not misleading in this context and TTB should not make
arbitrary changes to longstanding trade names. Separately, requiring
changes to brand names could cause immense harm and have untold
financial and marketplace impacts for industry members.
TTB Response
TTB intended the provision on misleading trade names to reflect
current policy with regard to the misleading use of trade names.
However, TTB did not intend to prohibit, for example, the adoption of
one industry member's trade name on the basic permit or brewer's notice
of another industry member in the context of a contract bottling or
production arrangement.
TTB is finalizing the provision that allows for the use of trade
names. This is consistent with current regulations in part 5 for
distilled spirits and current policy for malt beverages. However, TTB
is not adopting the proposed language specifying that trade names may
not be used in a misleading manner. However, TTB is maintaining its
current policy on this issue, and will view the comments as suggestions
for further public guidance on this issue to clarify TTB's policy. TTB
notes that the general prohibition on the use of misleading statements
on labels suffices to provide TTB with authority to regulate the
misleading use of trade names; however, we also stress that TTB does
not consider the use of identical trade names by different permittees
in a contract bottling or production context misleading, in and of
itself.
7. Subparts F, G, and H--Statements That Are Restricted, Prohibited, or
Prohibited if Misleading
The current regulations include a single section titled
``Prohibited Practices'' that sets forth a number of prohibited
practices, and it also describes certain labeling practices that TTB
regulates in various ways. To make regulatory provisions easier to
find, and to improve readability, TTB proposed to divide the
regulations addressing prohibited practices into three subparts: (1)
Subpart F, practices that may be used under certain conditions, (2)
subpart G, practices that are always prohibited, and (3) subpart H,
practices that are prohibited only if they are used in a misleading
manner on labels.
Proposed subparts F, G, and H each contain language to clarify that
the prohibitions in these subparts apply to any label, container, or
packaging, and define those terms as used in these subparts.
Specifically, for purposes of proposed subparts F, G, and H, the term
``label'' includes all labels on alcohol beverage containers on which
mandatory information may appear, as set forth in proposed Sec. Sec.
4.61, 5.61, and 7.61, as well as any other label on the container.
These proposed sections also set out the parts of the container on
which mandatory information may appear.
The proposed text defines ``packaging'' for purposes of proposed
subparts F, G, and H as any carton, case, carrier, individual covering,
or other packaging of such containers used for sale at retail. It does
not include shipping cartons or cases that are not intended to
accompany the container to the consumer. The proposed rule also
provides that the term ``statement or representation'' as used in those
subparts includes any statement, design, device, or representation, and
includes pictorial or graphic designs or representations as well as
written ones. It also includes both explicit and implicit statements
and representations. This provision avoids the need to repeat the
reference to each type of statement or representation in every section
in these subparts.
a. Subpart F--Restricted Labeling Statements in General
Proposed Sec. Sec. 4.81, 5.81, and 7.81 set out that the labeling
practices covered under subpart F (such as organic claims or food
allergen labeling) may be used
[[Page 7545]]
on labeling only when used in compliance with the provisions set out in
subpart F.
DISCUS expressed support for this section. Beverly Brewery
Consultants stated that Sec. 7.81(a)(1) was unnecessary and commented
that there was no explanation as to why the definition of ``container''
in paragraph (a)(2) differs from the provision in the definitions
section.
TTB Response
TTB is finalizing proposed Sec. Sec. 5.81 and 7.81 as proposed.
TTB disagrees with the comment from Beverly Brewery Consultants with
regard to each section's paragraph (a)(1), which sets forth the general
requirements applicable to restricted labeling statements, and makes
the regulations easier to understand. With regard to each section's
paragraph (a)(2), its purpose is not to define what a container is, but
to clarify that the provisions regarding restricted labeling statements
apply to all parts of the container, including those parts of the
container on which information would not satisfy mandatory labeling
requirements. For example, the regulations in Sec. Sec. 5.61 and 7.61
provide that information appearing on the bottom surface of a container
would not satisfy mandatory labeling requirements. However, pursuant to
the language in Sec. Sec. 5.81(a)(2) and 7.81(a)(2), information
appearing on the bottom surface of the container would nonetheless be
subject to the provisions on restricted labeling practices. Thus, for
example, the regulations would prohibit use of an optional ``organic''
claim on the bottom surface of a container unless the use of the claim
met the requirements set forth in the regulations. The final
regulations do not include any changes to the language of the proposed
regulations.
b. Voluntary Disclosure of Major Food Allergens
TTB received two comments that are specific to the proposed
regulations pertaining to voluntary allergen labeling in Sec. Sec.
4.82, 5.82, and 7.82, which set out the current regulatory provisions
without change. DISCUS commented in support of the provisions as
proposed. The Brewers Association commented in favor of mandatory
allergen labeling, and stated that ``[i]n the event that TTB decides to
maintain the existing voluntary allergen disclosure policy, the BA
believes that this issue warrants a separate rulemaking in the
future.'' In addition, as noted in section I.E.1.a of this document,
TTB received several comments from consumers and consumer groups in
support of mandatory allergen labeling.
TTB Response
TTB is finalizing Sec. Sec. 5.82 and 7.82 as proposed. As
explained in section I.E.1.a. of this document, comments about
mandatory allergen labeling are beyond the scope of this rulemaking. In
the preamble to Notice No. 176, TTB specifically stated that there were
a number of ongoing rulemaking initiatives related to labeling and
advertising of alcohol beverages, including any substantive changes to
the allergen labeling requirements, which TTB stated it would handle
separately from the proposed rule due to their complexity. TTB will
treat comments in favor of mandatory allergen labeling as suggestions
for future rulemaking.
c. Environmental, Sustainability, and Similar Statements
In Notice No. 176, TTB proposed a new section in parts 4, 5, and 7
(see proposed Sec. Sec. 4.85, 5.85, and 7.85) on the use of statements
relating to environmental and sustainability practices. The proposed
rule allowed statements related to environmental or sustainable
agricultural practices, social justice principles, and other similar
statements (such as, ``Produced using 100% solar energy'' or ``Carbon
Neutral'') to appear on labels as long as the statements are truthful,
specific, and not misleading. Similarly, the proposed regulations
provided that statements or logos indicating environmental, sustainable
agricultural, or social justice certification (such as, ``Biodyvin,''
``Salmon-Safe,'' or ``Fair Trade Certified'') may appear on labels of
products that are actually certified by the appropriate organization.
WineAmerica, the New York Farm Bureau, and Sazerac expressed
support for the proposed regulations. However, some commenters,
including the Brewers Association, DISCUS, and Comit[eacute] European
des Enterprises Vins opposed the proposed provisions as unnecessary and
unduly restrictive, and commented that they would delay the label
review process.
TTB Response
TTB has determined that some commenters misunderstood the effect of
the proposed regulations, and misconstrued the proposed regulation to
require additional steps to the label review process, whereas the
proposal simply clarified that the identified claims must be truthful,
specific, and non-misleading, and that certification claims must be
truthful. Nonetheless, TTB is not finalizing proposed Sec. Sec. 5.85
and 7.85 because TTB agrees that the general regulations on false or
misleading claims adequately cover this issue.
d. Use of the Term ``Organic''
Current TTB labeling regulations do not define the term
``organic,'' but instead provide that the optional use of the term
``organic'' in labeling and advertising must comply with regulations
issued by the United States Department of Agriculture's (USDA's)
National Organic Program (7 CFR part 205), as the USDA interprets those
regulations. Proposed Sec. Sec. 4.84, 5.84, and 7.84 would clarify
current TTB regulations by editing existing language specifically
stating that organic claims must conform with USDA regulations
concerning the National Organic Program. DISCUS expressed support for
the proposed regulation. TTB also received comments with regard to
certification requirements that are specific to imported wine, which
TTB will address when it finalizes the proposed wine regulations.
TTB Response
TTB is Finalizing Sec. Sec. 5.84, and 7.84 as Proposed.
e. Prohibited Labeling Practices in General
Subpart G sets forth the prohibited labeling practices. Proposed
Sec. Sec. 4.101, 5.101, and 7.101 provide that the prohibitions set
forth in this subpart apply to any label, container, or packaging, and
then sets out the definitions of those terms for purposes of this
subpart. The prohibited practices include false statements and obscene
or indecent depictions. The proposed rule restated and reorganized
prohibitions currently found in the TTB regulations.
DISCUS commented that this provision was unnecessary on the basis
that it is ``repetitive and addressed elsewhere.''
TTB Response
TTB is finalizing Sec. Sec. 5.101, and 7.101 as proposed. As
previously noted, TTB proposed to divide the regulations addressing
prohibited practices into three subparts: (1) Subpart F, practices that
may be used under certain conditions, (2) subpart G, practices that are
always prohibited, and (3) subpart H, practices that are prohibited
only if they are used in a misleading manner on labels. This final rule
adopts this organization; accordingly, it is necessary to provide for
the substantive prohibitions in each subpart so that the reader does
not need to refer to a
[[Page 7546]]
different subpart to understand the scope of the regulation. TTB
believes this organization makes it easier for industry members to
locate and understand necessary information.
f. False or Untrue Statements
Current regulations prohibit labeling statements that are false or
untrue in any particular, or that, irrespective of falsity, directly,
or by ambiguity, omission, or inference, or by the addition of
irrelevant, scientific, or technical matter, tends to create a
misleading impression. The FAA Act, 27 U.S.C. 205(e), authorizes the
issuance of regulations to prohibit statements that are either false or
misleading. As previously noted, TTB's proposed reorganization of the
regulations places the prohibitions against false statements and
misleading statements in separate subparts. Thus, the regulations on
false statements were proposed in Sec. Sec. 4.102, 5.102, and 7.102
within Subpart G, Prohibited Labeling Practices, while the prohibitions
on misleading statements were proposed in Subpart H, Labeling Practices
That Are Prohibited If They Are Misleading. The American Craft Spirits
Association (ACSA) expressed support for proposed Sec. 5.102. However,
DISCUS expressed opposition to the proposed restatement of existing
regulations.
TTB Response
TTB is finalizing Sec. Sec. 5.102 and 7.102 as proposed. TTB
believes that the reorganization of the existing prohibition will make
the regulations easier to read and understand. The restatement of this
statutory prohibition does not change current requirements or policy,
but it does conform more closely to how commercial speech is analyzed
under the First Amendment, which distinguishes between false commercial
speech (which is not protected) and misleading commercial speech
(which, if it is only potentially misleading, may be qualified in a
manner that dispels the otherwise misleading impression created by the
claim). See Pearson v. Shalala, 164 F.3d 650 (D.C. Cir. 1999).
g. Obscene or Indecent
Consistent with current regulations, proposed Sec. Sec. 4.103,
5.103, and 7.103 provide that wine, distilled spirits, and malt
beverage labels, containers, or packaging may not contain any statement
or representation that is obscene or indecent.
The ACSA commented that they are ``neutral'' on this provision.
Sazerac commented that TTB was approving labels that, in its view, were
``fairly obviously'' obscene.
Several commenters asserted that there were First Amendment
concerns with the regulatory prohibition on ``obscene and indecent''
materials on labels. DISCUS and the Brewers Association urged TTB to
amend the regulations to remove the prohibition altogether. DISCUS
suggested that the terms are ``subjective concepts'' and questioned
``who will be the judge of what is indecent or obscene in the context
of TTB labeling or advertising regulations.'' The Brewers Association
included this prohibition along with other regulations that it
suggested were ``subject to First Amendment challenges as an agency of
the federal government is forced to make subjective decisions approving
or disapproving messages that brewers are communicating to consumers.''
The Brewers Association suggested that this type of regulation would be
better left to self-enforcement through trade associations. The New
Civil Liberties Alliance commented that the proposed regulation
provided discretion to TTB that was ``inherently boundless because a
licensing official must make his or her own ad hoc subjective
determination as to whether the content of the COLA application meets
his or her standards for decency.''
The Wine Institute suggested amending the regulations to prohibit
only obscene material, noting that indecent speech receives protection
under the First Amendment, and suggesting that the relevant case law
indicates ``that such regulations are vulnerable to a First Amendment
challenge.'' In particular, the Wine Institute pointed to the decisions
in two cases involving First Amendment challenges to efforts by States
to ban alcohol beverage labels with vulgar or offensive images. See Bad
Frog Brewery, Inc. v. N.Y. State Liquor Auth., 134 F.3d 87 (2d Cir.
1998), and Flying Dog Brewery, LLLP v. Michigan Liquor Control Com'n,
597 Fed. Appx. 342 (6th Cir. 2015).
TTB Response
TTB is not adopting the suggestion to eliminate the prohibition on
``obscene'' material on labels or advertisements because the current
regulatory prohibition simply incorporates the statutory prohibitions
in 27 U.S.C. 205(e)(4). Furthermore, it is well recognized that the
First Amendment does not protect ``obscene'' speech or child
pornography. See Sable Communications v. FCC, 492 U.S. 115, 124 (1989).
Thus, the statutory and regulatory prohibitions on ``obscene'' labels
and advertisements do not violate the First Amendment.
In evaluating whether labels are ``obscene,'' TTB is mindful of the
three-pronged test established by the U.S. Supreme Court in Miller v.
California, 413 U.S. 15, 24-25 (1973). TTB recognizes that applying
this test in a prior approval context is a difficult challenge.
TTB agrees that the Wine Institute has raised a valid point about
whether there is a distinction between ``obscene'' and ``indecent''
speech under the FAA Act. TTB is aware that offensive speech that is
not obscene receives protection under the First Amendment, and TTB is
mindful of these First Amendment limitations when reviewing labels and
advertisements. In Iancu v. Brunetti, 139 S. Ct. 2294, 2299 (2019), the
Supreme Court struck down a provision of the Lanham Act that barred the
registration of ``immoral'' or ``scandalous'' trademarks, finding it to
be a viewpoint-based ban. The Court also noted that the Justices, in
Matal v. Tam, 137 S. Ct. 1744 (2017), had ``found common ground in a
core postulate of free speech law--the government may not discriminate
against speech based on the ideas or opinions it conveys.'' However,
the FAA Act's restriction on obscene and indecent speech is not a
viewpoint-based restriction. TTB does not reject labels on the sole
grounds that they might be offensive. Instead, as the Sazerac
acknowledges, TTB has approved labels including content that some
people may find offensive, including labels that include expletives or
nudity in certain contexts, based on the First Amendment protections
afforded to such speech under current case law.
Because TTB did not seek specifically comments on this issue in
Notice No. 176, TTB believes that it cannot make any substantive
changes to the existing standard without engaging in notice and comment
rulemaking on the issue. TTB will treat the comments on this issue as
suggestions for future rulemaking action, and will retain the statutory
prohibition in existing regulations. Nonetheless, in applying that
standard, TTB will continue to apply current case law under the First
Amendment, and will not reject labels on the sole grounds that they may
be offensive. As always, TTB urges industry members to consider that,
while their products are intended only for adult consumption, labels on
containers may be visible to children on store shelves.
h. Subpart H--Labeling Practices Prohibited as Misleading
Proposed Sec. Sec. 4.122(a), 5.122(a), and 7.122(a) set out the
general prohibition against any statement or representation,
[[Page 7547]]
irrespective of falsity, that is misleading to consumers as to the age,
origin, identity, or other characteristics of the wine, distilled
spirits, or malt beverages, or with regard to any other material
factor. Proposed Sec. Sec. 4.122(b), 5.122(b), and 7.122(b) also
provided as follows: ``For example, an otherwise truthful statement may
be misleading because of the omission of material information, the
disclosure of which is necessary to prevent the statement from being
misleading.'' This is not a new policy, but the proposed rule sets it
out more clearly.
The Wine Institute urged TTB to eliminate the examples in proposed
Sec. 4.122 and elsewhere in the Code of Federal Regulations,
suggesting that examples are better conveyed to industry via written
guidance documents made available on the agency's website. The Wine
Institute stated that ``[b]y providing examples of permissible or
impermissible label statements in written guidance, TTB will be able to
create or change examples and communicate this information to industry
members in an expeditious manner as opposed to making further points of
clarification or adjustments to the Code of Federal Regulations.''
TTB Response
This final rule adopts proposed Sec. Sec. 5.122 and 7.122 as
proposed. In this case, the example simply illustrates an important
principle to facilitate industry understanding of the regulations,
rather than a factual situation that might change with other
circumstances. Accordingly, the final rule retains this example.
i. General First Amendment Concerns
Subject to certain limited exceptions, the FAA Act specifically
requires industry members to obtain a certificate of label approval in
order to prevent the introduction into interstate commerce of alcohol
beverage containers that are not labeled in accordance with the
implementing regulations. See 27 U.S.C. 205(e). Nonetheless, TTB
received some comments that raised general First Amendment concerns
about the pre-approval of labels to enforce the statutory prohibition
on misleading statements on alcohol beverage labels subject to the FAA
Act.
NABI commented that while current case law does not protect
misleading commercial speech, ``it sets a high bar for the Federal
Government in backing up and proving its claim that any one specific
representation on a label or in an advertisement is misleading.'' NABI
further suggested that ``waiting for consumer complaints about specific
labels or advertisements may be the better approach than purely
speculating in advance of approving a certificate of label approval
(COLA) or pre-clearing a proposed advertisement.''
The New Civil Liberties Alliance (NCLA), which describes itself as
``a nonprofit civil rights organization founded to defend
constitutional rights,'' commented on several First Amendment issues.
The NCLA stated that the proposed rule reformed ``an overly burdensome
regulatory system.'' However, its comment also argues that ``COLAs are
unconstitutional prior restraints on liberties guaranteed to all
Americans by the First Amendment. To ameliorate the unconstitutional
impact of restraints on speech, the Rule should apply the process and
post-publication enforcement of the proposed labeling requirements for
COLAs related to personalized labels * * * to all COLAs.'' [Emphasis in
original.]
The NCLA comment questioned the distinction between the treatment
of labels (which TTB reviews prior to the introduction of the product
in interstate commerce) and advertisements (for which TTB does not
require prior review). NCLA suggested that TTB instead amend the
regulations to allow the approval of COLAs that include a ``template''
of mandatory information, and stated that this approach would be a
logical extension of TTB's current and proposed policies regarding
allowable revisions to approved labels and approval of personalized
labels.
The Washington Legal Foundation (WLF), a nonprofit, public-interest
law firm and policy center, stated that while TTB's proposed rule is in
many ways clarifying, it ``inadequately protects commercial-speech
rights. TTB is interested in promoting marketplace civility and
ensuring that consumers are not misled, but rules promoting these
laudable aims must still avoid unduly chilling free speech rights under
the First Amendment.''
The Brewers Association (BA) submitted a comprehensive comment on
this issue, stating as follows:
As a basic policy, the BA respectfully suggests that TTB treat
all types of label claims and trade dress in a similar manner. If
claims, graphics, or other content on a label are misleading on the
label as submitted, or if claims obscure or improperly modify
mandatory information, TTB should address whatever elements of the
label are misleading. Otherwise, the BA believes that TTB should
maintain its focus on mandatory information concerning malt
beverages. TTB could expressly reserve the right to initiate label
revocation proceedings or enforcement action to seek corrections if
claims on labels are determined to be false or misleading via
competitor complaints or other credible sources, such as the Federal
Trade Commission or recognized third party accreditation
organizations.
Various proposals in Notice 176 impose content restrictions
based on existing TTB regulations that are difficult or impossible
for TTB to enforce in an evenhanded manner and may violate
commercial speech protections guaranteed by the First Amendment.
See, e.g., Cabo Distributing Co., Inc. v. Brady, 821 F. Supp. 601
(N.D. Cal. 1992); Bad Frog Brewery v. New York State Liquor
Authority, 134 F.3d 87 (1998). The recent U.S. Supreme Court opinion
in Iancu v. Brunetti, decided on June 24, 2019 is also instructive
on the topic of regulation of potentially offensive speech.
Specific restrictions proposed Sec. 7.126 (use of flags); Sec.
7.127 (use of certain seals), Sec. 7.124 (disparaging competitors),
and Sec. 7.103 (obscene or indecent statements or representations)
are all subject to First Amendment challenges as an agency of the
federal government is forced to make subjective decisions approving
or disapproving messages that brewers are communicating to
consumers. The BA recommends that TTB delete these sections from the
final regulations.
Hundreds of examples exist of labels approved by TTB that
arguably violate existing regulations as well as the proposed
regulations. This reality places TTB in an untenable situation. To
the extent that any of the restrictions referenced above pose
legitimate government concerns, they can be addressed under proposed
Sec. 7.122, which lays out a solid approach to making
determinations on false and misleading labels. If TTB attempts to
enforce Sec. Sec. 7.126, 7.127, 7.124, and 7.103, a First Amendment
challenge is possible, and the archaic restrictions seem unlikely to
survive. In the past when confronted by an analogous situation, TTB
properly identified health claims as a legitimate policy concern,
engaged in rulemaking, and promulgated a comprehensive and
defensible regulation that is included in Notice 176 at Sec. 7.129.
TTB Response
After carefully reviewing the comments, TTB has concluded that its
proposed regulations comply with First Amendment case law regarding
regulation of commercial speech and the statutory requirement to pre-
approve labels to prevent misleading claims.
In Central Hudson Gas & Electric Corp. v. Public Services
Commission, 447 U.S. 557, 563-566 (1980), the Supreme Court held that
in order to regulate commercial speech, the Government must satisfy a
four-prong test. First, the First Amendment protects expression only if
it concerns lawful activity and is not misleading. Second, the
Government must establish a substantial interest. Third, the regulation
must directly advance the governmental interest asserted. Finally, the
regulation must be no more
[[Page 7548]]
extensive than necessary to serve the interest asserted.
In two cases involving alcohol beverages, the Supreme Court struck
down bans on truthful and non-misleading commercial speech. In Rubin v.
Coors Brewing Co., 514 U.S. 476, 491 (1995), the Supreme Court applied
the Central Hudson analysis in striking down the FAA Act's prohibition
of statements of alcohol content on malt beverage labels unless
required by State law. In 44 Liquormart, Inc. v. Rhode Island, 517 U.S.
484 (1996), the Supreme Court struck down Rhode Island's ban on
advertising the price of alcohol beverages on First Amendment grounds.
However, these decisions did not address the Government's authority to
regulate actually or potentially misleading commercial speech regarding
alcohol consumption. TTB also notes that courts have expressed a
general First Amendment preference for additional disclosure over bans
on potentially misleading commercial speech. See, e.g., Pearson v.
Shalala, 164 F.3d 650, 656 (D.C. Cir. 1999), citing Bates v. State Bar
of Arizona, 433 U.S. 350, 376 (1977) (where attorney advertising was
not inherently misleading, ``the preferred remedy is more disclosure,
rather than less.'').
To the extent that some comments are suggesting that the FAA Act's
COLA requirements are unconstitutional, TTB disagrees. A law acts as a
prior restraint when it mandates that a speaker seek government
permission before engaging in protected expression; however, the
Supreme Court has indicated that the prior-restraint doctrine may not
apply to commercial speech. See Central Hudson Gas & Elec. Corp v.
Public Serv. Comm'n, 447 U.S. 557, 571 n. 13 (1990) (stating that
``commercial speech is such a sturdy brand of expression that
traditional prior restraint doctrine may not apply to it'').
In a recent case involving a First Amendment challenge to TTB's
denial of a petition to allow specific health claims in the labeling
and advertising of distilled spirits regarding the alleged DNA-
protective properties of an ingredient added to alcohol beverages, the
D.C. Circuit declined again to rule on the issue of whether traditional
prior restraint doctrine applies to commercial speech. See Bellion
Spirits, LLC v. United States, 7 F.4th 1201, 1213 (D.C. Cir. Aug. 6,
2021) (``We have previously left open whether the prior-restraint
doctrine applies in the context of commercial speech * * * and we do so
again here. Even assuming the applicability of prior-restraint
principles, Bellion fails to demonstrate an unconstitutional prior
restraint.''). With respect to a facial challenge to TTB's COLA system,
the court held as follows:
By imposing sufficiently ``narrow, objective, and definite
standards,'' Shuttlesworth v. City of Birmingham, 394 U.S. 147, 151,
89 S.Ct. 935, 22 L.Ed.2d 162 (1969), the COLA scheme adequately
channels TTB's discretion. The COLA regulation provides that TTB
``will approve'' specific health claims ``only if the claim is
truthful and adequately substantiated by scientific or medical
evidence; sufficiently detailed and qualified with respect to the
categories of individuals to whom the claim applies; adequately
discloses the health risks associated with both moderate and heavier
levels of alcohol consumption; and outlines the categories of
individuals for whom any levels of alcohol consumption may cause
health risks.'' See 27 CFR 5.42(b)(8)(ii)(B)(2). Those conditions of
approval are ``sufficiently definite to constrain [TTB] within
reasonable bounds.'' See Nutritional Health Alliance v. Shalala, 144
F.3d 220, 228 (2d Cir. 1998).
In addition, the COLA process * * * channels TTB's
decisionmaking through adequately strict deadlines. See Freedman v.
Maryland, 380 U.S. 51, 58, 85 S.Ct. 734, 13 L.Ed.2d 649 (1965). The
regulation states that TTB must respond to an application within 90
days, unless it elects to use one 90-day extension. See 27 CFR
13.21(b). Indeed, applicants who do not receive a decision from TTB
within the specified time period may file an administrative appeal.
Id. We find no ``unbridled'' discretion in that scheme. See City of
Lakewood, 486 U.S. at 757, 108 S.Ct. 2138.
See Bellion Spirits at 1213.
Accordingly, it is TTB's position that the COLA regulations do not
represent an unconstitutional prior restraint on commercial speech.
j. Guarantees
The FAA Act specifically authorizes the issuance of regulations to
prohibit, irrespective of falsity, such statements relating to
``guarantees'' as the Secretary of the Treasury ``finds to be likely to
mislead the consumer.'' See 27 U.S.C. 205(e). Proposed Sec. Sec.
4.123, 5.123 and 7.123 prohibit the use of guarantees that are likely
to mislead the consumer. However, TTB does not prohibit money-back
guarantees. This is a restatement of existing policy currently found in
Sec. Sec. 4.39(a)(5), 5.42(a)(5), and 7.39(a)(5), with minor
modifications for clarity.
In addition to the First Amendment general concerns that commenters
raised about this provision and other provisions relating to misleading
speech, TTB received two comments in opposition to the proposed
provisions on guarantees on the ground that they were unnecessary. ADSA
commented that the provisions are from a bygone era, and DISCUS
suggested that the proposals were vague and unnecessary.
TTB Response
TTB is finalizing proposed Sec. Sec. 5.123 and 7.123 without
change. TTB agrees that the general provisions on misleading statements
might cover this issue; however, the intent of the regulation is to
implement the specific statutory language on this issue. Accordingly,
TTB believes that these specific regulations still serve a useful
purpose.
k. Statements That Are Disparaging of a Competitor's Products
Current regulations mirror the language in the FAA Act, 27 U.S.C.
205(e), which simply prohibits labeling and advertising statements that
``are disparaging of a competitor's products.'' See 27 U.S.C. 205(e)
and (f). In proposed Sec. Sec. 4.124, 5.124, and 7.124, TTB sought to
clarify longstanding ATF and TTB policy (as expressed in T.D. ATF-180,
49 FR 31667, August 8, 1984) that a competitor's product is disparaged
within the meaning of the statutory prohibition only when statements or
claims about the product, or relating to the product, are false or
would tend to mislead the consumer. This policy does not preclude
additional information such as ``puffery'' statements made about one's
own product, nor does it prohibit truthful and nonmisleading
comparative statements or claims that place the competitor's product in
an unfavorable light. TTB's intention was to clarify the prohibition in
a manner that conformed to current case law about protections afforded
to truthful and non-misleading commercial speech.
In the proposed regulatory text, TTB also included examples of
statements that would, or would not, be prohibited under this
provision. For example, TTB would not prohibit a statement of opinion
such as ``We think our [product] tastes better than any other [product]
on the market.'' However, TTB would consider a truthful statement such
as ``We do not add arsenic to our [product]'' to be disparaging because
it falsely implies that other producers do add arsenic to their
products. Furthermore, the proposed regulations provide that labels may
not include statements that disparage their competitor's products by
making specific allegations, such as ``Brand X is not aged in oak
barrels,'' when such statements are untrue.
In its comment, the Washington Legal Foundation (WLF) suggested
that the prohibition on false or misleading ``disparaging'' statements
about a competitor's products would ``violate commercial-speech rights
under the First Amendment.'' WLF pointed out
[[Page 7549]]
that a recent Supreme Court case, Matal v. Tam, 137 S. Ct. 1744 (2017),
struck down the ``disparagement clause'' of the Lanham Act, which
prohibited Federal trademark registration for marks that might
disparage any persons living or dead. WLF noted that the Court held
that the ban ``offends a bedrock First Amendment principle: Speech may
not be banned on the ground that it expresses ideas that offend.'' 137
S. Ct. at 1751. WLF noted that the Court emphasized that heightened
scrutiny applies when a law or regulation engages in viewpoint
discrimination.
The comment from NABI noted that as a general matter, the Supreme
Court has rejected ``paternalism'' on the part of the Federal
Government in prohibiting commercial speech, and suggested that review
by TTB of consumer deception after receipt of consumer complaints might
be a better approach than ``purely speculating'' in advance of
approving a label. The NABI comment specifically referenced the
proposed rule on ``disparaging'' statements. DISCUS commented in favor
of removing both the proposed and existing language on disparaging
statements, and suggested that proposed ``Section 5.122 should serve as
the only regulation governing truthful and misleading labeling claims.
In that regard, the instant rulemaking has several proposed rules
governing truthful, non-misleading statements regarding distilled
spirits labels, containers, and packaging when only one rule is
necessary.''
The Brewers Association suggested that the rule on disparaging
statements was one of several issues that were better left to self-
regulation by the alcohol beverage industries, noting that the Brewers
Association and other industry trade associations maintain advertising
codes that address obscene, indecent, and disparaging materials. The
Association also noted that the ``Federal Trade Commission has
repeatedly expressed support for voluntary industry initiatives to
regulate offensive alcohol beverage advertising and for advertising of
many other consumer products and services. See, e.g., Federal Trade
Commission, Self-Regulation in the Alcohol Industry: March 2014, p.
34.''
TTB received a comment in support of the proposed language on
disparaging statements from ACSA. Other trade associations suggested
amendments to the proposed revision on disparaging statements. Wine
Institute commented in support of the proposed amendments, but stated
that the codified regulations should not include examples of
permissible or impermissible label statements, believing that written
guidance on TTB's website better conveys such examples to industry.
Accordingly, Wine Institute recommended removing the examples from the
proposed regulation.
ADSA questioned the continued need for any specific regulation that
prohibits false or misleading statements that are disparaging about
competitors, and suggested that such statements would be covered by the
general prohibition on false or misleading statements. ADSA was
particularly concerned that the second example in the proposed rule,
about not adding arsenic to a distilled spirits product, was capable of
misinterpretation and ``could be construed as suggesting that any claim
about the absence of an ingredient or feature (e.g., `gluten-free')
constitutes a prohibited disparaging claim.'' Accordingly, ADSA stated
that ``[a]t a minimum, TTB should delete and not replace the examples
in the current proposal.''
TTB Response
TTB notes that it designed the proposed amendment to the
prohibition on statements that are ``disparaging'' of a competitor's
products to address First Amendment issues and clarify longstanding
policy that the prohibition applies only to false or misleading
statements.
Unlike the ``disparagement clause'' of the Lanham Act, which
applied to marks that might disparage any individuals, living or dead,
regardless of whether the information conveyed was truthful and non-
misleading, TTB narrowly focused the proposed rule on statements that
are false or misleading, and the disparage the products of a
competitor. Under the first prong of the Central Hudson test, the First
Amendment does not protect false or misleading commercial speech. The
language of the FAA Act does not specify this important qualification,
but, as explained above, this has been the position of TTB and its
predecessor agency since the 1980s. Unlike the provision of the Lanham
Act that was struck down in Matal v. Tam, the disparagement prohibition
in the proposed rule was thus specifically aimed at commercial speech
(relating to the products of a competitor) that is false or misleading,
and thus serves the dual purpose under the FAA Act of protecting fair
competition and preventing consumer deception.
Based on the comments regarding the examples, TTB agrees that in
this particular situation, the proposed examples seemed to confuse
people rather than shed light on its position. Accordingly, TTB is
removing the examples from the language of the final rule. Instead, the
final rule prohibits only false or misleading statements that
explicitly or implicitly disparage a competitor's product, and does not
prohibit statements of opinion or truthful and non-misleading
comparisons between products. This language is entirely consistent with
current case law under the First Amendment.
l. Tests or Analyses
Proposed Sec. Sec. 4.125, 5.125 and 7.125 prohibit statements or
representations of, or relating to, analyses, standards, or tests,
whether or not truthful, that are likely to mislead the consumer. These
proposed provisions incorporate current policy, but also provide new
examples of misleading statements or representations under these
sections, which TTB intends to illustrate the principle that a truthful
statement about a test or standard may nonetheless be misleading as
presented.
The ACSA expressed its support for the proposed regulation. Wine
Institute suggested the removal of the example of a misleading
statement regarding a test or analysis. The Mexican Chamber of the
Tequila Industry and the Tequila Regulatory Council supported the
inclusion of examples, and requested inclusion of a new example
relating specifically to the testing of tequila by anyone other than an
authorized conformity assessment body. Furthermore, the Tequila
Regulatory Council proposed that ``in the case of tequila, no
statements or declaration of test, other than the one provided by the
conformity assessment body in the form of a NOM [Norma Oficial
Mexicana] mark, be allowed'' and that TTB should require a NOM mark on
any label of Tequila bottled in the United States. The comment states
that this mark, which includes the four-digit code assigned to the
distiller, is a sign of quality and product assurance. Finally, DISCUS
and ADSA opposed the inclusion of Sec. 5.125, on the same grounds that
they opposed the provisions on guarantees. Among other things, they
commented that the general provisions on misleading statements would
cover misleading statements relating to analyses, standards, or tests.
TTB Response
TTB is finalizing proposed Sec. Sec. 5.125 and 7.125 without
change. TTB agrees with DISCUS and ADSA that the general provisions on
misleading statements might cover this issue; however, the intent of
the regulation is to provide guidance that is more specific to
[[Page 7550]]
industry members and consumers as to how they may depict statements
about standards, analyses, and tests on a label without running afoul
of the statute and regulations. Accordingly, TTB believes that these
specific regulations, including the example provided, serve a useful
purpose.
TTB is not adopting the suggestions made in the comments from the
Mexican Chamber of the Tequila Industry and the Tequila Regulatory
Council for the inclusion of a new example in the regulation regarding
testing by anyone other than an authorized conformity assessment body.
Similarly, TTB is not adopting the Tequila Regulatory Council's
suggestion that a NOM mark be required on labels of Tequila bottled in
the United States, as this would require more mandatory information to
appear on Tequila labels. TTB believes that these comments relate
specifically to Tequila rather than to the general prohibition on
misleading testing claims, and that they fall outside of the scope of
the proposals on which TTB solicited comments in Notice No. 176.
m. Depictions of Government Symbols
Under current regulations, TTB prohibits representations relating
to the American flag or the U.S. armed forces from appearing on alcohol
beverage labels in order to prevent misconceptions that the U.S.
government or its armed forces endorse, or otherwise supervised the
production of, the alcohol beverage. However, the regulations prohibit
the use of flags from other countries only where it would be
misleading. The regulations on U.S. and foreign flags are based on the
same statutory provision of the FAA Act at 27 U.S.C. 205(e)(5), which
prohibits deception of the consumer by use of a name or representation
of individuals or organizations when such use creates a misleading
impression of endorsement.
Consistent with the statutory prohibition on which TTB bases these
regulations, it is TTB's current policy to enforce this regulatory
prohibition only where such representations might tend to mislead
consumers. Thus, TTB proposed to amend the regulations to remove the
blanket prohibition against the use of representations of, or relating
to, the American flag, the armed forces of the United States, or other
symbols associated with the American flag or armed forces. Therefore,
proposed Sec. Sec. 4.126, 5.126, and 7.126, retain the prohibition
against the use of such symbols or images where they create the false
or misleading impression that the government entity represented has
endorsed or was otherwise affiliated with the labeled product.
Furthermore, each of these proposed sections specifically provides that
the section does not prohibit the use of a flag as part of a claim of
American origin or a claim of another country of origin.
TTB received several comments in support of removing the blanket
ban on the use of flags on alcohol beverage labels, including comments
from WineAmerica, the New York Farm Bureau, DISCUS, ACSA, and an
attorney in the alcohol beverage field. ADSA suggested that as amended,
the provision was meaningless. Wine Institute commented that a specific
provision on flags was unnecessary and should be covered by a general
misleading provision. Comments from the Brewers Association and the New
Civil Liberties Alliance raised First Amendment concerns about several
regulatory provisions, including this one.
On the other hand, TTB received two comments that favored a blanket
ban on the use of the American flag on labels or in advertisements. One
of these comments, from the Missouri Craft Distillers, raised concerns
about using national symbols for marketing purposes. The other comment,
from Sazerac, suggested that TTB's proposal is contrary to the Federal
Flag Code.
TTB Response
TTB is finalizing Sec. Sec. 5.126 and 7.126 as proposed. The
regulations on depictions of government symbols are based on the
statutory provisions of the FAA Act (27 U.S.C. 205(e)(5)) that prohibit
deception of the consumer by use of name or representation of
individuals or organizations when such use creates a misleading
impression of endorsement or affiliation. As stated in Notice No. 176
and above, the proposed regulations remove the blanket ban on use of
flags and other symbols of the United States and Armed Forces. Rather,
the proposed regulations set out TTB's current policy prohibiting the
use of these symbols only when they create a misleading impression that
there was some sort of endorsement by, or affiliation with, the
governmental entity represented.
With regard to Sazerac's comment, TTB notes that the Federal Courts
have not ruled on the validity of the Flag Code or other criminal
provisions with regard to the use of the image of the American flag for
marketing purposes. TTB believes that the use of an image of a flag as
part of a general message of patriotism may be protected under the
First Amendment, even if that message appears on a product label. For
more information, see the general discussion in the Congressional
Research Service's ``Frequently Asked Questions About Flag Law,'' dated
October 7, 2019, which can be found on the website at https://crsreports.congress.gov/product/pdf/R/R45945.
In any case, TTB's regulations implementing the FAA Act's ban on
the use of images that create a misleading impression that an alcohol
beverage is endorsed or otherwise affiliated with any private or public
organization does not intersect with or otherwise affect the
enforcement of the Flag Code, which governs the handling and display of
the United States flag. Thus, TTB does not address the Flag Code in its
analysis of this regulation.
n. Depictions Simulating Government Stamps Relating to Supervision
Proposed Sec. Sec. 4.127, 5.127, and 7.127 retain prohibitions
against depictions simulating government stamps or relating to
government supervision but provide that these representations are only
prohibited if they create the misleading impression that the alcohol
beverage is manufactured under government authority. In Notice No. 176,
TTB specifically solicited comments on whether there is still a need
for regulations on this issue.
DISCUS and the ACSA commented in favor of the proposal. However,
several commenters, including Wine Institute, ADSA, and the Williams
Group expressed the view that specific provisions on this issue were no
longer necessary, as they reflected a ``bygone era'' and it is
questionable as to whether such stamps or other symbols retain any
meaning for consumers today. The Brewers Association included this
provision in its general comment raising First Amendment concerns.
TTB Response
Based on the comments, TTB agrees that there is no longer a need to
include specific prohibitions on this issue. TTB will continue to cover
misleading representations on this issue via the general prohibition on
misleading labeling statements. Accordingly, this final rule does not
include proposed Sec. Sec. 5.127 and 7.127.
o. Health-Related Claims
In proposed Sec. Sec. 4.129, 5.129, and 7.129, TTB set out current
regulations pertaining to health-related statements without change.
ACSA expressed support for these provisions as proposed. The Wine
Institute and St. George Spirits sought clarification on the use of
specific terms used in these provisions, and the Wine Institute
suggested that TTB publish guidance
[[Page 7551]]
with regard to specific issues that the regulations present.
TTB Response
TTB is finalizing Sec. Sec. 5.129 and 7.129 as proposed. However,
TTB will consider the comments it received regarding the issuance of
public guidance on issues pertaining to the regulations on health-
related statements.
p. Appearance of Endorsement
Consistent with current regulations, proposed Sec. Sec. 4.130,
5.130, and 7.130 maintains TTB's prohibition on the use of the name of
a living person or existing private or public organization if the use
of that name or a representation misleads the consumer to believe that
the product has been endorsed, made, or used by, or produced for, or
under the supervision of, or in accordance with the specifications of,
such individual or organization. The difference between the current and
proposed regulations is that proposed Sec. Sec. 4.130, 5.130, and
7.130 made it more clear that actual endorsements are permitted and
that TTB may request documentation supporting a claim of endorsement.
DISCUS commented in favor of retaining the existing regulations,
without explaining the basis for this comment.
TTB Response
TTB believes the proposed regulations reflect the same policy as
the current regulations but are easier to understand. Accordingly, TTB
is finalizing Sec. Sec. 5.130 and 7.130 as proposed, but without the
language that TTB may request documentation supporting a claim of
endorsement. TTB is removing this language because it is true of any
claim.
The final rule also includes language in Sec. Sec. 5.130 and 7.130
that was inadvertently omitted from the proposed rule, for consistency
with the statutory provisions at 27 U.S.C. 205(e)(5). As amended, the
regulatory language, like the statutory language, specifically provides
that the provisions on implied endorsements do not apply to the use of
the name of any person engaged in business as a distiller, brewer,
rectifier, blender, or other producer, or as an importer, wholesaler,
retailer, bottler, or warehouseman of distilled spirits, wine, or malt
beverages. The legislative history of the FAA Act, as reflected in the
Report of the House Committee on Ways and Means (H.R. Rep. No. 1542,
74th Cong., 1st Sess., at 13), explains that this ``provision does not
extend to cases of conflict within the industry as to proprietary
rights in trade or brand names.'' This is consistent with TTB's
longstanding position, as stated on the COLA form, that its issuance of
a COLA in no way confers trademark protection.
The final rule also includes a ``grandfathering'' provision that is
found in the statutory language, regarding names that were in use by
the industry member or its predecessors in interest prior to August 29,
1935, the date that the FAA Act was enacted. While TTB believes it is
unlikely that such ``grandfathered' names are still being used, we are
retaining the statutory language in the final rule out of an abundance
of caution.
8. Subpart I--Standards of Identity
a. Geographic Names
In Notice No. 176, TTB proposed to reorganize and amend existing
regulations setting out the conditions under which geographic names for
distilled spirits and malt beverages may be used on a label as, or as
part of, the designation of the product.
For distilled spirits, the proposed regulations at Sec. 5.154
sought to clarify and update the rules currently found in 27 CFR
5.22(k) and (l). These regulations allow ``generic'' names (i.e., names
that have lost their geographical significance by usage and common
knowledge) to be used to designate products from places other than the
geographic areas otherwise indicated by the name. Current regulations
provide that ``London dry gin'' and ``Geneva (Hollands) gin'' are
examples of generic names. This means, for example, that ``London dry
gin'' may be used on the label of a product that is produced somewhere
other than London, and no modifier such as ``type'' would be required
for such a product.
The proposed regulations provided that geographic names that have
not been found to be ``generic'' may not be used on products made
outside of the place indicated by the name, unless TTB determines that
the name represents a type of distilled spirit, in which case the
designation must include a qualifier such as ``type'' or ``style'' or a
statement indicating the true place of production. TTB proposed to list
names of specific products that fall within the categories of products
without geographical designations that are associated with a particular
geographical region. Similarly, for malt beverages, TTB proposed to
clarify the requirements for the use of geographical names, which are
currently set out in 27 CFR 7.24(f) though (h), and to add to the
regulations several established generic names as well as names of types
of malt beverages that require a qualification that indicates the true
place of production.
In response to these proposals, TTB received a significant number
of comments from various interested parties, including distilled
spirits and malt beverage producers, domestic and foreign trade
associations, and foreign governments. The European Union (EU)
expressed concern that certain names of distilled spirits and malt
beverages listed in TTB's regulations ``correspond to EU [geographical
indications].'' Likewise, Spirits Europe commented that ``a number of
names quoted are registered as geographical indications in the EU (for
example Ouzo, Aquavit).'' Furthermore, many commenters, including the
EU, opposed certain aspects of TTB's proposal that allowed for the use
of the terms ``type'' and ``style'' on the grounds that it would
violate provisions of the Agreement on Trade-Related Aspects of
Intellectual Property Rights (TRIPS). For instance, DISCUS commented
that the proposed regulations appear inconsistent with Article 23 of
the Agreement and ``quer[ied] whether TTB has considered its
applicability.'' Likewise, the NABI encouraged TTB to ``review the U.S.
obligations [under TRIPS] to ensure that the U.S. is in compliance.''
Furthermore, several commenters suggested that the use of the terms
``type'' and ``style'' in conjunction with a geographical designation
creates potential for consumer confusion. For example, FEVS commented
that allowing for the use of ``type'' or ``style'' would be ``extremely
confusing and misleading to consumers as to the nature and essential
qualities of the product'' being purchased. Similarly, DISCUS commented
that ``the use of the terms `style' and `type' would be extremely
misleading to consumers in particular as it relates to the distinctive
products of other nations.'' The Mexican Chamber of the Tequila
Industry stated its belief that the use of the terms ``type'' or
``style'' on distinctive products ``undermines the traditional culture
and social context associated with it'' and that ``labels using the
name of the distinctive product should only be allowed when certified
according to its standard of identity.'' The Republic of Ireland stated
that ``use of the words `Irish type' or `Irish style' on whiskey-
related goods will convey an improper association with Irish Whiskey
and is an evocation of Ireland when such products will not have been
produced in Ireland.''
Several commenters proposed further amendments to the regulations.
For instance, an individual commenter requested that ``Berliner weiss
[be]
[[Page 7552]]
added to the list of recognized non-geographical beer styles'' and
Sazerac requested that TTB ``move `Ojen' and `Swedish Punch' to the
list of products that are associated with a particular place that have
become generic, and therefore may be manufactured in any place.'' The
BNIC requested that TTB add language to its regulations to ``[make]
absolutely clear that when a geographical designation is also a
standard of identity (e.g., a type designation), that designation
cannot be used on a label or in advertising except in conformity with
that standard of identity.'' ACSA supported the intent of TTB's
proposal but stated that ``clarification and additional protections are
necessary in order to avoid misleading consumers and to protect
regional and national American spirit designations.'' Specifically,
ACSA recommended that ``TTB recognize and protect any spirits
designations that are a product of a specific geographic region and
whose production standard have been formally agreed by an organized
cohort of producers in that region such that their products are
genuinely differentiated from the category.'' Furthermore, ACSA
suggested that the terms ``type'' and ``style'' be required to appear
``on the same line and in the same font as the geographical designation
stated.''
With regard to the proposed regulations for malt beverages, Beverly
Brewery Consultants questioned whether ``Munich,'' ``Munchner,'' and
``Kulmbacher'' should still be recognized as being distinctive types
that may be qualified with the word ``type'' or ``American'' or some
other statement indicating the true place of production. On the other
hand, the Brewers Association suggested that the proposed rule would
require labeling changes and suggested that ``[a]ny attempt at this
point in time to disentangle American and European geographic
designations for beer styles is almost certain to result in arbitrary
decisions.'' Finally, an owner of Schilling Beer Co. asked why TTB had
not yet recognized ``IPA'' (which is an abbreviation of the designation
``India Pale Ale'') as a recognized style of beer.
TTB Response
After reviewing and considering the comments received, TTB will not
move forward, at this time, with the proposed reorganization and
clarifying amendments to the existing regulations on geographical names
for distilled spirits and malt beverages. Instead, the final
regulations for distilled spirits (Sec. 5.154) and malt beverages
(Sec. 7.146) retain the provisions of the current regulations as they
appear in sections 27 CFR 5.22(k)-(l) and 27 CFR 7.24(f)-(h),
respectively. As several commenters raised issues relating to
compliance with international agreements to which the United States is
a Party, TTB believes that it must engage in further consultation with
other government agencies on these matters prior to taking further
action on the proposed amendments. For this reason, TTB will also
evaluate the comments that address existing regulations as suggestions
for further rulemaking.
TTB notes that its decision to retain the current regulations
without incorporating the proposed amendments does not represent any
change in TTB's current policy on the matter of geographical names, as
set forth in TTB guidance or otherwise. Thus, for example, while the
final rule does not specifically include Scotch ale (Scottish ale), and
Russian Imperial Stout (Imperial Russian Stout) as examples of generic
designations for malt beverages, TTB has already issued public guidance
recognizing these names as generic. Accordingly, brewers may continue
to use ``Imperial Russian Stout'' or ``Russian Imperial Stout'' and
``Scotch Ale'' or ``Scottish Ale'' on labels to describe this type of
malt beverage without the addition of any qualifying statements, such
as ``type,'' ``American,'' etc. Similarly, this final rule will not
affect the continued validity of any certificates of label approval
that TTB has issued for malt beverage or distilled spirits labels that
include geographical names (such as approvals issued for ``Ojen''
products made in the United States).
TTB is finalizing the proposed change regarding the recognition of
``Andong Soju'' in the regulations in Sec. 5.154. Pursuant to Article
2.13.2 of the United States-Korea Free Trade Agreement, the United
States agreed to recognize Andong Soju as a distinctive product of the
Republic of Korea. See TTB Ruling 2012-3.
Accordingly, the final rule includes Andong Soju in the examples of
geographical names that may not be used on labels for distilled spirits
produced in any other place than the particular place of region
indicated in the name. With regard to the comment about recognition of
``IPA'' as a type of malt beverage, TTB notes that the designation
``India Pale Ale'' has been recognized as a generic designation since
the issuance of the first malt beverage labeling rules under the FAA
Act in 1936. However, the abbreviation ``IPA'' is not recognized as a
designation for a malt beverage. It is TTB's policy is to allow ``IPA''
to appear as additional information on malt beverage labels; however,
TTB has not allowed this abbreviation to suffice as the class/type
designation without an additional designation (such as ``ale,''
``beer,'' or ``India Pale Ale''). Because TTB did not solicit comments
on whether the industry and consumers recognize the term ``IPA''
(standing alone on a label) to mean the same thing as ``India Pale
Ale,'' TTB will not adopt the comment on this issue, but will instead
consider it as a suggestion for future action.
9. Subpart L--Recordkeeping and Substantiation Requirements
Proposed Subpart L of parts 4, 5, and 7 provided rules for
recordkeeping and substantiation requirements for alcohol beverages.
a. Recordkeeping Requirements and Retention Period
Current regulations require bottlers holding an original or
duplicate original of a certificate of label approval (COLA) or a
certificate of exemption to exhibit such certificates, upon demand, to
a duly authorized representative of the United States Government (see
27 CFR 4.51, 5.55, and 7.42). Current regulations also require
importers to provide a copy of the applicable COLA upon the request of
the appropriate TTB officer or a customs officer (see 27 CFR 4.40,
5.51, and 7.31). However, these regulations do not state how long
industry members should retain their COLA. Furthermore, since the
current regulations were originally drafted, TTB has implemented the
electronic filing of applications for label approval. Now, applicants
electronically submit over 98 percent of new applications for label
approval, and TTB electronically processes the remainder. Industry
members have asked for clarification as to whether they have to retain
paper copies of certificates that TTB electronically processed.
Finally, because industry members may make certain specified revisions
to approved labels without obtaining a new COLA, it is important that
industry members keep track of which label approval they are using when
they make such revisions.
Accordingly, proposed Sec. Sec. 4.211, 5.211, and 7.211 provided
that, upon request by the appropriate TTB officer, bottlers and
importers must provide evidence of label approval for a label that is
used on an alcohol beverage container and that is subject to the COLA
requirements of the applicable part. The proposed regulations stated
that bottlers and importers could satisfy the requirement by providing
original certificates, photocopies, or electronic
[[Page 7553]]
copies of COLAs, or records showing the TTB identification number
assigned to the approved COLA. Where labels on containers reflect
revisions to the approved label that have been made in compliance with
allowable revisions authorized to be made on the COLA form or otherwise
authorized by TTB, the bottler or importer must be able to identify the
COLA covering the product, upon request by the appropriate TTB officer.
Bottlers and importers must be able to provide this information for a
period of 5 years from the date the products covered by the COLAs were
removed from the bottler's premises or from customs custody, as
applicable.
TTB proposed 5 years as a reasonable period for regulated industry
members to retain records because this period covers both the civil and
criminal statute of limitations for violations of the FAA Act. TTB
noted that the proposed rule would not require industry members to
retain paper copies of each certificate. They should simply be able to
track a particular removal to a particular certificate, and they may
rely on electronic copies of certificates, including copies contained
in the TTB Public COLA Registry.
DISCUS expressed support for the recordkeeping requirement
provisions, but raised a separate issue regarding how long TTB kept
records of approved COLAs and formulas, suggesting that TTB should
retain them in perpetuity. WineAmerica expressed support for the
inclusion of a recordkeeping requirement in the regulations but asked
that if such a form is not physically locatable, TTB should not
penalize the producer, ``as virtually all TTB related documents can be
accessed via online sources.'' NABI recommended that there be no
mandatory retention period for COLAs available on COLAs Online, or in
the alternative, stated that the retention period should be 3 years
with a2-year optional extension. NABI stated that retention of
certificates for every shipment imposed an undue burden on importers
that a shorter retention period would be lessen, while the Williams
Group believed 5 years was a reasonable record retention period for
substantiating documentation. Wine Institute stated that maintaining
the records required under Sec. Sec. 4.212 and 5.212 for 5 years would
create a significant recordkeeping and, therefore, financial burden on
smaller wineries. Wine Institute recommended a3-year retention period,
which was in line with other TTB record retention requirements and the
period reviewed by TTB during audits.
Beverly Brewery Consultants suggested removing as redundant from
Sec. 7.211(b) the words ``if the product is required to be covered by
a COLA,'' because the other text in the paragraph already establishes
that the products and label revisions would be covered by a COLA.
Beverly Brewery Consultants also recommend removing from Sec. 7.211(c)
a reference to Sec. 7.26, which does not appear in the proposed
regulations.
The New York Farm Bureau commented as follows:
Beverage producers must provide proof of COLA approval at TTB's
request. NYFB supports the idea that each producer keeps their own
records of TTB approved forms, but if such form is not physically
able to be located, the TTB does not penalize the producer, as
virtually all TTB related documents can be accessed via online
sources.
TTB Response
After reviewing the comments, TTB believes that the proposed
recordkeeping provisions caused some confusion; therefore, the final
rule does not adopt Sec. Sec. 5.211 and 7.211 as proposed. Instead,
TTB is finalizing the provision in current regulations that imposes a
5-year record retention period for certificates of age and origin for
imported distilled spirits. These requirements are finalized in new
Sec. 5.30.
TTB is also finalizing the provision in the current regulations
that requires certificate holders to produce COLAs upon demand from an
appropriate TTB official.
TTB notes the proposed rule did not require industry members to
retain paper copies of each certificate. Rather they may rely on
electronic copies of certificates, including copies contained in the
TTB Public COLA Registry. TTB is adopting final regulations that
reflect the use of modern, online systems as it will no longer require
certificate holders to provide original certificates in response to
such requests. Instead of consolidating these requirements into a
recordkeeping subpart, TTB will simply retain the requirements in the
appropriate sections of the regulations in new Sec. Sec. 5.21(c),
5.23, 5.24(d), 7.21, and 7.24.
The DISCUS comment about TTB's own schedule for retaining records
in its online systems is beyond the scope of this rulemaking, and TTB
will consider it as a request for further action. Because TTB is not
adopting the proposed regulations in this final rule, TTB is not
addressing editorial comments from Beverly Brewery Consultants.
b. Substantiation Requirements
Proposed Sec. Sec. 4.212, 5.212, and 7.212 set forth specific
substantiation requirements, which are new to the regulations, but
which reflect TTB's current policies as to the level of evidence that
industry members are expected to have to support labeling claims. The
proposed regulations provided that all claims, whether implicit or
explicit, must have a reasonable basis in fact. Claims that contain
express or implied statements regarding the amount of support for the
claim (e.g., ``tests provide'' or ``studies show'') must have the
claimed level of substantiation.
Furthermore, the proposed regulations provided for the first time
that any labeling claim that does not have a reasonable basis in fact,
or cannot be adequately substantiated upon the request of the
appropriate TTB officer, would be considered misleading. The proposed
regulations in subpart H similarly included the same requirement. TTB
proposed these revisions to the regulations to clarify that industry
members are responsible for ensuring that all labeling and advertising
claims have adequate substantiation.
NABI raised due process concerns and stated that proposed
Sec. Sec. 4.212, 5.212, and 7.212 must be clarified and narrowed to
inform industry members of their obligations. Specifically, NABI
commented that the provisions allowing TTB to request substantiation
for any claim, implicit or explicit, did not adequately inform industry
members of their obligations, and would require importers to maintain
an indeterminate amount of information for every product they import.
Wine Origins Alliance (WOA) expressed support for the proposed
section and noted that the term ``claim'' was not defined in existing
or proposed regulations, and expected that it would have the same broad
meaning used by the Federal Trade Commission and Lanham Act
jurisprudence, i.e., text ``that states or implies a particular fact.''
WOA stated that under current TTB regulations, there is no specific
obligation for an industry member to substantiate a claim on labeling,
and therefore ``a claim could be based on mere supposition or
speculation.'' According to WOA, it is currently TTB's burden to prove
that an unsubstantiated claim is false or misleading, whereas under the
proposal, TTB could request substantiation for any claim and take
enforcement action if it found the support inadequate. With this
understanding, WOA supported the proposed requirements to the extent
they would cause industry members to be more conservative in deciding
which claims to put on labels, and thus
[[Page 7554]]
``reduce the chances of claims that falsely or misleadingly suggest a
connection to one of our member regions.''
Oregon Winegrowers Association and Willamette Valley Wineries
Association supported proposed Sec. 4.212 for similar reasons,
believing it would help avoid consumer confusion by leading to fewer
false or misleading labeling claims. The Williams Group supported
requiring substantiation and a reasonable basis in fact for all
labeling claims.
Wine Institute recommended removing Sec. 4.122(b)(2) as
duplicative of Sec. 4.212(b). Proposed 4.122 states TTB's general
prohibition of misleading statements or representations on wine labels,
containers, or packaging, and references the substantiation requirement
in Sec. 4.212(b).
DISCUS opposed Sec. 5.212 because substantiation requests by TTB
may delay label approvals. According to DISCUS, TTB faces a significant
and increasing label review burden and lacks the capacity and expertise
to determine the sufficiency of scientific or other substantiation of
claims on distilled spirits labels. DISCUS also expressed concern that
subjective rejections of labels by label specialists could impede
product launches or lead to other commercial impacts. The DISCUS
comment also stated that the proposal may ``affect or delay historical
labels to the detriment of industry members without commensurate
benefit to TTB.''
ADSA similarly believed that TTB lacked expertise to police
labeling substantiation. ADSA expressed concern that TTB personnel
would allege substantiation failures that would result in either
expensive legal proceedings or offers in compromise to resolve the
allegations. ADSA stated that its member companies already must
substantiate labeling claims to avoid potential civil and governmental
liability, including actions by competitors, consumers, State attorneys
general, and the Federal Trade Commission, so additional requirements
from TTB were unnecessary.
Beer Institute believed the phrase ``adequately substantiated,''
the standard by which TTB official would determine if a claim was
misleading under proposed Sec. 7.212, was too vague and required
clarification. Beverly Brewing Consultants opposed the proposed
regulation at Sec. 7.212 because it did not distinguish between
potentially false and misleading claims and generally accepted
advertising puffery, such as ``Vermont's Favorite Beer'' or ``Great
Tasting Beer.'' Beverly Brewing Consultants stated that the proposed
regulation did not have a basis in the current regulations or past
practice or usage.
TTB Response
After careful review of the comments, TTB has concluded that the
proposed language caused confusion among industry members. TTB did not
intend the proposed regulations to slow down the label review process
by requiring COLA applicants to substantiate all claims prior to label
approval, but some commenters incorrectly interpreted them as such.
Accordingly, TTB is not adopting the proposed regulations on
substantiation of claims. TTB stresses that it continues to expect
certificate holders to be able to provide substantiation of both
implicit and explicit labeling claims upon request.
It is worth noting that while TTB has not issued regulations on
``puffery,'' TTB generally follows the FTC's policy under which the
agency does not expect ``puffery,'' in the form of statements of
opinion or hyperbolic claims regarding the quality of the product, to
be substantiated. See ``FTC Policy Statement on Deception,'' dated
October 14, 1983 (appended to Cliffdale Assoc., Inc., 103 F.T.C. 110,
185 (1984), which states, ``The Commission generally will not pursue
cases involving obviously exaggerated or puffing representations, i.e.,
those that the ordinary consumers do not take seriously''). See also
Pfizer, Inc, 81 F.T.C. 23, 64 (1972) (``[t]he term ``puffing'' refers
generally to an expression of opinion not made as a representation of
fact'').
10. Subpart M--Penalties and Compromise
a. Criminal Penalties
Consistent with statutory provisions of 27 U.S.C. 205(e), proposed
Sec. Sec. 4.221, 5.221 and 7.221 state that a violation of the
labeling provisions is punishable as a misdemeanor and refer readers to
27 U.S.C. 207 for the statutory provisions relating to criminal
penalties, consent decrees, and injunctions.
DISCUS, Willamette Valley Wineries Association (WVWA), Oregon
Winegrower's Association (OWA) and the New York Farm Bureau expressed
support for this proposal. WVWA and OWA also requested an amendment to
the proposed penalty regulations, providing that TTB would refer
permittees who have repeated or egregious labeling violations for
further investigation.
TTB Response
The proposed regulatory language simply refers readers to the
statutory provisions about criminal penalties, as it is not appropriate
to codify the suggested enforcement policies in the regulations.
Accordingly, TTB is finalizing Sec. Sec. 5.221 and 7.221 as proposed.
b. Conditions of Basic Permits
Proposed Sec. Sec. 4.222, 5.222, and 7.222 provide that basic
permits are conditioned on compliance with the provisions of 27 U.S.C.
205, including the labeling provisions of parts 4, 5 and 7. The
proposed regulations state that a willful violation of the conditions
of a basic permit provides grounds for the revocation or suspension of
the permit, as applicable, as set forth in 27 CFR part 1.
DISCUS, Willamette Valley Wineries Association, and the Oregon
Winegrower's Association expressed support for the regulations as
proposed. Beverly Brewery Consultants, however, requested that TTB
delete Sec. 7.222 because part 7 ``does not describe or regulate FAA
Basic Permits.'' Similarly, the National Beer Wholesalers Association
questioned whether TTB was proposing to create such a permit
requirement for brewers.
TTB Response
Brewers are not required to obtain a basic permit under the FAA
Act. Instead, the Internal Revenue Code at 26 U.S.C. 5401 requires
brewers to file a notice of intent to operate a brewery. Under this
authority, TTB requires brewery applicants to submit TTB Form 5130.10,
the Brewer's Notice, which collects information similar to that
collected on a permit application and, when approved by TTB, is a
brewer's authorization to operate. The requirements for filing and a
maintaining a brewer's notice are located at 27 CFR part 25, subpart G.
While brewers are not required to obtain a permit, importers and
wholesalers of malt beverages are subject to this requirement of the
FAA Act. See 27 U.S.C. 203-204; 27 CFR 1.21 and 1.23. Because the FAA
Act provides the authority for part 7 and sets forth the basic permit
requirements for importers and wholesalers of malt beverages, TTB
proposed, similar to the parallel provisions for wine and distilled
spirits, to provide a reference to the basic permit requirement in part
7. Section 7.222 does not imply that brewers must obtain a basic
permit, but simply states that possession of a basic permit is
conditioned upon compliance with 27 U.S.C. 205. TTB is therefore
finalizing Sec. Sec. 5.222 and 7.222 as proposed.
[[Page 7555]]
c. Compromise
Proposed Sec. Sec. 4.223, 5.223, and 7.223 set forth TTB's
authority to compromise liability for a violation of 27 U.S.C. 205 upon
payment of a sum not in excess of $500 for each offense. The
appropriate TTB officer will collect this payment and deposit it into
the Treasury as miscellaneous receipts.
DISCUS, Willamette Valley Wineries Association, and the Oregon
Winegrower's Association expressed support for the regulations as
proposed.
TTB Response
TTB is finalizing Sec. Sec. 5.223 and 7.223 as proposed.
B. Amendments Specific to 27 CFR Part 5 (Distilled Spirits)
In addition to the changes discussed in section II.A. of this
document that apply to more than one commodity, TTB proposed editorial
and substantive changes specific to the distilled spirits labeling
regulations in part 5. This section will not repeat the changes already
discussed in section II.A. of this document, which relate to more than
one commodity. Furthermore, the proposed changes regarding part 5 on
which TTB received no comments, and that TTB has adopted without change
in this final rule, will not be discussed in this section. The
substantive changes that are unique to part 5, on which TTB received
comments, are described below. They are organized by subpart.
1. Subpart A--General Provisions
In Notice No. 176, TTB proposed in Sec. 5.1 a list of definitions.
These were largely consistent with current regulations but included
some proposed revisions. TTB addressed some of the proposed amendments
in T.D. TTB-158. As explained in that final rule, TTB adopted the
proposed definition of ``distilled spirits'' to codify its longstanding
position that products containing less than 0.5 percent alcohol by
volume are not regulated as ``distilled spirits'' under the FAA Act.
TTB also stated in that final rule that it had decided not to move
forward with the proposed new definition of the term ``oak barrel.''
TTB noted that in the absence of a regulatory definition for ``oak
barrel'' or ``oak container,'' it will be TTB's policy that these terms
include oak containers of varying shapes and sizes. However, T.D. TTB-
158 did not address many of the other proposed amendments to the
definitions. We address the comments on those proposed amendments here.
Additionally TTB made minor clarifying edits in subpart A for
consistency with statutory language and current requirements.
Comments on Definitions in Sec. 5.1
TTB proposed to modify the definition of ``age'' to include the
concept that the distilled spirits must have been stored in oak barrels
``in such a manner that chemical changes take place as a result of
direct contact with the wood.'' TTB received several comments that
objected to this standard on the grounds that it was subjective, vague,
arbitrary, and/or unnecessary.
In Notice No. 176, TTB proposed to add a definition of ``American
proof,'' which cross references the definition of ``proof,'' which is
unchanged from the current regulations. TTB uses the term ``American
proof'' in some circumstances to clarify that the proof listed on a
certificate should be calculated using the standards in the part 5
regulations, not under another country's standards. TTB received two
comments with regard to this proposed definition. One commenter stated
that the term ``proof'' does not need a regulatory definition because
it is well understood. The Distilled Spirits Council of the United
States (DISCUS) commented in support of defining ``proof'' but urged
TTB to change the temperature at which alcohol content is measured from
60 degrees Fahrenheit to 68 degrees Fahrenheit (20 degrees Celsius),
stating that ``[m]oving the U.S. to a 68 [deg]F (20 [deg]C) standard
would allow U.S. manufacturers to calculate proof in a manner similar
to the rest of world and reduce production burdens.'' DISCUS also
commented that it opposed the proposed definition of ``American proof''
because it is unnecessary and confusing. TTB also proposed to add a
definition of ``grain,'' which would define the term to include cereal
grains as well as the seeds of three pseudocereal grains: Amaranth,
buckwheat, and quinoa. (A ``pseudocereal'' is not a grass, but its
seeds may be ground into flour and otherwise used as cereals). TTB has
received a number of applications for label approval for products using
these pseudocereals, and TTB also notes that the FDA has proposed draft
guidance regarding ``whole grain'' claims that include amaranth,
buckwheat, and quinoa as ``cereal grains.'' See 71 FR 8597 (February
17, 2006).
TTB received seven comments in support of allowing the use of
pseudocereals as grains for the purposes of distilled spirits labeling.
One distiller suggested that pseudocereals are different from
traditional cereal grains, and if they are permitted to be used in the
distillation of whisky, they should be specifically identified on the
label. DISCUS suggested that TTB include the grains listed in the
definition of grain set forth in the U.S. Department of Agriculture
(USDA) regulations at 7 CFR 810.101 (which includes barley, canola,
corn, flaxseed, mixed grain, oats, rye, sorghum, soybeans, sunflower
seed, triticale, and wheat) and that the TTB definition should also
include other grains not listed in the USDA regulations, such as rice,
millet, and heirloom grains. DISCUS supported the language regarding
pseudocereals.
The Kentucky Distillers Association (KDA) supported the inclusion
of pseudocereals as grains but requested the inclusion of, and
clarification of, the status of sorghum, proposing a distinction
between sorghum grains vs. cane sorghum and sorghum stalks (which the
commenter argued should not be allowed to be considered as grains for
purposes of distilling whiskey).
The American Craft Spirits Association (ACSA) supported the
inclusion of the three pseudo cereals, but also requested the specific
addition of millet and sorghum, and requested that TTB revise the
definition to clearly provide that it did not exclude cereals or
pseudocereals that were not specifically listed. ACSA also requested
that TTB revise the definition of a ``distiller,'' which is found in 27
CFR part 19.
TTB Response
After reviewing the comments on the proposed changes to the
definition of ``age,'' TTB is retaining the current definition in the
regulations. The comments suggested that the reference to chemical
changes was vague, and TTB did not mean to introduce a subjective
element to the definition. TTB notes that it retains its current policy
that storage in paraffin-lined oak barrels does not meet regulatory
requirements for ``aging'' distilled spirits in oak barrels. Finally,
as proposed in Notice No. 176, the definition of ``age'' in the final
rule refers to ``oak barrels'' rather than ``oak containers,'' to avoid
confusion with the new definition of ``container'' in the final rule,
which includes cans, bottles, and other closed receptacles that are for
use in the sale of distilled spirits at retail. As previously noted, in
T.D. TTB-158, TTB explained that in the absence of a regulatory
definition for ``oak barrel'' or ``oak container,'' it will be TTB's
policy that these terms include oak containers of varying shapes and
sizes.
TTB is finalizing the proposed definition of ``American proof,''
because
[[Page 7556]]
in certain contexts, the use of this term makes it clear that the proof
should be measured under American standards, which (as the DISCUS
comment noted) differ from those of several other countries. TTB also
notes that the measurement of proof at 60 degrees Fahrenheit in the
current and proposed definitions of ``proof'' and ``proof gallon'' in
part 5 is consistent with the statutory definition of ``proof spirits''
in the IRC (see 26 U.S.C. 5002(a)(10)), and adopting a different
standard in the FAA Act regulations would cause confusion. Accordingly,
TTB is finalizing the proposed definitions of ``proof,'' ``proof
gallon,'' and ``American proof.''
TTB is also adopting the proposed definition of ``grain.'' TTB
believes this definition will expand options for distillers by
clarifying that they may use the seeds of amaranth, buckwheat, and
quinoa to distill spirits (such as ``grain spirits'' or ``whisky'')
that are required to be distilled from grain. TTB is not adopting the
DISCUS suggestion to specifically list each type of cereal grain in the
definition because such specificity is unnecessary. The definition
includes all cereal grains; as such, TTB does not need to specifically
list those grains. Furthermore, TTB sees no reason to implement
specific labeling disclosure requirements for the seeds of the
pseudocereals amaranth, buckwheat, and quinoa, beyond the labeling
requirements that currently apply to grains. For example, if a
commodity statement is required for a spirit distilled from buckwheat,
the statement could be worded as either ``Distilled from Grain'' or
``Distilled from Buckwheat.'' This maintains labeling flexibility for
the bottler or importer.
With regard to ACSA's suggestion that the regulation be revised to
provide that all pseudocereals are included within the definition of
grain, TTB currently has only addressed the status of the three
pseudocereals that were listed in the proposed regulation (amaranth,
buckwheat, and quinoa). The commenters did not identify any specific
pseudocereals that they wished to use in distilled spirits, other than
the three identified in the proposed rule, and thus TTB sees no reason
to address this issue in the current rulemaking. Similarly, the
proposed definition of ``grain'' did not address the issue of whether
stalks and cane from certain agricultural products (such as sorghum)
qualify as grains. Thus, the KDA comment proposing that the regulations
exclude cane sorghum and sorghum stalks is outside the scope of this
proposal. TTB will treat this comment as a suggestion for future
rulemaking. TTB also notes that the definition adopted in this final
rule in no way changes its current policy, which is that sorghum and
corn syrups are not grains.
The ACSA comment on amending the definition of ``distiller'' in 27
CFR part 19 is outside the scope of this rulemaking document, which is
not amending the part 19 regulations.
Finally, TTB is making a technical amendment to the definition of
``distilled spirits.'' As amended by T.D. TTB-158, the definition
listed the maximum alcohol content of a distilled spirit containing
wine as ``48 degrees of proof'' and the minimum alcohol content for any
distilled spirits as ``0.5 percent alcohol by volume.'' For clarity and
consistency, this final rule amends the definition to express both of
these values in degrees of proof, with a parenthetical reference to the
equivalent percentage of alcohol by volume. As amended, the two
sentences in question state that ``[t]he term `distilled spirits' does
not include mixtures containing wine, bottled at 48 degrees of proof
(24 percent alcohol by volume) or less, if the mixture contains more
than 50 percent wine on a proof gallon basis. The term `distilled
spirits' also does not include products containing less than one degree
of proof (0.5 percent alcohol by volume).''
Subpart E--Mandatory Label Information
a. Single Field of Vision Labeling
In Notice No. 176, TTB proposed to clarify where mandatory
information must appear on a container by replacing the ``brand label''
concept with a requirement that three elements of mandatory information
(the brand name; the class, type, or other designation; and the alcohol
content) must appear within the same field of vision. TTB intended the
proposed amendments to increase flexibility for placing such
information on a distilled spirits container.
Previously, the term ``brand label'' was defined in current Sec.
5.11 as the principal display panel that is most likely to be
displayed, presented, shown, or examined under normal retail display
conditions. Further, the definition stated that ``[t]he principal
display panel appearing on a cylindrical surface is that 40 percent of
the circumference which is most likely to be displayed, presented,
shown, or examined under normal and customary conditions of display for
retail sale.''
TTB proposed, in proposed Sec. 5.63(a), to allow this mandatory
information to appear anywhere on the labels, as long as it is within
the same field of vision, which means a single side of a container
(which for a cylindrical container is 40 percent of the circumference),
where all pieces of information can be viewed simultaneously without
the need to turn the container. TTB explained that requiring that this
information appear in the same field of vision, rather than on the
display panel ``most likely to be displayed, presented, shown, or
examined'' at retail, is a more objective and understandable standard,
particularly as applied to cylindrical bottles.
TTB received five comments related to this proposal. A distiller
and the American Craft Spirits Association each supported the change to
a ``single field of vision'' concept. Another distiller commented in
favor of allowing the alcohol content statement to appear on either the
front label or the back label. Diageo commented in favor of allowing
all information required by TTB regulations to appear on a single
label, stating that ``if TTB were to permit all mandatory information
to appear on a single label, U.S. consumers almost certainly would
quickly become accustomed to the new label and shop accordingly.''
DISCUS supported the increased flexibility that the proposal would
allow, bringing distilled spirits more in line with current
requirements for wine. However, DISCUS also recommended that TTB
liberalize placement rules further, allowing mandatory information to
appear anywhere on distilled spirits labels.
TTB Response
In T.D. TTB-158, TTB liberalized the placement rules as proposed by
allowing the brand name, class and type designation, and alcohol
content to appear anywhere on the container as long as those three
pieces of information are in the same field of vision. TTB did not
adopt the DISCUS comment to eliminate all placement standards for
mandatory information, based upon TTB's position that it is important
to keep these three closely-related elements of information together on
the label since they express vital, related information that, taken
together, conveys important facts to consumers about the identity of
the product. With regard to the comment from Diageo, TTB notes that
under the final rule, industry members may, if they wish, include
additional optional or mandatory statements on the same label as the
three pieces of information that are required to appear in the same
field of vision.
In this final rule, TTB is finalizing its regulation for mandatory
information as proposed in Notice No. 176, which
[[Page 7557]]
maintains the substance of the rule as finalized in T.D. TTB-158, but
also eliminates the ``brand label'' concept from the regulations in
part 5. As finalized, Sec. 5.63 does not include the term ``brand
label,'' and thus the definition of the term is also removed from the
regulations. This amendment is a liberalizing change that will not
require any changes to labels, but will allow further flexibility in
the placement of labeling information on distilled spirits containers.
TTB notes that it may take some time to make conforming changes to the
COLAs Online system to remove references to a ``brand label,'' but, in
the interim, COLA applicants may simply designate in COLAs Online the
label(s) bearing the brand name, class and type designation, and
alcohol content within a single field of vision as the ``brand label.''
b. Alcohol Content Statement--Proof
In Notice No. 176, TTB proposed to clarify the existing requirement
that, if the alcohol content is stated as degrees of proof, that
statement must appear in direct conjunction with the mandatory alcohol
content statement. Proposed Sec. 5.65 provided that the statement of
proof must appear immediately adjacent to the mandatory alcohol content
statement.
The proposed rule kept the current requirement that the mandatory
alcohol content statement must be stated on the label as a percentage
of alcohol by volume, and provided that a proof statement may, but need
not, appear on the label. In ATF Ruling 88-1, TTB's predecessor agency
clarified that an optional proof statement must appear in direct
conjunction with the mandatory statement only once on the label or in
an advertisement, specifically, in the place where the alcohol by
volume statement is serving as the mandatory alcohol content statement.
Accordingly, the proposed rule clarified that additional statements of
proof need not be accompanied by the alcohol by volume statement.
TTB received one comment on this issue, from a distiller (SanTan)
arguing that there was no need for an optional statement of proof to be
in direct conjunction with the required statement of alcohol content as
a percentage of alcohol by volume.
TTB Response
It is TTB's view that, if an optional proof statement appears on
the label, it should be in the same field of vision as the required
alcohol content statement to avoid confusing consumers. The proof of a
distilled spirit is defined as being twice the ethyl alcohol content as
a percentage of alcohol by volume, at 60 degrees Fahrenheit. Consumers
who are used to seeing the alcohol content labeled as a percentage of
alcohol by volume, however, may be confused if the only alcohol content
statement on the label is, for example, ``80 proof.'' In contrast, if
the ``80 proof'' statement appears in the same field of vision as the
mandatory alcohol content statement (``40 percent alcohol by volume''),
consumers will understand the relationship between proof and alcohol
content as a percentage of alcohol by volume.
Accordingly, as finalized by this document, Sec. 5.65 provides
that, if a single optional proof statement appears on the label, it
must be in the same field of vision as the required alcohol content
statement, expressed as a percentage of alcohol by volume. This change
liberalizes the placement requirements in the current regulations,
which provide that there may be no intervening material between the
mandatory alcohol content statement and the optional proof statement.
The final rule also provides that additional statements of proof may
appear on the label in different locations, without an accompanying
alcohol by volume statement. The final rule adopts the proposal to
allow other truthful, accurate, and specific factual representations of
alcohol content, such as alcohol by weight, as long as they appear
together with, and as part of, the statement of alcohol content as a
percentage of alcohol by volume; however, it removes, as unnecessary,
language clarifying that the mandatory statement may not be expressed
as a range or by maximums or minimums. As discussed later in this
document, similar language has also been removed from the malt beverage
regulations at Sec. 7.65.
c. Terms Used in Name and Address Statement
In Notice No. 176, TTB explained that the current regulations in 27
CFR 5.36 allow for various statements as part of the name and address
statement, and limit the use of certain phrases, depending upon the
party seeking to use those phrases. In general, a ``bottled by''
statement must appear on the label of domestically bottled distilled
spirits, followed by the name and address of the bottler. In lieu of
this statement, as explained elsewhere in this document, the phrase
``distilled by'' may appear on the label to describe the original
distiller of the distilled spirits, where the spirits are bottled by or
for that distiller. Current Sec. 5.36(a)(4) provides that certain
other terms may be used to describe the ``rectifier'' of the distilled
spirits--these terms are ``blended by,'' ``made by,'' ``prepared by,''
``manufactured by,'' and ``produced by.'' The current regulations do
not define these terms. Because there is no longer a rectification tax
on distilled spirits, and thus these terms have lost their significance
under the IRC, some industry members and consumers are confused as to
when the use of those terms is appropriate.
Accordingly, proposed Sec. 5.66(b)(2) used the term ``processor''
of distilled spirits, rather than ``rectifier'' to be consistent with
current IRC use. The proposed regulation also clarified that the term
``produced by,'' when applied to distilled spirits, does not refer to
the original distillation of the spirits, but instead indicates a
processing operation (formerly known as rectification) that involves a
change in the class or type of the product through the addition of
flavors or some other processing activity. TTB solicited comments on
whether the proposed definitions of these terms are consistent with
trade and consumer understanding.
TTB received several comments on this issue that raised questions
as to whether the terms used in the regulations reflected current
consumer understanding.
TTB Response
TTB is finalizing the proposed regulation, which accurately
reflects current TTB policy as to the meaning of the term
``production,'' but does not define the other terms that describe
processing operations (formerly known as rectification operations). TTB
believes that several commenters raised valid points as to consumer
understanding of these terms. The proposed rule, however, did not
solicit specific comments on precise definitions for terms other than
``produced by,'' so incorporating new definitions for these terms would
be outside the scope of the rulemaking. Accordingly, TTB will treat
these comments as suggestions for future rulemaking.
d. State of Distillation
TTB noted in Notice No. 176 that it has received several inquiries
about its existing regulations on labeling certain whisky products with
the name of the State where distillation occurred. Current Sec.
5.36(d) requires the State of distillation to be listed on the label if
it is not included in the mandatory name and address statement.
However, because the name and address statement may be satisfied with a
bottling statement, there is no way to know, simply by reviewing a
proposed label, if
[[Page 7558]]
distillation actually occurred in the same State as the bottling
location. For example, a whisky label may indicate that the product was
bottled in Kentucky, even if it was distilled in another State and
transferred in bond to Kentucky for bottling.
Accordingly, TTB proposed, in Sec. 5.66(f), an updated regulation
that would provide that, where required, the State of original
distillation for certain whisky products must be shown on the label in
at least one of the following ways:
By including a ``distilled by'' (or ``distilled and
bottled by'' or any other phrase including the word ``distilled'')
statement as part of the mandatory name and address statement, followed
by a single location. This means that a principal place of business or
a list with multiple locations would not suffice;
By including the name of the State in which original
distillation occurred immediately adjacent to the class or type
designation (such as ``Kentucky Bourbon whisky''), as long as
distillation and any required aging occurred in that State; or
By including a separate statement, such as ``Distilled in
[name of State].''
TTB received 47 comments on the proposal to clarify the State of
distillation. Of those, 45 comments supported the proposal to require
the State of distillation to be indicated on the label in one of the
three ways proposed. For example, the Texas Whiskey Association stated
that ``[w]e applaud the clarity in new proposals on listing the State
of Distillation on a label where it is not the same as bottling or
business address. We strongly support that distillation and aging must
take place in the actual state where the whiskey is distilled for a
whiskey to carry a state designation.'' The American Single Malt
Whiskey Commission stated that ``[w]e are in favor of the current
propos[ed] Sec. 5.66(f) requiring that the state of distillation for
certain whisky products be shown on the label in at least one of the
three ways outlined.'' Heaven Hill Brands commented that: ``[w]e
strongly support distillation and aging being labeled per the actual
state where this occurs so that consumers know exactly what product
they are buying, especially as it relates to Kentucky Bourbon Whisky.''
Some commenters suggested that TTB impose tighter restrictions on
State of distillation labeling. For example, the Texas Whiskey
Association commented as follows:
We strongly support that distillation and aging must take place
in the actual State where the whiskey is distilled for a whiskey to
carry a state designation. We would go further and request that it
be mashed, fermented, distilled and aged in that State before it
carries a State designation. We would further support that if a
whiskey is distilled more than once, with distillation occurring in
more than one state, that no State designation be permitted.
TTB received two comments opposed to the proposal. The Confederated
Tribes of the Chehalis Reservation explained that:
Because tribes literally were barred from opening and operating
distilleries until just recently, the Chehalis Tribe has had no
ability to create and stockpile our own aging supply of products. We
should be allowed to negotiate with older participants in the
industry in creating and blending products without having to
disclose confidential information about our sources, partners or
partnerships * * *. At a minimum, the Chehalis Tribe and other
tribes should be exempt from such requirements.
DISCUS, in its comment, urged TTB to eliminate the requirement to
include a State of distillation on labels. DISCUS commented that State
of distillation statements should be optional and subject to the
relevant business circumstances of each supplier.
TTB Response
After carefully considering the comments, TTB has decided not to
finalize the proposed changes to the State of distillation labeling
requirement. While most of the comments from distillers supported the
position that consumers should be provided with this information,
DISCUS commented that TTB should eliminate the requirement altogether,
allowing such statements as optional information on labels. This
represents a new option that TTB did not air for comment in Notice No.
176. Because adoption of the amendment proposed in Notice No. 176 could
reasonably be expected to require some labeling changes by bottlers of
certain types of whisky, TTB has determined that, before adopting any
substantive changes to this longstanding requirement, it might be
appropriate to air, for public comment, the relative merits of making
the State of distillation labeling statement optional rather than
mandatory. This would also allow TTB to solicit comments on the costs
and burdens of the different options. Accordingly, TTB will treat the
comments on this issue as suggestions for future rulemaking.
Instead of mandating changes to labels, the final rule maintains
the current requirements for labeling of the State of distillation on
certain whisky products by continuing to allow the bottling statement
to suffice where the whisky was in fact distilled in the State shown on
the label, even though the label does not make any representation as to
the place of distillation. However, the final rule further clarifies
current requirements by revising the current language to provide that
if the address shown in the ``bottled by'' statement includes the State
in which distillation occurred, the requirement may be satisfied by
including a ``bottled by'' statement as part of the mandatory name and
address statement, followed by a single location. TTB believes this
clarification will assist industry members in complying with the
requirements, but it will not change the substance of the current
labeling requirement.
With regard to the Texas Whiskey Association comment about when a
whiskey may use a State designation, this document finalizes the
proposed language clarifying that the use of, for example, ``Texas Rye
Whisky'' means that the product was both distilled and aged in Texas.
With regard to any additional redistillations in a second State, it has
been the longstanding position of TTB and its predecessors that the
State where the original distillation occurred is the State of
distillation for purposes of the labeling regulations. See Rev. Rul.
54-416, 1954-2 C.B. 470. TTB is adopting this position in the final
rule.
e. Coloring Materials
In Notice No. 176, TTB proposed to maintain the substantive
requirements for disclosure, on labels, of the use of certain coloring
materials used in the production of distilled spirits, including the
provision (found in current Sec. 5.39(b)(3)) that the use of caramel
need not be indicated on labels of brandy, rum, Tequila, or whisky
other than straight whisky. Pursuant to current Sec. 5.23, caramel may
be used in distilled spirits products if this use is customarily
employed in them in accordance with established trade usage, and if the
caramel is used at not more than 2.5 percent by volume of the finished
product.
TTB received four comments related to coloring materials. Two
distillers asked for more stringent labeling rules for the use of
caramel in the categories of distilled spirits products that are
currently exempted from the caramel disclosure requirements. Of these,
Sazerac commented that ``[i]n order to respond to reasonable consumer
expectations for consistency across products, Sazerac asks that TTB
require consistent disclosure of caramel color.'' Privateer Rum
commented in favor of the proposal and suggested that the
[[Page 7559]]
regulation should require disclosure of the use of caramel in rum.
ACSA commented that it was ``in favor and supportive of the
language on coloring materials and feels strongly the provision should
be applied equally to imported spirits.'' The European Union (EU) asked
for an explanation as to the general rule on disclosure of caramel on
distilled spirits, and the basis for the exceptions.
TTB Response
After careful consideration, TTB is finalizing the coloring
materials labeling regulation as proposed in Sec. 5.72, which
clarifies current regulations but does not impose additional labeling
requirements. TTB did not propose any changes to the current
requirements, and believes that the addition of new labeling disclosure
requirements for coloring materials such as caramel is beyond the scope
of this rulemaking. The exception to the caramel disclosure requirement
for brandy, rum, Tequila, and whisky other than straight whisky is a
longstanding policy of TTB and its predecessors.
3. Subparts F, G, and H
a. Barrel Proof and Similar Terms
In Notice No. 176, TTB proposed in Sec. 5.87 to set forth
definitions for the terms ``barrel proof'', ``cask strength'',
``original proof'', ``original barrel proof'', ``original cask
strength'', and ``entry proof'' on distilled spirits labels. The
proposed rule also added ``cask strength'' as a term that means the
same as ``barrel proof'' and ``original cask strength'' as a term that
means the same as ``original barrel proof.''
The proposed rule incorporated the holding, set forth in ATF Ruling
79-9, that the terms ``original proof,'' ``original barrel proof,'' and
``entry proof,'' when appearing on a distilled spirits product label,
indicate that the proof of the spirits entered into the barrel and the
proof of the bottled spirits are the same. The ruling further held that
the term ``barrel proof'' appearing on a distilled spirits label
indicates that the bottling proof is not more than two degrees lower
than the proof established at the time the spirits were gauged for tax
determination.
The proposed regulations updated the description of the term
``barrel proof'' to take into account changes in the operation of
distilled spirits plants as a result of the Distilled Spirits Tax
Revision Act of 1979. The reference to the time of tax determination is
no longer the applicable standard under the current tax determination
system. Since the term ``barrel proof'' is intended to indicate that
the spirit is approximately the same proof as when it is dumped from
the barrel, the proposed regulations state that the term may be used on
a label when the alcohol content (proof) of distilled spirits when
bottled is not more than two degrees of proof lower than the proof of
the spirit when the spirit was dumped from the barrel. Proposed Sec.
5.87 accordingly provided that the term ``barrel proof'' or ``cask
strength'' may be used to refer to distilled spirits that had been
stored in wood barrels, and the proof when bottled is not more than two
degrees lower than the proof of the spirits when the spirits are dumped
from the barrels. TTB noted that it rarely sees such terms on distilled
spirits labels and specifically sought comments on whether they still
have relevance and provide meaningful information to the consumer and
whether TTB should regulate their use on labels.
TTB received several comments on this proposal. Some of the
comments reflected disagreement on the two different concepts that TTB
addressed in proposed Sec. 5.87. Proposed Sec. 5.87(a) defined terms
that may be used on a label when the proof at which the product is
bottled is within 2 degrees of the proof of the product when the
spirits were dumped from the barrel into the bottling tank. Proposed
Sec. 5.87(b) defined terms that refer to the proof of the spirits when
entered into the barrels for aging.
DISCUS and the ACSA commented that all of the terms refer to proof
at bottling, with the exception of ``entry proof,'' which it states is
``clearly understood as the proof at which the spirit was entered into
the barrel and would therefore be confusing to define in relation to
final proof post-maturation, which can be very different than the entry
proof into the barrel.'' Therefore, ACSA recommended that ``entry
proof'' not be included in this list of definitions, and instead be
allowed as an applicable descriptor of the proof of entry into the
barrels regardless of bottling proof.
On the other hand, DISCUS commented that ``Original proof'' and
``barrel proof'' are two distinct and separate concepts, as proof can
go up or down during aging. DISCUS suggested that the two degree
variance for ``cask strength'' and ``barrel proof'' is too narrow,
suggesting that at a minimum, ``the standard should be set at a 7
percent differential and should be measured when the product is dumped
from the barrel. Water is used as part of production, for example, to
flush the production lines and other technical needs. This amount of
water may differ based upon the length of the production line and other
factors specific to each producer's facility. Based upon these
realties, TTB should amend this proposal to establish that ``barrel
proof'' may be within 7 percent of proof at dump.''
The Scotch Whisky Association commented that ``original proof'' is
not a useful term for labeling. Spirits Canada commented in opposition
to defining what they referred to as marketing terms. Two individual
commenters also wrote in support of the proposed definitions.
TTB Response
After careful consideration of the comments, TTB is finalizing
Sec. 5.87 as proposed. TTB believes that it is useful to consumers to
have uniform standards for these terms appearing on labels, and most of
these terms have been subject to the definitions in ATF Ruling 79-9 for
over 40 years. Many industry members rely on these labeling terms for
their products.
b. Terms Related to Scotland
In Notice No. 176, TTB proposed rules that maintain and clarify
standards for the use of terms related to Scotland on distilled spirits
labels. Such rules currently appear only in the regulatory sections
related to product standards of identity and class and type, at current
Sec. Sec. 5.22(k)(4) and 5.35, respectively. The proposed provision
retained the current rule set forth at current Sec. 5.22(k)(4), that
the words ``Scotch,'' ``Scots,'' ``Highland,'' or ``Highlands'' and
similar words connoting, indicating, or commonly associated with
Scotland may be used only on a product wholly produced in Scotland. It
moves this rule to the provisions on restricted labeling practices in
the new subpart F. However, regardless of where the finished products
are produced, the regulations would not prohibit the term ``Scotch
Whisky'' from appearing on the label in the statement of composition
for distilled spirits specialty products that use Scotch Whisky or in
the statement of composition on the label of Flavored Scotch Whisky.
(While the finished product may be produced anywhere, the Scotch Whisky
component must continue to be made in Scotland under the rules of the
United Kingdom.) In addition, proposed Sec. 5.90(b) clarified (in
accordance with current regulations as well as proposed Sec. 5.127)
that phrases related to government supervision may be allowed only if
required or specifically authorized by the regulations of the United
Kingdom. This supersedes Revenue Ruling 61-15, which applied that rule
to specific
[[Page 7560]]
language on labels of Scotch whisky bottled in the United States.
The Scotch Whisky Association commented in support of the existing
prohibition. Several commenters commented that the terms ``highlands''
and ``lowlands'' should not be restricted to Scotch Whisky products, as
other areas of the world have highlands and lowlands areas. The Irish
Whiskey Association and the Ireland Department of Agriculture commented
that TTB should impose new restrictions on terms related to Ireland.
TTB Response
After careful consideration, TTB is finalizing Sec. 5.90, on terms
related to Scotland, as proposed, with a minor editorial change. TTB
believes that these longstanding restrictions ensure that consumers are
fully informed about the meanings of the regulated terms. TTB will
consider comments about allowing the use of the terms ``highlands'' and
``lowlands'' in other contexts for potential future rulemaking.
c. Pure
In Notice No. 176, TTB proposed to maintain its longstanding
restrictions on the use of the term ``pure'' on distilled spirits
labels. The rule provides that the term ``pure'' may not be used unless
it is a truthful representation about a particular ingredient, is part
of the name of a permittee or retailer for whom the spirits are
bottled, or is part of the name of the permittee who bottled the
spirits.
While TTB did not specifically request comments on this issue, TTB
received six comments regarding ``pure.'' Three commenters, Diageo,
DISCUS, and the American Distilled Spirits Association (ADSA), urged
TTB to eliminate the prohibition on the term ``pure.'' Diageo stated
that allowing the use of the term on wine and malt beverages but not
distilled spirits is inconsistent. SanTan Spirits suggested that TTB's
definition of ``pure'' should include products that consist of
distillate and water, such as, for example, ``pure whisky.'' St. George
Spirits commented in support of the proposed regulation. ACSA commented
that the term ``pure'' is vague and sought further clarification.
TTB Response
After careful consideration, TTB is finalizing the current
regulations on the term ``pure'' as proposed in Sec. 5.91. Thus, the
final rule retains the longstanding restrictions on the use of the term
``pure'' on distilled spirits labels. The rule provides that the term
``pure'' may not be used unless it is a truthful representation about a
particular ingredient, is part of the name of a permittee or retailer
for whom the spirits are bottled, or is part of the name of the
permittee who bottled the spirits.
This issue has been the subject of separate rulemaking, and TTB
published an advance notice of proposed rulemaking (Notice No. 53,
December 7, 2005, 70 FR 72731), soliciting comments on whether it or
not it should revise the standard. TTB did not specifically solicit
comments on this issue as part of the recodification, and it will
consider the comments that it did receive as suggestions for future
rulemaking.
4. Subpart I
In Notice No. 176, TTB set forth, in subpart I, the standards of
identity for distilled spirits. The standards of identity are divided
into classes and more specific types. TTB proposed certain revisions to
the standards of identity, described in more detail below. In addition
to comments on TTB's proposed revisions, TTB received a number of
suggestions for new standards of identity, both classes and types, that
had not been proposed in Notice No. 176. Examples of standards of
identity that commenters advocated for include standards for Straight
Applejack, Juniper Processed Spirits (including Genever), Straight Rum,
Rum Agricole, Queen's Share Rum, Irish Cream Liqueur, and others.
Additionally, TTB received comments supporting the creation of a type
of whisky, American Single Malt Whisky. Because other commenters could
not anticipate creation of new standards that were not initially
proposed, TTB is not finalizing any of these suggested standards in
this rulemaking. It will keep the comments for consideration for future
rulemaking focused on the standards of identity for distilled spirits.
a. The Standards of Identity in General
In Notice No. 176, TTB stated that some distilled spirits products
may conform to the standards of identity of more than one class.
Consistent with longstanding policy, TTB proposed to clarify, in Sec.
5.141(b)(3), that such a product may be designated with any class
designation to which the product conforms. For example, a vodka with
added natural orange flavor and sugar bottled at 45 percent alcohol by
volume may meet the standard of identity for a flavored spirit or for a
liqueur. Accordingly, the product may be designated as either ``orange
flavored vodka'' or ``orange liqueur'' at the option of the bottler or
importer. Under current policy, TTB would not allow a product to be
designated on a single label as both ``orange flavored vodka'' and
``orange liqueur,'' because TTB views it as misleading for a label to
bear two different class designations. TTB specifically sought comments
on whether the TTB regulations should permit a distilled spirits label
to bear more than one class designation if the product conforms to the
standards of identity for more than one class.
TTB received three comments related to this issue. All three
commenters wrote that TTB should allow labels to bear only one
designation.
TTB Response
TTB will finalize this regulation as proposed, in Sec.
5.141(b)(3), to allow industry members the flexibility of designating
their products with any single class designation to which the product
conforms, but not to use multiple designations. It was not TTB's
intention to allow multiple designations on labels. A product that may
meet the definition for two or more classes or types must still be
designated with a single class or type.
b. Neutral Spirits
In Notice No. 176, TTB proposed to provide that the source material
of the neutral spirits may be specifically included in the designation
on the label of the product. Thus, the bottler would have the option of
labeling a product as ``Apple Neutral Spirits'' (in addition to
``neutral spirits distilled from apples'' as the required commodity
statement) or ``Grape Vodka,'' (in addition to ``vodka distilled from
fruit'' as the required commodity statement) as long as such statements
accurately describe the source materials.
TTB received four comments on this issue. Three commenters
supported allowing the source material to provide better clarity to
consumers and would allow for labeling flexibility. DISCUS commented
that it opposes allowing the source material as part of the designation
as it would affect current products that use terms such as ``Grape
Vodka'' as the distinctive or fanciful name for a distilled spirits
specialty product.
TTB Response
TTB agrees that allowing the source material as part of the
designation for neutral spirits may cause confusion with distilled
spirits specialty products that use similar statements as distinctive
or fanciful names. As DISCUS pointed out, TTB has allowed terms such as
``grape vodka'' as the distinctive or fanciful name for specialty
products--such a product is different from a vodka distilled from
grapes. Accordingly, TTB
[[Page 7561]]
will not move forward with finalizing the proposed rule. TTB notes,
however, that industry members are not precluded from placing
information about the source materials on the label. For example, a
phrase such as ``Distilled from grapes'' or ``Distilled from Washington
apples'' would be allowed on vodka labels.
c. Whisky
In Notice No. 167, TTB proposed to set forth an updated standard of
identity for whisky. Among other things, TTB proposed clarifying that
Bourbon Whisky may not contain coloring, flavoring, or blending
materials. TTB also proposed to specifically note that ``whisky'' may
be spelled either ``whisky'' or ``whiskey,'' which is longstanding
policy.
TTB received four comments supporting the clarification that
bourbon whisky may not contain coloring, flavoring, or blending
materials. Six commenters supported the clarification that whisky may
be spelled ``whisky'' or ``whiskey'', while SanTan Spirits commented
that whisky should only be spelled as ``whiskey''.
In Notice No. 176, TTB also proposed to provide for a new type
designation of ``white whisky or unaged whisky.'' TTB has seen a marked
increase in the number of products on the market that are distilled
from grain but are unaged or that are aged for very short periods of
time. Under current regulations, unaged products would not be eligible
for a whisky designation (other than corn whisky) and would have to be
labeled with a distinctive or fanciful name, along with a statement of
composition.
Accordingly, TTB proposed new standards of identity for products
that are either unaged (so they are colorless) or aged and then
filtered to remove color; these products would be designated as
``unaged whisky'' or ``white whisky,'' respectively. This proposal
represented a change in policy because, currently, all whiskies (except
corn whisky) must be aged, although there is no minimum time
requirement for such aging. TTB believes that, currently, some
distillers may be using a barrel for a very short aging process solely
for the purpose of meeting the requirement to age for a minimal time.
Consequently, TTB proposed the new type designation of ``white whisky
or unaged whisky'' and specifically requested comments on this new type
and its standards.
TTB received 22 comments on the proposal to add the new ``white
whisky or unaged whisky'' type. Twelve commenters wrote in support of
the proposal. For example, Stoutridge Distillery commented in support
of the change, suggesting that ``there are many craft distillers
creating these products and `passing them through' an oak container to
meet the `letter of the law'. This change would acknowledge that this
is a legitimate whisky type and encourage further development of the
commercial category.''
TTB also received 10 comments opposed to the creation of this new
type. For example, Diageo objected to:
the creation of a ``white whiskey'' or ``unaged whiskey'' categor[y]
. . . Consumers expect whiskey to be aged. This is backed by
hundreds of years of whiskey production domestically and
internationally. Such products could be misleading by labeling as
``whiskey'' spirits that are otherwise neutral or bear no whiskey
characteristics unless artificially imparted.
ADSA also opposed the new type, stating that its member companies have
spent years building whisky brands based on aged liquids that are
synonymous with quality. ADSA stated that the proposed category might
cause consumer confusion.
TTB Response
After careful consideration, TTB is not finalizing the proposal to
create a new type of ``white whisky or unaged whisky''. Both the
current and amended standards for types of whisky adequately inform
consumers of products that are aged for short periods of time and any
whisky aged less than 4 years must include an age statement. TTB agrees
that adding unaged whiskies to the ``whisky'' class may cause consumer
confusion. Such products may continue to be labeled as distilled
spirits specialty products with a statement of composition.
TTB is finalizing the proposals that whisky may be spelled as
``whisky'' or ``whiskey'' and that bourbon whisky must not contain any
coloring, flavoring, or blending materials. These amendments reflect
current policy and were supported by commenters. While there was one
comment that advocated the use of a single spelling of ``whiskey,'' it
has been longstanding policy to recognize either spelling, and TTB sees
no basis for revising that policy and requiring changes to labels to
enforce a single spelling for this term.
d. Cordials and Liqueurs
In Notice No. 167, TTB proposed to set out minor changes to the
standards for cordials and liqueurs. Among other changes, TTB proposed
to prohibit the terms ``distilled,'' ``compound,'' or ``straight'' from
appearing on labels for cordials and liqueurs, on the grounds that the
terms were misleading on labels for cordials and liqueurs, which are by
definition blended (rectified) compounds. The proposed rule thus
incorporated into this section the following holding in Revenue Ruling
61-71:
In view of the fact that the term `straight,' in relation to
American types of whisky, can be employed on labels only if the
product is a single distillate or a homogeneous mixture not subject
to rectification tax, and as the term `straight,' in every-day trade
parlance, is regarded in much the same sense as `unblended' in
relation to distilled spirits, in general, the use of the term
`straight' on labels on rectified compounds, known as `cordials' or
`liqueurs,' would be deceptive or misleading to the consumer with
respect to the actual identity of the product thus labeled or
advertised.
Current regulations also provide that certain cordials or liqueurs
may be designated with a name known to consumers as referring to a
cordial or liqueur and therefore need not use the word ``cordial'' or
``liqueur'' as part of their designation. Thus, pursuant to TTB's
Beverage Alcohol Manual (TTB P 5110.7), several cordials and liqueurs--
specifically, Kummel, Ouzo, Anise, Anisette, Sambuca, Peppermint
Schnapps, Triple Sec, Cura[ccedil]ao, Goldwasser, and Cr[egrave]me de
[predominant flavor]--currently may be designated by those names on the
labels of those products. TTB proposed to codify this policy by adding
these names as type designations under proposed Sec. 5.150.
TTB received several comments related to this proposal. The
American Distilling Institute commented that if a producer ferments and
distills the base spirit used in the creation of the liqueur, they
should be able to state that fact on their label along with other
relevant production functions. Sazerac pointed out that ``Revenue
Ruling 61-71, which TTB cites as the basis for this proposed change,
only addresses the claim `straight' and does not address `distilled' or
`compound' '' and suggested that TTB had not provided an adequate basis
for providing that terms like ``distilled'' imply original distillation
and are misleading when used on cordials or liqueurs.
ACSA commented that it supports the proposed Sec. 5.150 without
further detail.
TTB Response
After considering the comments, TTB is finalizing Sec. 5.150 with
modifications. The final rule incorporates the holding of Rev. Rul. 61-
71 with regard to the prohibition on the use of misleading claims that
a cordial or liqueur is ``straight.'' For the reasons set forth in
[[Page 7562]]
that ruling, a cordial or liqueur cannot be ``straight.'' TTB agrees
with the comment that stated that the proposed regulation went further
than Rev. Rul. 61-71 but notes that the current regulations at 27 CFR
5.22(h)(6) provide that cordials and liqueurs ``shall not be designated
as `distilled' or `compound.' '' However, TTB is not adopting the
proposed amendment to prohibit the use of the term ``distilled'' or
``compound'' on cordial or liqueur labels. Additionally, TTB will
consider for future rulemaking whether to expand the allowable sugars
to other types of sweeteners.
e. Flavored Spirits
The TTB regulations currently list flavored brandy, flavored gin,
flavored rum, flavored vodka, and flavored whisky as the class
designations under Class 9. Currently, other types or classes of
distilled spirits that are flavored must generally be labeled with a
statement of composition in accordance with 27 CFR 5.35(a).
In Notice No. 176, TTB proposed to expand the current Class 9 by
establishing a standard of identity for ``flavored spirits.'' The
current Class 9 covers only five classes of distilled spirits (brandy,
gin, rum, vodka and whisky) as ``base spirits'' to which flavoring
materials may be added. As proposed, the base spirits for the new
``flavored spirits'' class would include types within these classes
(such as corn whisky), as well as other classes of base spirits covered
by a standard of identity (and types within those classes), such as
agave spirits (or Tequila).
The proposed rule also included a clarification of current TTB
policy, which is that a person may not add additional spirits to a base
spirit in a flavored spirits product, even if the additional spirits
are mixed into an intermediate product. As TTB explained in more detail
in T.D. TTB-158, TTB's longstanding policy is that Class 9 flavored
spirits must derive all of their spirits content from the base spirit
of the product, in contrast with those products that are labeled with
statements of composition in lieu of a class or type.
While TTB allows for any spirit to appear as part of a truthful
statement of composition, TTB stated in Notice No. 176 that it did not
believe that consumers perceive a distinction between, for example
``Orange Flavored Tequila''--which is how a flavored spirit would be
designated under the proposed rule--and ``Tequila with Orange
Flavor''--which is how the statement of composition would appear for a
distilled spirits specialty product. TTB therefore proposed to allow
any type of base spirit to be flavored in accordance with the flavored
spirits standard instead of just brandy, gin, rum, vodka, and whisky,
as permitted by the current regulations. Accordingly, proposed Sec.
5.151 provided a class of flavored spirits that could be made by adding
flavors to any base spirit made in accordance with the standards of
identity set forth in the regulation. TTB proposed to maintain a
minimum alcohol content at bottling of 30 percent (60[deg] proof) for
this revised and expanded class. Flavored spirits may contain added
wine. TTB proposes to maintain the requirement that wine content above
2.5 percent (or 15 percent for brandy) must be disclosed on a label.
TTB received six comments related to this issue. ACSA, the Tequila
Regulatory Council, and the Mexican Chamber of the Tequila Industry
supported the proposed regulation. The Tequila Regulatory Council noted
that it would lessen the administrative burden for Tequila bottlers in
the United States if TTB allows any base spirits to be flavored. The
Irish Whiskey Association and the Ireland Department of Agriculture
commented in opposition to the proposal, stating that flavored Irish
Whiskey would be misleading. Heritage Distilling commented in favor of
amendments to clarify that flavored Bourbon whisky is a recognized type
of flavored whisky. The Scotch Whisky Association opposed allowing
``flavored Scotch Whisky'' on labels because the United Kingdom does
not allow for such a product under its laws and regulations.
TTB Response
After careful consideration of the comments, TTB is finalizing the
flavored spirits regulations as proposed except that TTB is modifying
the standards of identity to provide that the base spirit must be a
distilled spirit conforming to one of the standards of identity set
forth in Sec. Sec. 5.142 through 5.148. This does not include liqueurs
or distilled spirits specialty products, because these products may
already contain natural flavors, so there is no need to have
``flavored'' versions of them. As a clarifying change, TTB is also
adding the word ``natural'' to ``nonbeverage flavors'' to clarify that
there is no change to the requirement in TTB's current regulations at
Sec. 5.22(i) that only natural (and not artificial) flavoring
materials may be used in Class 9 flavored spirits.
The final rule will not require label changes, and simply clarifies
current TTB policy. Industry members who choose to maintain their
product as a distilled spirits specialty product will not need to
change their labels, but may choose to label their products as, for
example, ``Bourbon whisky with cherry flavor'' rather than ``Cherry
flavored bourbon whisky.'' In response to the comment regarding the use
of terms related to Scotland, under the final rule, TTB would approve
the use of ``Scotch Whisky'' in a designation such as ``Cherry Flavored
Scotch Whisky'' if the base spirit meets the standards of identity for
Scotch Whisky, regardless of whether the United Kingdom would allow
this type of designation. In such a case, TTB notes that the product
may be flavored in the United States or another country after
exportation from the United Kingdom. TTB notes that it is also
finalizing without change the standard of identity for distilled
spirits specialty products in Sec. 5.156.
f. Diluted Spirits
In Notice No. 176, TTB proposed to codify standards for the use of
the term ``diluted.'' As set forth in ATF Ruling 75-32, TTB currently
requires that distilled spirits bottled at below the specified alcohol
content for that particular class be designated on the label as
``diluted'' in direct conjunction with the statement of class and type
to which it refers. For example, under the standard of identity for
vodka set forth at current Sec. 5.22(a), vodka must be bottled at
``not less than 80[deg] proof.'' As a result, a vodka bottled at
60[deg] proof must bear the statement ``diluted vodka'' on the label.
TTB proposed, in Sec. 5.153, to incorporate this policy into the
regulations by establishing a class of spirits known as ``diluted
spirits.'' This applies to products that would otherwise meet one of
the class or type designations specified in subpart I except that it
does not meet the minimum alcohol content, usually because of reduction
of proof through the addition of water. Although the ruling states that
the word ``diluted'' must be readily legible and as conspicuous as the
statement of class to which it refers and in no case smaller than 8-
point Gothic caps (except on small bottles), TTB proposed to require
that the word ``diluted'' appear in readily legible type at least half
the size of the class and type designation to which it refers. For
example, but for the fact that a product is 70[deg] proof, it would be
eligible to be designated as ``Vodka.'' However, because of its lower
proof, it must instead be designated as ``Diluted Vodka''.
TTB received ten comments opposed to the creation of the ``diluted
spirits'' class. For example, Spirits Europe questioned whether the
class would undermine certain traditional products
[[Page 7563]]
and confuse consumers. DISCUS and ACSA opposed the proposed language
and believe that consumers would prefer a ``lite'', ``low alcohol'' or
``under-proof'' label rather than a ``diluted'' designation.
TTB Response
TTB has decided not to move forward with the creation of the
``diluted spirits'' class. TTB will maintain the comments related to
other ways to label diluted products as suggestions for future
rulemaking. The holding of ATF Ruling 75-32, including those relating
to type size, will remain in effect.
5. Subpart J--Formulas for Distilled Spirits
With regard to the formula requirements in part 5, in Notice No.
176, TTB stated:
The current regulations in subpart C of part 5 set forth
requirements for formulas for distilled spirits. In the present
rulemaking, TTB proposes to maintain the formula requirements with
minor changes to reflect current policy as set forth in TTB Industry
Circular 2007-4. However, TTB believes there may be formula
requirements that no longer serve a labeling purpose. TTB seeks
specific comments on whether certain formula requirements should be
eliminated and the rationale for such a change. TTB may address
these issues in the final rule or in a separate rulemaking document.
TTB received two comments on the distilled spirits formula
regulations in proposed subpart J. ADSA commented in opposition to
formula requirements for spirits that are first aged in an oak barrel
and then aged in a different type of barrel, such as a barrel
previously used to age wines or other types of spirits. ADSA stated
that interest in this type of innovative production has grown in the
past decade. Accordingly, ADSA urged TTB to delete from its final
regulations the prohibition on claiming age for time spent in a second
(or third, or fourth, etc.) barrel and the presumption that aging in a
second barrel of different wood alters a product's class or type. For
the same reasons, ADSA urged TTB to eliminate the proposed formula
requirement for the mixing of spirits subject to different aging
methods (charred and non-charred barrels, etc.). At a minimum, ADSA
stated that proposed Sec. 5.193 requires substantial revisions to
better clarify exactly when a formula is required.
The National Association of Beverage Importers (NABI) noted that
proposed Sec. 5.193 requires a formula where, among other things,
distilled spirits are ``mingled,'' and that the regulations do not
define the term ``mingling.'' NABI suggested that if TTB is using the
term ``mingling'' to cover mixing or blending activities, then it would
be clearer to use those terms. NABI noted that the term ``mingling''
dates back to the pre-1980 regulatory framework, when the IRC imposed a
rectification tax, and that the term lost its significance after the
repeal of the rectification tax. NABI stated that clarification of the
term is important to importers as they need to decide whether they must
apply for formula approval for specific imported distilled spirits
products.
TTB Response
With regard to the ADSA comment regarding formula requirements for
aging in different types of barrels, and the NABI comment requesting
clarification of when a formula is require for ``mingling,'' TTB
believes that the commenters have raised valid concerns about whether
the formula requirements are current and easy to understand.
As noted in the NABI comment, many of the formula requirements in
part 5 date back to pre-1980 requirements. In recent years, it has been
TTB's goal to update formula requirements on a regular basis through
the issuance of public guidance. See, e.g., Industry Circular 2020-1,
dated February 12, 2020, Industry Circular 2018-6, dated September 18,
2018, and TTB Ruling 2016-3, dated September 29, 2016.
Accordingly, rather than revising the regulations in subpart J to
address the specific issues that the commenters addressed, TTB is
keeping the current regulations in place, with a change that will allow
TTB to clarify or eliminate formula requirements for distilled spirits
through public guidance, without amending the regulations. In this
final rule, Sec. 5.193 provides general rules for distilled spirits
formulas, but also provides that TTB may exempt categories of distilled
spirits products from specific regulatory formula requirements upon a
finding that the filing of a formula is no longer necessary in order to
properly classify the finished product. TTB will review the comments on
this issue as suggestions for exemptions from the formula requirements
when it issues new guidance on this issue, and as suggestions for
future rulemaking to update the formula regulations.
TTB has also revised the language in Sec. 5.193(a) to provide that
while the compounding of distilled spirits through the mixing of a
distilled spirits product with any coloring or flavoring material,
wine, or other material containing distilled spirits generally requires
a formula, there is an exception if TTB has issued public guidance
recognizing that such ingredients are harmless coloring, flavoring or
blending materials that do not alter the class or type pursuant to the
standards set forth in Sec. 5.155. This language is added for
consistency with the provisions of TTB Ruling 2016-3, dated September
29, 2016, in which TTB approved general formulas for vodka and rum, and
certain types of whisky and brandy, made with certain specified
harmless coloring, flavoring, or blending materials, in accordance with
the ruling. TTB referred to these formulas as ``general-use formulas''
and industry members who produce distilled spirits in conformance with
a general-use formula do not need to submit a formula to TTB for
approval.
C. Amendments Specific to 27 CFR Part 7 (Malt Beverages)
In addition to the changes discussed in Section II.A. of this
document that apply to more than one commodity, this section discusses
proposed editorial and substantive changes specific to the malt
beverage labeling regulations in part 7. It will not repeat the changes
already discussed in Section II.A. of this document, which relate to
more than one commodity. The substantive changes that are unique to
part 7, on which TTB received comments, are described below, and are
organized by subpart. Unless otherwise stated, TTB is finalizing the
proposals in Notice No. 176 specific to the malt beverage regulations
in part 7.
1. Subpart A--General Provisions
In Notice No. 176, TTB proposed to set forth, in subpart A, several
provisions with general applicability to part 7, including a list of
defined terms, territorial limits of the regulations, a section setting
forth to whom and to which products the regulations apply, and sections
addressing administrative items such as forms used and delegations of
the Administrator. For more information on the specific proposals for
subpart A of part 7, please refer to Notice No. 176, section II.E.1. As
explained below, TTB is finalizing the specific proposals for subpart A
of part 7, with certain changes. Among other things, certain minor
clarifying edits have been made for consistency with statutory language
and current requirements.
a. Comments on Definitions in Sec. 7.1
In Notice No 176, TTB proposed in Sec. 7.1 a list of definitions
largely consistent with the current regulations. TTB proposed to add
definitions for the terms ``keg collar'' and ``tap cover,'' consistent
with a proposed amendment,
[[Page 7564]]
discussed later in this document in Section II.C.3., to allow mandatory
label information to appear on non-firmly affixed keg collars and tap
covers, subject to certain conditions. See Sec. 7.51, as finalized
below. TTB is also finalizing its proposals to amend the definition of
the term ``bottler'' to include any brewer or wholesaler who places
malt beverages in containers (regardless of size), and to remove the
definition of ``packer,'' consistent with amendments that remove from
TTB's current name and address regulations a distinction between
``bottling'' malt beverages in containers of a capacity of one gallon
or less and ``packing'' them in containers in excess of one gallon. See
Section II.A.6.d.
TTB received several comments related to definitions in proposed
Sec. 7.1. Beverly Brewery Consultants approved of the proposal to
remove the definition of ``packer.'' In a comment submitted previously
in response to the Treasury Department's RFI, the Brewers Association
had recommended elimination of the distinction between ``bottler'' and
``packer,'' although the Brewers Association did not address this issue
in its comments on Notice No. 176.
Beverly Brewery Consultants also requested that TTB delete the
definition of ``Certificate of exemption from label approval'' because
the term is not used in part 7, and also suggested that TTB add a
definition of ``packaging,'' noting that the term was defined nearly
identically in proposed Sec. Sec. 7.62(a), 7.81(a)(3), 7.101(a)(3),
and 7.121(a)(3). In addition, Beverly Brewery Consultants suggested
adding a definition for ``industry member.''
TTB Response
TTB is finalizing its proposal to eliminate the definition of
``packer'' from its part 7 regulations. TTB received two comments in
support of this change and none opposed. In Sec. 7.1, TTB is
finalizing its proposed definition of ``bottler'' as ``Any brewer or
wholesaler who places malt beverages in containers.'' Also in Sec.
7.1, TTB is finalizing the proposed definition of ``Certificate of
exemption from label approval'' to clarify that such certificates are
available for wine and distilled spirits products only. See TTB Ruling
2013-1 (noting that, ``unlike the regulations for wine and distilled
spirits (set forth in 27 CFR parts 4 and 5, respectively) the part 7
regulations do not require certificates of exemption for malt beverages
sold exclusively in intrastate commerce. TTB and its predecessor
agencies have never issued certificates of exemption for malt
beverages.''). As discussed in Section II.C.2 below, the holdings of
this ruling are being incorporated into the regulations, and thus this
ruling is superseded by this final rule.
In response to the comment regarding the definition for
``packaging,'' TTB included the definition of packaging separately in
subparts E, F, G, and H for ease of reference and along with other
definitions relevant to those subparts. TTB is finalizing those
definitions as proposed. In response to Beverly Brewery Consultants'
request that TTB add a definition of ``industry member,'' TTB does not
believe the definition is necessary because this term does not appear
in the part 7 regulations. Where the term is used in relation to part 7
in the preamble of this final rule, it refers generally to the brewers,
wholesalers, and importers of malt beverages to whom part 7 applies.
b. Minimum Quantities of Barley and Hops
In Sec. 7.1, TTB proposed to retain the current definition of
``malt beverage,'' but requested comments on whether it should set
forth any minimum standards for the quantity of malted barley or hops
used in the production of malt beverages. The current definition states
that malt beverages must be made with malted barley and hops but does
not set forth minimum quantities.
Two commenters opposed establishing minimum standards for the
quantity of malted barley or hops needed for an alcohol beverage to be
considered a malt beverage. The Brewers Association supported TTB's
decision not to include a minimum standard for use of barley and hops
in its definition of ``malt beverage,'' noting that ``[a]t this point
in the evolution of the brewing industry, new standards for use of
barley and hops would necessitate reformulation of thousands of malt
beverages.'' The Beer Institute also submitted a comment opposing
minimum standards. TTB received no comments in support of establishing
minimum standards.
TTB Response
TTB is not moving forward with minimum standards in this final
rule. TTB will continue to enforce its current policy on this issue, as
stated in TTB Ruling 2008-3. Under this policy, TTB does not mandate
minimum quantities of malted barley and hops to meet the definition of
a malt beverage.
c. Comments on Requirement To Obtain a COLA
In proposed Sec. 7.3, TTB described the general requirements and
prohibitions under the FAA Act, including the requirement for brewers,
wholesalers, and importers to obtain from TTB a COLA covering the
labeling on each container of a malt beverage. An owner of Schilling
Beer Co. requested that TTB allow malt beverages to be shipped in
interstate commerce after submitting labels to TTB, but before a COLA
is issued, or alternatively, that TTB cease issuing COLAs but instead
conduct periodic compliance checks of labels that are submitted. The
commenter stated that a shutdown in government operations severely
impacted the brewer and caused a delay in obtaining TTB label
approvals.
TTB Response
TTB recognizes that label approvals are critical to brewers and
that any disruption to normal TTB operations may increase label
processing times. However, this comment is beyond the scope of the
current rulemaking. Accordingly, TTB is not incorporating any special
rules to address compliance with labeling requirements during
government shutdowns in this final rule.
Separately, TTB finalized technical changes in Sec. 7.3(d), which
generally describes the regulatory requirements under each subpart of
part 7. First, Sec. 7.3(d)(3) and (5) contain editorial changes for
consistency within Sec. 5.3(d). Second, three references to regulatory
definitions in Sec. 7.3(d)(3)-(4) are updated to correspond to the
correct definitions and subparts.
d. Comments on ``Similar'' State Law
In Notice No. 176, TTB proposed at Sec. 7.4 a regulation setting
forth the jurisdictional limits of the FAA Act found in 27 U.S.C. 205.
Generally, the labeling and advertising provisions of the FAA Act apply
only to malt beverages shipped in interstate commerce. However, the
penultimate paragraph of 27 U.S.C. 205 includes an additional
limitation, stating the labeling provisions apply ``to malt beverages
sold or shipped or delivered for shipment or otherwise introduced into
or received in any State'' from any place outside of that State only
``only to the extent that the law of such State imposes similar
requirements with respect to the labeling . . . of malt beverages not
sold or shipped or delivered for shipment or otherwise introduced into
or received in such State'' from any place outside that State. Section
7.4(a)(1) sets forth this requirement in the regulations, while Sec.
7.4(a)(2) defines ``similar'' State law as applying to those
requirements ``found in State laws or regulations that apply
[[Page 7565]]
specifically to malt beverages or in State laws or regulations that
provide general labeling requirements that are not specific to malt
beverages.''
Separately, TTB proposed, at Sec. Sec. 7.21(a) and 7.24(a), to
require that bottlers and importers obtain a COLA for domestically
bottled and imported malt beverages, respectively, subject to certain
exceptions, which are addressed in Sec. Sec. 7.21(b) and 7.24(f).
These proposed regulations clarified, consistent with current
regulations, that COLAs are required only if the laws or regulations of
the State into which the malt beverages are being shipped ``require
that all malt beverages sold or otherwise disposed of in such State be
labeled in conformity with the requirements of subparts D through I of
this part.'' These provisions specify that this condition is met ``when
the State has either adopted subparts D through I of this part in their
entireties or has adopted requirements identical to those set forth in
subparts D through I of this part.'' Consistent with Sec. Sec. 7.4,
7.21(b), and 7.24(f), TTB also notes that malt beverages not subject to
the COLA requirements may still be subject to the substantive labeling
provisions of the part 7 labeling regulations.
For example, under both current regulations and the final rule, a
brewer may not need a COLA to ship malt beverages, in interstate
commerce, into a State that has adopted some, but not all, of the
labeling requirements of part. However, if the regulations of that
State require the name and address of the bottler to appear on the
label, in a manner that is similar to TTB requirements, and the
container bears no information as to the name and address of the
bottler, then the brewer shipping that malt beverage has violated both
State regulations and the FAA Act, even though it was not required to
obtain a COLA for the malt beverage.
Beverly Brewery Consultants stated that proposed Sec. Sec.
7.4(a)(2), 7.21(b), and 7.24(f) were inconsistent in their discussion
of State law. The commenter stated that while Sec. 7.4 refers to
``similar'' State laws, Sec. Sec. 7.21(b) and 7.24(f) refer to
``identical'' State laws. Beverly Brewery Consultants stated that each
section relates to the extent that malt beverages are subject to the
provisions of the FAA Act, and therefore should use consistent
language. NABI requested that TTB clarify in Sec. 7.4 that similar
State law refers only to State law that applies to alcohol beverages.
For example, the NABI comment distinguished between a State consumer
protection law relating to the labeling of foods in general that is
broad enough to include alcohol beverages and a State labeling law that
only applies to carbonated soft drinks, and thus would not be a similar
State law.
TTB Response
TTB is finalizing Sec. Sec. 7.4, 7.21(b), and 7.24(f) as proposed,
with minor editorial revisions that are discussed below. Other comments
received on Sec. 7.21 are discussed in Section II.C.2 below. Other
comments received on Sec. 7.24 are discussed in Section II.A.3.b. and
c. above.
As previously noted, Beverly Brewery Consultants commented that TTB
was inconsistent in using the term ``similar'' State laws in Sec. 7.4,
while using the term ``identical'' State regulations in Sec. Sec.
7.21(b) and 7.24(f). However, TTB intended to use different standards
in these regulations. TTB reiterates that Sec. 7.4 describes the
jurisdictional limits of the labeling and advertising provisions of the
FAA Act, whereas Sec. Sec. 7.21 and 7.24 relate to the regulatory
requirement to obtain a COLA. The statutory limits with regard to
compliance with the substantive labeling requirements of the FAA Act
for malt beverages shipped in interstate commerce provide there is no
violation of the FAA Act unless the State into which the malt beverage
is shipped has ``similar'' State law. However, the regulations have
always provided that no COLA is required for malt beverages shipped, in
interstate commerce, into a State that has not adopted the labeling
regulations in part 7. TTB and its predecessor agencies have
interpreted this to mean that a COLA is required only if the State into
which the malt beverages are being introduced has either adopted the
Federal malt beverage labeling regulations (specifically or by
reference) or has adopted labeling requirements that are identical in
effect (not just similar) to those in part 7. As described above, the
relationship to State law is different for each of these situations.
This provision is consistent with current regulations at 27 CFR
7.40, and with the malt beverage COLA regulations since they were first
adopted in 1936, both of which provided that the COLA requirement
applied only where the State into which the malt beverages are being
shipped had adopted the Federal malt beverage labeling regulations. In
the proposed rule, TTB clarified the language further by specifically
providing that this included the adoption of regulations identical to
the labeling regulations in part 7. Because the comments indicate that
this language may have been confusing, TTB is incorporating a minor
technical change in the language of sections 7.21(b) and 7.24(f), which
now state that the COLA requirement applies when malt beverages are
being shipped from one State into another State, and the destination
State has either adopted subparts D through I of this part in their
entireties or has adopted requirements identical in effect to those set
forth in subparts D through I of this part. This editorial change
clarifies that the regulations of the destination State need not
replicate the exact text of the Federal regulations, word for word, but
simply must be identical in effect to the labeling regulations in part
7.
In response to NABI, TTB also finds that Sec. 7.4, as proposed,
accurately describes the relationship between ``similar'' State law and
the labeling and advertising provisions of the FAA Act applicable to
malt beverages. Section 7.4(a)(2) sets out the longstanding Bureau
interpretation of ``similar'' State law by stating that if a malt
beverage label does not violate the laws or regulations of the State or
States into which the malt beverages are being shipped, it does not
violate part 7. The similar State law referred to in Sec. 7.4(a)(2)
therefore includes State laws and regulations that apply specifically
to malt beverages and those general labeling requirements that are not
specific to malt beverages, but which apply to malt beverages.
TTB agrees with NABI's comment to the effect that a State law that
specifically applied only to, for example, carbonated soft drinks, and
did not apply to malt beverages, would not be a ``similar'' State law
for this purpose. Accordingly, the regulatory text in Sec. 7.4(a)(2)
has been revised to include the clarification that in order to be
``similar,'' the State requirements need to apply to malt beverages,
even if their application extends more broadly to non-alcoholic
beverages as well. As revised, the regulations provide that a
``similar'' State law may be found in State laws or regulations that
apply specifically to malt beverages or in State laws or regulations
that provide general labeling requirements that are not specific to
malt beverages but that do apply to malt beverages.
e. Other Editorial Changes
Beverly Brewery Consultants suggested other editorial and
clarifying changes in Sec. Sec. 7.7 and 7.10. For example, Beverly
Brewery Consultants suggested that TTB remove a reference to
``alcoholic beverages'' from Sec. 7.7(a)'s description of the health
warning statement required under the Alcoholic Beverage Labeling Act of
1988 (ABLA).
[[Page 7566]]
TTB Response
TTB considered these recommendations of technical and clarifying
changes and concluded that the text of the regulations as originally
proposed clearly communicates TTB's requirements. In Sec. 7.7(a), TTB
accurately describes the requirements of the ABLA as applicable to
alcoholic beverages, including malt beverages, that contain at least
0.5 percent alcohol by volume. See 27 U.S.C. 214. Separately, TTB
corrected a minor spelling error corrected in Sec. 7.10, as finalized
below.
2. Subpart B--Certificates of Label Approval
In Notice No. 176, TTB proposed to consolidate the regulations
related to TTB label approval in a new subpart B for each commodity in
parts 4, 5, and 7. TTB further proposed in Sec. 7.21 to clarify that
certificates of label approval (COLAs) are not required for malt
beverages sold exclusively in the State in which the malt beverages
were bottled.
Proposed Sec. 7.21(a) set forth the general requirement for
bottlers of malt beverages to obtain a COLA. Section 7.21(b) clarified
that a COLA is required for malt beverages shipped into a State from
outside of the State only where the laws or regulations of the
receiving State require that all malt beverages sold or otherwise
disposed of in such State be labeled in conformity with the
requirements of part 7, subparts D through I. Proposed Sec. 7.21(b)
also noted that malt beverages that are not subject to the COLA
requirements of current Sec. 7.21 may still be subject to the
substantive labeling provisions of part 7, subparts D through I, to the
extent that the State into which the malt beverages are being shipped
has similar State laws or regulations. As previously noted, these
requirements are consistent with the longstanding policy of TTB and its
predecessor agencies.
Proposed Sec. 7.21(c) clarified that persons bottling malt
beverages that will not be shipped, or delivered for sale or shipment,
in interstate or foreign commerce, are not required to obtain a COLA or
a certificate of exemption from label approval, along with a note
explaining what constitutes a certificate of exemption from label
approval. As noted in the NPRM, TTB has never issued certificates of
exemption for malt beverages. TTB issues certificates of exemption from
label approval to cover a wine or distilled spirits product that will
not be introduced in interstate or foreign commerce. TTB solicited
comments on whether the issuance of a certificates of exemption for
malt beverages in such circumstances (for products that will not be
sold outside of the State of the bottling brewery) would be useful to
industry members, and whether the regulations should allow a
certificate of exemption for such products.
TTB received four comments on the proposed regulations at Sec.
7.21. The Brewers Association interpreted the proposed regulation as
requiring brewers to obtain COLAs if they are located in States that
incorporate TTB regulations by reference or have identical regulations,
even if the product was bottled for intrastate sale. The Brewers
Association stated that the proposal would have the effect of requiring
brewers and brewpubs who only sell malt beverages in their home States
to now obtain a COLA.
The Williams Group suggested that TTB allow industry members who
are exempt from COLA requirements to request and obtain a COLA or a
certificate of exemption ``in the rare instance that it might be
required or otherwise helpful.'' NABI stated it would be valuable for
brewers to obtain certificates of exemption so that the labels would
appear on the COLA Public Registry, which would confirm that products
were legally produced in the United States. Beverly Brewery Consultants
suggested removing the note in Sec. 7.21(c) explaining what a
certificate of exemption from label approval is and replacing it with a
statement that TTB does not issue certificates of exemption for malt
beverages.
TTB Response
TTB is finalizing Sec. 7.21 as proposed, except for the addition,
at paragraph (d), of a provision originally proposed at Sec. 7.211,
regarding the presentation of evidence of label approval upon request
by an appropriate TTB official. See Section II.A.9.a. Section 7.21 does
not create any new COLA requirements for brewers. Consistent with TTB's
current regulations, Sec. 7.21 requires brewers or wholesalers
bottling malt beverages to obtain a COLA prior to bottling the malt
beverages or removing them from the bottling premises if the product is
intended for sale in interstate commerce and if the State in which the
product is to be sold incorporates TTB labeling regulations by
reference or has identical regulations. Malt beverages intended only
for sale intrastate are not required to obtain a COLA, as stated in
Sec. 7.21(c).
In response to the comment from the Williams Group, requesting that
COLAs or certificates of exemption be available for malt beverages that
will not be shipped or delivered for sale or shipment, in interstate or
foreign commerce, TTB notes that bottlers may currently apply for COLAs
on a voluntary basis. Brewers may therefore apply for COLAs covering
malt beverages currently sold in intrastate commerce if, for example,
they believe the State may require such documentation, or to cover the
possibility that such products may be sold in interstate commerce in
the future.
Because COLAs are granted based on the label's compliance with
TTB's regulations in part 7, some malt beverages that are only
distributed intrastate and are labeled in conformance with State law
may not be eligible to obtain a COLA, such as where State law creates a
conflicting requirement. This is why TTB sought comments on whether
certificates of exemption should be available for malt beverages that
are only distributed intrastate. While the Williams Group recommended
making them available in the ``rare case that it might be required or
otherwise helpful,'' it also stated that it was not aware of State
requirements for COLAs or certificates of exemption for malt beverages
only distributed intrastate. Because TTB did not receive comments
referring to State requirements for TTB documentation for these types
of malt beverages, this final rule does not include any provisions for
allowing certificates of exemption for malt beverages on an optional
basis.
NABI suggested that requiring certificates of exemption for malt
beverages sold in intrastate commerce would be useful, so that industry
members could confirm, via the COLA Public Registry, that products were
legally produced in the United States. However, the NABI comment did
not provide any evidence to establish that the theoretical benefit from
such a requirement would justify the additional regulatory burden. TTB
notes that such a requirement would constitute a new burden on bottlers
of malt beverages distributed only in intrastate commerce and would
represent a change to longstanding TTB policy to not require
certificates of exemption for malt beverages sold exclusively in
intrastate commerce. Accordingly, this final rule does not adopt the
NABI comment.
Finally, TTB disagrees with the comment from Beverly Brewery
Consultants, requesting that TTB remove from Sec. 7.21(c) the
parenthetical statement explaining what constitutes a certification of
exemption from label approval. TTB believes this note in paragraph (c)
provides useful information because it provides context
[[Page 7567]]
for the earlier statement in Sec. 7.21 that bottlers of malt beverages
that will not be shipped or delivered for sale or shipment in
interstate or foreign commerce are not required to obtain a COLA or a
certificate of exemption from label approval.
3. Subpart D--Label Standards
In Notice No. 176, TTB proposed a subpart D in each of parts 4, 5,
and 7, containing regulations governing the placement of, and other
requirements applicable to, mandatory and additional information on
labels and containers. Most of the proposals applied similarly to the
labels of the wine, distilled spirits, and malt beverage products.
Specific to part 7, TTB proposed, and is now finalizing, an exception,
for certain kegs, to the requirement that labels be firmly affixed to
malt beverage containers.
Generally, TTB requires that labels be ``firmly affixed'' to malt
beverage containers, that is, that they must be affixed in such manner
that they cannot be removed without the thorough application of water
or other solvents. Under Sec. 7.51(b), TTB proposed an exception to
this requirement for kegs that have a capacity of 10 gallons or more.
The exception provided that a label in the form of a keg collar or a
tap cover was not required to be firmly affixed, provided that the name
of the brewer or bottler of the malt beverage was permanently or semi-
permanently stated on the keg in the form of embossing, engraving, or
stamping, or through the use of a sticker or ink jet method. (TTB notes
that it inadvertently described the proposal as contingent on the name
of the brewer appearing on the keg, but proposed regulatory text that
provided that the name of the bottler appear on the keg.)
TTB proposed this exception in response to requests from brewers,
who have asserted that the requirement for firmly affixed labels is
unduly burdensome as applied to kegs. Brewers have noted that kegs are
intended to be reused, but that it takes considerable time and effort
to scrape off the label each time a keg is to be reused. For this
reason, brewers requested that TTB authorize the use of keg collars
that are not firmly affixed to the keg, or a tap cover, to bear
mandatory labeling information.
Seven commenters addressed proposed Sec. 7.51, including the
proposed exception and the general requirement that labels must
otherwise be firmly affixed to malt beverage containers. The commenters
provided important information, including current practices of affixing
labels to kegs, the burden of compliance with current and proposed
regulations, and the prevalence of keg sharing programs. In light of
those comments, TTB is finalizing the requirement that labels be firmly
affixed to containers, as proposed at Sec. 7.51(a), and is expanding
the exception to this requirement from what was proposed at Sec.
7.51(b).
Only the Williams Group appeared to support, without reservation,
the proposed exception, for certain keg collars and tap covers, to the
requirement that labels be firmly affixed to containers. The six other
commenters raised one or more specific objections. The Brewers
Association, the Beer Institute, and MicroStar Logistics opposed making
the exception to the firmly affixed label requirement for keg collars
and tap covers contingent upon permanently or semi-permanently marking
the keg with the name of the bottler. The Brewers Association and
MicroStar Logistics stated that many brewers rely on third-party keg-
sharing programs and that the exception, as proposed, would not provide
any additional flexibility in such circumstances. The Brewers
Association, MicroStar Logistics, NBWA, and the Confederated Tribes of
the Chehalis Reservation described the exception, with its reliance on
identifying the brewer through marking on the keg, as a new requirement
that would add costs to industry members. The Confederated Tribes of
the Chehalis Reservation stated that ``the current use of keg collars
with the brewery information is a system that is working'' and does not
need to be changed. They stated that the proposed rule would impose
costs on brewers and force them to purchase additional kegs. The Beer
Institute requested that TTB clarify that brewers may use trade names
in lieu of actual corporate names and provide guidance on the proposal
as applied to contract brewing. NBWA requested that TTB clarify that
brewers are responsible for affixing keg collars before kegs leave the
brewery.
The Brewers Association and MicroStar Logistics also objected to
the existing requirement that labels must be ``firmly affixed'' to malt
beverages containers such that they ``cannot be removed without
thorough application of water or other solvents.'' They described this
requirement, proposed at Sec. 7.51(a) and derived from TTB's prior
regulations, as ``out of date and unnecessary in light of the
significant adoption of keg sharing programs by the beer industry.''
The Brewers Association additionally opposed the ``unnecessary use of
additional water or solvents'' out of concern for workplace safety and
environmental protection.
The Brewers Association, the Beer Institute, and MicroStar
Logistics suggested that TTB allow firmly affixed, non-adhesive keg
collars that ``are specifically designed to affix to the neck of the
keg and cannot be removed without deliberate effort.'' They stated that
the use of such collars would save brewers from the burden and expense
of scraping off old labels and would still maintain appropriate
consumer protections. The Brewers Association stressed that TTB should
allow the use of such non-adhesive keg collars because other aspects of
malt beverage distribution and sale ensure that the proper products are
delivered from brewers to wholesalers, retailers, and consumers. The
Brewers Association stated that kegs are transported by licensed
carriers and wholesalers, who have an economic motivation to deliver
the proper product to retailers and consumers. It stated that kegs are
typically shipped from packaging breweries shrink wrapped and on
pallets, which deters tampering with keg collars. Once in commerce, the
Brewers Association stated that State laws require retailers, bars, and
restaurants to supply the correct product and that permanent keg
marking would not serve to ameliorate any attempts to deceive consumers
because kegs typically are not visible to consumers.
The Beer Institute, along with Beverly Brewery Consultants, also
proposed extending the exception for keg collars to kegs with a
capacity of less than 10 gallons. The Beer Institute favored a minimum
capacity of 5.2 gallons, while Beverly Brewery Consultants recommended
allowing keg collars on kegs with a capacity greater than 1 gallon.
Both commenters stated that, because brewers frequently use a variety
of keg sizes, these suggestions would allow brewers greater flexibility
in labeling their kegs.
Finally, the Confederated Tribes of the Chehalis Reservation
questioned the impact that the requirement, in proposed Sec. 7.51(a),
to firmly affix labels would have on growlers. The commenter asked that
the regulations clarify that refillable beer containers, such as
growlers, which are refilled at the request of consumers at the point
of sale, do not need to be firmly affixed with product information.
TTB Response
After reviewing the comments, TTB has decided to finalize, as
proposed in Sec. 7.51(a), the requirement that labels be firmly
affixed to containers, and expand
[[Page 7568]]
the exception for keg labels proposed in Sec. 7.51(b). Recognizing the
points made in the comments by the Beer Institute, the Brewers
Association, and MicroStar Logistics, TTB is providing an exception to
the ``firmly affixed'' requirement for kegs to incorporate certain
types of non-adhesive keg collars or tap covers.
This final rule provides that a keg collar or tap cover is
considered to be firmly affixed if removal would break or destroy the
keg collar or tap cover in such a way that it cannot be reused. Because
any attempt at removal will break the keg collar or tap cover, or
render it unfit for reuse, this provision allows non-adhesive keg
collars and tap covers but mitigates the risk that labels simply could
be switched between kegs. TTB believes this additional option will
reduce the burden on breweries of removing and replacing keg labels and
recognizes the use of third party keg providers. Although the Brewers
Association described various controls and requirements that deter
intentional mislabeling of kegs in commerce, TTB believes that allowing
keg labels that could be switched from one keg to another with minimal
effort presents an undue risk of fraud or deliberate tampering that
would result in consumer deception.
Any keg collar or tap cover that is either broken or destroyed and
rendered unfit for reuse upon removal would be eligible for the
exception under Sec. 7.51(b)(1), including those that utilize tamper-
resistant or tamper-evident seals, leave evidence of tampering behind,
or are intended to be self-adhering as opposed to adhering directly to
a keg. While some commenters suggested that TTB allow keg collars and
tap covers that cannot be removed without ``deliberate effort,'' TTB
finds that such a standard would be difficult to define and
communicate, and would risk being unenforceable in practice.
TTB is also finalizing the exception proposed in Notice No. 176
that allows for placement of mandatory information on keg collars and
tap covers that are not firmly affixed. The exception is now set forth
below at Sec. 7.51(b)(2). It provides that a keg collar or tap cover
is not required to be firmly affixed if the name of the bottler or
importer is permanently or semi-permanently stated on the keg in the
form of embossing, engraving, or stamping, or through the use of a
sticker or ink jet method. TTB has added the words ``or importer'' to
clarify that the exception applies both to domestically brewed and
imported malt beverages.
In both Sec. 7.51(b)(1) and (b)(2), TTB is clarifying that these
provisions apply only to keg collars and tap covers that meet the
definitions of these terms in Sec. 7.1, as finalized by this rule. TTB
did not receive comments in response to the proposed definitions of
``keg collar'' or ``tap cover'' in Sec. 7.1, which were proposed to
provide clarity on the meaning of these terms in the context of the
exception proposed at Sec. 7.51(b).
In response to comments by the Beer Institute and Beverly Brewery
Consultants, TTB is providing additional flexibility by reducing the
minimum capacity of kegs to which Sec. 7.51(b)(1) and (b)(2) apply,
from the proposed 10 gallons to 5.16 gallons. Both of these commenters
described common keg sizes used by brewers with a capacity of less than
ten gallons, including ``sixth barrel'' kegs, which have a capacity of
one-sixth of a 31-gallon barrel (or approximately 5.16 gallons). In
Notice No. 176, TTB proposed the exception to the requirement that
labels be firmly affixed to containers because kegs are intended to be
reused and brewers had expressed that it takes considerable effort to
remove and replace adhesive labels on kegs. TTB stressed that the
proposed exception would afford additional flexibility without
sacrificing consumer protection. This remains the case for kegs with a
minimum capacity of 5.16 gallons. Such kegs are generally reused by
brewers and delivered to bars or restaurants that dispense malt
beverages to consumers, whereas smaller containers, such as one gallon
kegs, typically are not reused and are often sold directly to
consumers. For these reasons, TTB believes reducing the minimum keg
capacity from the proposed 10 gallons to 5.16 gallons will ease the
burden on industry members, particularly small brewers, of labeling and
relabeling kegs while maintaining adequate consumer protections.
In response to the Brewers Association and MicroStar Logistics
comments requesting changes to the requirement that labels be firmly
affixed to containers, which appears in Sec. 7.51(a), TTB notes that
it did not propose changes to this standard. The standard, that
generally labels must be affixed such that they ``cannot be removed
without thorough application of water or other solvents,'' represents
TTB's general requirement for labels in the malt beverage industry.
This standard also exists in the wine and distilled spirits
regulations. Because TTB did not propose changes to this standard, it
finds that this option was not adequately aired for comment in the
notice, and thus will consider it for further rulemaking.
The Confederated Tribes of the Chehalis Reservation asked TTB to
clarify what impact the requirement to firmly affixed labels to
containers under proposed Sec. 7.51 would have on growlers. Section
7.51 does not create new requirements for growlers, which TTB considers
to be bottles or glasses, depending on how they are used. See TTB Beer
FAQs B9, What is TTB's policy with respect to ``growlers''?,''
available at https://www.ttb.gov/beer/beer-faqs.
Proposed Sec. 7.51(a), requiring that labels be firmly affixed to
containers of malt beverage, was derived from current TTB regulatory
requirements. The exception described above only applies to malt
beverages in kegs of 5.16 gallons or more.
In response to the Beer Institute's request that TTB clarify that
brewers may use trade names in lieu of actual corporate names and
provide guidance on the proposal as applied to contract brewing, TTB
notes that Sec. 7.51 only addresses how labels must be affixed to
containers. The name and address statements required to appear on
labels are described in part 7, subpart E, in Sec. Sec. 7.66-7.68. TTB
is therefore addressing this comment in the discussion of those
sections below. In response to the NBWA request that TTB clarify that
brewers are responsible for affixing keg collars before kegs leave the
brewery, TTB refers the commenter to the discussion above under part 7
subpart A. Section 7.3(c) of that subpart states in relevant part that
brewers and wholesalers may only introduce in interstate or foreign
commerce malt beverages in containers that are marked, labeled, and
branded in accordance with the labeling requirements of part 7. TTB
notes that subject to the jurisdictional limits of the FAA Act, the law
clearly prohibits the sale or shipment in interstate or foreign
commerce of wine, distilled spirits, or malt beverages that are not
bottled, packaged, and labeled in accordance with regulations issued by
the Secretary. See 27 U.S.C. 205(e).
TTB is making two additional technical changes to proposed Sec.
7.51. First, for clarity, TTB is changing the title of Sec. 7.51 from
``Firmly affixed requirements.'' to ``Requirements for firmly affixed
labels.'' Second, TTB is moving the second sentence from proposed Sec.
7.51(b) to a separate paragraph (c). This provision states, ``This
section in no way affects the requirements of part 16 of this chapter
regarding the mandatory health warning statement.'' Part 16 contains
TTB's requirements implementing the Alcoholic Beverage Labeling Act of
1988
[[Page 7569]]
(ABLA), which requires that a specific health warning statement appear
on the labels of all containers of alcohol beverages for sale or
distribution in the United States. See 27 U.S.C. 215. Part 16 contains
a separate requirement that the health warning statement be firmly
affixed to alcohol beverage containers. See Sec. 16.22(c). TTB is
therefore making this change to further clarify that none of the
provisions in Sec. 7.51 affect the regulatory requirements under part
16.
4. Subpart E--Mandatory Label Information
Subpart E in part 7 sets forth the information that is required to
appear on malt beverage labels (otherwise known as ``mandatory
information''). Proposed changes specific to malt beverages included
removing restrictions on where mandatory information may appear on malt
beverage labels, allowing alternative statements of alcohol content
(such as alcohol by weight), expanding the tolerance for statements of
alcohol content, clarifying the permissible name and address statements
for brewers and bottlers, and codifying TTB's policy that statements of
net contents may be expressed in metric units in addition to U.S.
standard measures. For more information on the specific part 7 subpart
E proposals, please refer to Notice No. 176, Section II.E.4. In the
case of allowing alternative statements of alcohol content (such as
alcohol by weight), TTB finalized this change in T.D. TTB-158.
Regarding name and address statements for brewers and bottlers of malt
beverages, TTB discussed these requirements along with similar
requirements for wine and distilled spirits regulations above in
Section II.A.6.d.
a. Placement of Mandatory Information
In Notice No. 176, TTB proposed in Sec. 7.63 a provision to allow
mandatory information to appear on any label on a malt beverage
container. TTB is finalizing this proposal. TTB's current regulations
require certain mandatory information to appear on a ``brand label,''
while other mandatory information or additional information could
appear on any label. Our current regulations define brand label as
``[t]he label carrying, in the usual distinctive design, the brand name
of the malt beverage.'' TTB proposed to remove this requirement because
in practice, many malt beverage labels wrap around the container. As a
result, mandatory information often appears anywhere on certain cans or
bottles.
TTB did not receive any comments for or against this change
specifically as applied to malt beverages. Therefore Sec. 7.63 is
finalized as proposed.
TTB notes that it may take some time to make conforming changes to
the COLAs Online system to remove references to a ``brand label.'' COLA
applicants may, in the interim, simply designate in COLAs Online any
label bearing the brand name as the ``brand label.''
b. Alcohol Content Statements for Malt Beverage Labels
In Notice No. 176, TTB proposed to increase the alcohol content
tolerance for malt beverages from 0.3 percent above or below the
labeled alcohol content to 1 percent above or below. However, TTB is
not finalizing this proposal. TTB made this proposal with the
understanding that some brewers, especially small brewers, avoid
putting optional alcohol content statements on malt beverage labels
because of difficulty maintaining precise alcohol content from batch to
batch. Currently, alcohol content statements must only be included on
malt beverage labels if the product contains alcohol derived from added
flavors or other added nonbeverage ingredients (other than hops
extract) containing alcohol. TTB stated that it believed increasing the
tolerance for malt beverage alcohol content statements would encourage
more brewers to include such statements when they are otherwise
optional. TTB stated that it did not believe that a one percentage
point variation from the labeled alcohol content would significantly
impact consumers. TTB noted that under both its current regulations,
and those finalized by this rule at Sec. 7.65(c)-(e) below, the
alcohol content tolerance is restricted in the case of malt beverages
labeled with the statements ``low alcohol,'' ``reduced alcohol,''
``non-alcoholic,'' and ``alcohol free.'' For example, alcohol content
for malt beverages labeled as ``low alcohol'' or ``reduced alcohol''
must be less than 2.5 percent alcohol by volume. Likewise, malt
beverages labeled ``non-alcoholic'' must contain less than 0.5 percent
alcohol, and ``alcohol free'' malt beverages must contain no alcohol.
Four commenters, the Brewers Association, the Beer Institute,
Beverly Brewery Consultants, and a team of professors from Abertay
University and Heriot Watt University in Scotland, commented on TTB's
proposed alcohol content tolerance for malt beverages in Sec. 7.65.
Beverly Brewery Consultants supported the proposed increase, noting
that fermentation may result in batches of the same product that vary
by alcohol content. The Brewers Association also supported the proposed
increase in the alcohol content tolerance. The Brewers Association
proposed that TTB require disclosure of alcohol content on malt
beverage labels, provided it increased the tolerance as proposed. Prior
to the publication of Notice No. 176, in its response to the Treasury
Department's RFI, the Brewers Association also suggested maintaining
the existing tolerance of plus or minus 0.3 percent for malt beverages
below 5 percent alcohol-by-volume (ABV) and increasing the tolerance to
plus or minus 0.5 percent for malt beverages with an alcohol content at
or above 5 percent ABV.
The Beer Institute opposed the proposed increase of the alcohol
tolerance for malt beverages. It stated that the proposed increase was
too great and would undermine provisions of the FAA Act that direct the
Secretary to promulgate regulations that prevent consumer deception,
provide adequate information to consumers, and prohibit false or
misleading statements. Further, the Beer Institute stated that the
increase could confuse, mislead, and possibly endanger consumers due to
higher than labeled alcohol content. The Beer Institute also expressed
concern about the relationship of an increased tolerance to other TTB
requirements, such as the labeling of low or reduced alcohol malt
beverages and the use of optional Serving Facts statements. It raised
concerns that brewers might use the increased tolerance to either save
costs by brewing near the low end of the tolerance, or provide more
alcohol than is labeled by brewing at the high end. The Beer Institute
recommended keeping the current tolerance, which it stated balances the
technical challenges of brewing with the consumer interest in
predictable alcohol content.
The team of professors supported the proposed increase and
submitted the results of a study of beers brewed in the United Kingdom
showing that a significant fraction fell outside a tolerance of plus or
minus 0.3 percent.
TTB Response
TTB is not finalizing the proposal to increase the alcohol content
tolerance for malt beverages from 0.3 percent to 1 percent. Commenters
have raised important issues in support of, and in opposition to, the
proposal. The comments from the Brewers Association, Beverly Brewery
Consultants, and the team of professors supported an expanded tolerance
and observed that some brewers have difficulty maintaining precise
alcohol content in malt beverages from batch to batch. However, TTB
notes that the
[[Page 7570]]
Brewers Association's comment to the RFI sought a smaller increase (to
plus or minus 0.5 percent) for those malt beverages with an alcohol
content at or above 5 percent alcohol by volume, and no increase at all
for other malt beverages.
TTB notes that it does not agree with a comment from the Beer
Institute, which stated that an increased alcohol content tolerance
would allow malt beverages labeled as ``low alcohol'' to contain one
percentage point more alcohol than is labeled. This is not the case. As
noted above, Sec. 7.65 maintains the alcohol tolerance limitations
from TTB's current regulations, including for malt beverages labeled as
low or reduced alcohol. Under Sec. 7.65(d), as finalized, alcohol
content for such malt beverages must be less than 2.5 percent alcohol
by volume regardless of the otherwise permitted tolerance.
Regarding the issue of increasing the tolerance for alcohol
content, the Brewers Association appeared to request that disclosure of
alcohol content be made mandatory for all malt beverages, and that TTB
should increase the tolerance as part of such a change. In Notice No.
176, TTB stated that it was not proposing to expand the types of malt
beverages for which an alcohol content statement would be mandatory.
Accordingly, TTB finds that aspect of the Brewers Association comment
to be outside the scope of this rulemaking.
Based on the comments received in response to the proposal on
alcohol content tolerances, TTB has concluded that whether the alcohol
content tolerance for malt beverages should be increased requires
further consideration. As a result, TTB is finalizing Sec. 7.65
without changing the alcohol content tolerance for malt beverages. The
tolerance remains 0.3 percent above or below the stated alcohol
content, subject to the limitations described in Sec. 7.65. TTB will
treat the Brewers Association comment as a request for further
rulemaking on this issue.
TTB is also finalizing proposed Sec. 7.65(b) with minor
modifications. In T.D. TTB--158, TTB amended existing regulations on
alcohol content statements to provide that, while a statement of
alcohol content must be expressed as a percentage of alcohol by volume,
other truthful, accurate, and specific factual representations of
alcohol content, such as alcohol by weight, may be made, as long as
they appear together with, and as part of, the statement of alcohol
content as a percentage of alcohol by volume. This document
incorporates this amendment, with minor clarifying changes. Consistent
with current regulations, the final rule clarifies that Sec. 7.65
applies only where State law does not either prohibit alcohol content
statements or provide its own requirements for the manner of such
statements. The final rule also removes, as unnecessary, language
clarifying that a mandatory alcohol content statement may not be
expressed as a range or by maximums or minimums.
c. Net Content Labeling for Malt Beverages
In Notice No. 176, TTB proposed at Sec. 7.70 to amend the net
content labeling regulations for malt beverages to reflect current
policy by specifically stating in the regulations that malt beverages
may be labeled with the equivalent metric measure in addition to the
mandatory U.S. measure. (As explained further below, the notice
referred to ``U.S. standard measures'' to mean U.S. customary units of
measurement, e.g., U.S. gallons, quarts, pints, and fluid ounces). TTB
noted that current regulations allow for the use of U.S. standard
measures, but do not address whether metric contents also may be
displayed. Because current TTB policy is to allow net contents to be
expressed in both formats, TTB proposed that Sec. 7.70 allow for the
statement of net contents of metric measurements in addition to, but
not in lieu of, the U.S. standard measures. TTB did not receive
comments for or against this proposal.
In the interim, this change was adopted in the current malt
beverage net content labeling regulations by T.D. TTB-165. The summary
of that final rule explained that: ``TTB is also amending the labeling
regulations for distilled spirits and malt beverages to reflect current
policy by specifically stating in the regulations that distilled
spirits may be labeled with the equivalent standard United States
(U.S.) measure in addition to the mandatory metric measure, and that
malt beverages may be labeled with the equivalent metric measure in
addition to the mandatory U.S. measure.''
Separately, in response to the Treasury Department's RFI, the
Brewers Association suggested that, for malt beverage containers with
volumes of between one pint and one quart, TTB should allow the
expression of net contents as fluid ounces only. Currently, net
contents for containers of this size must be expressed as fractions of
a quart, or in pints and fluid ounces.
TTB Response
Because TTB did not receive comments on its proposal to allow the
statement of net contents in metric measurements in addition to, but
not in lieu of, the U.S. standard measures, and because this change has
already been made in the regulations as amended by T.D. TTB-165, TTB is
finalizing Sec. 7.70 as proposed. TTB is making a minor editorial
revision to refer to the U.S. standard measures as ``U.S. customary
units of measurement.'' While both terms have the same meaning, TTB
finds that the term ``customary'' describes this system of measurement
more accurately than the term ``standard.''
In response to the RFI comment from the Brewers Association, TTB
notes that it did not propose changes to the permissible format of U.S.
standard units. It is not clear whether industry members and consumers
were given adequate notice that such formatting requirements were
subject to change. TTB is therefore not adopting this suggestion from
the Brewers Association. TTB may consider changes to the permissible
formats for net contents statements in a future rulemaking.
5. Subpart H--Labeling Practices That Are Prohibited if They Are
Misleading
In Notice No. 176, TTB proposed, in subpart H of parts 4, 5, and 7,
regulations on labeling practices that are prohibited if they are
misleading. See section II.B.6. TTB responds above to comments on
proposals that apply similarly to wine, distilled spirits, and malt
beverages. See section II.A.7.h. Regarding malt beverages specifically,
TTB is incorporating in Sec. 7.128 text from TTB's current
regulations, which prohibits malt beverage labels from containing
statements or representations that tend to create a false or misleading
impression that a malt beverage contains distilled spirits or is a
distilled spirits product. TTB is also adding in Sec. 7.128(b)(4),
based on current guidance, a provision that truthful and accurate
statements about production of a malt beverage, such as ``aged in
whisky barrels,'' do not violate this standard. See TTB Ruling 2015-1.
Finally, based on comments received, TTB is not finalizing proposed
Sec. 7.131, which contained a prohibition from TTB's current
regulations on the use of the term ``bonded'' or similar terms that may
imply governmental supervision over the production, bottling, or
packing of a malt beverages product. TTB does not believe a separate
regulation is necessary in this area and is opting to rely on its
general prohibition against statements or representations, irrespective
of falsity, that tend to mislead consumers.
[[Page 7571]]
a. Claims Related to Distilled Spirits
In Notice No. 176, TTB proposed regulations at Sec. Sec. 4.128,
5.128, and 7.128 prohibiting labeling statements that tended to create
a false or misleading impression that products of one commodity contain
or are themselves a different commodity. In the case of malt beverages,
the proposed regulation at Sec. 7.128 prohibited labeling statements
that would create a misleading impression that a malt beverage product
contained or was itself a distilled spirit or wine product. The
proposed regulations also would have prohibited homophones or coined
words that simulate or imitate a class or type designation of a
different commodity. TTB proposed this requirement based on its receipt
of increasing numbers of applications for approval of labels that
contained such terms.
In T.D. TTB-158, TTB decided not to finalize proposed Sec. Sec.
4.128, 5.128, and 7.128, stating in response to comments that ``a
blanket approach to cross-commodity terms * * * could unnecessarily
restrict creativity in the use of truthful and non-misleading
representations on labels.'' However, as discussed in Notice No. 176,
current TTB regulations continue to prohibit misleading representations
that a malt beverage product contains or is itself a distilled spirit
product. See 27 CFR 7.29(a)(7). TTB received two comments in relation
to this current regulation. The Beer Institute, although it opposed the
language in proposed Sec. 7.128, which took a more expansive approach
to cross-commodity terms in general, supported TTB's current
regulation. The Williams Group, however, commented that both TTB's
current and proposed regulations limit producers' freedom to be
creative. The Williams Group also stated that consumers are able to
read labels and determine the type of commodity.
Both proposed Sec. 7.128 and TTB's current regulation at Sec.
7.29(a)(7) listed three types of labeling statements that TTB does not
consider to create a false or misleading impression that a malt
beverage contains distilled spirits or is a distilled spirits product.
They are truthful and accurate statements of alcohol content, the use
of a brand name of a distilled spirits product as a malt beverage brand
name, or the use of a cocktail name as a brand name or distinctive or
fanciful name. In Notice No. 176, TTB proposed to add items to this
list. First, TTB proposed to allow truthful and accurate statements
about the production of a malt beverage, such as ``aged in whisky
barrels'' or ``Beer brewed with chardonnay grapes.'' This provision was
based on labeling guidance in TTB Ruling 2014-4. TTB notes that Ruling
2014-4 was superseded by TTB Ruling 2015-1, which includes the content
of Ruling 2014-4 in its entirety. Second, based on provisions in the
Beverage Alcohol Manual for malt beverages, TTB proposed to allow the
use of the designations ``barley (or wheat or rye) wine ale'' or
``barley (or wheat or rye) style wine ale.'' Third, TTB proposed to add
a new provision, permitting ``[t]he use of terms that simply compare
malt beverage products to wine or distilled spirits products without
creating a misleading impression as to the identity of the product.''
The Beer Institute opposed adding these three items, on the grounds
that TTB personnel in the future may interpret the exceptions as
defining the limits of what labeling claims or statements related to
non-malt beverage products may be used. In contrast, Beverly Brewery
Consultants supported listing specific terms in the regulations to
clarify to brewers that use of these terms on labels is permissible.
TTB notes that while the Beer Institute opposed proposed Sec. 7.128,
it did not oppose the existing restrictions from the prior regulation
at Sec. 7.29(a)(7) and recommended that such restrictions be extended
to wine product labels. Finally, Beverly Brewery Consultants expressed
concern that the proposed regulation could impact currently permissible
statements on malt beverage labels, such as those comparing malt
beverage products to ``champagne.''
TTB Response
TTB is finalizing at Sec. 7.128 its current regulation from Sec.
7.29(a)(7), which prohibits malt beverage labels from containing
statements or representations that tend to create a false or misleading
impression that a malt beverage contains distilled spirits or is
distilled spirits product.'' In response to the Williams Group, TTB
believes its current regulation does not limit product innovation,
because statements or representations related to distilled spirits are
still permitted, provided they do not create a false or misleading
impression about the identity of the product. For the same reason, TTB
believes this provision is necessary for consumer protection.
TTB is also finalizing the provision proposed at Sec. 7.128(b)(4),
which incorporates current guidance to state that truthful and accurate
statements about the production of a malt beverage, such as ``aged in
whisky barrels'' are not prohibited. However, TTB is not including the
proposed examples relating to the use of grapes in the production of
beer (``fermented with grapes'' and ``Beer brewed with chardonnay
grapes''), because they relate to the proposed regulatory language
about misleading cross-commodity comparisons with wine, which was not
finalized. Similarly, this final rule makes conforming changes to Sec.
7.143(h)(3), which describes designations related to barrel aging that
TTB would consider misleading, to remove examples of designations that
mention wine or grapes. These types of claims remain subject to the
general prohibition against misleading labeling statements.
TTB is also not finalizing in Sec. 7.128 the proposed provision
permitting terms ``barley (or wheat or rye) wine ale'' or ``barley (or
wheat or rye) style wine ale,'' because they also relate specifically
to claims related to wine. TTB's policy permitting these terms remains
in effect, as reflected in the class and type regulations that are
finalized at Sec. 7.143(g).
TTB is also not finalizing the provision permitting labeling
statements that simply compare malt beverage products to wine or
distilled spirits products, without creating a misleading impression as
to the identity of the product. Upon further review, this provision
does not provide additional clarity over and above the general
prohibition in Sec. 7.128(a), that labels may not create a false or
misleading impression that a malt beverage contains distilled spirits
or is a distilled spirits product.
b. Use of the Term ``Bonded''
In proposed Sec. 7.131, TTB maintained a provision from its
current regulations that prohibited the use on malt beverage labels of
the term ``bonded'' or similar terms that may imply governmental
supervision over the production, bottling, or packing of the product.
TTB sought comments, however, on whether it should continue to prohibit
the use of such terms on malt beverage labels.
Two commenters responded to TTB's proposal. The Williams Group and
Beverly Brewery Consultants both stated that the prohibition is
unnecessary and outdated. The Williams Group stated that the term had
little meaning and would not mislead consumers or cause them to believe
that distilled spirits had been added to a malt beverage. Beverly
Brewery Consultants stated that there did not appear to be a need to
retain the prohibition. TTB also notes that the Brewers Association
submitted a comment in response to the Treasury Department's RFI
stating that there is no reason to prohibit the use of the word
[[Page 7572]]
``bonded'' on malt beverage labels because the word ``has no meaning
related to malt beverages.''
TTB Response
Based on the comments received, TTB is eliminating the prohibition
on the use of the word ``bonded'' or similar terms on malt beverage
labels. Commenters generally stated that use of the term ``bonded'' or
similar terms on malt beverages labels would not tend to mislead
consumers. TTB notes that the general prohibition in Sec. 7.122
against statements or representations, irrespective of falsity, that
mislead consumers is finalized as proposed. This provision extends to
labeling statements that use the term ``bonded'' or similar terms in a
misleading fashion, for example, implying government supervision or
certification that actually was not provided. Such uses would be
prohibited under TTB's general prohibition on misleading labeling. See
27 CFR 7.102.
6. Subpart I--Class and Type
In Notice No. 176, TTB proposed to reorganize and amend its class
and type designations for malt beverages. These regulations appear in
current Sec. 7.24 and were proposed to be reorganized into part 7
subpart I, Sec. Sec. 7.141-7.147.
Part 7 does not prescribe standards of identity for malt beverages.
Instead, current Sec. 7.24(a) provides that statements of class and
type for malt beverages shall conform to the designation of the product
as known to the trade. If the product is not known to the trade under a
particular designation, a distinctive or fanciful name, together with
an adequate and truthful statement of composition of the product, shall
be stated, and such statement is treated as a statement of class and
type for purposes of part 7.
TTB did not propose now to include specific standards of identity.
Proposed Sec. 7.141 is derived from 27 CFR 7.24(a) and sets out
standards for class and type designations on malt beverages. This
section explains that the class of the malt beverage must be stated on
the label. The type may optionally be stated. Statements of class and
type must conform to the designation of the product as known to the
trade. If the product is not known to the trade, the product must
contain a distinctive or fanciful name as well as a statement of
composition.
Proposed Sec. 7.141 differs from the current regulations in that
it proposes to define a ``malt beverage specialty'' as a malt beverage
that does not fall under any of the class designations set forth in
part 7 and is not known to the trade under a particular designation,
usually because of the addition of ingredients such as colorings,
flavorings, or food materials, or the use of certain types of
production processes. Such beverages will not be designated as ``malt
beverage specialties'' on the label, but the term reflects current
usage and is a convenient way to refer to such products in the
regulations.
Proposed Sec. 7.142 sets out class designations. Any malt beverage
may be designated simply as a ``malt beverage.'' The designations
``beer'', ``ale'', ``porter'', ``stout'', ``lager'', and ``malt
liquor'' may be used to designate malt beverages that contain at least
0.5 percent alcohol by volume and that conform to the trade's
understanding of those designations. TTB proposes to allow these
designations to be preceded or followed by descriptions of the color of
the product (such as brown, red, or golden).
Proposed Sec. 7.143 is largely consistent with existing
regulations on class and type designations. There are new proposed
provisions for ``ice beer,'' ``wheat beer,'' ``rye beer,'' and ``barley
wine ale,'' consistent with existing TTB policy.
The proposed regulations in proposed Sec. Sec. 7.143(h) and 7.144
reflect changes adopted in TTB Ruling 2014-4 (which was then superseded
by TTB Ruling 2015-1) with respect to the labeling of malt beverage
products fermented or flavored with honey, certain fruits, and certain
spices. In response to a petition from the Brewers Association, TTB
exempted certain malt beverages from the formula requirements under
part 25, and liberalized the labeling rules applicable to these
products. We proposed to codify these labeling standards in the
regulations.
Malt beverages that are not ``known to the trade'' are required to
be labeled with a statement of composition. Proposed Sec. 7.147 sets
forth provisions for statements of composition on malt beverages. These
provisions reflect current policy. Specifically, a statement of
composition is required to appear on the label for malt beverage
specialty products, as defined in proposed Sec. 7.141(b), which are
not known to the trade under a particular designation. For example, the
addition of flavoring materials, colors, or artificial sweeteners may
change the class and type of the malt beverage. The statement of
composition along with a distinctive or fanciful name serves as the
class and type designation for these products.
TTB notes that this final rule does not adopt the proposed
regulations regarding the use of geographical names on malt beverage
labels in Sec. Sec. 7.142(c) and 7.146.
Instead, due to issues raised by commenters relating to compliance
with international agreements to which the United States is a party,
TTB is retaining its geographical names regulations under current Sec.
7.24(f)-(h), codifying them at Sec. 7.146 with organizational changes
only. This determination is discussed in Section II.A.8.a. Otherwise,
TTB is finalizing Sec. Sec. 7.141-7.147 as proposed, with only minor
changes as discussed below.
a. General Support and Opposition
TTB received one comment generally in favor of the reorganized
class and type regulations changes, and one opposed. Beverly Brewery
Consultants supported the reorganization of TTB's class and type
regulations, stating that it was more logical and would enable users to
find information more easily. Beverly Brewery Consultants also
supported the proposed definition of ``malt beverage specialty
products'' at Sec. 7.141. The Brewers Association, however, opposed
the proposed regulations at Sec. Sec. 7.141-7.144 and 7.147, stating
that they ``are based on longstanding concepts used in distilled
spirits labeling and advertising regulations'' which ``are not
generally understood by brewers and would necessitate many changes in
existing labels and advertisements.'' The association requested that
TTB retain the language addressing class and type found in the current
regulations in Sec. 7.24. Finally, Beverly Brewery Consultants
suggested editorial changes at Sec. 7.141(b) for clarity by breaking
up the text into multiple sentences.
TTB Response
In response to the Brewer's Association's comment questioning the
use of certain concepts, TTB believes the comment potentially refers to
the terms ``malt beverage specialty products'' and ``distinctive or
fanciful name.'' The inclusion of these terms does not reflect
substantive changes to the class and type regulations for malt
beverages. Under both TTB's current and proposed regulations,
statements of class and type must conform to the designation of the
product as known to the malt beverage trade, and if the product is not
known to the trade, it must be labeled with a distinctive or fanciful
name as well as a statement of composition.
Proposed Sec. 7.141 designated such products not known to the
trade under a particular designation as ``malt beverage specialty
products.'' Thus, while the term ``malt beverage specialty
[[Page 7573]]
products'' is new to the regulations, the concept is not new to the
malt beverage industry. It currently appears in Formulas Online and
COLAs Online and is merely a way to refer to those products ``not known
to the trade.'' TTB also notes that the term ``distinctive or fanciful
name'' appears in TTB's current malt beverage class and type
regulations. See 27 CFR 7.24(a). The inclusion of these terms will not
result in changes to existing malt beverage labels or advertising
because the substantive provisions are the same in both the current and
proposed regulations and the terms themselves are not required to
appear on labels.
In response to Beverly Brewery Consultant's editorial comments, TTB
reviewed the text for clarity and found that it sufficiently
communicates TTB's requirements.
b. Oak Barrels
TTB proposed in Sec. 7.143(h) to expressly permit non-misleading
labeling statements that describe malt beverages aged in barrels or
with woodchips, spirals, or staves derived from barrels. TTB is
finalizing Sec. 7.143(h) as proposed. Paragraph (h)(2) of this section
provided examples of acceptable designations such as ``beer aged in an
oak barrel,'' ``bourbon barrel aged honey ale,'' and ``wine barrel aged
beer.'' NABI noted that in Notice No. 176, TTB proposed a definition of
``oak barrel'' in its part 5 regulations regarding the labeling of
distilled spirits and asked that TTB clarify what is meant by the term
``oak barrel'' as it appears in Sec. 7.143(h).
TTB Response
TTB does not believe it is necessary to add a separate definition
of ``oak barrel'' in part 7. Section 7.143(h) describes statements
relating to barrel aging of malt beverages, and is not limited to oak
barrels. TTB also notes that it previously declined to finalize the
proposed definition of ``oak barrel'' for purposes of distilled spirits
labeling. See T.D. TTB-158.
c. Comments on Existing and Additional Designations
As noted above, TTB proposed in Sec. 7.142(b)(1) to expressly
allow descriptions of color (e.g., ``amber,'' ``brown,'' or ``red'')
and descriptive terms (e.g., ``dry,'' ``cream,'' or ``pale''). TTB also
proposed to recodify at Sec. 7.142(b)(2) a provision from TTB's
current regulations at Sec. 7.24(e) stating the requirement that: ``No
product other than a malt beverage fermented at a comparatively high
temperature, possessing the characteristics generally attributed to
`ale,' `porter,' or `stout' and produced without the use of coloring or
flavoring materials (other than those recognized in standard brewing
practices) may bear any of these class designations.'' Among other type
designations, proposed Sec. 7.143 included a new proposed definition
for ``black and tan,'' describing it as a product containing two
classes of malt beverage with the names of the two classes displayed
together along with the term ``black and tan,'' for example, ``Black
and Tan, Stout and Ale.''
Beverly Brewery Consultants suggested adding the terms ``session''
and ``imperial'' to the descriptive terms allowed with class
designations included in proposed Sec. 7.142. The Brewers Association
submitted comments relating to class-and-type issues in its response to
the Treasury Department's RFI. In those comments, the association
recommended removing the requirement that products labeled as ``ale,''
``porter,'' and ``stout'' must be fermented at a comparatively high
temperature. The Brewers Association states that ale may be brewed at
lower temperatures than in the past because ``modern brewing practice
utilizes many yeast strands.'' TTB notes that the association did not
specifically address this issue in its comments on Notice No. 176.
Finally, Beverly Brewery Consultants suggested that TTB amend its
definition of ``black and tan'' in proposed Sec. 7.143. The comment
recommended that because this designation does not imply equal parts of
the two classes, a minimum quantity of at least 25 percent of one of
the classes should be a requirement for this designation.
TTB Response
TTB did not propose to incorporate into the regulations the
additional descriptive terms that Beverly Brewery Consultants requested
(``session'' and ``imperial''), but will consider this as a suggestion
for future rulemaking. TTB will continue its policy of allowing such
terms on labels.
TTB also declines to remove the requirement that ales, porters, and
stouts be fermented at a comparatively high temperature, which was
simply a reissuing of TTB's current regulation, set forth with only a
minor typographical change. Because TTB did not air for public comment
any revisions to these longstanding regulatory provisions, it would not
be appropriate to adopt changes in this final rule. TTB will consider
these comments as suggestions for future rulemaking.
Regarding the proposed type designation for ``black and tan,''
TTB's Beverage Alcohol Manual for Malt Beverages (TTB P 5130.3)
currently provides that this type designation covers products where two
classes of malt beverage are present in the product, and both classes
are stated on the label in conjunction with the words ``black and
tan.''
The comment from Beverly Brewery Consultants suggested that a
minimum quantity of at least 25 percent of one of the classes should be
a requirement for this designation. However, by definition, if the
product is composed of only two different classes, at least one of the
classes would always make up at least 25 percent of the product. If the
commenter meant to instead suggest that each one of the classes should
make up at least 25 percent of the finished product, TTB notes that
Beverly Brewery Consultants did not articulate, and TTB is not aware
of, any reason to believe that such a requirement is necessary in order
to avoid consumer deception. Furthermore, such a requirement would also
restrict industry flexibility. TTB sees no reason to further restrict
the use of the term. Accordingly, TTB is finalizing the proposed type
designation in Sec. 7.143.
D. Amendments of the Advertising Regulations
In Notice No. 176, TTB proposed to consolidate its alcohol beverage
advertising regulations in a new part, 27 CFR part 14, Advertising of
Wine, Distilled Spirits, and Malt Beverages. The proposed part 14
contained only those updates needed to conform certain regulated
practices to the updates being proposed for the labeling provisions.
Additional updates to the regulations on advertising to address
contemporary issues, such as social media, in more detail were not
proposed, but TTB stated that such amendments might be proposed in
future rulemaking initiatives.
In this final rule, TTB is not moving forward with the
reorganization of the advertising regulations into a part 14. Instead,
this final rule simply retains the existing regulations on advertising
in parts 5 and 7 with minor modifications. As explained earlier, this
final rule does not amend the labeling or advertising regulations in
part 4, which relate to wine. Instead, TTB plans to address these
issues in a future rulemaking, which will reorganize part 4 in a manner
similar to the way in which parts 5 and 7 are being reorganized, and
which will also address the substantive issues raised by the commenters
on the labeling and advertising of wine. At that
[[Page 7574]]
time, TTB will also pursue the reorganization of the advertising
regulations pertaining to wine, distilled spirits, and malt beverages
in a new part 14, as proposed in Notice No. 176.
Pending the reorganization of the advertising regulations into a
proposed part 14, this final rule simply retains the existing
regulations on advertising in parts 5 and 7, with minor modifications
for consistency with changes that were made to the labeling regulations
in this final rule. For example, this final rule adopts changes to the
advertising regulations to conform to amendments made to the labeling
regulations on the use of flags, the use of disparaging statements
about competitors, and statements relating to guarantees. These changes
are liberalizing in nature. The final rule also includes minor
clarifications in Sec. 7.235, consistent with the proposed rule, to
clarify that the advertising regulations do not require use of an
approved label where a malt beverage container is not subject to the
COLA requirements under part 7.
TTB is adding a paragraph to Sec. 5.235 and Sec. 7.235 stating
that the use of the term ``organic'' in advertising must comply with
the United States Department of Agriculture's National Organic Program
rules. This is consistent with the current advertising regulations and
is consistent with the finalized labeling regulations.
In Sec. Sec. 5.234 and 7.234, the provision on the legibility of
mandatory information is revised to include clarifying changes from the
proposed rule.
The advertising regulations have also been amended to modify the
definition of ``Advertisement or Advertising'' to include internet and
social media advertisements, as proposed in Notice No. 176. The
inclusion of internet and social media advertisements in the definition
of ``advertisement'' reflects current TTB policy, and is simply a
clarifying change in the part 5 and part 7 regulations. See TTB
Industry Circular 2013-1, ``Use of Social Media in the Advertising of
Alcohol Beverages,'' dated May 13, 2013, in which TTB noted that the
``regulations list specific types of advertising, including `any other
media.' TTB interprets `any other media' in the regulations to apply to
advertising in all types of media, including types of media that did
not exist when the regulations were originally adopted.'' The Industry
Circular clarifies that internet advertising and social media
advertising, among other types of advertising, are subject to the
requirements of the FAA Act and its implementing regulations. That
policy will continue to apply to advertisements of wine, distilled
spirits, and malt beverages. At this time, TTB is not addressing the
more substantive comments that were received with regard to ways in
which the TTB regulations should address those issues.
Finally, the numbering of the sections in the subparts on the
advertising regulations has changed, due to the reorganization of the
labeling regulations in parts 5 and 7.
E. Impact on Public Guidance Documents
The chart below describes the impact of this final rule on rulings,
industry circulars, and other public guidance documents issued over the
years by TTB and its various predecessor agencies. The following public
guidance documents will be superseded by the publication of a final
rule:
----------------------------------------------------------------------------------------------------------------
Document No. Subject Incorporated into proposed sections at:
----------------------------------------------------------------------------------------------------------------
Cross Cutting
----------------------------------------------------------------------------------------------------------------
Industry Circular 1963-23............ Use of Disparaging Not incorporated.
Themes or References
in Alcoholic Beverage
Advertising is
Prohibited.
----------------------------------------------------------------------------------------------------------------
Distilled Spirits
----------------------------------------------------------------------------------------------------------------
Revenue Ruling 54-592................ Relabeling Tax Paid Sec. 5.42.
Distilled Spirits.
Revenue Ruling 55-399................ Straight Whiskey....... Not Incorporated.
Revenue Ruling 61-15................. Labeling of Scotch Sec. 5.90(b).
Whisky.
Revenue Ruling 61-25................. Distilled Spirits Sec. Sec. 5.141 and 5.143.
Labeling.
Revenue Ruling 61-71................. Use of the Word Sec. 5.150(a).
Straight in Labeling
and Advertising of
Liqueurs or Cordials.
Revenue Ruling 62-224................ Relabeling by Wholesale Sec. 5.42.
Liquor Dealer.
Revenue Ruling 68-502................ Light Whisky from Sec. 5.66(f)(3).
Kentucky.
Revenue Ruling 71-535................ Labels on Imported Sec. 5.68.
Alcohol Beverages.
ATF Ruling 79-9...................... Distilled Spirits Sec. 5.87.
Labels.
ATF Ruling 88-1...................... Alcohol Content on Sec. 5.65.
Labels and in
Advertisements of
Distilled Spirits.
ATF Ruling 93-3...................... Age Statements on Sec. 5.74(c).
Grappa Brandy.
ATF Ruling 94-5...................... Geographical Names..... Sec. 5.143 and Sec. 5.145(c)(2)-(5).
ATF Ruling 2001-2.................... Country of Origin Sec. 5.69.
Statements on
Distilled Spirits
Labels.
Industry Circular 1971-7............. Protection of Names of Sec. Sec. 5.143 and 5.145.
Bourbon Whiskey and
Certain French
Brandies.
Industry Circular 76-28.............. Production of New Not Incorporated.
Charred Barrels using
Used Heads.
----------------------------------------------------------------------------------------------------------------
Malt Beverages
----------------------------------------------------------------------------------------------------------------
Revenue Ruling 71-535................ Labels on Imported Sec. 7.68.
Alcohol Beverages.
ATF Ruling 76-13..................... Malt Beverages of Less Sec. 7.145.
Than \1/2\ of 1%
Alcohol by Volume
Subject to FAA Act.
ATF Ruling 94-3 (superseded only with Ice Beer............... Sec. 7.143.
respect to the provisions related to
part 7. The part 25 provisions
remain in effect.).
[[Page 7575]]
ATF Procedure 98-1................... Labeling of Imported Sec. Sec. 7.67 and 7.69.
Malt Beverages Bottled
or Packed in the
United States, and
Labeling of Blends of
Imported and Domestic
Malt Beverages Bottled
or Packed in the
United States.
TTB Ruling 2013-1.................... Malt Beverages Sold Sec. Sec. 7.4 and 7.21.
Exclusively in
Intrastate Commerce.
----------------------------------------------------------------------------------------------------------------
III. Derivation Tables for Finalized Parts 5 and 7
27 CFR Part 5
------------------------------------------------------------------------
Are derived from current
Requirements of new section: section:
------------------------------------------------------------------------
5.0....................................... 5.1.
------------------------------------------------------------------------
Subpart A--General Provisions
------------------------------------------------------------------------
5.1....................................... 5.11.
5.2....................................... 5.1.
5.3....................................... New.
5.4....................................... [reserved].
5.5....................................... [reserved].
5.6....................................... [reserved].
5.7....................................... New.
5.8....................................... 5.1.
5.9....................................... [reserved].
5.10...................................... 5.2.
5.11...................................... 5.3.
5.12...................................... 5.4.
------------------------------------------------------------------------
Subpart B--Certificates of Label Approval and Certificates of Exemption
from Label Approval
------------------------------------------------------------------------
5.21...................................... 5.31(a).
5.22...................................... 5.55.
5.23...................................... 5.55(b).
5.24...................................... 5.51(a) and 5.55(c).
5.25...................................... 5.51.
5.27...................................... 5.51 and 5.55.
5.28...................................... 5.33(g).
5.29...................................... 5.57.
5.30...................................... 5.52.
------------------------------------------------------------------------
Subpart C--Alteration of Labels, Relabeling and Adding Information to
Containers
------------------------------------------------------------------------
5.41...................................... 5.31(b).
5.42...................................... 5.31(b).
5.43...................................... New.
5.44...................................... 5.31(b).
------------------------------------------------------------------------
Subpart D--Label Standards
------------------------------------------------------------------------
5.51...................................... 5.33(e).
5.52...................................... 5.33(a).
5.53...................................... 5.33(b)(5) and (6).
5.54...................................... New.
5.55...................................... 5.33(c).
5.56...................................... 5.33(f).
------------------------------------------------------------------------
Subpart E--Mandatory Label Information
------------------------------------------------------------------------
5.61...................................... New.
5.62...................................... 5.41.
5.63...................................... 5.32.
5.64...................................... 5.34.
5.65...................................... 5.37.
5.66...................................... 5.36.
5.67...................................... 5.36.
5.68...................................... 5.36.
5.69...................................... 5.36(e).
5.70...................................... 5.38.
5.71...................................... 5.39(a).
5.72...................................... 5.39(b).
5.73...................................... 5.39(c).
5.74...................................... 5.40.
------------------------------------------------------------------------
Subpart F--Restricted Labeling Statements
------------------------------------------------------------------------
5.81...................................... New.
5.82...................................... 5.32a.
5.83...................................... 5.32b.
5.84...................................... 5.71.
5.85...................................... [reserved].
5.86...................................... [reserved].
5.87...................................... New.
5.88...................................... 5.42(b)(4).
5.89...................................... 5.42(b)(6).
5.90...................................... 5.22(k)(4).
5.91...................................... 5.42(b)(5).
------------------------------------------------------------------------
Subpart G--Prohibited Labeling Practices
------------------------------------------------------------------------
5.101..................................... New.
5.102..................................... 5.42(a)(1).
5.103..................................... 5.42(a)(3).
------------------------------------------------------------------------
Subpart H--Labeling Practices That are Prohibited if They are Misleading
------------------------------------------------------------------------
5.121..................................... New.
5.122..................................... 5.42(a)(1).
5.123..................................... 5.42(a)(5).
5.124..................................... 5.42(a)(2).
5.125..................................... 5.42(a)(4).
5.126..................................... 5.42(b)(7).
5.127..................................... [reserved].
5.128..................................... [reserved].
5.129..................................... 5.42(b)(8).
5.130..................................... 5.42(a)(6).
------------------------------------------------------------------------
Subpart I--The Standards of Identity for Distilled Spirits
------------------------------------------------------------------------
5.141..................................... 5.22.
5.142..................................... 5.22(a).
5.143..................................... 5.22(b) and 5.35(c).
5.144..................................... 5.22(c).
5.145..................................... 5.22(d).
5.146..................................... 5.22(e).
5.147..................................... 5.22(f).
5.148..................................... 5.22(g).
5.149..................................... [reserved].
5.150..................................... 5.22(h).
5.151..................................... 5.22(i).
5.152..................................... 5.22(j).
5.153..................................... New.
5.154..................................... 5.22(k) and (l).
5.155..................................... 5.23.
5.156..................................... 5.35(a) and (b).
5.157-5.165............................... [reserved].
5.166..................................... New.
------------------------------------------------------------------------
Subpart J--Formulas
------------------------------------------------------------------------
5.191..................................... 5.25.
5.192..................................... 5.26.
5.193..................................... 5.27.
5.194..................................... 5.28.
------------------------------------------------------------------------
Subpart K--Distilled spirits containers and Authorized Container Sizes
------------------------------------------------------------------------
5.201..................................... 5.45.
5.202..................................... 5.46.
5.203..................................... 5.47a.
5.204..................................... [reserved].
5.205..................................... New.
------------------------------------------------------------------------
Subpart L--[Reserved]
------------------------------------------------------------------------
Subpart M--Penalties and Compromise of Liability
------------------------------------------------------------------------
5.221..................................... New.
5.222..................................... New.
5.223..................................... New.
------------------------------------------------------------------------
Subpart N--Advertising of Distilled Spirits
------------------------------------------------------------------------
5.231..................................... 5.61.
5.232..................................... 5.62.
5.233..................................... 5.63.
5.234..................................... 5.64.
5.235..................................... 5.65.
5.236..................................... 5.66.
------------------------------------------------------------------------
Subpart O--Paperwork Reduction Act
------------------------------------------------------------------------
5.241..................................... New.
------------------------------------------------------------------------
27 CFR Part 7
------------------------------------------------------------------------
Are derived from current
Requirements of new section: section:
------------------------------------------------------------------------
7.0....................................... 7.1.
------------------------------------------------------------------------
Subpart A--General Provisions
------------------------------------------------------------------------
7.1....................................... 7.10.
7.2....................................... 7.2.
7.3....................................... 7.20(b) and (c).
7.4....................................... 7.20(a) and New.
7.5....................................... 7.11.
7.6....................................... 7.6.
[[Page 7576]]
7.7....................................... New.
7.8....................................... 7.60.
7.9....................................... [reserved].
7.10...................................... 7.4.
7.11...................................... 7.3.
7.12...................................... 7.5.
------------------------------------------------------------------------
Subpart B--Certificates of Label Approval
------------------------------------------------------------------------
7.21...................................... 7.20(b), and 7.40-7.42.
7.22...................................... 7.40 and 7.41.
7.23...................................... [reserved].
7.24...................................... 7.30 and 7.31(b).
7.25...................................... 7.30 and 7.31.
7.27...................................... 7.42.
7.28...................................... 7.31(d).
7.29...................................... 7.43.
------------------------------------------------------------------------
Subpart C--Alteration of Labels, Relabeling, and Adding Information to
Containers
------------------------------------------------------------------------
7.41...................................... 7.20(c)(1).
7.42...................................... 7.20(c)(2).
7.43...................................... New.
7.44...................................... New.
------------------------------------------------------------------------
Subpart D--Label Standards
------------------------------------------------------------------------
7.51...................................... 7.28(d).
7.52...................................... 7.28(a).
7.53...................................... 7.28(b).
7.54...................................... New.
7.55...................................... 7.28(c).
7.56...................................... 7.28(e).
------------------------------------------------------------------------
Subpart E--Mandatory Label Information
------------------------------------------------------------------------
7.61...................................... New.
7.62...................................... 7.21(b) and 7.29(h).
7.63...................................... 7.22.
7.64...................................... 7.23.
7.65...................................... 7.71.
7.66...................................... 7.25(a) and (d).
7.67...................................... 7.25(b).
7.68...................................... 7.25(b).
7.69...................................... 7.25(c).
7.70...................................... 7.27.
------------------------------------------------------------------------
Subpart F--Restricted Labeling Statements
------------------------------------------------------------------------
7.81...................................... New.
7.82...................................... 7.22a.
7.83...................................... 7.22b.
7.84...................................... 7.81.
7.85...................................... [reserved].
7.86...................................... [reserved].
7.87...................................... [reserved].
------------------------------------------------------------------------
Subpart G--Prohibited Labeling Practices
------------------------------------------------------------------------
7.101..................................... New.
7.102..................................... 7.29(a)(1).
7.103..................................... 7.29(a)(3).
------------------------------------------------------------------------
Subpart H--Labeling Practices That are Prohibited if They are Misleading
------------------------------------------------------------------------
7.121..................................... New.
7.122..................................... 7.29(a)(1) and New.
7.123..................................... 7.29(a)(5).
7.124..................................... 7.29(a)(2).
7.125..................................... 7.29(a)(4).
7.126..................................... 7.29(d).
7.127..................................... [reserved].
7.128..................................... 7.29(a)(7) and New.
7.129..................................... 7.29(e).
7.130..................................... 7.29(a)(6).
7.131..................................... [reserved].
7.132..................................... [reserved].
------------------------------------------------------------------------
Subpart I--Classes and Types of Malt Beverages
------------------------------------------------------------------------
7.141..................................... 7.24(a).
7.142..................................... 7.24(e).
7.143..................................... 7.24(b) and (c) and New.
7.144..................................... New.
7.145..................................... 7.24(d).
7.146..................................... 7.24(g), (f), and (h).
7.147..................................... New.
------------------------------------------------------------------------
Subparts J-L--[Reserved]
------------------------------------------------------------------------
Subpart M--Penalties and Compromise of Liability
------------------------------------------------------------------------
7.221..................................... New.
7.222..................................... New.
7.223..................................... New.
------------------------------------------------------------------------
Subpart N--Advertising of Malt Beverages
------------------------------------------------------------------------
7.231..................................... 7.50.
7.232..................................... 7.51.
7.233..................................... 7.52.
7.234..................................... 7.53.
7.235..................................... 7.54.
7.236..................................... 7.55.
------------------------------------------------------------------------
Subpart O--Paperwork Reduction Act
------------------------------------------------------------------------
7.241..................................... New.
------------------------------------------------------------------------
IV. Regulatory Analyses and Notices
A. Regulatory Flexibility Act
In accordance with the Regulatory Flexibility Act (5 U.S.C. 601 et.
seq.), TTB certifies that this final rule will not have a significant
economic impact on a substantial number of small entities. While TTB
has determined that the majority of businesses subject to this rule are
small businesses, the regulatory amendments in this final rule will not
have a significant impact on those small entities as it will not
impose, or otherwise cause, an increase in reporting, recordkeeping, or
other compliance burdens on regulated industry members. As finalized,
this rule will not require industry members to make changes to labels
or advertisements. The following analysis provides the factual basis
for TTB's certification under 5 U.S.C. 605.
1. Background
In Notice No. 176, published on November 26, 2018, TTB proposed a
recodification of the labeling and advertising regulations pertaining
to wine, distilled spirits, and malt beverages. The purpose was to
clarify and update these regulations to make them easier to understand
and to incorporate agency policies. TTB determined that the majority of
businesses subject to the proposed rule were small businesses (see
Notice No. 176 for more information on this determination).
Accordingly, TTB sought comments on the impact of the proposals, and on
ways in which the regulations could be improved. TTB also proposed a
delayed compliance date to provide all regulated entities 3 years to
come into compliance with the proposed regulations, to minimize the
costs associated with any label changes.
On April 2, 2020, TTB published T.D. TTB-158, (85 FR 18704), which
finalized certain proposals from Notice No. 176, and announced its
decision not to move forward with certain other proposals. Generally,
the amendments that TTB adopted in T.D. TTB-158 were well supported by
commenters, could be implemented relatively quickly, and would either
give more flexibility to industry members or help industry members
understand existing requirements, while not requiring any current
labels or advertisements to be changed. TTB did not incorporate the
proposed reorganization of the regulations in T.D. TTB-158 because that
final rule only addressed a subset of the issues raised in Notice No.
176. Instead, amendments to the TTB regulations were made within the
framework of the existing regulations.
In this rulemaking, TTB is finalizing the reorganization proposed
in Notice No. 176 for 27 CFR parts 5 and 7. This includes clarifying
regulatory language and breaking up large sections into smaller
sections--resulting in a larger number of overall sections, but not a
larger number of regulatory requirements. TTB is also adopting many
proposals that include incorporation of current policy. This final rule
addresses comments that TTB received on the proposed regulatory
provisions for all of parts 5 and 7 by incorporating changes in the
regulations, announcing that TTB will not move forward with some
proposed changes, and identifying proposals or issues commenters raised
that TTB will consider for future rulemaking.
[[Page 7577]]
2. Comment From SBA Chief Counsel for Advocacy
As required by section 7805(f) of the Internal Revenue Code (26
U.S.C. 7805(f)), TTB submitted Notice No. 176 to the Chief Counsel for
Advocacy of the Small Business Administration (SBA) for comment on the
impact of these regulations.
By letter dated August 6, 2019, the Office of Advocacy for the U.S.
Small Business Administration (``SBA Office of Advocacy'') provided a
comment on Notice No. 176. The comment stated that ``Advocacy commends
the TTB on its logical reorganization of the labeling and advertising
rules and streamlining some of its processes.'' However, the comment
also indicated that in its discussions with small businesses in the
alcohol beverage industry, two issues with the proposed rule were
brought to its attention--the definition of an ``oak barrel,'' and
creating a separate class and type for mead, a type of wine made from
honey. The comment suggested that TTB revise the rule to reduce the
impacts of the proposed definition of ``oak barrel'' and concluded
that:
Advocacy is concerned that the agency's certification that the
rule will not have a significant economic impact on a substantial
number of small entities lacks a factual basis. Advocacy suggests
the agency revise the rule to reduce the impacts of the definition
of `oak barrel' and to establish a new class and type for mead or
publish a supplemental initial regulatory flexibility analysis
(IFRA) to propose alternatives to the rule
In T.D. TTB-158, TTB announced it was not moving forward with a
number of proposals that received comments raising concerns about
regulatory costs and burdens, including the proposed definition of an
``oak barrel.'' The other issue addressed by the comment from the SBA
Office of Advocacy dealt with the proposed regulations on mead. This
final rule does not address wine labeling issues; thus, TTB will review
SBA's comment on mead, along with the other comments received on this
issue, when it finalizes the rulemaking on wine labeling.
Because this final rule does not address either of the issues
raised by the comment from the SBA Office of Advocacy, there is no need
to conduct a supplemental initial regulatory flexibility analysis to
propose alternatives to the rule.
3. Other Proposals That Will Not Be Adopted
In addition to not adopting its proposed definition of an ``oak
barrel,'' TTB has decided not to adopt certain other proposals,
including the following:
A proposal to codify TTB's current policy, as stated on
the label application form, that the issuance of a COLA does not confer
trademark protection or relieve the certificate holder from liability
for violations of the FAA Act, the IRC, ABLA, or related regulations,
and that products covered by a COLA may still be mislabeled if the
label contains statements that are false or misleading when applied to
the beverage in the container.
A proposed amendment that would clarify and somewhat
expand existing requirements with regard to placing certain label
information on closed ``packaging'' of wine, distilled spirits, and
malt beverage containers.
A proposal to codify TTB's current policy with respect to
the allowed use of certain non-misleading labeling claims about
environmental and sustainability practices.
A proposal to establish a 5-year retention period for
required records and to codify TTB's current substantiation
requirements.
A proposed amendment that would clarify and expand current
requirements that certain whisky products distilled in the United
States must include the State of distillation on the label, by
providing that a bottling address within the State does not suffice
unless it includes a representation as to distillation. TTB is not
moving forward with this proposal because it might require labeling
changes, but will instead clarify current requirements.
A proposed amendment that would modify the standard of
identity for whisky to provide for ``white whisky'' and ``unaged
whisky.''
A proposal that would address ``aggregate'' standards of
fill in a manner that is based on current policy.
A proposed amendment that would increase the alcohol
content tolerance for malt beverages from 0.3 percent above or below
the labeled alcohol content to 1 percent above or below.
This final rule includes only amendments that TTB believes clarify
and liberalize requirements for industry members and that do not
conflict with current labels or business practices, while still
providing adequate protection for consumers. An example of a
liberalizing change is the amendment to the malt beverage regulations
that allows mandatory information to appear on keg collars that are not
firmly affixed to the keg. Because the final rule will not require
changes to labels, advertisements, or business practices, no delayed
compliance date is necessary, and the final rule will take effect 30
days from publication in the Federal Register.
The preamble of Notice No. 176 explains in detail the reasons why
the proposals that have been adopted in this final rule are either
clarifying or liberalizing. Examples of clarifying changes include:
Adding examples in the regulations of how certain
requirements may be satisfied;
Adding to the regulations guidance that had previously
been provided in rulings, Industry Circulars, or other documents
separate from the regulations;
Addressing questions the public frequently asks TTB;
Making definitions, organization, numbering of sections,
and phrasing of requirements within the regulations consistent across
27 CFR parts 5 and 7 to the extent possible;
Breaking large subparts and large sections into smaller
subparts and smaller sections to increase readability;
Providing more cross references in the regulations to
relevant regulations and statutes;
Making it explicit that mandatory information may not be
covered or obscured in whole or in part;
Codifying in the regulations the current requirement that
distilled spirits covered by a certificate of exemption must bear a
labeling statement that the product is ``For sale in [name of State]
only'';
Codifying current TTB guidance with respect to the use of
a COLA by an importer other than the permittee to whom the COLA was
issued;
Codifying current policy with respect to the required name
and address statement on labels for distilled spirits and malt
beverages that have been subject to certain production activities after
importation in bulk;
Codifying current policy that allows truthful and non-
misleading comparisons on labels and in advertisements without
violating the prohibition against ``disparaging'' statements;
Providing that the prohibition against the use of flags
and other symbols of a government applies whenever the label may create
a misleading impression that the product is endorsed by, or otherwise
affiliated with, that government; and
Specifying how the FAA Act applies to the labeling of malt
beverages under the penultimate paragraph of 27 U.S.C. 205(f).
Some examples of liberalizing measures that TTB is finalizing in
this document include:
Allowing greater flexibility in the placement of mandatory
information on labels by eliminating the requirement
[[Page 7578]]
that mandatory information appear on the ``brand label;''
Allowing wholesalers to relabel distilled spirits when
necessary and when approved by TTB;
Allowing the use of designations in accordance with trade
understanding, rather than statements of composition, in the labeling
of malt beverages that are flavored or fermented with ingredients that
TTB has determined are generally recognized as traditional ingredients
in the production of a fermented beverage designated as ``beer,''
``ale,'' ``porter,'' ``stout,'' ``lager,'' or ``malt liquor''; and
Allowing certain mandatory information to appear on the
keg collar or tap cover of malt beverage kegs with a capacity of 5.16
gallons or more, subject to certain requirements.
In summary, while the entities affected by the amendments in this
final rule include a substantial number of small entities, the final
rule does not require labeling or advertising changes by these small
businesses, but instead offers industry members additional flexibility
in complying with the regulations. Thus, TTB certifies that this final
rule will not have a significant economic impact on a substantial
number of small entities.
B. Executive Order 12866
It has been determined that this final rule is not a significant
regulatory action as defined in Executive Order 12866 of September 30,
1993. Therefore, a regulatory assessment is not necessary.
C. Paperwork Reduction Act
The Office of Management and Budget (OMB) has previously reviewed
and approved the eight collections of information in the regulations
contained in this final rule in accordance with the Paperwork Reduction
Act of 1995 (44 U.S.C. 3507) and assigned control numbers 1513-0020,
1513-0064, 1513-0084, 1513-0085, 1513-0087, 1513-0111, 1513-0121, and
1513-0122. An agency may not conduct or sponsor, and a person is not
required to respond to, a collection of information unless it displays
a valid control number assigned by OMB.
This final rule includes only amendments that TTB believes offer
clarifications and liberalizations of the TTB regulations, including
their information collection requirements. The amendments adopted in
this final rule are well supported by commenters, can be implemented
relatively quickly, and will give more flexibility to industry members
or help industry members understand existing regulatory and information
collection requirements, but will not require industry members to
change any current alcohol beverage label or advertisement. The
preamble discussion contained in this final rule document explains in
detail the reasons why the proposals adopted in this final rule are
either clarifying or liberalizing.
The specific regulatory sections in this final rule that contain
approved collections of information are found in part 5 at Sec. Sec.
5.11, 5.21, 5.22, 5.23, 5.24, 5.25, 5.27, 5.28, 5.29, 5.30, 5.62, 5.63,
5.82, 5.83, 5.84, 5.87, 5.88, 5.89, 5.90, 5.91, 5.192, 5.193, 5.194,
5.203, 5.205, and 5.233, and in part 7 at Sec. Sec. 7.11, 7.21, 7.22,
7.24, 7.25, 7.27, 7.28, 7.29, 7.62, 7.63, 7.66, 7.67, 7.81, 7.82, 7.83,
7.84, and 7.233.
Regarding OMB control number 1513-0020, the regulations in
Sec. Sec. 5.21, 5.22, 5.23, 5.24, 5.25, 5.29, 5.205, 7.21, 7.22, 7.24,
7.25, 7.27, and 7.29 set forth information collection requirements
related to submission of applications for certification of, or
exemption from, label or bottle approval. These regulations do not add
any new requirements or respondent burden to this previously-approved
collection as they merely recodify and clarify existing TTB regulations
regarding the submission of such certificate of label approval (COLA)
applications, including those for personalized labels.
Regarding OMB control number 1513-0064, which is related to
importer records and reports, the regulations in Sec. Sec. 5.24 and
7.24 state, respectively, that distilled spirits and malt beverages
imported in containers are not eligible for release from customs
custody for consumption unless the importer removing the products has
obtained a COLA for the products in question, and is able to provide it
(either electronically or on paper) upon request, which is consistent
with TTB's current regulations regarding such imports. In addition,
Sec. 5.30 merely makes clarifications to the existing regulations
concerning certificates of age and origin for distilled spirits and do
not affect the information collection's requirements or estimated
burden.
OMB control number 1513-0084 concerns the labeling of sulfites in
alcohol beverages. The current TTB requirements that alcohol beverage
labels disclose the presence of sulfites (defined as 10 or more parts
per million of sulfur dioxide or other sulfating agent measured as
total sulfur dioxide) are recodified in Sec. 5.63(c)(7) for distilled
spirits and in Sec. 7.63(b)(3) for malt beverages.
OMB control number 1513-0085 concerns the use of the principal
place of business of a brewer and place of production coding in lieu of
the actual place of bottling on malt beverage labels. The existing
requirements for such labeling are recodified for domestic beverages at
Sec. 7.66 and for imported beverages at Sec. 7.68. As such, there are
no changes to this information collection's estimated burden.
Information collection requirements approved under OMB control
number 1513-0087, which concerns Federal Alcohol Administration (FAA)
Act-based labeling and advertising information requirements, are
contained in Sec. Sec. 5.62, 5.63, 5.84, 5.87, 5.88, 5.89, 5.90, 5.91,
5.233, 7.62, 7.63, 7.81, 7.84, and 7.233. None of these regulatory
amendments require changes to any alcohol beverage label or
advertisement, or increase the requirements or estimated burden
associated with OMB No. 1513-0087. Rather, these regulations recodify
existing TTB label and advertising information requirements or allow
for additional options in displaying or providing the required
information. For example, Sec. 5.63, which concerns mandatory label
information, contains liberalizing changes that will not require any
changes to labels, but will allow further flexibility in the placement
of labeling information on distilled spirits containers; while
Sec. Sec. 5.233 and 7.233 will allow alcohol beverage advertisers
optional ways to provide contact information in their advertisements,
such as by displaying a telephone number, website, or email address in
lieu of the advertiser's city and State.
Applications to request access TTB's COLA Online system are covered
by OMB control number 1513-0111, and TTB's existing requirements to
file such applications are recodified in Sec. Sec. 5.11 and 7.11.
Regarding OMB control number 1513-0121, which covers the label
disclosures of major food allergens and petitions from exemption from
such labeling, Sec. Sec. 5.82, 5.83, 7.82, and 7.83 merely recodify
TTB's existing regulations regarding those matters, and there are no
changes to this collection's requirements or burden estimate.
OMB No. 1513-0122, which covers submission of formulas and
processes for domestic and imported alcohol beverages, is found in
Sec. Sec. 5.28 and 7.28. There are no changes to this information
collection's existing requirements or estimated burden.
V. Drafting Information
Christopher M. Thiemann, Kara T. Fontaine, and Curtis Eilers of the
Regulations and Rulings Division drafted this document with the
assistance of other employees of the
[[Page 7579]]
Alcohol and Tobacco Tax and Trade Bureau.
List of Subjects
27 CFR Part 5
Advertising, Alcohol and alcoholic beverages, Customs duties and
inspection, Food additives, Grains, Imports, International agreements,
Labeling, Liquors, Packaging and containers, Reporting and
recordkeeping requirements, Trade practices.
27 CFR Part 7
Advertising, Alcohol and alcoholic beverages, Beer, Customs duties
and inspection, Food additives, Imports, Labeling, Packaging and
containers, Reporting and recordkeeping requirements, Trade practices.
Regulatory Amendments
For the reasons discussed in the preamble, TTB amends 27 CFR,
chapter I, as follows:
0
1. Revise part 5 to read as follows:
PART 5--LABELING AND ADVERTISING OF DISTILLED SPIRITS
Sec.
5.0 Scope.
Subpart A--General Provisions
5.1 Definitions.
5.2 Territorial extent.
5.3 General requirements and prohibitions under the FAA Act.
5.4-5.6 [Reserved]
5.7 Other TTB labeling regulations that apply to distilled spirits.
5.8 Distilled spirits for export.
5.9 [Reserved]
5.10 Other related regulations.
5.11 Forms.
5.12 Delegations of the Administrator.
Subpart B--Certificates of Label Approval and Certificates of Exemption
From Label Approval
Requirements for Distilled Spirits Bottled in the United States
5.21 Requirement for certificates of label approval (COLAs) for
distilled spirits bottled in the United States.
5.22 Rules regarding certificates of label approval (COLAs) for
distilled spirits bottled in the United States.
5.23 Application for exemption from label approval for distilled
spirits bottled in the United States.
Requirements for Distilled Spirits Imported in Containers
5.24 Certificates of label approval (COLAs) for distilled spirits
imported in containers.
5.25 Rules regarding certificates of label approval (COLAs) for
distilled spirits imported in containers.
Administrative Rules
5.27 Presenting certificates of label approval (COLAs) to Government
officials.
5.28 Formulas, samples, and documentation.
5.29 Personalized labels.
5.30 Certificates of age and origin for imported spirits.
Subpart C--Alteration of Labels, Relabeling, and Adding Information to
Containers
5.41 Alteration of labels.
5.42 Authorized relabeling activities by distillers and importers.
5.43 Relabeling activities that require separate written
authorization from TTB.
5.44 Adding a label or other information to a container that
identifies the wholesaler, retailer, or consumer.
Subpart D--Label Standards
5.51 Requirement for firmly affixed labels.
5.52 Legibility and other requirements for mandatory information on
labels.
5.53 Minimum type size of mandatory information.
5.54 Visibility of mandatory information.
5.55 Language requirements.
5.56 Additional information.
Subpart E--Mandatory Label Information
5.61 What constitutes a label for purposes of mandatory information.
5.62 Packaging (cartons, coverings, and cases).
5.63 Mandatory label information.
5.64 Brand name.
5.65 Alcohol content.
5.66 Name and address for domestically bottled distilled spirits
that were wholly made in the United States.
5.67 Name and address for domestically bottled distilled spirits
that were bottled after importation.
5.68 Name and address for distilled spirits that were imported in a
container.
5.69 Country of origin.
5.70 Net contents.
5.71 Neutral spirits and name of commodity.
5.72 Coloring materials.
5.73 Treatment of whisky or brandy with wood.
5.74 Statements of age, storage, and percentage.
Subpart F--Restricted Labeling Statements
5.81 General.
Food Allergen Labeling
5.82 Voluntary disclosure of major food allergens.
5.83 Petitions for exemption from major food allergen labeling.
Production Claims
5.84 Use of the term ``organic.''
5.85 [Reserved]
5.86 [Reserved]
Other Label Terms
5.87 ``Barrel Proof'' and similar terms.
5.88 Bottled in bond.
5.89 Multiple distillation claims.
5.90 Terms related to Scotland.
5.91 Use of the term ``pure.''
Subpart G--Prohibited Labeling Practices
5.101 General.
5.102 False or untrue statements.
5.103 Obscene or indecent depictions.
Subpart H--Labeling Practices That Are Prohibited If They Are
Misleading
5.121 General.
5.122 Misleading statements or representations.
5.123 Guarantees.
5.124 Disparaging statements.
5.125 Tests or analyses.
5.126 Depictions of government symbols.
5.127 [Reserved]
5.128 [Reserved]
5.129 Health-related statements.
5.130 Appearance of endorsement.
Subpart I--Standards of Identity for Distilled Spirits
5.141 The standards of identity in general.
5.142 Neutral spirits or alcohol.
5.143 Whisky.
5.144 Gin.
5.145 Brandy.
5.146 Blended applejack.
5.147 Rum.
5.148 Agave spirits.
5.149 [Reserved].
5.150 Cordials and liqueurs.
5.151 Flavored spirits.
5.152 Imitations.
5.153 Diluted spirits.
5.154 Rules for geographical designations.
5.155 Alteration of class and type.
5.156 Distilled spirits specialty products.
5.157-5.165 [Reserved]
5.166 Statement of composition.
Subpart J--Formulas
5.191 Application.
5.192 Formula requirements.
5.193 Operations requiring formulas.
5.194 Adoption of predecessor's formulas.
Subpart K--Standards of Fill and Authorized Container Sizes
5.201 General.
5.202 Standard liquor containers.
5.203 Standards of fill (container sizes).
5.204 [Reserved]
5.205 Distinctive liquor bottle approval.
Subpart L--[Reserved]
5.211 [Reserved]
5.212 [Reserved]
Subpart M--Penalties and Compromise of Liability
5.221 Criminal penalties.
5.222 Conditions of basic permit.
5.223 Compromise.
Subpart N--Advertising of Distilled Spirits
5.231 Application.
5.232 Definitions.
5.233 Mandatory statements.
5.234 Legibility of mandatory information.
5.235 Prohibited practices.
5.236 Comparative advertising.
Subpart O--Paperwork Reduction Act
5.241 OMB control numbers assigned under the Paperwork Reduction
Act.
Authority: 26 U.S.C. 5301, 7805, 27 U.S.C. 205 and 207.
[[Page 7580]]
Sec. 5.0 Scope.
This part sets forth requirements that apply to the labeling and
packaging of distilled spirits in containers, including requirements
for label approval and rules regarding mandatory, regulated, and
prohibited labeling statements. This part also sets forth requirements
that apply to the advertising of distilled spirits.
Subpart A--General Provisions
Sec. 5.1 Definitions.
When used in this part and on forms prescribed under this part, the
following terms have the meaning assigned to them in this section,
unless the terms appear in a context that requires a different meaning.
Any other term defined in the Federal Alcohol Administration Act (FAA
Act) and used in this part has the same meaning assigned to it by the
FAA Act.
Administrator. The Administrator, Alcohol and Tobacco Tax and Trade
Bureau, Department of the Treasury.
Advertisement or Advertising. See Sec. 5.232 for meaning of these
terms as used in subpart N of this part.
Age. The length of time during which, after distillation and before
bottling, the distilled spirits have been stored in oak barrels.
``Age'' for bourbon whisky, rye whisky, wheat whisky, malt whisky, or
rye malt whisky, and straight whiskies other than straight corn whisky,
means the period the whisky has been stored in charred new oak barrels.
American proof. See Proof.
Appropriate TTB officer. An officer or employee of the Alcohol and
Tobacco Tax and Trade Bureau (TTB) authorized to perform any function
relating to the administration or enforcement of this part by the
current version of TTB Order 1135.5, Delegation of the Administrator's
Authorities in 27 CFR part 5, Labeling and Advertising of Distilled
Spirits.
Bottler. Any distiller or processor of distilled spirits who places
distilled spirits in containers.
Brand name. The name under which a distilled spirit or a line of
distilled spirits is sold.
Certificate holder. The permittee or brewer whose name, address,
and basic permit number, plant registry number, or brewer's notice
number appears on an approved TTB Form 5100.31.
Certificate of exemption from label approval. A certificate issued
on TTB Form 5100.31, which authorizes the bottling of wine or distilled
spirits, under the condition that the product will under no
circumstances be sold, offered for sale, shipped, delivered for
shipment, or otherwise introduced by the applicant, directly or
indirectly, into interstate or foreign commerce.
Certificate of label approval (COLA). A certificate issued on TTB
Form 5100.31 that authorizes the bottling of wine, distilled spirits,
or malt beverages, or the removal of bottled wine, distilled spirits,
or malt beverages from customs custody for introduction into commerce,
as long as the product bears labels identical to the labels appearing
on the face of the certificate, or labels with changes authorized by
TTB on the certificate or otherwise (such as through the issuance of
public guidance available on the TTB website at https://www.ttb.gov).
Container. Any can, bottle, box, cask, keg, or other closed
receptacle, in any size or material, which is for use in the sale of
distilled spirits at retail. See subpart K of this part for rules
regarding authorized standards of fill for containers.
Customs officer. An officer of U.S. Customs and Border Protection
(CBP) or any agent or other person authorized by law to perform the
duties of such an officer.
Distilled spirits. Ethyl alcohol, hydrated oxide of ethyl, spirits
of wine, whisky, rum, brandy, gin, and other distilled spirits,
including all dilutions and mixtures thereof, for nonindustrial use.
The term ``distilled spirits'' does not include mixtures containing
wine, bottled at 48 degrees of proof (24 percent alcohol by volume) or
less, if the mixture contains more than 50 percent wine on a proof
gallon basis. The term ``distilled spirits'' also does not include
products containing less than one degree of proof (0.5 percent alcohol
by volume).
Distilling season. The period from January 1 through June 30, which
is the spring distilling season, or the period from July 1 through
December 31, which is the fall distilling season.
Distinctive or fanciful name. A descriptive name or phrase chosen
to identify a distilled spirits product on the label. It does not
include a brand name, class or type designation, or statement of
composition.
FAA Act. The Federal Alcohol Administration Act.
Gallon. A U.S. gallon of 231 cubic inches at 60 degrees Fahrenheit.
Grain. Includes cereal grains and the seeds of the pseudocereals
amaranth, buckwheat, and quinoa.
In bulk. In barrels or other receptacles having a capacity in
excess of 1 wine gallon (3.785 liters).
Interstate or foreign commerce. Commerce between any State and any
place outside of that State or commerce within the District of Columbia
or commerce between points within the same State but through any place
outside of that State.
Liter or litre. A metric unit of capacity equal to 1,000 cubic
centimeters or 1,000 milliliters (mL) of distilled spirits at 15.56
degrees Celsius (60 degrees Fahrenheit), and equivalent to 33.814 U.S.
fluid ounces.
Net contents. The amount, by volume, of distilled spirits held in a
container.
Permittee. Any person holding a basic permit under the FAA Act.
Person. Any individual, corporation, partnership, association,
joint-stock company, business trust, limited liability company, or
other form of business enterprise, including a receiver, trustee, or
liquidating agent and including an officer or employee of any agency of
a State or political subdivision of a State.
Produced at or distilled at. When used with reference to specific
degrees of proof of a distilled spirits product, the phrases ``produced
at'' and ``distilled at'' mean the composite proof of the distilled
spirits after completion of distillation and before reduction in proof,
if any.
Proof. The ethyl alcohol content of a liquid at 60 degrees
Fahrenheit, stated as twice the percentage of ethyl alcohol by volume.
Proof gallon. A gallon of liquid at 60 degrees Fahrenheit that
contains 50 percent by volume of ethyl alcohol having a specific
gravity of 0.7939 at 60 degrees Fahrenheit, referred to water at 60
degrees Fahrenheit as unity, or the alcoholic equivalent thereof.
Responsible advertiser. The permittee responsible for the
publication or broadcast of an advertisement.
Spirits. See Distilled spirits.
State. One of the 50 States of the United States, the District of
Columbia, or the Commonwealth of Puerto Rico.
TTB. The Alcohol and Tobacco Tax and Trade Bureau of the Department
of the Treasury.
United States (U.S.). The 50 States, the District of Columbia, and
the Commonwealth of Puerto Rico.
Sec. 5.2 Territorial extent.
The provisions of this part apply to the 50 States, the District of
Columbia, and the Commonwealth of Puerto Rico.
Sec. 5.3 General requirements and prohibitions under the FAA Act.
(a) Certificates of label approval (COLAs). Subject to the
requirements and exceptions set forth in the regulations in subpart B
of this part, any bottler of distilled spirits, and any person who
removes distilled spirits in containers from customs custody for
[[Page 7581]]
sale or any other commercial purpose, is required to first obtain from
TTB a COLA covering the label(s) on each container.
(b) Alteration, mutilation, destruction, obliteration, or removal
of labels. Subject to the requirements and exceptions set forth in the
regulations in subpart C of this part, it is unlawful to alter,
mutilate, destroy, obliterate, or remove labels on distilled spirits
containers. This prohibition applies to any person, including
retailers, holding distilled spirits for sale in interstate or foreign
commerce or any person holding distilled spirits for sale after
shipment in interstate or foreign commerce.
(c) Labeling requirements for distilled spirits. It is unlawful for
any person engaged in business as a distiller, rectifier (processor),
importer, wholesaler, bottler, or warehouseman and bottler, directly or
indirectly, or through an affiliate, to sell or ship, or deliver for
sale or shipment, or otherwise introduce or receive in interstate or
foreign commerce, or remove from customs custody, any distilled spirits
in containers unless such containers are marked, branded, labeled, and
packaged in conformity with the regulations in this part.
(d) Labeled in accordance with this part. In order to be labeled in
accordance with the regulations in this part, a container of distilled
spirits must be in compliance with the following requirements:
(1) It must bear one or more label(s) meeting the standards for
``labels'' set forth in subpart D of this part;
(2) One or more of the labels on the container must include the
mandatory information set forth in subpart E of this part;
(3) Claims on any label, container, or packaging (as defined in
Sec. 5.81) must comply with the rules for restricted label statements,
as applicable, set forth in subpart F of this part;
(4) Statements or any other representations on any label,
container, or packaging (as defined in Sec. Sec. 5.101 and 5.121) may
not violate the regulations in subparts G and H of this part regarding
certain practices on labeling of distilled spirits; and
(5) The class and type designation on any label, as well as any
designation appearing on containers or packaging, must comply with the
standards of identity set forth in subpart I of this part.
(e) Packaged in accordance with this part. In order to be packaged
in accordance with the regulations in this part, the distilled spirits
must be bottled in authorized standards of fill in containers that meet
the requirements of subpart K of this part.
Sec. Sec. 5.4-5.6 [Reserved]
Sec. 5.7 Other TTB labeling regulations that apply to distilled
spirits.
In addition to the regulations in this part, distilled spirits must
also comply with the following TTB labeling regulations:
(a) Health warning statement. Alcoholic beverages, including
distilled spirits, that contain at least 0.5 percent alcohol by volume,
must be labeled with a health warning statement, in accordance with the
Alcoholic Beverage Labeling Act of 1988 (ABLA). The regulations
implementing the ABLA are contained in 27 CFR part 16.
(b) Internal Revenue Code requirements. The labeling and marking
requirements for distilled spirits under the Internal Revenue Code are
found in 27 CFR part 19, subpart T (for domestic products) and 27 CFR
part 27, subpart E (for imported products).
Sec. 5.8 Distilled spirits for export.
The regulations in this part shall not apply to distilled spirits
exported in bond.
Sec. 5.9 [Reserved]
Sec. 5.10 Other related regulations.
(a) TTB regulations. Other TTB regulations that relate to distilled
spirits are listed in paragraphs (a)(1) through (8) of this section:
(1) 27 CFR part 1--Basic Permit Requirements under the Federal
Alcohol Administration Act, Nonindustrial Use of Distilled Spirits and
Wine, Bulk Sales and Bottling of Distilled Spirits;
(2) 27 CFR part 13--Labeling Proceedings;
(3) 27 CFR part 16--Alcoholic Beverage Health Warning Statement;
(4) 27 CFR part 19--Distilled Spirits Plants;
(5) 27 CFR Part 26--Liquors and Articles from Puerto Rico and the
Virgin Islands;
(6) 27 CFR Part 27--Importation of Distilled Spirits, Wines, and
Beer;
(7) 27 CFR Part 28--Exportation of Alcohol; and
(8) 27 CFR Part 71--Rules of Practice in Permit Proceedings.
(b) Other Federal Regulations. The regulations listed in paragraphs
(b)(1) through (8) of this section issued by other Federal agencies
also may apply:
(1) 7 CFR Part 205--National Organic Program;
(2) 19 CFR Part 11--Packing and Stamping; Marking;
(3) 19 CFR Part 102--Rules of Origin;
(4) 19 CFR Part 134--Country of Origin Marking;
(5) 21 CFR Part 1--General Enforcement Regulations, Subpart H,
Registration of Food Facilities, and Subpart I, Prior Notice of
Imported Food;
(6) 21 CFR Parts 70-82, which pertain to food and color additives;
(7) 21 CFR Part 110--Current Good Manufacturing Practice in
Manufacturing, Packing, or Holding Human Food; and
(8) 21 CFR Parts 170-189, which pertain to food additives and
secondary direct food additives.
Sec. 5.11 Forms.
(a) General. TTB prescribes and makes available all forms required
by this part. Any person completing a form must provide all of the
information required by each form as indicated by the headings on the
form and the instructions for the form. Each form must be filed in
accordance with this part and the instructions for the form.
(b) Electronically filing forms. The forms required by this part
can be filed electronically by using TTB's online filing systems: COLAs
Online and Formulas Online. Anyone who intends to use one of these
online filing systems must first register to use the system by
accessing the TTB website at https://www.ttb.gov.
(c) Obtaining paper forms. Forms required by this part are
available for printing through the TTB website (https://www.ttb.gov) or
by mailing a request to the Alcohol and Tobacco Tax and Trade Bureau,
National Revenue Center, 550 Main Street, Room 8002, Cincinnati, OH
45202.
Sec. 5.12 Delegations of the Administrator.
Most of the regulatory authorities of the Administrator contained
in this part are delegated to ``appropriate TTB officers.'' To find out
which officers have been delegated specific authorities, see the
current version of TTB Order 1135.5, Delegation of the Administrator's
Authorities in 27 CFR part 5, Labeling and Advertising of Distilled
Spirits. Copies of this order can be obtained by accessing the TTB
website (https://www.ttb.gov) or by mailing a request to the Alcohol
and Tobacco Tax and Trade Bureau, National Revenue Center, 550 Main
Street, Room 8002, Cincinnati, OH 45202.
[[Page 7582]]
Subpart B--Certificates of Label Approval and Certificates of
Exemption from Label Approval
Requirements for Distilled Spirits Bottled in the United States
Sec. 5.21 Requirement for certificates of label approval (COLAs) for
distilled spirits bottled in the United States.
(a) Applicability. The certificate of label approval (COLA)
requirements described in this section apply to distilled spirits
bottled in the United States, outside of customs custody.
(b) Distilled spirits shipped or sold in interstate commerce. No
person may bottle distilled spirits without first applying for and
obtaining a COLA issued by the appropriate TTB officer. This
requirement applies to distilled spirits produced and bottled in the
United States and to distilled spirits imported in bulk, regardless of
where produced, and bottled in the United States. Bottlers may obtain
an exemption from this requirement only if they satisfy the conditions
set forth in Sec. 5.23.
(c) Evidence of COLA. Upon request by the appropriate TTB officer,
a bottler or importer must provide evidence that a container of
distilled spirits is covered by a COLA. This requirement may be
satisfied by providing original COLAs, photocopies or electronic copies
of COLAs, or records showing the TTB identification number assigned to
the approved certificate.
Sec. 5.22 Rules regarding certificates of label approval (COLAs) for
distilled spirits bottled in the United States.
(a) What a COLA authorizes. An approved TTB Form 5100.31 authorizes
the bottling of distilled spirits covered by the certificate of label
approval (COLA), as long as the container bears labels identical to the
labels appearing on the face of the COLA, or labels with changes
authorized by TTB on the COLA or otherwise (such as through the
issuance of public guidance available on the TTB website at https://www.ttb.gov).
(b) When to obtain a COLA. The COLA must be obtained prior to
bottling. No bottler may bottle distilled spirits, or remove distilled
spirits from the premises where bottled, unless a COLA has been
obtained.
(c) Application for a COLA. The bottler may apply for a COLA by
submitting an application to TTB on Form 5100.31, in accordance with
the instructions on the form. The bottler may apply for a COLA either
electronically by accessing TTB's online system, COLAs Online, at
https://www.ttb.gov, or by submitting the paper form. For procedures
regarding the issuance of COLAs, see part 13 of this chapter.
Sec. 5.23 Application for exemption from label approval for
distilled spirits bottled in the United States.
(a) Exemption. Any bottler of distilled spirits may apply to be
exempt from the requirements of Sec. Sec. 5.21, 5.22, and 5.30(h), by
showing to the satisfaction of the appropriate TTB officer that the
distilled spirits to be bottled are not to be sold, offered for sale,
or shipped or delivered for shipment, or otherwise introduced, in
interstate or foreign commerce.
(b) Application required. The bottler must file an application on
TTB Form 5100.31 for exemption from label approval before bottling the
distilled spirits. The bottler may apply for a certificate of exemption
from label approval either electronically, by accessing TTB's online
system, COLAs Online, at https://www.ttb.gov, or by using the paper
form. For procedures regarding the issuance of certificates of
exemption from label approval, see part 13 of this chapter.
(c) Labeling of distilled spirits covered by certificate of
exemption. The application for a certificate of exemption from label
approval requires that the applicant identify the State in which the
product will be sold. As a condition of receiving exemption from label
approval, the label covered by an approved certificate of exemption
must include the statement ``For sale in [name of State] only.'' See
Sec. Sec. 19.517 and 19.518 of this chapter for additional labeling
rules that apply to distilled spirits covered by a certificate of
exemption.
Requirements for Distilled Spirits Imported in Containers
Sec. 5.24 Certificates of label approval (COLAs) for distilled
spirits imported in containers.
(a) Application requirement. Any person removing distilled spirits
in containers from customs custody for consumption must first apply for
and obtain a certificate of label approval (COLA) covering the
distilled spirits from the appropriate TTB officer, or obtain
authorization to use the COLA from the person to whom the COLA is
issued.
(b) Release of distilled spirits from customs custody. Distilled
spirits, imported in containers, are not eligible for release from
customs custody for consumption, and no person may remove such
distilled spirits from customs custody for consumption, unless the
person removing the distilled spirits has obtained a COLA covering the
distilled spirits and is able to provide it (either electronically or
on paper) upon request. Products imported under another person's COLA
are eligible for release only if each bottle or individual container to
be imported bears the name (or trade name) and address of the person to
whom the COLA was issued by TTB, and only if the importer using the
COLA to obtain release of a shipment can substantiate that the person
to whom the COLA was issued has authorized its use by the importer.
(c) Filing requirements. If filing electronically, the importer
must file with U.S. Customs and Border Protection (CBP), at the time of
filing the customs entry, the TTB-assigned identification number of the
valid COLA that corresponds to the label on the product or lot of
distilled spirits to be imported. If the importer is not filing
electronically, the importer must provide a copy of the COLA to CBP at
the time of entry. In addition, the importer must provide a copy of the
applicable COLA, and proof of the COLA holder's authorization if
applicable, upon request by the appropriate TTB officer or a customs
officer.
(d) Evidence of COLA. Upon request by the appropriate TTB officer,
an importer must provide evidence that a container of distilled spirits
is covered by a COLA. This requirement may be satisfied by providing
original COLAs, photocopies or electronic copies of COLAs, or records
showing the TTB identification number assigned to the approved
certificate.
(e) Scope of this section. The COLA requirement imposed by this
section applies only to distilled spirits that are removed for sale or
any other commercial purpose. Distilled spirits that are imported in
containers are not eligible for a certificate of exemption from label
approval. See 27 CFR 27.49, 27.74, and 27.75 for labeling exemptions
applicable to certain imported samples of distilled spirits.
(f) Relabeling in customs custody. Containers of distilled spirits
in customs custody that are required to be covered by a COLA but are
not labeled in conformity with a COLA must be relabeled, under the
supervision and direction of customs officers, prior to their removal
from customs custody for consumption.
Sec. 5.25 Rules regarding certificates of label approval (COLAs) for
distilled spirits imported in containers.
(a) What COLA authorizes. An approved TTB Form 5100.31 authorizes
the use of the labels covered by the
[[Page 7583]]
certificate of label approval (COLA) on containers of distilled
spirits, as long as the container bears labels identical to the labels
appearing on the face of the COLA, or labels with changes authorized by
the form or otherwise authorized by TTB (such as through the issuance
of public guidance available on the TTB website at https://www.ttb.gov).
(b) When to obtain a COLA. The COLA must be obtained prior to the
removal of distilled spirits in containers from customs custody for
consumption.
(c) Application for a COLA. The person responsible for the
importation of distilled spirits must obtain approval of the labels by
submitting an application to TTB on TTB Form 5100.31. A person may
apply for a COLA either electronically, by accessing TTB's online
system, COLAs Online, at https://www.ttb.gov, or by submitting the
paper form. For procedures regarding the issuance of COLAs, see part 13
of this chapter.
Administrative Rules
Sec. 5.27 Presenting certificates of label approval (COLAs) to
Government officials.
A certificate holder must present the original or a paper or
electronic copy of the appropriate certificate of label approval (COLA)
upon the request of any duly authorized representative of the United
States Government.
Sec. 5.28 Formulas, samples, and documentation.
(a) In addition to any formula specifically required under subpart
J of this part, TTB may require formulas under certain circumstances in
connection with the label approval process. Prior to or in conjunction
with the review of an application for a certificate of label approval
(COLA) on TTB Form 5100.31, the appropriate TTB officer may require a
bottler or importer to submit a formula, the results of laboratory
testing of the distilled spirits, or a sample of any distilled spirits
or ingredients used in producing a distilled spirit. After the issuance
of a COLA, or with regard to any distilled spirits required to be
covered by a COLA, the appropriate TTB officer may require a full and
accurate statement of the contents of the container.
(b) A formula may be filed electronically by using Formulas Online,
or it may be submitted on paper on TTB Form 5100.51. See Sec. 5.11 for
more information on forms and Formulas Online.
Sec. 5.29 Personalized labels.
(a) General. Applicants for label approval may obtain permission
from TTB to make certain changes in order to personalize labels without
having to resubmit labels for TTB approval. A personalized label is an
alcohol beverage label that meets the minimum mandatory label
requirements and is customized for customers. Personalized labels may
contain a personal message, picture, or other artwork that is specific
to the consumer who is purchasing the product. For example, a distiller
may offer individual or corporate customers labels that commemorate an
event such as a wedding or grand opening.
(b) Application. Any person who intends to offer personalized
labels must submit a template for the personalized label as part of the
application for label approval required under Sec. Sec. 5.21 or 5.24,
and must note on the application a description of the specific
personalized information that may change.
(c) Approval of personalized label. If the application complies
with the regulations, TTB will issue a certificate of label approval
(COLA) with a qualification allowing the personalization of labels. The
qualification will allow the certificate holder to add or change items
on the personalized label such as salutations, names, graphics,
artwork, congratulatory dates and names, or event dates without
applying for a new COLA. All of these items on personalized labels must
comply with the regulations of this part.
(d) Changes not allowed to personalized labels. Approval of an
application to personalize labels does not authorize the addition of
any information that discusses either the alcohol beverage or
characteristics of the alcohol beverage or that is inconsistent with or
in violation of the provisions of this part or any other applicable
provision of law or regulations.
Sec. 5.30 Certificates of age and origin for imported spirits.
(a) Scotch, Irish, and Canadian whiskies. (1) Scotch, Irish, and
Canadian whiskies, imported in containers, are not eligible for release
from customs custody for consumption, and no person may remove such
whiskies from customs custody for consumption, unless that person has
obtained and is in possession of an invoice accompanied by a
certificate of origin issued by an official duly authorized by the
appropriate foreign government, certifying:
(i) That the particular distilled spirits are Scotch, Irish, or
Canadian whisky, as the case may be; and
(ii) That the distilled spirits have been manufactured in
compliance with the laws of the respective foreign governments
regulating the manufacture of whisky for home consumption.
(2) In addition, an official duly authorized by the appropriate
foreign government must certify to the age of the youngest distilled
spirits in the container. The age certified shall be the period during
which, after distillation and before bottling, the distilled spirits
have been stored in oak containers.
(b) Brandy and Cognac. Brandy (other than fruit brandies of a type
not customarily stored in oak containers) or Cognac, imported in
containers, is not eligible for release from customs custody for
consumption, and no person may remove such brandy or Cognac from
customs custody for consumption, unless the person so removing the
brandy or Cognac possesses a certificate issued by an official duly
authorized by the appropriate foreign country certifying that the age
of the youngest brandy or Cognac in the container is not less than 2
years, or if age is stated on the label that none of the distilled
spirits are of an age less than that stated. The age certified shall be
the period during which, after distillation and before bottling, the
distilled spirits have been stored in oak containers. If the label of
any fruit brandy, not stored in oak containers, bears any statement of
storage in another type of container, the brandy is not eligible for
release from customs custody for consumption, and no person may remove
such brandy from customs custody for consumption, unless the person so
removing the brandy possesses a certificate issued by an official duly
authorized by the appropriate foreign government certifying to such
storage. Cognac, imported in bottles, is not eligible for release from
customs custody for consumption, and no person may remove such Cognac
from customs custody for consumption, unless the person so removing the
Cognac possesses a certificate issued by an official duly authorized by
the French Government, certifying that the product is grape brandy
distilled in the Cognac region of France and entitled to be designated
as ``Cognac'' by the laws and regulations of the French Government.
(c) Rum. Rum imported in containers that contain any statement of
age is not eligible to be released from customs custody for
consumption, and no person may remove such rum from customs custody for
consumption, unless the person so removing the rum possesses a
certificate issued by an official duly authorized by the appropriate
foreign country, certifying to the age of the youngest rum in the
container. The age certified shall be the period during which, after
distillation and before
[[Page 7584]]
bottling, the distilled spirits have been stored in oak containers.
(d) Tequila. (1) Tequila imported in containers is not eligible for
release from customs custody for consumption, and no person may remove
such Tequila from customs custody for consumption, unless the person
removing such Tequila possesses a Certificate of Tequila Export issued
by an official duly authorized by the Mexican Government or a
conformity assessment body stating that the product is entitled to be
designated as Tequila under the applicable laws and regulations of the
Mexican Government.
(2) If the label of any Tequila imported in containers contains any
statement of age, the Tequila is not eligible for release from customs
custody for consumption, and no person may remove such Tequila from
customs custody for consumption, unless the person removing the Tequila
possesses a Certificate of Tequila Export issued by an official duly
authorized by the Mexican Government or a conformity assessment body as
to the age of the youngest Tequila in the container. The age certified
shall be the period during which the Tequila has been stored in oak
containers after distillation and before bottling.
(e) Other whiskies. Whisky, as defined in Sec. 5.143(c)(2) through
(7) and (10) through (14), imported in bottles, is not eligible for
release from customs custody for consumption, and no person shall
remove such whiskies from customs custody for consumption, unless that
person has obtained and is in possession of a certificate issued by an
official duly authorized by the appropriate foreign government
certifying:
(1) In the case of whisky (regardless of whether it is mixed or
blended) that contains no neutral spirits:
(i) The type of the whisky as defined in Sec. 5.143;
(ii) The American proof at which the whisky was distilled;
(iii) That no neutral spirits (or other whisky in the case of
straight whisky) have been added or otherwise included in the whisky;
(iv) The age of the whisky; and
(v) The type of oak barrel in which the whisky was aged and whether
the barrel was new or reused, charred or uncharred; and
(2) In the case of whisky containing neutral spirits:
(i) The type of the whisky as defined in Sec. 5.143;
(ii) The percentage of straight whisky used in the blend, if any;
(iii) The American proof at which any straight whisky in the blend
was distilled;
(iv) The percentage of whisky other than straight whisky in the
blend, if any;
(v) The percentage of neutral spirits in the blend and the name of
the commodity from which the neutral spirits were distilled;
(vi) The age of any straight whisky and the age of any other whisky
in the blend; and
(vii) The type of oak barrel in which the age of each whisky in the
blend was attained and whether the barrel was new or reused and charred
or uncharred.
(f) Miscellaneous. Distilled spirits (other than Scotch, Irish, and
Canadian whiskies, and Cognac) imported in containers are not eligible
for release from customs custody for consumption, and no person shall
remove such spirits from customs custody for consumption, unless that
person has obtained and is in possession of an invoice accompanied by a
certificate of origin issued by an official duly authorized by the
appropriate foreign government, if the issuance of such certificates
with respect to such distilled spirits is required by the foreign
government concerned, certifying as to the identity of the distilled
spirits and that the distilled spirits have been manufactured in
compliance with the laws of the respective foreign government
regulating the manufacture of such distilled spirits for home
consumption.
(g) Retention of certificates--distilled spirits imported in
containers. The importer of distilled spirits imported in containers
must retain for 5 years following the removal of the bottled distilled
spirits from customs custody copies of the certificates (and
accompanying invoices, if applicable) required by paragraphs (a)
through (f) of this section, and must provide them upon request of the
appropriate TTB officer or a customs officer.
(h) Distilled spirits imported in bulk for bottling in the United
States. Distilled spirits that would be required under paragraphs (a)
through (f) of this section to be covered by a certificate of age and/
or a certificate of origin and that are imported in bulk for bottling
in the United States may be removed from the premises where bottled
only if the bottler possesses a certificate of age and/or a certificate
of origin, issued by the appropriate entity as set forth in paragraphs
(a) through (f) of this section, applicable to the spirits that
provides the same information as a certificate required under
paragraphs (a) through (f) of this section, would provide for like
spirits imported in bottles.
(i) Retention of distilled spirits certificates--distilled spirits
in bulk. The bottler of distilled spirits imported in bulk must retain,
for 5 years following the removal of such distilled spirits from the
premises where bottled, copies of the certificates required by
paragraphs (a) through (f) of this section, and must provide them upon
request of the appropriate TTB officer.
Subpart C--Alteration of Labels, Relabeling, and Adding Information
to Containers
Sec. 5.41 Alteration of labels.
(a) Prohibition. It is unlawful for any person to alter, mutilate,
destroy, obliterate or remove any mark, brand, or label on distilled
spirits in containers held for sale in interstate or foreign commerce,
or held for sale after shipment in interstate or foreign commerce,
except as authorized by Sec. Sec. 5.42, 5.43, or 5.44, or as otherwise
authorized by Federal law.
(b) Authorized relabeling. For purposes of the relabeling
activities authorized by this subpart, the term ``relabel'' includes
the alteration, mutilation, destruction, obliteration, or removal of
any existing mark, brand, or label on the container, as well as the
addition of a new label (such as a sticker that adds information about
the product or information engraved on the container) to the container,
and the replacement of a label with a new label bearing identical
information.
(c) Obligation to comply with other requirements. Authorization to
relabel under this subpart:
(1) In no way authorizes the placement of labels on containers that
do not accurately reflect the brand, bottler, identity, or other
characteristics of the product;
(2) Does not relieve the person conducting the relabeling
operations from any obligation to comply with the regulations in this
part and with State or local law; and,
(3) Does not relieve the person conducting the relabeling
operations from any obligation to obtain permission from the owner of
the brand where otherwise required.
Sec. 5.42 Authorized relabeling activities by distillers and
importers.
(a) Relabeling at distilled spirits plant premises. A proprietor of
distilled spirits plant premises may relabel domestically bottled
distilled spirits prior to removal from, and after return to bond at,
the distilled spirits plant premises, with labels covered by a
certificate of label approval (COLA), without obtaining separate
permission
[[Page 7585]]
from TTB for the relabeling activity, provided that the proprietor is
the certificate holder (and bottler).
(b) Relabeling after removal from distilled spirits plant premises.
A proprietor of distilled spirits plant premises may relabel
domestically bottled distilled spirits (or direct the relabeling of
such spirits by an authorized agent) after removal from distilled
spirits plant premises with labels covered by a COLA, without obtaining
separate permission from TTB for the relabeling activity, provided that
the proprietor is the certificate holder (and bottler).
(c) Relabeling in customs custody. Under the supervision of U.S.
customs officers, imported distilled spirits in containers in customs
custody may be relabeled without obtaining separate permission from TTB
for the relabeling activity. Such containers must bear labels covered
by a COLA upon their removal from customs custody for consumption. See
Sec. 5.24(b).
(d) Relabeling after removal from customs custody. The importer of
distilled spirits in containers may relabel imported distilled spirits
(or direct the relabeling of such spirits by an authorized agent) after
removal from customs custody without obtaining separate permission from
TTB for the relabeling activity, as long as the labels are covered by a
COLA.
Sec. 5.43 Relabeling activities that require separate written
authorization from TTB.
(a) General. Any permittee holding distilled spirits for sale who
needs to relabel the containers but is not the original bottler may
apply for written permission for the relabeling of distilled spirits
containers. The appropriate TTB officer may permit relabeling of
distilled spirits in containers if the facts show that the relabeling
is for the purpose of compliance with the requirements of this part or
State law, or for the purpose of replacing damaged labels.
(b) Application. The written application must include:
(1) Copies of the original and proposed new labels;
(2) The circumstances of the request, including the reason for
relabeling;
(3) The number of containers to be relabeled;
(4) The location where the relabeling will take place; and
(5) The name and address of the person who will be conducting the
relabeling operations.
Sec. 5.44 Adding a label or other information to a container that
identifies the wholesaler, retailer, or consumer.
Any label or other information that identifies the wholesaler,
retailer, or consumer of the distilled spirits may be added to
containers (by the addition of stickers, engraving, stenciling, etc.)
without prior approval from TTB and without being covered by a
certificate of label approval or certificate of exemption from label
approval. Such information may be added before or after the containers
have been removed from distilled spirits plant premises or released
from customs custody. The information added:
(a) May not violate the provisions of subpart F, G, or H of this
part;
(b) May not contain any reference to the characteristics of the
product; and
(c) May not be added to the container in such a way that it
obscures any other labels on the container.
Subpart D--Label Standards
Sec. 5.51 Requirement for firmly affixed labels.
Any label that is not an integral part of the container must be
affixed to the container in such a way that it cannot be removed
without thorough application of water or other solvents.
Sec. 5.52 Legibility and other requirements for mandatory
information on labels.
(a) Readily legible. Mandatory information on labels must be
readily legible to potential consumers under ordinary conditions.
(b) Separate and apart. Subject to the exceptions below, mandatory
information on labels, except brand names, must be separate and apart
from any additional information.
(1) This does not preclude the addition of brief optional phrases
of additional information as part of the class or type designation
(such as, ``premium vodka'' or ``delicious Tequila''), the name and
address statement (such as, ``Proudly distilled and bottled by ABC
Distilling Company, Atlanta, GA, for over 30 years'') or other
information required by Sec. 5.63(a) and (b). The statements required
by Sec. 5.63(c) may not include additional information.
(2) Mandatory information (other than an aspartame declaration
required by Sec. 5.63(c)(8)) may be contained among other descriptive
or explanatory information if the script, type, or printing of the
mandatory information is substantially more conspicuous than that of
the descriptive or explanatory information.
(c) Contrasting background. Mandatory information must appear in a
color that contrasts with the background on which it appears, except
that if the net contents are blown into a glass container, they need
not be contrasting. The color of the container and of the distilled
spirits must be taken into account if the label is transparent or if
mandatory label information is etched, engraved, sandblasted, or
otherwise carved into the surface of the container or is branded,
stenciled, painted, printed, or otherwise directly applied on to the
surface of the container. Examples of acceptable contrasts are:
(1) Black lettering appearing on a white or cream background; or
(2) White or cream lettering appearing on a black background.
(d) Capitalization. Except for the aspartame statement when
required by Sec. 5.63(c)(8), which must appear in all capital letters,
mandatory information prescribed by this part may appear in all capital
letters, in all lower case letters, or in mixed-case using both capital
and lower-case letters.
Sec. 5.53 Minimum type size of mandatory information.
All capital and lowercase letters in statements of mandatory
information on labels must meet the following type size requirements.
(a) Containers of more than 200 milliliters. All mandatory
information must be in script, type, or printing that is at least two
millimeters in height.
(b) Containers of 200 milliliters or less. All mandatory
information must be in script, type, or printing that is at least one
millimeter in height.
Sec. 5.54 Visibility of mandatory information.
Mandatory information on a label must be readily visible and may
not be covered or obscured in whole or in part. See Sec. 5.62 for
rules regarding packaging of containers (including cartons, coverings,
and cases). See subpart N of this part for regulations pertaining to
advertising materials.
Sec. 5.55 Language requirements.
(a) General. Mandatory information must appear in the English
language, with the exception of the brand name and except as provided
in paragraph (c) of this section.
(b) Foreign languages. Additional statements in a foreign language,
including translations of mandatory information that appears elsewhere
in English on the label, are allowed on labels and containers as long
as they do not in any way conflict with, or contradict, the
requirements of this part.
(c) Distilled spirits for consumption in the Commonwealth of Puerto
Rico. Mandatory information may be stated solely in the Spanish
language on labels of distilled spirits bottled for consumption within
the Commonwealth of Puerto Rico.
[[Page 7586]]
Sec. 5.56 Additional information.
Information (other than mandatory information) that is truthful,
accurate, and specific, and that does not violate subparts F, G, or H
of this part, may appear on labels. Such additional information may not
conflict with, modify, qualify or restrict mandatory information in any
manner.
Subpart E--Mandatory Label Information
Sec. 5.61 What constitutes a label for purposes of mandatory
information.
(a) Label. Certain information, as outlined in Sec. 5.63, must
appear on a label. When used in this part for purposes of determining
where mandatory information must appear, the term ``label'' includes:
(1) Material affixed to the container, whether made of paper,
plastic, metal, or other matter;
(2) For purposes of the net content statement only, information
blown, embossed, or molded into the container as part of the process of
manufacturing the container;
(3) Information etched, engraved, sandblasted, or otherwise carved
into the surface of the container; and
(4) Information branded, stenciled, painted, printed, or otherwise
directly applied on to the surface of the container.
(b) Information appearing elsewhere on the container. Information
appearing on the following parts of the container is subject to all of
the restrictions and prohibitions set forth in subparts F, G and H of
this part, but will not satisfy any requirements in this part for
mandatory information that must appear on labels:
(1) Material affixed to, or information appearing on, the bottom
surface of the container;
(2) Caps, corks or other closures unless authorized to bear
mandatory information by the appropriate TTB officer; and
(3) Foil or heat shrink bottle capsules.
(c) Materials not firmly affixed to the container. Any materials
that accompany the container to the consumer but are not firmly affixed
to the container, including booklets, leaflets, and hang tags, are not
``labels'' for purposes of this part. Such materials are instead
subject to the advertising regulations in subpart N of this part.
Sec. 5.62 Packaging (cartons, coverings, and cases).
(a) General. An individual covering, carton, or other container of
the bottle used for sale at retail (other than a shipping container),
may not contain any statement, design, device, or graphic, pictorial,
or emblematic representation that is prohibited on labels by
regulations in subpart F, G, or H of this part.
(b) Sealed opaque cartons. If containers are enclosed in sealed
opaque coverings, cartons, or other containers used for sale at retail
(other than shipping containers), such coverings, cartons, or other
containers must bear all mandatory label information.
(c) Other cartons. (1) If an individual covering, carton, or other
container of the bottle used for sale at retail (other than a shipping
container) is so designed that the bottle is readily removable, it may
display any information which is not in conflict with the label on the
bottle contained therein.
(2) Cartons displaying brand names and/or designations must display
such names and designations in their entirety--brand names required to
be modified, e.g., by ``Brand'' or ``Product of U.S.A.'', must also
display such modification.
(3) Specialty products for which a truthful and adequate statement
of composition is required must display such statement.
(d) Labeling of containers within the packaging. The container
within the packaging is subject to all labeling requirements of this
part, including mandatory labeling information requirements, regardless
of whether the packaging bears such information.
Sec. 5.63 Mandatory label information.
(a) Mandatory information required to appear within the same field
of vision. Distilled spirits containers must bear a label or labels (as
defined in Sec. 5.61) containing the following information within the
same field of vision (which means a single side of a container (for a
cylindrical container, a side is 40 percent of the circumference) where
all of the pieces of information can be viewed simultaneously without
the need to turn the container):
(1) Brand name, in accordance with Sec. 5.64;
(2) Class, type, or other designation, in accordance with subpart I
of this part; and
(3) Alcohol content, in accordance with Sec. 5.65.
(b) Other mandatory information. Distilled spirits containers must
bear a label or labels (as defined in Sec. 5.61) anywhere on the
container bearing the following information:
(1) Name and address of the bottler or distiller, in accordance
with Sec. 5.66, or the importer, in accordance with Sec. 5.67 or
Sec. 5.68, as applicable; and
(2) Net contents (which may be blown, embossed, or molded into the
container as part of the process of manufacturing the container), in
accordance with Sec. 5.70.
(c) Disclosure of certain ingredients, processes and other
information. The following ingredients, processes, and other
information must be disclosed on a label, without the inclusion of any
additional information as part of the statement, as follows:
(1) Neutral spirits. The percentage of neutral spirits and the name
of the commodity from which the neutral spirits were distilled, or in
the case of continuously distilled neutral spirits or gin, the name of
the commodity only, in accordance with Sec. 5.7;
(2) Coloring or treatment with wood. Coloring or treatment with
wood, in accordance with Sec. Sec. 5.72 and 5.73;
(3) Age. A statement of age or age and percentage of type, when
required or used, in accordance with Sec. 5.74;
(4) State of distillation. State of distillation of any type of
whisky defined in Sec. 5.143(c)(2) through (c)(7), which is distilled
in the United States, in accordance with Sec. 5.66(f);
(5) FD&C Yellow No. 5. If a distilled spirit contains the coloring
material FD&C Yellow No. 5, the label must include a statement to that
effect, such as ``FD&C Yellow No. 5'' or ``Contains FD&C Yellow No.
5'';
(6) Cochineal extract or carmine. If a distilled spirit contains
the color additive cochineal extract or the color additive carmine, the
label must include a statement to that effect, using the respective
common or usual name (such as ``contains cochineal extract'' or
``contains carmine''). This requirement applies to labels when either
of the coloring materials was used in a distilled spirit that is
removed from bottling premises or from customs custody on or after
April 16, 2013;
(7) Sulfites. If a distilled spirit contains 10 or more parts per
million of sulfur dioxide or other sulfiting agent measured as total
sulfur dioxide, the label must include a statement to that effect.
Examples of acceptable statements are ``Contains sulfites'' or
``Contains (a) sulfiting agent(s)'' or a statement identifying the
specific sulfiting agent. The alternative terms ``sulphites'' or
``sulphiting'' may be used; and
(8) Aspartame. If the distilled spirit contains aspartame, the
label must include the following statement, in capital letters,
separate and apart from all other information:
[[Page 7587]]
``PHENYLKETONURICS: CONTAINS PHENYLALANINE.''
(d) Distinctive liquor bottles. See Sec. 5.205(b)(2) for exemption
from placement requirements for certain mandatory information for
distinctive liquor bottles.
Sec. 5.64 Brand name.
(a) Requirement. The distilled spirits label must include a brand
name. If the distilled spirits are not sold under a brand name, then
the name of the bottler, distiller or importer, as applicable,
appearing in the name and address statement is treated as the brand
name.
(b) Misleading brand names. Labels may not include any misleading
brand names. A brand name is misleading if it creates (by itself or in
association with other printed or graphic matter) any erroneous
impression or inference as to the age, origin, identity, or other
characteristics of the distilled spirits. A brand name that would
otherwise be misleading may be qualified with the word ``brand'' or
with some other qualification, if the appropriate TTB officer
determines that the qualification dispels any misleading impression
that might otherwise be created.
Sec. 5.65 Alcohol content.
(a) General. The alcohol content for distilled spirits must be
stated on the label as a percentage of alcohol by volume. Products that
contain a significant amount of material, such as solid fruit, that may
absorb spirits after bottling must state the alcohol content at the
time of bottling as follows: ``Bottled at __ percent alcohol by
volume.''
(b) How the alcohol content must be expressed. The following rules
apply to statements of alcohol content.
(1) A statement of alcohol content must be expressed as a
percentage of alcohol by volume.
(i) In addition, the alcohol content in degrees of proof may be
stated on a label as long as it appears in the same field of vision as
the mandatory statement of alcohol content as a percentage of alcohol
by volume. Additional statements of proof may appear on the label
without being in the same field of vision as the mandatory alcohol by
volume statement.
(ii) Other truthful, accurate, and specific factual representations
of alcohol content, such as alcohol by weight, may be made, as long as
they appear together with, and as part of, the statement of alcohol
content as a percentage of alcohol by volume.
(2)(i) The alcohol content statement must be expressed in one of
the following formats:
(A) ``Alcohol __ percent by volume'';
(B) ``__ percent alcohol by volume''; or
(C) ``Alcohol by volume __ percent.''
(ii) Any of the words or symbols may be enclosed in parentheses and
authorized abbreviations may be used with or without a period. The
alcohol content statement does not have to appear with quotation marks.
(3) The statements listed in paragraph (b)(2)(i) of this section
must appear as shown, except that the following abbreviations may be
used: Alcohol may be abbreviated as ``alc''; percent may be represented
by the percent symbol ``%''; alcohol and volume may be separated by a
slash ``/'' in lieu of the word ``by''; and volume may be abbreviated
as ``vol''.
(4) The following are examples of alcohol content statements that
comply with the requirements of this part:
(i) ``40% alc/vol'';
(ii) ``Alc. 40 percent by vol.'';
(iii) ``Alc 40% by vol''; and
(iv) ``40% Alcohol by Volume.''
(c) Tolerances. A tolerance of plus or minus 0.3 percentage points
is allowed for actual alcohol content that is above or below the
labeled alcohol content.
Sec. 5.66 Name and address for domestically bottled distilled
spirits that were wholly made in the United States.
(a) General. Domestically bottled distilled spirits that were
wholly made in the United States and contain no imported distilled
spirits must be labeled in accordance with this section. (See
Sec. Sec. 5.67 and 5.68 for name and address requirements applicable
to distilled spirits that are not wholly made in the United States.)
For purposes of this section, a ``processor'' who solely bottles the
labeled distilled spirits will be considered the ``bottler.''
(b) Form of statement. The bottler, distiller, or processor of the
distilled spirits must be identified by a phrase describing the
function performed by that person. If that person performs more than
one function, the label may (but is not required to) so indicate.
(1) If the name of the bottler appears on the label, it must be
preceded by a phrase such as ``bottled by,'' ``canned by,'' ``packed
by,'' or ``filled by,'' followed by the name and address of the
bottler.
(2) If the name of the processor appears on the label, it must be
preceded by a phrase such as ``blended by,'' ``made by,'' ``prepared
by,'' ``produced by,'' or ``manufactured by,'' as appropriate, followed
by the name and address of the processor. When applied to distilled
spirits, the term ``produced by'' indicates a processing operation
(formerly known as rectification) that involves a change in the class
or type of the product through the addition of flavors or some other
processing activity.
(3) If the name of the distiller appears on the label, it must be
preceded by a phrase such as ``distilled by,'' followed by the name and
address of the distiller. If the distilled spirits were bottled for the
distiller thereof, the name and address of the distiller may be
preceded by a phrase such as ``distilled by and bottled for,'' or
``bottled for.''
(c) Listing of more than one function. If different functions are
performed by more than one person, statements on the label may not
create the misleading impression that the different functions were
performed by the same person.
(d) Form of address--(1) General. The address consists of the city
and State where the operation occurred, or the city and State of the
principal place of business of the person performing the operation.
This information must be consistent with the information on the basic
permit. Addresses may, but are not required to, include additional
information such as street names, counties, zip codes, phone numbers,
and website addresses. The postal abbreviation of the State name may be
used; for example, California may be abbreviated as CA.
(2) More than one address. If the bottler, distiller, or processor
listed on the name and address statement is the actual operator of more
than one distilled spirits plant engaged in bottling, distilling, or
processing operations, as applicable, the label may state, immediately
following the name of the permittee, the addresses of those other
plants, in addition to the address of the plant at which the distilled
spirits were bottled. In this situation, the address where the
operation occurred must be indicated on the label or on the container
by printing, coding, or other markings.
(3) Principal place of business. The label may provide the address
of the bottler's, distiller's, or processor's principal place of
business, in lieu of the place where the bottling, distilling, or other
operation occurred, provided that the address where the operation
occurred is indicated on the label or on the container by printing,
coding, or other markings.
(4) Distilled spirits bottled for another person. (i) If distilled
spirits are bottled for another person, other than the actual
[[Page 7588]]
distiller thereof, the label may state, in addition to (but not in
place of) the name and address of the bottler, the name and address of
such other person, immediately preceded by the words ``bottled for'' or
another similar appropriate phrase. Such statements must clearly
indicate the relationship between the two persons (for example,
contract bottling).
(ii) If the same brand of distilled spirits is bottled by two
distillers that are not under the same ownership, the label for each
distiller may set forth both locations where bottling takes place, as
long as the label uses the actual location (and not the principal place
of business) and as long as the nature of the arrangement is clearly
set forth.
(5) Additional addresses. No additional places or addresses may be
stated for the same person unless:
(i) That person is actively engaged in the conduct of an additional
bona fide and actual alcohol beverage business at such additional place
or address, and
(ii) The label also contains in direct conjunction therewith,
appropriate descriptive material indicating the function occurring at
such additional place or address in connection with the particular
product (such as ``distilled by.'')
(e) Special rule for straight whiskies. If ``straight whiskies''
(see Sec. 5.143) of the same type are distilled in the same State by
two or more different distillers and are combined (either at the time
of bottling or at a warehouseman's bonded premises for further storage)
and subsequently bottled and labeled as ``straight whisky,'' that
``straight whisky'' must bear a label that contains name and address
information of the bottler. If that combined ``straight whisky'' is
bottled by or for the distillers, in lieu of the name and address of
the bottler, the label may contain the words ``distilled by,'' followed
immediately by the names (or trade names) and addresses of the
different distillers who distilled a portion of the ``straight whisky''
and the percentage of ``straight whisky'' distilled by each distiller,
with a tolerance of plus or minus 2 percent. If ``straight whisky''
consists of a mixture of ``straight whiskies'' of the same type from
two or more different distilleries of the same proprietor located
within the same State, and if that ``straight whisky'' is bottled by or
for that proprietor, in lieu of the name and address of the bottler,
the ``straight whisky'' may bear a label containing the words
``distilled by'' followed by the name (or trade name) of the proprietor
and the addresses of the different distilleries that distilled a
portion of the ``straight whisky.''
(f) State of distillation for whisky. (1) The State of
distillation, which is the State in which original distillation takes
place, must appear on the label of any type of whisky defined in Sec.
5.143(c)(2) through (7), which is distilled in the United States. The
State of distillation may appear on any label and must be shown in at
least one of the following ways:
(i) By including a ``distilled by'' (or ``distilled and bottled
by'' or any other phrase including the word ``distilled'') statement as
part of the mandatory name and address statement, followed by a single
location.
(ii) If the address shown in the ``bottled by'' statement includes
the State in which distillation occurred, by including a ``bottled by''
statement as part of the mandatory name and address statement, followed
by a single location;
(iii) By including the name of the State in which original
distillation occurred immediately adjacent to the class or type
designation (such as ``Kentucky bourbon whisky''), as long as the
product was both distilled and aged in that State in conformance with
the requirements of Sec. 5.143(b); or
(iv) By including a separate statement, such as ``Distilled in
[name of State].''
(2) The appropriate TTB officer may require that the State of
distillation or other information appear on a label of any whisky
subject to the requirements of paragraph (f)(1) of this section (and
may prescribe placement requirements for such information), even if
that State appears in the name and address statement, if such
additional information is necessary to negate any misleading or
deceptive impression that might otherwise be created as regards the
actual State of distillation.
(3) In the case of ``light whisky,'' the State name ``Kentucky'' or
``Tennessee'' may not appear on any label, except as a part of a name
and address as specified in paragraph (a)(1), (2), or (4) of this
section.
(g) Trade or operating names. The name of the person appearing on
the label may be the trade name or the operating name, as long as it is
identical to a trade or operating name appearing on the basic permit.
In the case of a distillation statement for spirits bottled in bond,
the name or trade name under which the spirits were distilled must be
shown.
Sec. 5.67 Name and address for domestically bottled distilled
spirits that were bottled after importation.
(a) General. This section applies to distilled spirits that were
bottled after importation. See Sec. 5.68 for name and address
requirements applicable to imported distilled spirits that were
imported in a container. See 19 CFR parts 102 and 134 for U.S. Customs
and Border Protection country of origin marking requirements.
(b) Distilled spirits bottled after importation in the United
States. Distilled spirits bottled, without further blending, making,
preparing, producing, manufacturing, or distilling activities after
importation, must bear one of the following name and address
statements:
(1) The name and address of the bottler, preceded by the words
``bottled by,'' ``canned by,'' ``packed by,'' or ``filled by'';
(2) If the distilled spirits were bottled for the person
responsible for the importation, the words ``imported by and bottled
(canned, packed, or filled) in the United States for'' (or a similar
appropriate phrase) followed by the name and address of the principal
place of business in the United States of the person responsible for
the importation;
(3) If the distilled spirits were bottled by the person responsible
for the importation, the words ``imported by and bottled (canned,
packed, or filled) in the United States by'' (or a similar appropriate
phrase) followed by the name and address of the principal place of
business in the United States of the person responsible for the
importation.
(c) Distilled spirits that were subject to blending or other
production activities after importation. Distilled spirits that, after
importation in bulk, were blended, made, prepared, produced,
manufactured or further distilled, may not bear an ``imported by''
statement on the label, but must instead be labeled in accordance with
the rules set forth in Sec. 5.66 for mandatory and optional labeling
statements.
(d) Optional statements. In addition to the statements required by
paragraph (a)(1) of this section, the label may also state the name and
address of the principal place of business of the foreign producer.
(e) Form of address. (1) The address consists of the city and State
where the operation occurred, or the city and State of the principal
place of business of the person performing the operation. This
information must be consistent with the information on the basic
permit. Addresses may, but are not required to, include additional
information such as street names, counties, zip codes, phone numbers,
and website addresses.
(2) If the bottler or processor listed on the name and address
statement is the actual operator of more than one distilled spirits
plant engaged in bottling, distilling, or processing
[[Page 7589]]
operations, as applicable, the label may state, immediately following
the name of the bottler, the addresses of those other plants, in
addition to the address of the plant at which the distilled spirits
were bottled. In this situation, the address where the operation
occurred must be indicated on the label or on the container by
printing, coding, or other markings.
(3) The label may provide the address of the bottler's or
processor's principal place of business, in lieu of the place where the
bottling, distilling, or other operation occurred, provided that the
address where the operation occurred is indicated on the label or on
the container by printing, coding, or other markings.
(f) Trade or operating names. A trade name may be used if the trade
name is listed on the basic permit or other qualifying documentation.
Sec. 5.68 Name and address for distilled spirits that were imported
in a container.
(a) General. This section applies to distilled spirits that were
imported in a container, as defined in Sec. 5.1. See Sec. 5.67 for
name and address requirements applicable to distilled spirits that were
domestically bottled after importation. See 19 CFR parts 102 and 134
for U.S. Customs and Border Protection country of origin marking
requirements.
(b) Mandatory labeling statement. Distilled spirits imported in
containers, as defined in Sec. 5.1, must bear a label stating the
words ``imported by'' or a similar appropriate phrase, followed by the
name and address of the importer.
(1) For purposes of this section, the importer is the holder of the
importer's basic permit who either makes the original customs entry or
is the person for whom such entry is made, or the holder of the
importer's basic permit who is the agent, distributor, or franchise
holder for the particular brand of imported alcohol beverages and who
places the order abroad.
(2) The address of the importer must be stated as the city and
State of the principal place of business and must be consistent with
the address reflected on the importer's basic permit. Addresses may,
but are not required to, include additional information such as street
names, counties, zip codes, phone numbers, and website addresses. The
postal abbreviation of the State name may be used; for example,
California may be abbreviated as CA.
(c) Optional statements. In addition to the statements required by
paragraph (b)(1) of this section, the label may also state the name and
address of the principal place of business of the foreign producer.
(d) Form of address. The ``place'' stated must be the city and
State, shown on the basic permit or other qualifying document, of the
premises at which the operations took place; and the place for each
operation that is designated on the label must be shown.
(e) Trade or operating names. A trade name may be used if the trade
name is listed on the basic permit or other qualifying documentation.
Sec. 5.69 Country of origin.
For U.S. Customs and Border Protection (CBP) rules regarding
country of origin marking requirements, see the CBP regulations at 19
CFR parts 102 and 134.
Sec. 5.70 Net contents.
The requirements of this section apply to the net contents
statement required by Sec. 5.63.
(a) General. The volume of spirits in the container must appear on
a label as a net contents statement. The word ``liter'' may be
alternatively spelled ``litre'' or may be abbreviated as ``L''. The
word ``milliliters'' may be abbreviated as ``ml.,'' ``mL.,'' or ``ML.''
Net contents in equivalent U.S. customary units of measurement and in
metric equivalents such as centiliters may appear on a label and, if
used, must appear in the same field of vision as the metric net
contents statement.
(b) Tolerances. (1) The following tolerances are permissible for
purposes of applying paragraph (a) of this section:
(i) Errors in measuring. Discrepancies due to errors in measuring
that occur in filling conducted in compliance with good commercial
practice;
(ii) Differences in capacity. Discrepancies due exclusively to
differences in the capacity of containers, resulting solely from
unavoidable difficulties in manufacturing the containers so as to be of
uniform capacity, provided that the discrepancy does not result from a
container design that prevents the manufacture of containers of an
approximately uniform capacity; and
(iii) Differences in atmospheric conditions. Discrepancies in
measure due to differences in atmospheric conditions in various places,
including discrepancies resulting from the ordinary and customary
exposure of alcohol beverage products in containers to evaporation,
provided that the discrepancy is determined to be reasonable on a case
by case basis.
(2) Shortages and overages. A contents shortage in certain of the
containers in a shipment may not be counted against a contents overage
in other containers in the same shipment for purposes of determining
compliance with the requirements of this section.
Sec. 5.71 Neutral spirits and name of commodity.
(a) In the case of distilled spirits (other than cordials,
liqueurs, flavored neutral spirits, including flavored vodka, and
distilled spirits specialty products) manufactured by blending or other
processing, if neutral spirits were used in the production of the
spirits, the percentage of neutral spirits so used and the name of the
commodity from which the neutral spirits were distilled must appear on
a label. The statement of percentage and the name of the commodity must
be in substantially the following form: ``__% neutral spirits distilled
from__ (insert grain, cane products, fruit, or other commodity as
appropriate)''; or ``__ % neutral spirits (vodka) distilled from __
(insert grain, cane products, fruit, or other commodity as
appropriate)''; or ``__ % (grain) (cane products), (fruit) neutral
spirits'', or ``__ % grain spirits.''
(b) In the case of gin manufactured by a process of continuous
distillation or in the case of neutral spirits, a label on the
container must state the name of the commodity from which the gin or
neutral spirits were distilled. The statement of the name of the
commodity must appear in substantially the following form: ``Distilled
from grain'' or ``Distilled from cane products''.
Sec. 5.72 Coloring materials.
The words ``artificially colored'' must appear on a label of any
distilled spirits product containing synthetic or natural materials
that primarily contribute color, or when information on a label conveys
the impression that a color was derived from a source other than the
actual source of the color, except that:
(a) If no coloring material other than a color exempt from
certification under FDA regulations has been added, a truthful
statement of the source of the color may appear in lieu of the words
``artificially colored,'' for example, ``Contains Beta Carotene'' or
``Colored with beet extract.'' See 21 CFR parts 73 and 74 for the list
of such colors under Food and Drug Administration (FDA) regulations;
(b) If no coloring material has been added other than one certified
as suitable for use in foods by the FDA, the words ``(to be filled in
with name of) certified color added'' or ``Contains Certified Color''
may appear in lieu of the words ``artificially colored''; and
(c) If no coloring material other than caramel has been added, the
words ``colored with caramel,'' ``contains caramel color,'' or another
statement
[[Page 7590]]
specifying the use of caramel color, may appear in lieu of the words
``artificially colored.'' However, no statement of any type is required
for the use of caramel color in brandy, rum, or Tequila, or in any type
of whisky other than straight whisky if used at not more than 2.5
percent by volume of the finished product.
(d) As provided in Sec. 5.61, the use of FD&C Yellow No. 5,
carmine, or cochineal extract must be specifically stated on the label
even if the label also contains a phrase such as ``contains certified
color'' or ``artificially colored.''
Sec. 5.73 Treatment of whisky or brandy with wood.
The words ``colored and flavored with wood__ '' (inserting
``chips,'' ``slabs,'' etc., as appropriate) must appear immediately
adjacent to, and in the same size of type as, the class and type
designation under subpart I of this part for whisky and brandy treated,
in whole or in part, with wood through percolation or otherwise during
distillation or storage, other than through contact with an oak barrel.
However, the statement specified in this section is not required in the
case of brandy treated with an infusion of oak chips in accordance with
Sec. 5.155(b)(3)(B).
Sec. 5.74 Statements of age, storage, and percentage.
(a) General. (1) As defined in Sec. 5.1, age is the length of time
during which, after distillation and before bottling, the distilled
spirits have been stored in oak barrels. For bourbon whisky, rye
whisky, wheat whisky, malt whisky, or rye malt whisky, and straight
whiskies other than straight corn whisky, aging must occur in charred
new oak barrels.
(2) If an age statement is used, it is permissible to understate
the age of a product, but overstatements of age are prohibited.
However, the age statement may not conflict with the standard of
identity, if aging is required as part of the standard of identity. For
example, the standard of identity for straight rye whisky requires that
the whisky be aged for a minimum of 2 years, so the age statement
``Aged 1 year,'' would be prohibited for a product designated as
``straight'' rye whisky, even if the spirits were actually aged for
more than 2 years, because it is inconsistent with the standard of
identity.
(3)The age may be stated in years, months, or days.
(b) Age statements and percentage of type statements for whisky.
For all domestic or foreign whiskies that are aged less than 4 years,
including blends containing a whisky that is aged less than 4 years, an
age statement and percentage of types of whisky statement is required
to appear on a label, unless the whisky is labeled as ``bottled in
bond'' in conformity with Sec. 5.88. For all other whiskies, the
statements are optional, but if used, they must conform to the
formatting requirements listed below. Moreover, if the bottler chooses
to include a statement of age or percentage on the label of a product
that is 4 years old or more and that contains neutral spirits, the
statement must appear immediately adjacent to the neutral spirits
statement required by Sec. 5.70. The following are the allowable
formats for the age and percentage statements for whisky:
(1)(i) In the case of whisky, whether or not mixed or blended but
containing no neutral spirits, the age of the youngest whisky in the
product. The age statement must appear substantially as follows: ``__
years old''; and
(ii) If a whisky is aged in more than one container, the label may
optionally indicate the types of oak containers used.
(2) In the case of whisky containing neutral spirits, whether or
not mixed or blended, if any straight whisky or other whisky in the
product is less than 4 years old, the percentage by volume of each such
whisky and the age of each such whisky (the age of the youngest of the
straight whiskies or other whiskies if the product contains two or more
of either). The age and percentage statement for a straight whisky and
other whisky must appear immediately adjacent to the neutral spirits
statement required by Sec. 5.70 and must read substantially as
follows:
(i) If the product contains only one straight whisky and no other
whisky: ``__ percent straight whisky __ years old;''
(ii) If the product contains more than one straight whisky but no
other whisky: ``__ percent straight whiskies __ years or more old.'' In
this case the age blank must state the age of the youngest straight
whisky in the product. However, in lieu of the foregoing statement, the
following statement may appear on the label: ``__ percent straight
whisky __ years old, __ percent straight whisky __ years old, and __
percent straight whisky __ years old'';
(iii) If the product contains only one straight whisky and one
other whisky: ``__ percent straight whisky __ years old, __ percent
whisky __ years old''; or
(iv) If the product contains more than one straight whisky and more
than one other whisky: ``__ percent straight whiskies __ years or more
old, __ percent whiskies __ years or more old.'' In this case, the age
blanks must state the age of the youngest straight whisky and the age
of the youngest other whisky. However, in lieu of the foregoing
statement, the following statement may appear on the label: ``__
percent straight whisky __ years old, percent straight whisky __ years
old, __ percent whisky __ years old, and __ percent whisky __ years
old'';
(3) In the case of an imported rye whisky, wheat whisky, malt
whisky, or rye malt whisky, a label on the product must state each age
and percentage in the manner and form that would be required if the
whisky had been made in the United States;
(4) In the case of whisky made in the United States and stored in
reused oak barrels, other than corn whisky and light whisky, in lieu of
the words ``__ years old'' specified in paragraphs (b)(1) and (b)(2) of
this section, the period of storage in the reused oak barrels must
appear on the label as follows: ``stored __ years in reused
cooperage.''
(c) Statements of age for rum, brandy, and agave spirits. A
statement of age on labels of rums, brandies, and agave spirits is
optional, except that, in the case of brandy (other than immature
brandies, fruit brandies, marc brandy, pomace brandy, Pisco brandy, and
grappa brandy, which are not customarily stored in oak barrels) not
stored in oak barrels for a period of at least 2 years, a statement of
age must appear on the label. Any statement of age authorized or
required under this paragraph must appear substantially as follows:
``__ years old,'' with the blank to be filled in with the age of the
youngest distilled spirits in the product.
(d) Statement of storage for grain spirits. In the case of grain
spirits, the period of storage in oak barrels may appear on a label
immediately adjacent to the percentage statement required under Sec.
5.73, for example: ``__ % grain spirits stored __ years in oak
barrels.''
(e) Other distilled spirits. (1) Statements regarding age or
maturity or similar statements or representations on labels for all
other spirits, except neutral spirits, are permitted only when the
distilled spirits are stored in an oak barrel and, once dumped from the
barrel, subjected to no treatment besides mixing with water, filtering,
and bottling. If batches are made from barrels of spirits of different
ages, the label may only state the age of the youngest spirits.
(2) Statements regarding age or maturity or similar statements of
neutral spirits (except for grain spirits as stated
[[Page 7591]]
in paragraph (c) of this section) are prohibited from appearing on any
label.
(f) Other age representations. (1) If a representation that is
similar to an age or maturity statement permitted under this section
appears on a label, a statement of age, in a manner that is conspicuous
and in characters at least half the type size of the representation
must also appear on each label that carries the representation, except
in the following cases:
(i) The use of the word ``old'' or another word denoting age as
part of the brand name of the product is not deemed to be an age
representation that requires a statement of age; and
(ii) Labels of whiskies and brandies (other than immature brandies,
pomace brandy, marc brandy, Pisco brandy, and grappa brandy) not
required to bear a statement of age, and rum and agave spirits aged for
not less than 4 years, may contain general inconspicuous age, maturity
or similar representations without the label having to bear an age
statement.
(2) Distillation dates (which may be an exact date or a year) may
appear on a label of spirits where the spirits are manufactured solely
through distillation. A distillation date may only appear if an
optional or mandatory age statement is used on the label and must
appear in the same field of vision as the age statement.
Subpart F--Restricted Labeling Statements.
Sec. 5.81 General.
(a) Application. The labeling practices, statements, and
representations in this subpart may be used on distilled spirits labels
only when used in compliance with this subpart. In addition, if any of
the practices, statements, or representations in this subpart are used
elsewhere on containers or in packaging, they must comply with the
requirements of this subpart. For purposes of this subpart:
(1) The term ``label'' includes all labels on distilled spirits
containers on which mandatory information may appear, as set forth in
Sec. 5.61(a), as well as any other label on the container.
(2) The term ``container'' includes all parts of the distilled
spirits container, including any part of a distilled spirits container
on which mandatory information may appear, as well as those parts of
the container on which information does not satisfy mandatory labeling
requirements, as set forth in Sec. 5.61(b).
(3) The term ``packaging'' includes any carton, case, carrier,
individual covering or other packaging of such containers used for sale
at retail, but does not include shipping cartons or cases that are not
intended to accompany the container to the consumer.
(b) Statement or representation. For purposes of the practices in
this subpart, the term ``statement or representation'' includes any
statement, design, device, or representation, and includes pictorial or
graphic designs or representations as well as written ones. The term
``statement or representation'' includes explicit and implicit
statements and representations.
Food Allergen Labeling
Sec. 5.82 Voluntary disclosure of major food allergens.
(a) Definitions. For purposes of this section, the following terms
or phrases have the meanings indicated.
(1) Major food allergen means any of the following:
(i) Milk, egg, fish (for example, bass, flounder, or cod),
Crustacean shellfish (for example, crab, lobster, or shrimp), tree nuts
(for example, almonds, pecans, or walnuts), wheat, peanuts, and
soybeans; or
(ii) A food ingredient that contains protein derived from a food
specified in paragraph (a)(1)(i) of this section, except:
(A) Any highly refined oil derived from a food specified in
paragraph (a)(1)(i) of this section and any ingredient derived from
such highly refined oil; or
(B) A food ingredient that is exempt from major food allergen
labeling requirements pursuant to a petition for exemption approved by
the Food and Drug Administration (FDA) under 21 U.S.C. 343(w)(6) or
pursuant to a notice submitted to FDA under 21 U.S.C. 343(w)(7),
provided that the food ingredient meets the terms or conditions, if
any, specified for that exemption.
(2) Name of the food source from which each major food allergen is
derived means the name of the food as listed in paragraph (a)(1)(i) of
this section, except that:
(i) In the case of a tree nut, it means the name of the specific
type of nut (for example, almonds, pecans, or walnuts); and
(ii) In the case of Crustacean shellfish, it means the name of the
species of Crustacean shellfish (for example, crab, lobster, or
shrimp); and
(iii) The names ``egg'' and ``peanuts,'' as well as the names of
the different types of tree nuts, may be expressed in either the
singular or plural form, and the name ``soy,'' ``soybean,'' or ``soya''
may be used instead of ``soybeans.''
(b) Voluntary labeling standards. Major food allergens used in the
production of a distilled spirits product may, on a voluntary basis, be
declared on any label affixed to the container. However, if any one
major food allergen is voluntarily declared, all major food allergens
used in production of the distilled spirits product, including major
food allergens used as fining or processing agents, must be declared,
except when covered by a petition for exemption approved by the
appropriate TTB officer under Sec. 5.83. The major food allergens
declaration must consist of the word ``Contains'' followed by a colon
and the name of the food source from which each major food allergen is
derived (for example, ``Contains: egg'').
Sec. 5.83 Petitions for exemption from major food allergen labeling.
(a) Submission of petition. Any person may petition the appropriate
TTB officer to exempt a particular product or class of products from
the labeling requirements of Sec. 5.82. The burden is on the
petitioner to provide scientific evidence (as well as the analytical
method used to produce the evidence) that demonstrates that the
finished product or class of products, as derived by the method
specified in the petition, either:
(1) Does not cause an allergic response that poses a risk to human
health; or
(2) Does not contain allergenic protein derived from one of the
foods identified in Sec. 5.82(a)(1)(i), even though a major food
allergen was used in production.
(b) Decision on petition. TTB will approve or deny a petition for
exemption submitted under paragraph (a) of this section in writing
within 180 days of receipt of the petition. If TTB does not provide a
written response to the petitioner within that 180-day period, the
petition will be deemed denied, unless an extension of time for
decision is mutually agreed upon by the appropriate TTB officer and the
petitioner. TTB may confer with the Food and Drug Administration (FDA)
on petitions for exemption, as appropriate and as FDA resources permit.
TTB may require the submission of product samples and other additional
information in support of a petition; however, unless required by TTB,
the submission of samples or additional information by the petitioner
after submission of the petition will be treated as the withdrawal of
the initial petition and the submission of a new petition. An approval
or denial under this section will constitute final agency action.
[[Page 7592]]
(c) Resubmission of a petition. After a petition for exemption is
denied under this section, the petitioner may resubmit the petition
along with supporting materials for reconsideration at any time. TTB
will treat this submission as a new petition.
(d) Availability of information--(1) General. TTB will promptly
post to its website (https://www.ttb.gov) all petitions received under
this section, as well as TTB's responses to those petitions. Any
information submitted in support of the petition that is not posted to
the TTB website will be available to the public pursuant to the Freedom
of Information Act, at 5 U.S.C. 552, except where a request for
confidential treatment is granted under paragraph (d)(2) of this
section.
(2) Requests for confidential treatment of business information. A
person who provides trade secrets or other commercial or financial
information in connection with a petition for exemption under this
section may request that TTB give confidential treatment to that
information. A failure to request confidential treatment at the time
the information in question is submitted to TTB will constitute a
waiver of confidential treatment. A request for confidential treatment
of information under this section must conform to the following
standards:
(i) The request must be in writing;
(ii) The request must clearly identify the information to be kept
confidential;
(iii) The request must relate to information that constitutes trade
secrets or other confidential commercial or financial information
regarding the business transactions of an interested person, the
disclosure of which would cause substantial harm to the competitive
position of that person;
(iv) The request must set forth the reasons why the information
should not be disclosed, including the reasons why the disclosure of
the information would prejudice the competitive position of the
interested person; and
(v) The request must be supported by a signed statement by the
interested person, or by an authorized officer or employee of that
person, certifying that the information in question is a trade secret
or other confidential commercial or financial information and that the
information is not already in the public domain.
Production Claims
Sec. 5.84 Use of the term ``organic.''
Use of the term ``organic'' is permitted if any such use complies
with United States Department of Agriculture (USDA) National Organic
Program rules (7 CFR part 205), as interpreted by the USDA.
Sec. 5.85 [Reserved]
Sec. 5.86 [Reserved]
Other Label Terms
Sec. 5.87 ``Barrel Proof'' and similar terms.
(a) The term ``barrel proof'' or ``cask strength'' may be used to
refer to distilled spirits stored in wood barrels only when the
bottling proof is not more than two degrees lower than the proof of the
spirits when the spirits are dumped from the barrels.
(b) The term ``original proof,'' ``original barrel proof,''
``original cask strength,'' or ``entry proof'' may be used only if the
distilled spirits were stored in wooden barrels and the proof of the
spirits entered into the barrel and the proof of the bottled spirits
are the same.
Sec. 5.88 Bottled in bond.
(a) The term ``bond,'' ``bonded,'' ``bottled in bond,'' or ``aged
in bond,'' or phrases containing these or synonymous terms, may be used
(including as part of the brand name) only if the distilled spirits
are:
(1) Composed of the same kind (type, if one is applicable to the
spirits, otherwise class) of spirits distilled from the same class of
materials;
(2) Distilled in the same distilling season (as defined in Sec.
5.1) by the same distiller at the same distillery.
(3) Stored for at least 4 years in wooden containers wherein the
spirits have been in contact with the wood surface, except for vodka,
which must be stored for at least 4 years in wooden containers coated
or lined with paraffin or other substance which will preclude contact
of the spirits with the wood surface, and except for gin, which must be
stored in paraffin-lined or unlined wooden containers for at least 4
years;
(4) Unaltered from their original condition or character by the
addition or subtraction of any substance other than by filtration,
chill proofing, or other physical treatments (which do not involve the
addition of any substance which will remain in the finished product or
result in a change in class or type);
(5) Reduced in proof by the addition of only pure water to 50
percent alcohol by volume (100 degrees of proof); and
(6) Bottled at 50 percent alcohol by volume (100 degrees of proof).
(b) Imported spirits labeled as ``bottled in bond'' or other
synonymous term described above must be manufactured in accordance with
paragraphs (a)(1) through (6) of this section and may only be so
labeled if the laws and regulations of the country in which the spirits
are manufactured authorize the bottling of spirits in bond and require
or specifically authorize such spirits to be so labeled. The ``bottled
in bond'' or synonymous statement must be immediately followed, in the
same font and type size, by the name of the country under whose laws
and regulations such distilled spirits were so bottled.
(c) Domestically manufactured spirits labeled as ``bottled in
bond'' or with some other synonymous statement must bear the real name
of the distillery or the trade name under which the distiller distilled
and warehoused the spirits, and the number of the distilled spirits
plant in which distilled, and the number of the distilled spirits plant
in which bottled. The label may also bear the name or trade name of the
bottler.
Sec. 5.89 Multiple distillation claims.
(a) Truthful statements about the number of distillations, such as
``double distilled,'' ``distilled three times,'' or similar terms to
convey multiple distillations, may be used if they are truthful
statements of fact. For the purposes of this section only, the term
``distillation'' means a single run through a pot still or a single run
through a column of a column (reflux) still. For example, if a column
still has three separate columns, one complete additional run through
the system would constitute three additional distillations.
(b) The number of distillations may be understated but may not be
overstated.
Sec. 5.90 Terms related to Scotland.
(a) The words ``Scotch,'' ``Scots,'' ``Highland,'' or
``Highlands,'' and similar words connoting, indicating, or commonly
associated with Scotland, may be used to designate only distilled
spirits wholly manufactured in Scotland, except that the term ``Scotch
whisky'' may appear in the designation for a flavored spirit
(``Flavored Scotch Whisky'') or in a truthful statement of composition
(``Scotch whisky with natural flavors'') where the base distilled
spirit meets the requirements for a Scotch whisky designation,
regardless of where the finished product is manufactured.
(b) In accordance with Sec. 5.127, statements relating to
government supervision may appear on Scotch whisky containers only if
such labeling statements are required or specifically authorized by the
applicable regulations of the United Kingdom.
[[Page 7593]]
Sec. 5.91 Use of the term ``pure.''
Distilled spirits labels, containers, or packaging may not bear the
word ``pure'' unless it:
(a) Refers to a particular ingredient used in the production of the
distilled spirits, and is a truthful representation about that
ingredient;
(b) Is part of the bona fide name of a permittee or retailer for
which the distilled spirits are bottled; or
(c) Is part of the bona fide name of the permittee that bottled the
distilled spirits.
Subpart G--Prohibited Labeling Practices
Sec. 5.101 General.
(a) Application. The prohibitions set forth in this subpart apply
to any distilled spirits label, container, or packaging. For purposes
of this subpart:
(1) The term ``label'' includes all labels on distilled spirits
containers on which mandatory information may appear, as set forth in
Sec. 5.61(a), as well as any other label on the container;
(2) The term ``container'' includes all parts of the distilled
spirits container, including any part of a distilled spirits container
on which mandatory information may appear, as well as those parts of
the container on which information does not satisfy mandatory labeling
requirements, as set forth in Sec. 5.61(b); and
(3) The term ``packaging'' includes any carton, case, carrier,
individual covering or other packaging of such containers used for sale
at retail, but does not include shipping cartons or cases that are not
intended to accompany the container to the consumer.
(b) Statement or representation. For purposes of the practices in
this subpart, the term ``statement or representation'' includes any
statement, design, device, or representation, and includes pictorial or
graphic designs or representations as well as written ones. The term
``statement or representation'' includes explicit and implicit
statements and representations.
Sec. 5.102 False or untrue statements.
Distilled spirits labels, containers, or packaging may not contain
any statement or representation that is false or untrue in any
particular.
Sec. 5.103 Obscene or indecent depictions.
Distilled spirits labels, containers, or packaging may not contain
any statement, design, device, picture, or representation that is
obscene or indecent.
Subpart H--Labeling Practices That Are Prohibited If They Are
Misleading
Sec. 5.121 General.
(a) Application. The labeling practices that are prohibited if
misleading set forth in this subpart apply to any distilled spirits
label, container, or packaging. For purposes of this subpart:
(1) The term ``label'' includes all labels on distilled spirits
containers on which mandatory information may appear, as set forth in
Sec. 5.61(a), as well as any other label on the container;
(2) The term ``container'' includes all parts of the distilled
spirits container, including any part of a distilled spirits container
on which mandatory information may appear, as well as those parts of
the container on which information does not satisfy mandatory labeling
requirements, as set forth in Sec. 5.61(b); and
(3) The term ``packaging'' includes any carton, case, carrier,
individual covering or other packaging of such containers used for sale
at retail, but does not include shipping cartons or cases that are not
intended to accompany the container to the consumer.
(b) Statement or representation. For purposes of this subpart, the
term ``statement or representation'' includes any statement, design,
device, or representation, and includes pictorial or graphic designs or
representations as well as written ones. The term ``statement or
representation'' includes explicit and implicit statements and
representations.
Sec. 5.122 Misleading statements or representations.
(a) General prohibition. Distilled spirits labels, containers, or
packaging may not contain any statement or representation, irrespective
of falsity, that is misleading to consumers as to the age, origin,
identity, or other characteristics of the distilled spirits, or with
regard to any other material factor.
(b) Ways in which statements or representations may be found to be
misleading. (1) A statement or representation is prohibited,
irrespective of falsity, if it directly creates a misleading
impression, or if it does so indirectly through ambiguity, omission,
inference, or by the addition of irrelevant, scientific, or technical
matter. For example, an otherwise truthful statement may be misleading
because of the omission of material information, the disclosure of
which is necessary to prevent the statement from being misleading.
(2) All claims, whether implicit or explicit, must have a
reasonable basis in fact. Any claim on distilled spirits labels,
containers, or packaging that does not have a reasonable basis in fact,
or cannot be adequately substantiated upon the request of the
appropriate TTB officer, is considered misleading.
Sec. 5.123 Guarantees.
Distilled spirits labels, containers, or packaging may not contain
any statement relating to guarantees if the appropriate TTB officer
finds it is likely to mislead the consumer. However, money-back
guarantees are not prohibited.
Sec. 5.124 Disparaging statements.
(a) General. Distilled spirits labels, containers, or packaging may
not contain any false or misleading statement that explicitly or
implicitly disparages a competitor's product.
(b) Truthful and accurate comparisons. This section does not
prevent truthful and accurate comparisons between products (such as,
``Our liqueur contains more strawberries than Brand X'') or statements
of opinion (such as, ``We think our rum tastes better than any other
distilled spirits on the market'').
Sec. 5.125 Tests or analyses.
Distilled spirits labels, containers, or packaging may not contain
any statement or representation of or relating to analyses, standards,
or tests, whether or not it is true, that is likely to mislead the
consumer. An example of such a misleading statement is ``tested and
approved by our research laboratories'' if the testing and approval
does not in fact have any significance.
Sec. 5.126 Depictions of government symbols.
Representations of the armed forces and flags. Distilled spirits
labels, containers, or packaging may not show an image of any
government's flag or any representation related to the armed forces of
the United States if the representation, standing alone or considered
together with any additional language or symbols on the label, creates
a false or misleading impression that the product was endorsed by, made
by, used by, or made under the supervision of, the government
represented by that flag or by the armed forces of the United States.
This section does not prohibit the use of a flag as part of a claim of
American origin or another country of origin.
[[Page 7594]]
Sec. 5.127 [Reserved]
Sec. 5.128 [Reserved]
Sec. 5.129 Health-related statements.
(a) Definitions. When used in this section, the following terms
have the meaning indicated:
(1) Health-related statement means any statement related to health
(other than the warning statement required under part 16 of this
chapter) and includes statements of a curative or therapeutic nature
that, expressly or by implication, suggest a relationship between the
consumption of alcohol, distilled spirits, or any substance found
within the distilled spirits product, and health benefits or effects on
health. The term includes both specific health claims and general
references to alleged health benefits or effects on health associated
with the consumption of alcohol, distilled spirits, or any substance
found within the distilled spirits, as well as health-related
directional statements. The term also includes statements and claims
that imply that a physical or psychological sensation results from
consuming the distilled spirits, as well as statements and claims of
nutritional value (for example, statements of vitamin content).
(2) Specific health claim means a type of health-related statement
that, expressly or by implication, characterizes the relationship of
distilled spirits, alcohol, or any substance found within the distilled
spirits, to a disease or health-related condition. Implied specific
health claims include statements, symbols, vignettes, or other forms of
communication that suggest, within the context in which they are
presented, that a relationship exists between alcohol, distilled
spirits, or any substance found within the distilled spirits, and a
disease or health-related condition.
(3) Health-related directional statement means a type of health-
related statement that directs or refers consumers to a third party or
other source for information regarding the effects on health of
distilled spirits or alcohol consumption.
(b) Rules for labeling--(1) Health-related statements. In general,
distilled spirits may not contain any health-related statement that is
untrue in any particular or tends to create a misleading impression as
to the effects on health of alcohol consumption. TTB will evaluate such
statements on a case-by-case basis and may require as part of the
health-related statement a disclaimer or some other qualifying
statement to dispel any misleading impression conveyed by the health-
related statement.
(2) Specific health claims. (i) TTB will consult with the Food and
Drug Administration (FDA), as needed, on the use of a specific health
claim on the distilled spirits. If FDA determines that the use of such
a labeling claim is a drug claim that is not in compliance with the
requirements of the Federal Food, Drug, and Cosmetic Act, TTB will not
approve the use of that specific health claim on the distilled spirits.
(ii) TTB will approve the use of a specific health claim on a
distilled spirits label only if the claim is truthful and adequately
substantiated by scientific or medical evidence; is sufficiently
detailed and qualified with respect to the categories of individuals to
whom the claim applies; adequately discloses the health risks
associated with both moderate and heavier levels of alcohol
consumption; and outlines the categories of individuals for whom any
levels of alcohol consumption may cause health risks. This information
must appear as part of the specific health claim.
(3) Health-related directional statements. A health-related
directional statement is presumed misleading unless it:
(i) Directs consumers in a neutral or other non-misleading manner
to a third party or other source for balanced information regarding the
effects on health of distilled spirits or alcohol consumption; and
(ii)(A) Includes as part of the health-related directional
statement the following disclaimer: ``This statement should not
encourage you to drink or to increase your alcohol consumption for
health reasons;'' or
(B) Includes as part of the health-related directional statement
some other qualifying statement that the appropriate TTB officer finds
is sufficient to dispel any misleading impression conveyed by the
health-related directional statement.
Sec. 5.130 Appearance of endorsement.
(a) General. Distilled spirits labels, containers, or packaging may
not include the name, or the simulation or abbreviation of the name, of
any living individual of public prominence, or an existing private or
public organization, or any graphic, pictorial, or emblematic
representation of the individual or organization, if its use is likely
to lead a consumer to falsely believe that the product has been
endorsed, made, or used by, or produced for, or under the supervision
of, or in accordance with the specifications of, such individual or
organization. This section does not prohibit the use of such names
where the individual or organization has provided authorization for
their use.
(b) Disclaimers. Statements or other representations do not violate
this section if, taken as a whole, they create no misleading impression
as to an implied endorsement either because of the context in which
they are presented or because of the use of an adequate disclaimer.
(c) Exception. This section does not apply to the use of the name
of any person engaged in business as a distiller, rectifier
(processor), blender, or other producer, or as an importer, wholesaler,
retailer, bottler, or warehouseman of distilled spirits. This section
also does not apply to the use by any person of a trade or brand name
that is the name of any living individual of public prominence or
existing private or public organization, provided such trade or brand
name was used by the industry member or its predecessors in interest
prior to August 29, 1935.
Subpart I--Standards of Identity for Distilled Spirits
Sec. 5.141 The standards of identity in general.
(a) General. Distilled spirits are divided, for labeling purposes,
into classes, which are further divided into specific types. As set
forth in Sec. 5.63, a distilled spirits product label must bear the
appropriate class, type or other designation. The standards that define
the classes and types are known as the ``standards of identity.'' The
classes and types of distilled spirits set forth in this subpart apply
only to distilled spirits for beverage or other nonindustrial purposes.
(b) Rules. (1) Unless otherwise specified, when a standard of
identity states that a mash is of a particular ingredient (such as
``fermented mash of grain''), the mash must be made entirely of that
ingredient without the addition of other fermentable ingredients.
(2) Some distilled spirits products may conform to the standards of
identity of more than one class. Such products may be designated with
any single class designation defined in this subpart to which the
products conform.
(c) Designating with both class and type. If a product is
designated with both the class and the type, the type designation must
be as conspicuous as the class designation, and must appear in the same
field of vision.
(d) Words in a designation. All words in a designation must be
similarly conspicuous and must appear together.
[[Page 7595]]
Sec. 5.142 Neutral spirits or alcohol.
(a) The class neutral spirits. ``Neutral spirits'' or ``alcohol''
are distilled spirits distilled from any suitable material at or above
95 percent alcohol by volume (190[deg] proof), and, if bottled, bottled
at not less than 40 percent alcohol by volume (80[deg] proof). Neutral
spirits other than the type ``grain spirits'' may be designated as
``neutral spirits'' or ``alcohol'' on a label. Neutral spirits (other
than the type ``grain spirits'') may not be aged in wood barrels at any
time.
(b) Types. The following chart lists the types of neutral spirits
and the rules that apply to the type designation.
------------------------------------------------------------------------
Type designation Standards
------------------------------------------------------------------------
(1) Vodka............................ Neutral spirits which may be
treated with up to two grams per
liter of sugar and up to one
gram per liter of citric acid.
Products to be labeled as vodka
may not be aged or stored in
wood barrels at any time except
when stored in paraffin-lined
wood barrels and labeled as
bottled in bond pursuant to Sec.
5.88. Vodka treated and
filtered with not less than one
ounce of activated carbon or
activated charcoal per 100 wine
gallons of spirits may be
labeled as ``charcoal
filtered.'' Addition of any
other flavoring or blending
materials changes the
classification to flavored vodka
or to a distilled spirits
specialty product, as
appropriate. Vodka must be
designated on the label as
``neutral spirits,''
``alcohol,'' or ``vodka''.
(2) Grain spirits.................... Neutral spirits distilled from a
fermented mash of grain and
stored in oak barrels. ``Grain
spirits'' must be designated as
such on the label. Grain spirits
may not be designated as
``neutral spirits'' or
``alcohol'' on the label.
------------------------------------------------------------------------
Sec. 5.143 Whisky.
(a) The class whisky. ``Whisky'' or ``whiskey'' is distilled
spirits that is an alcoholic distillate from a fermented mash of any
grain distilled at less than 95 percent alcohol by volume (190[deg]
proof) having the taste, aroma, and characteristics generally
attributed to whisky, stored in oak barrels (except that corn whisky
need not be so stored), and bottled at not less than 40 percent alcohol
by volume (80[deg] proof), and also includes mixtures of such
distillates for which no specific standards of identity are prescribed.
(b) Label designations. The word whisky may be spelled as either
``whisky'' or ``whiskey''. The place, State, or region where the whisky
was distilled may appear as part of the designation on the label if the
distillation and any required aging took place in that location (e.g.,
``New York Bourbon Whisky'' must be distilled and aged in the State of
New York); however, blending and bottling need not have taken place in
the same place, State, or region. However, if any whisky is made
partially from whisky distilled in a country other than that indicated
by the type designation, the label must indicate the percentage of such
whisky and the country where that whisky was distilled. Additionally,
the label of whisky that does not meet one of the standards for
specific types of whisky and that is comprised of components distilled
in more than one country must contain a statement of composition
indicating the country of origin of each component (such as ``Whisky--
50% from Japan, 50% from the United States''). The word ``bourbon'' may
not be used to describe any whisky or whisky-based distilled spirits
not distilled and aged in the United States. The whiskies defined in
paragraphs (c)(2) through (6) and (10) through (14) of this section are
distinctive products of the United States and must have the country of
origin stated immediately adjacent to the type designation if it is
distilled outside of the United States, or the whisky designation must
be proceeded by the term ``American type'' if the country of origin
appears elsewhere on the label. For example, ``Brazilian Corn Whisky,''
``Rye Whisky distilled in Sweden,'' and ``Blended Whisky--Product of
Japan'' are statements that meet this country of origin requirement.
``Light whisky'', ``Blended light whisky'', and ``Whisky distilled from
bourbon (rye, wheat, malt, rye malt, or other named grain) mash'' may
only be produced in the United States.
(c) Types of whisky. The following tables set out the designations
for whisky. Table 1 sets forth the standards for whisky that are
defined based on production, storage, and processing standards, while
Table 2 sets forth rules for the types of whisky that are defined as
distinctive products of certain foreign countries. For the whiskies
listed in Table 1, a domestic whisky may be labeled with the
designation listed, when it complies with the production standards in
the subsequent columns. The ``source'' column indicates the source of
the grain mash used to make the whisky. The ``distillation proof''
indicates the allowable distillation proof for that type. The
``storage'' column indicates the type of packages (barrels) in which
the spirits must be stored and limits for the proof of the spirits when
entering the packages. The ``neutral spirits permitted'' column
indicates whether neutral spirits may be used in the product in their
original state (and not as vehicles for flavoring materials), and if
so, how much may be used. The ``harmless coloring, flavoring, blending
materials permitted'' column indicates whether harmless coloring,
flavoring, or blending materials, other than neutral spirits in their
original form, described in Sec. 5.142, may be used in the product.
The use of the word ``straight'' is a further designation of a type,
and is optional.
Table 1 to Paragraph (c)--Types of Whisky and Production, Storage, and Processing Standards
--------------------------------------------------------------------------------------------------------------------------------------------------------
Allowable coloring,
Type Source Distillation proof Storage Neutral spirits flavoring, blending
permitted materials permitted
--------------------------------------------------------------------------------------------------------------------------------------------------------
(1) Whisky, which may be used as Fermented grain mash.. Less than 190[deg].... Oak barrels with no No................... Yes.
the designation for any of the minimum time
type designations under the class requirement.
``whisky,'' or may be used as the
designation if the whisky does not
meet one of the type designations
but satisfies the class
designation.
[[Page 7596]]
(2) Bourbon Whisky, Rye Whisky, Fermented mash of not 160[deg] or less...... Charred new oak No................... Yes, except for
Wheat Whisky, Malt Whisky, Rye less than 51%, barrels at 125[deg] bourbon whisky.
Malt Whisky, or [name of other respectively: Corn, or less.
grain] Whisky. Rye, Wheat, Malted
Barley, Malted Rye
Grain, [Other grain].
(3) Corn Whisky. (Whisky conforming Fermented mash of not 160[deg] or less...... Required only if age No................... Yes.
to this standard must be less than 80% corn. is claimed on the
designated as ``corn whisky.''). label. If stored,
must be stored at
125[deg] or less in
used or uncharred
new oak barrels.
(4) Straight Whisky................ Fermented mash of less 160[deg] or less...... Charred new oak No................... No.
than 51% corn, rye, barrels at 125[deg]
wheat, malted barley, or less for a
malted rye [or other] minimum of 2 years.
grain. (Includes
mixtures of straight
whiskies made in the
same state.).
(5) Straight Bourbon Whisky, Fermented mash of not 160[deg] or less...... Charred new oak No................... No.
Straight Rye Whisky, Straight less than 51%, barrels at 125[deg]
Wheat Whisky, Straight Malt respectively: Corn, or less for a
Whisky, or Straight Rye Malt Rye, Wheat, Malted minimum of 2 years.
Whisky. Barley, Malted Rye
Grain.
(6) Straight Corn Whisky........... Fermented mash of not 160[deg] or less...... 125[deg] or less in No................... No.
less than 80% corn. used or uncharred
new oak barrels for
a minimum of 2 years.
(7) Whisky distilled from Bourbon/ Fermented mash of not 160[deg] or less...... Used oak barrels..... No................... Yes.
Rye/Wheat/Malt/Rye Malt/[Name of less than 51%,
other grain] mash. respectively: Corn,
Rye, Wheat, Malted
Barley, Malted Rye
Grain, [Other grain].
(8) Light Whisky................... Fermented grain mash.. More than 160[deg].... Used or uncharred new No................... Yes.
oak barrels.
(9) Blended Light Whisky (Light Light whisky blended Blend................. Will contain a blend. No................... Yes.
Whisky--a blend). with less than 20%
Straight Whisky on a
proof gallon basis.
(10) Blended Whisky (Whisky--a At least 20% Straight 160[deg] or less...... Will contain a blend Maximum of 80% on a Yes.
blend). Whisky on a proof of spirits, some proof gallon basis.
gallon basis plus stored and some not
Whisky or Neutral stored.
Spirits alone or in
combination.
(11) Blended Bourbon Whisky, At least 51% on a Blend................. Will contain a blend Maximum of 49% on a Yes.
Blended Rye Whisky, Blended Wheat proof gallon basis of spirits, some proof gallon basis.
Whisky, Blended Malt Whisky, of: Straight Bourbon, stored and some not
Blended Rye Malt Whisky, Blended Rye, Wheat, Malt, Rye stored.
Corn Whisky (or Whisky--a blend). Malt, or Corn Whisky;
the rest comprised of
Whisky or Neutral
Spirits alone or in
combination.
(12) Blend of Straight Whiskies Mixture of Straight 160[deg] or less...... Will contain a blend No, except as part of Yes.
(Blended Straight Whiskies). Whiskies that does of spirits which a flavor.
not conform to were aged at least 2
``Straight Whisky''. years.
(13) Blended Straight Bourbon Mixture of Straight 160[deg] or less...... Will contain a blend No, except as part of Yes.
Whiskies, Blended Straight Rye Whiskies of the same of spirits which a flavor.
Whiskies, Blended Straight Wheat named type produced were aged at least 2
Whiskies, Blended Straight Malt in different states years.
Whiskies, Blended Straight Rye or produced in the
Malt Whiskies, Blended Straight same state but
Corn Whiskies, (or a blend of contains coloring,
straight whiskies). flavoring or blending
material.
(14) Spirit Whisky................. Mixture of Neutral Blend................. Will contain a blend Maximum of 95% on a Yes.
Spirits and 5% or of spirits, some proof gallon basis.
more on a proof stored and some not
gallon basis of: stored.
Whisky or Straight
Whisky or a
combination of both.
The Straight Whisky
component must be
less than 20% on a
proof gallon basis.
--------------------------------------------------------------------------------------------------------------------------------------------------------
[[Page 7597]]
Table 2 to Paragraph (c)--Types of Whisky That Are Distinctive Products
------------------------------------------------------------------------
------------------------------------------------------------------------
(16) Scotch whisky................... Whisky which is a distinctive
product of Scotland,
manufactured in Scotland in
compliance with the laws of the
United Kingdom regulating the
manufacture of Scotch whisky for
consumption in the United
Kingdom: Provided, That if such
product is a mixture of
whiskies, such mixture is
``blended Scotch whisky'' or
``Scotch whisky--a blend''.
(17) Irish whisky.................... Whisky which is a distinctive
product of Ireland, manufactured
either in the Republic of
Ireland or in Northern Ireland,
in compliance with their laws
regulating the manufacture of
Irish whisky for home
consumption: Provided, That if
such product is a mixture of
whiskies, such mixture is
``blended Irish whisky'' or
``Irish whisky--a blend''.
(18) Canadian whisky................. Whisky which is a distinctive
product of Canada, manufactured
in Canada in compliance with the
laws of Canada regulating the
manufacture of Canadian whisky
for consumption in Canada:
Provided, That if such product
is a mixture of whiskies, such
mixture is ``blended Canadian
whisky'' or ``Canadian whisky--a
blend''.
------------------------------------------------------------------------
Sec. 5.144 Gin.
(a) The class gin. ``Gin'' is distilled spirits made by original
distillation from mash, or by redistillation of distilled spirits, or
by mixing neutral spirits, with or over juniper berries and,
optionally, with or over other aromatics, or with or over extracts
derived from infusions, percolations, or maceration of such materials,
and includes mixtures of gin and neutral spirits. It must derive its
main characteristic flavor from juniper berries and be bottled at not
less than 40 percent alcohol by volume (80[deg] proof). Gin may be aged
in oak containers.
(b) Distilled gin. Gin made exclusively by original distillation or
by redistillation may be further designated as ``distilled,'' ``Dry,''
``London,'' ``Old Tom'' or some combination of these four terms.
Sec. 5.145 Brandy.
(a) The class brandy. ``Brandy'' is spirits that are distilled from
the fermented juice, mash, or wine of fruit, or from the residue
thereof, distilled at less than 95 percent alcohol by volume (190[deg]
proof) having the taste, aroma, and characteristics generally
attributed to the product, and bottled at not less than 40 percent
alcohol by volume (80[deg] proof).
(b) Label designations. Brandy conforming to one of the type
designations must be designated with the type name or specific
designation specified in the requirements for that type. The term
``brandy'' without further qualification (such as ``peach'' or
``marc'') may only be used as a designation on labels of grape brandy
as defined in paragraph (c)(1) of this section. Brandy conforming to
one of the type designations defined in paragraphs (c)(1) through (12)
of this section must be designated on the label with the type name
unless a specific designation is included in the requirements for that
type. Brandy, or mixtures thereof, not conforming to any of the types
defined in this section must be designated on the label as ``brandy''
followed immediately by a truthful and adequate statement of
composition.
(c) Types. Paragraphs (c)(1) through (12) of this section set out
the types of brandy and the standards for each type.
------------------------------------------------------------------------
Type Standards
------------------------------------------------------------------------
(1) Fruit brandy..................... Brandy distilled solely from the
fermented juice or mash of
whole, sound, ripe fruit, or
from standard grape or other
fruit wine, with or without the
addition of not more than 20
percent by weight of the pomace
of such juice or wine, or 30
percent by volume of the lees of
such wine, or both (calculated
prior to the addition of water
to facilitate fermentation or
distillation). Fruit brandy
includes mixtures of such brandy
with not more than 30 percent
(calculated on a proof gallon
basis) of lees brandy. Fruit
brandy derived solely from
grapes and stored for at least 2
years in oak containers must be
designated ``grape brandy'' or
``brandy.'' Grape brandy that
has been stored in oak barrels
for fewer than 2 years must be
designated ``immature grape
brandy'' or ``immature brandy.''
Fruit brandy, other than grape
brandy, derived from one variety
of fruit, must be designated by
the word ``brandy'' qualified by
the name of such fruit (for
example, ``peach brandy''),
except that ``apple brandy'' may
be designated ``applejack,''
``plum brandy'' may be
designated ``Slivovitz,'' and
``cherry brandy'' may be
designated ``Kirschwasser.''
Fruit brandy derived from more
than one variety of fruit must
be designated as ``fruit
brandy'' qualified by a truthful
and adequate statement of
composition, for example ``Fruit
brandy distilled from
strawberries and blueberries.''
(2) Cognac or ``Cognac (grape) Grape brandy distilled
brandy''. exclusively in the Cognac region
of France, which is entitled to
be so designated by the laws and
regulations of the French
government.
(3) Armagnac......................... Grape brandy distilled
exclusively in France in
accordance with the laws and
regulations of France regulating
the manufacture of Armagnac for
consumption in France.
(4) Brandy de Jerez.................. Grape brandy distilled
exclusively in Spain in
accordance with the laws and
regulations of Spain regulating
the manufacture of Brandy de
Jerez for consumption in Spain.
(5) Calvados......................... Apple brandy distilled
exclusively in France in
accordance with the laws and
regulations of France regulating
the manufacture of Calvados for
consumption in France.
(6) Pisco............................ Grape brandy distilled in Peru or
Chile in accordance with the
laws and regulations of the
country of manufacture of Pisco
for consumption in the country
of manufacture, including:
(i) ``Pisco Per[uacute]'' (or
``Pisco Peru''), which is Pisco
manufactured in Peru in
accordance with the laws and
regulations of Peru governing
the manufacture of Pisco for
consumption in that country; and
(ii) ``Pisco Chileno'' (or
``Chilean Pisco''), which is
Pisco manufactured in Chile in
accordance with the laws and
regulations of Chile governing
the manufacture of Pisco for
consumption in that country.
(7) Dried fruit brandy............... Brandy that conforms to the
standard for fruit brandy except
that it has been derived from
sound, dried fruit, or from the
standard wine of such fruit.
Brandy derived from raisins, or
from raisin wine, must be
designated ``raisin brandy.''
Dried fruit brandy, other than
raisin brandy, must be
designated by the word
``brandy'' qualified by the name
of the dried fruit(s) from which
made preceded by the word
``dried'', for example, ``dried
apricot brandy.''
[[Page 7598]]
(8) Lees brandy...................... Brandy distilled from the lees of
standard grape or other fruit
wine, and such brandy derived
solely from grapes must be
designated ``grape lees brandy''
or ``lees brandy.'' Lees brandy
derived from fruit other than
grapes must be designated as
``lees brandy,'' qualified by
the name of the fruit from which
such lees are derived, for
example, ``cherry lees brandy.''
(9) Pomace brandy or Marc brandy..... Brandy distilled from the skin
and pulp of sound, ripe grapes
or other fruit, after the
withdrawal of the juice or wine
therefrom. Such brandy derived
solely from grape components
must be designated ``grape
pomace brandy,'' ``grape marc
brandy'', ``pomace brandy,'' or
``mark brandy.'' Grape pomace
brandy may alternatively be
designated as ``grappa'' or
``grappa brandy.'' Pomace or
marc brandy derived from fruit
other than grapes must be
designated as ``pomace brandy''
or ``marc brandy'' qualified by
the name of the fruit from which
derived, for example, ``apple
pomace brandy'' or ``pear marc
brandy.''
(10) Residue brandy.................. Brandy distilled wholly or in
part from the fermented residue
of fruit or wine. Such brandy
derived solely from grapes must
be designated ``grape residue
brandy,'' or ``residue brandy.''
Residue brandy, derived from
fruit other than grapes, must be
designated as ``residue brandy''
qualified by the name of the
fruit from which derived, for
example, ``orange residue
brandy.'' Brandy distilled
wholly or in part from residue
materials which conforms to any
of the standards set forth in
paragraphs (b)(1) and (7)
through (9) of this section may,
regardless of such fact, be
designated ``residue brandy'',
but the use of such designation
shall be conclusive, precluding
any later change of designation.
(11) Neutral brandy.................. Any type of brandy distilled at
more than 85% alcohol by volume
(170[deg] proof) but less than
95% alcohol by volume. Such
brandy derived solely from
grapes must be designated
``grape neutral brandy,'' or
``neutral brandy.'' Other
neutral brandies, must be
designated in accordance with
the rules for those types of
brandy, and be qualified by the
word ``neutral''; for example,
``neutral citrus residue
brandy''.
(12) Substandard brandy.............. Any brandy:
(i) Distilled from fermented
juice, mash, or wine having a
volatile acidity, calculated as
acetic acid and exclusive of
sulfur dioxide, in excess of
0.20 gram per 100 cubic
centimeters (20 degrees
Celsius); measurements of
volatile acidity must be
calculated exclusive of water
added to facilitate
distillation.
(ii) Distilled from unsound,
moldy, diseased, or decomposed
juice, mash, wine, lees, pomace,
or residue, or which shows in
the finished product any taste,
aroma, or characteristic
associated with products
distilled from such material.
(iii) Such brandy derived solely
from grapes must be designated
``substandard grape brandy,'' or
``substandard brandy.'' Other
substandard brandies must be
designated in accordance with
the rules for those types of
brandy, and be qualified by the
word ``substandard''; for
example, ``substandard fig
brandy''.
------------------------------------------------------------------------
Sec. 5.146 Blended applejack.
(a) The class blended applejack. ``Blended applejack'' is a mixture
containing at least 20 percent on a proof gallon basis of apple brandy
(applejack) that has been stored in oak barrels for not less than 2
years, and not more than 80 percent of neutral spirits on a proof
gallon basis. Blended applejack must be bottled at not less than 40
percent alcohol by volume (80[deg] proof).
(b) Label designation. The label designation for blended applejack
may be ``blended applejack'' or ``applejack-a blend.''
Sec. 5.147 Rum.
(a) The class rum. ``Rum'' is distilled spirits that is distilled
from the fermented juice of sugar cane, sugar cane syrup, sugar cane
molasses, or other sugar cane by-products at less than 95 percent
alcohol by volume (190[deg] proof) having the taste, aroma, and
characteristics generally attributed to rum, and bottled at not less
than 40 percent alcohol by volume (80[deg] proof); and also includes
mixtures solely of such spirits. All rum may be designated as ``rum''
on the label, even if it also meets the standards for a specific type
of rum.
(b) Types. Paragraph (b)(1) of this section describes a specific
type of rum and the standards for that type.
------------------------------------------------------------------------
Type Standards
------------------------------------------------------------------------
(1) Cacha[ccedil]a................... Rum that is a distinctive product
of Brazil, manufactured in
Brazil in compliance with the
laws of Brazil regulating the
manufacture of Cacha[ccedil]a
for consumption in that country.
The word ``Cacha[ccedil]a'' may
be spelled with or without the
diacritic mark (i.e.,
``Cacha[ccedil]a'' or
``Cachaca''). Cacha[ccedil]a may
be designated as
``Cacha[ccedil]a'' or ``rum'' on
labels.
(2) [Reserved]....................... .................................
------------------------------------------------------------------------
Sec. 5.148 Agave spirits.
(a) The class agave spirits. ``Agave spirits'' are distilled from a
fermented mash, of which at least 51 percent is derived from plant
species in the genus Agave and up to 49 percent is derived from other
sugars. Agave spirits must be distilled at less than 95 percent alcohol
by volume (190[deg] proof) and bottled at or above 40 percent alcohol
by volume (80[deg] proof). Agave spirits may be stored in wood barrels.
Agave spirits may contain added flavoring or coloring materials as
authorized by Sec. 5.155. This class also includes mixtures of agave
spirits. Agave spirits that meet the standard of identity for
``Tequila'' or ``Mezcal'' may be designated as ``agave spirits,'' or as
``Tequila'' or ``Mezcal'', as applicable.
(b) Types. Paragraphs (b)(1) and (2) of this section describe the
types of agave spirits and the rules for each type.
[[Page 7599]]
------------------------------------------------------------------------
Type Standards
------------------------------------------------------------------------
(1) Tequila.......................... An agave spirit that is a
distinctive product of Mexico.
Tequila must be made in Mexico,
in compliance with the laws and
regulations of Mexico governing
the manufacture of Tequila for
consumption in that country.
(2) Mezcal........................... An agave spirit that is a
distinctive product of Mexico.
Mezcal must be made in Mexico,
in compliance with the laws and
regulations of Mexico governing
the manufacture of Mezcal for
consumption in that country.
------------------------------------------------------------------------
Sec. 5.149 [Reserved]
Sec. 5.150 Cordials and liqueurs.
(a) The class cordials and liqueurs. Cordials and liqueurs are
flavored distilled spirits that are made by mixing or redistilling
distilled spirits with or over fruits, flowers, plants, or pure juices
therefrom, or other natural flavoring materials, or with extracts
derived from infusions, percolation, or maceration of such materials,
and containing sugar (such as sucrose, fructose, dextrose, or levulose)
in an amount of not less than 2.5 percent by weight of the finished
product. Designations on labels may be ``Cordial'' or ``Liqueur,'' or,
in the alternative, may be one of the type designations below. Cordials
and liqueurs may not be designated as ``straight''. The designation of
a cordial or liqueur may include the word ``dry'' if sugar is less than
10 percent by weight of the finished product.
(b) Types. Paragraph (b)(1) through (12) of this section list
definitions and standards for optional type designations.
------------------------------------------------------------------------
Type Rule
------------------------------------------------------------------------
(1) Sloe gin......................... A cordial or liqueur with the
main characteristic flavor
derived from sloe berries.
(2) Rye liqueur, bourbon liqueur (or Liqueurs, bottled at not less
rye cordial or bourbon cordial). than 30 percent alcohol by
volume, in which not less than
51 percent, on a proof gallon
basis, of the distilled spirits
used are, respectively, rye or
bourbon whisky, straight rye or
straight bourbon whisky, or
whisky distilled from a rye or
bourbon mash, and which possess
a predominant characteristic rye
or bourbon flavor derived from
such whisky. Wine, if used, must
be within the 2.5 percent
limitation provided in Sec.
5.155 for coloring, flavoring,
and blending materials.
(3) Rock and rye; Rock and bourbon; Liqueurs, bottled at not less
Rock and brandy; Rock and rum. than 24 percent alcohol by
volume, in which, in the case of
rock and rye and rock and
bourbon, not less than 51
percent, on a proof gallon
basis, of the distilled spirits
used are, respectively, rye or
bourbon whisky, straight rye or
straight bourbon whisky, or
whisky distilled from a rye or
bourbon mash, and, in the case
of rock and brandy and rock and
rum, the distilled spirits used
are all grape brandy or rum,
respectively; containing rock
candy or sugar syrup, with or
without the addition of fruit,
fruit juices, or other natural
flavoring materials, and
possessing, respectively, a
predominant characteristic rye,
bourbon, brandy, or rum flavor
derived from the distilled
spirits used. Wine, if used,
must be within the 2.5 percent
limitation provided in Sec.
5.155 for harmless coloring,
flavoring, and blending
materials.
(4) Rum liqueur, gin liqueur, brandy Liqueurs, bottled at not less
liqueur. than 30 percent alcohol by
volume, in which the distilled
spirits used are entirely rum,
gin, or brandy, respectively,
and which possess, respectively,
a predominant characteristic
rum, gin, or brandy flavor
derived from the distilled
spirits used. In the case of
brandy liqueur, the type of
brandy must be stated in
accordance with paragraph (d) of
this section, except that
liqueurs made entirely with
grape brandy may be designated
simply as ``brandy liqueur.''
Wine, if used, must be within
the 2.5 percent limitation
provided for in Sec. 5.155 for
harmless coloring, flavoring,
and blending materials.
(5) Amaretto......................... Almond flavored liqueur/cordial
(6) Kummel........................... Caraway flavored liqueur/cordial
(7) Ouzo, Anise, Anisette............ Anise flavored liqueurs/cordials
(8) Sambuca.......................... Anise flavored liqueur. See Sec.
5.154(b)(2) for designation
rules for Sambuca not produced
in Italy.
(9) Peppermint Schnapps.............. Peppermint flavored liqueur/
cordial
(10) Triple Sec and Curacao.......... Orange flavored liqueurs/
cordials. Curacao may be
preceded by the color of the
liqueur/cordial (for example,
Blue Curacao).
(11) Cr[egrave]me de................. A liqueur/cordial where the blank
is filled in with the
predominant flavor (for example,
Cr[egrave]me de menthe is mint
flavored liqueur/cordial.)
(12) Goldwasser...................... Herb flavored liqueur/cordial and
containing gold flakes. See Sec.
5.154(b)(2) for designation
rules for Goldwasser not made in
Germany.
------------------------------------------------------------------------
Sec. 5.151 Flavored spirits.
(a) The class flavored spirits. ``Flavored spirits'' are distilled
spirits that are spirits conforming to one of the standards of identity
set forth in Sec. Sec. 5.142 through 5.148 to which have been added
nonbeverage natural flavors, wine, or nonalcoholic natural flavoring
materials, with or without the addition of sugar, and bottled at not
less than 30 percent alcohol by volume (60[deg] proof). The flavored
spirits must be specifically designated by the single base spirit and
one or more of the most predominant flavors (for example, ``Pineapple
Flavored Tequila'' or ``Cherry Vanilla Flavored Bourbon Whisky''). The
base spirit must conform to the standard of identity for that spirit
before the flavoring is added. Base spirits that are a distinctive
product of a particular place must be manufactured in accordance with
the laws and regulations of the country as designated in the base
spirit's standard of identity. If the finished product contains more
than 2.5 percent by volume of wine, the kinds and percentages by volume
of wine must be stated as a part of the designation (whether the wine
is added directly to the product or whether it is first mixed into an
intermediate product), except that a flavored brandy may contain an
additional 12.5 percent by volume of wine, without label disclosure, if
the additional wine is derived from the particular fruit corresponding
to the labeled flavor of the product.
[[Page 7600]]
(b) [Reserved]
Sec. 5.152 Imitations.
(a) Imitations must bear, as a part of the designation thereof, the
word ``imitation'' and include the following:
(1) Any class or type of distilled spirits to which has been added
coloring or flavoring material of such nature as to cause the resultant
product to simulate any other class or type of distilled spirits;
(2) Any class or type of distilled spirits (other than distilled
spirits specialty products as defined in Sec. 5.156) to which has been
added flavors considered to be artificial or imitation.
(3) Any class or type of distilled spirits (except cordials,
liqueurs and specialties marketed under labels which do not indicate or
imply that a particular class or type of distilled spirits was used in
the manufacture thereof) to which has been added any whisky essence,
brandy essence, rum essence, or similar essence or extract which
simulates or enhances, or is used by the trade or in the particular
product to simulate or enhance, the characteristics of any class or
type of distilled spirits;
(4) Any type of whisky to which beading oil has been added;
(5) Any rum to which neutral spirits or distilled spirits other
than rum have been added;
(6) Any brandy made from distilling material to which has been
added any amount of sugar other than the kind and amount of sugar
expressly authorized in the production of standard wine; and
(7) Any brandy to which neutral spirits or distilled spirits other
than brandy have been added, except that this provision shall not apply
to any product conforming to the standard of identity for blended
applejack.
(b) If any of the standards set forth in paragraphs (a)(1) through
(7) of this section apply, the ``Imitation'' class designation must be
used in front of the appropriate class as part of the designation (for
example, Imitation Whisky).
Sec. 5.153 [Reserved]
Sec. 5.154 Rules for geographical designations.
(a) Geographical designations. (1) Geographical names for
distinctive types of distilled spirits (other than names found by the
appropriate TTB officer under paragraph (a)(2) of this section to have
become generic) may not be applied to distilled spirits produced in any
other place than the particular region indicated by the name, unless:
(i) There appears the word ``type'' or the word ``American'' or
some other adjective indicating the true place of production, in
lettering substantially as conspicuous as such name; and
(ii) The distilled spirits to which the name is applied conform to
the distilled spirits of that particular region. The following are
examples of distinctive types of distilled spirits with geographical
names that have not become generic: Eau de Vie de Dantzig (Danziger
Goldwasser), Ojen, Swedish punch. Geographical names for distinctive
types of distilled spirits may be used to designate only distilled
spirits conforming to the standard of identity, if any, for such type
specified in this section, or if no such standard is so specified, then
in accordance with the trade understanding of that distinctive type.
(2) Only such geographical names for distilled spirits as the
appropriate TTB officer finds have by usage and common knowledge lost
their geographical significance to such extent that they have become
generic shall be deemed to have become generic. Examples are London dry
gin, Geneva (Hollands) gin.
(3) Geographical names that are not names for distinctive types of
distilled spirits, and that have not become generic, shall not be
applied to distilled spirits produced in any other place than the
particular place or region indicated in the name. Examples are
Armagnac, Greek brandy, Jamaica rum, Puerto Rico rum, Demerara rum and
Andong Soju.
(b) Products without geographical designations but distinctive of a
particular place. (1) The whiskies of the types specified in paragraphs
(c)(2) through (6) and (10) through (14) of Sec. 5.143 are distinctive
products of the United States and if produced in a foreign country
shall be designated by the applicable designation prescribed in such
paragraphs, together with the words ``American type'' or the words
``produced (distilled, blended) in __'', the blank to be filled in with
the name of the foreign country: Provided, That the word ``bourbon''
shall not be used to describe any whisky or whisky-based distilled
spirits not produced in the United States. If whisky of any of these
types is composed in part of whisky or whiskies produced in a foreign
country there shall be stated, on the brand label, the percentage of
such whisky and the country of origin thereof.
(2) The name for other distilled spirits which are distinctive
products of a particular place or country (such as Habanero), may not
be given to the product of any other place or country unless the
designation for such product includes the word ``type'' or an adjective
such as ``American'', or the like, clearly indicating the true place of
production. The provision for place of production shall not apply to
designations which by usage and common knowledge have lost their
geographical significance to such an extent that the appropriate TTB
officer finds they have become generic. Examples of generic
designations are Slivovitz, Zubrovka, Aquavit, Arrack, and
Kirschwasser.
Sec. 5.155 Alteration of class and type.
(a) Definitions--(1) Coloring, flavoring, or blending material. For
the purposes of this section, the term ``coloring, flavoring, or
blending material'' means a harmless substance that is an essential
component of the class or type of distilled spirits to which it is
added; or a harmless substance, such as caramel, straight malt or
straight rye malt whiskies, fruit juices, sugar, infusion of oak chips
when approved by the Administrator, or wine, that is not an essential
component part of the distilled spirits product to which it is added
but which is customarily employed in the product in accordance with
established trade usage.
(2) Certified color. For purposes of this section, the term
``certified color'' means a color additive that is required to undergo
batch certification in accordance with part 74 or part 82 of the Food
and Drug Administration regulations (21 CFR parts 74 and 82). An
example of a certified color is FD&C Blue No. 2.
(b) Allowable additions. Except as provided in paragraph (c) of
this section, the following may be added to distilled spirits without
changing the class or type designation:
(1) Coloring, flavoring, and blending materials that are essential
components of the class or type of distilled spirits to which added;
(2) Coloring, flavoring, and blending materials that are not
essential component parts of the distilled spirits to which added,
provided that such coloring, flavoring, or blending materials do not
total more than 2.5 percent by volume of the finished product; and
(3) Wine, when added to Canadian whisky in Canada in accordance
with the laws and regulations of Canada governing the manufacture of
Canadian whisky.
(c) Special rules. The addition of the following will require a
redesignation of the class or type of the distilled spirits product to
which added:
(1) Coloring, flavoring, or blending materials that are not
essential component parts of the class or type of distilled spirits to
which they are added, if such coloring, flavoring, and blending
[[Page 7601]]
materials total more than 2.5 percent by volume of the finished
product;
(2) Any material, other than caramel, infusion of oak chips, and
sugar, added to Cognac brandy;
(3) Any material whatsoever added to neutral spirits or straight
whisky, except that vodka may be treated with sugar, in an amount not
to exceed two grams per liter, and with citric acid, in an amount not
to exceed one gram per liter;
(4) Certified colors, carmine, or cochineal extract;
(5) Any material that would render the product to which it is added
an imitation, as defined in Sec. 5.152; or
(6) For products that are required to be stored in oak barrels in
accordance with a standard of identity, the storing of the product in
an additional barrel made of another type of wood.
(d) Extractions from distilled spirits. The removal of any
constituents from a distilled spirits product to such an extent that
the product no longer possesses the taste, aroma, and characteristics
generally attributed to that class or type of distilled spirits will
alter the class or type of the product, and the resulting product must
be redesignated appropriately. In addition, in the case of straight
whisky, the removal of more than 15 percent of the fixed acids,
volatile acids, esters, soluble solids, or higher alcohols, or the
removal of more than 25 percent of the soluble color, constitutes an
alteration of the class or type of the product and requires a
redesignation of the product.
(e) Exceptions. Nothing in this section has the effect of modifying
the standards of identity specified in Sec. 5.150 for cordials and
liqueurs, and in Sec. 5.151 for flavored spirits, or of authorizing
any product defined in Sec. 5.152 to be designated as other than an
imitation.
Sec. 5.156 Distilled spirits specialty products.
(a) General. Distilled spirits that do not meet one of the other
standards of identity specified in this subpart are distilled spirits
specialty products and must be designated in accordance with trade and
consumer understanding, or, if no such understanding exists, with a
distinctive or fanciful name (which may be the name of a cocktail)
appearing in the same field of vision as a statement of composition.
The statement of composition and the distinctive or fanciful name serve
as the class and type designation for these products. The statement of
composition must follow the rules found in Sec. 5.166. A product may
not bear a designation which indicates it contains a class or type of
distilled spirits unless the distilled spirits therein conform to such
class and type.
(b) Products designated in accordance with trade and consumer
understanding. Products may be designated in accordance with trade and
consumer understanding without a statement of composition if the
appropriate TTB officer has determined that there is such
understanding.
Sec. Sec. 5.157-5.165 [Reserved]
Sec. 5.166 Statements of composition.
(a) Rules for the statement of composition. When a statement of
composition is required as part of a designation for a distilled
spirits specialty product, the statement must be truthful and adequate.
(b) Cocktails. A statement of the classes and types of distilled
spirits used in the manufacture thereof will be deemed a sufficient
statement of composition in the case of highballs, cocktails, and
similar prepared specialties when the designation adequately indicates
to the consumer the general character of the product.
Subpart J--Formulas
Sec. 5.191 Application.
The requirements of this subpart apply to the following persons:
(a) Proprietors of distilled spirits plants qualified as processors
under part 19 of this chapter;
(b) Persons in the Commonwealth of Puerto Rico who manufacture
distilled spirits products for shipment to the United States. However,
the filing of a formula for approval by TTB is only required for those
products that will be shipped to the United States; and
(c) Persons who ship Virgin Islands distilled spirits products into
the United States.
Sec. 5.192 Formula requirements.
(a) General. An approved formula is required to blend, mix, purify,
refine, compound, or treat distilled spirits in a manner that results
in a change of class or type of the spirits.
(b) Preparation and submission. In order to obtain formula
approval, a person listed in Sec. 5.191 must file a formula in
accordance with the instructions on TTB Form 5100.51, Formula and
Process for Domestic and Imported Alcohol Beverages (if filing by
paper) or on Formulas Online, if filing electronically. When a product
will be made or processed under the same formula at more than one
location operated by the distiller or processor, the distiller or
processor must identify on the form each place of production or
processing by name and address, and by permit number, if applicable,
and must ensure that a copy of the approved formula is maintained at
each location.
(c) Existing approvals. Any approval of a formula will remain in
effect until revoked, superseded, or voluntarily surrendered, and if
the formula is revoked, superseded, or voluntarily surrendered, any
existing qualifying statements on such approval as to the rate of tax
or the limited use of alcoholic flavors will be made obsolete.
(d) Change in formula. Any change in an approved formula requires
the filing of a new TTB Form 5100.51 for approval of the changed
formula. After a changed formula is approved, the filer must surrender
the original formula approval to the appropriate TTB officer.
Sec. 5.193 Operations requiring formulas.
The following operations change the class or type of distilled
spirits and therefore require formula approval under Sec. 5.192:
Provided, That, TTB may exempt categories of distilled spirits products
from specific regulatory formula requirements upon a finding that the
filing of a formula is no longer necessary in order to properly
classify the finished product:
(a) The compounding of distilled spirits through the mixing of a
distilled spirits product with any coloring or flavoring material,
wine, or other material containing distilled spirits, unless TTB has
issued public guidance recognizing that such ingredients are harmless
coloring, flavoring or blending materials that do not alter the class
or type pursuant to the standards set forth in Sec. 5.155;
(b) The manufacture of an intermediate product to be used
exclusively in other distilled spirits products on bonded premises;
(c) Any filtering or stabilizing process that results in a
distilled spirits product's no longer possessing the taste, aroma, and
characteristics generally attributed to the class or type of distilled
spirits before the filtering or stabilizing, or, in the case of
straight whisky, that results in the removal of more than 15 percent of
the fixed acids, volatile acids, esters, soluble solids, or higher
alcohols, or more than 25 percent of the soluble color;
(d) The mingling of spirits that differ in class or in type of
materials from which made;
(e) The mingling of distilled spirits that were stored in charred
cooperage with distilled spirits that were stored in plain or reused
cooperage, or the mixing of distilled spirits that have been treated
with wood chips with distilled spirits not so treated, or the mixing of
distilled spirits that have been subjected to any treatment which
changes their character
[[Page 7602]]
with distilled spirits not subjected to such treatment, unless it is
determined by the appropriate TTB officer in each of these cases that
the composition of the distilled spirits is the same notwithstanding
the storage in different kinds of cooperage or the treatment of a
portion of the spirits;
(f) Except when authorized for production or storage operations by
part 19 of this chapter, the use of any physical or chemical process or
any apparatus that accelerates the maturing of the distilled spirits;
(g) The steeping or soaking of plant materials, such as fruits,
berries, aromatic herbs, roots, or seeds, in distilled spirits or wines
at a distilled spirits plant;
(h) The artificial carbonating of distilled spirits;
(i) In Puerto Rico, the blending of distilled spirits with any
liquors manufactured outside Puerto Rico;
(j) The production of gin by:
(1) Redistillation, over juniper berries and other natural
aromatics or over the extracted oils of such materials, of spirits
distilled at or above 190 degrees of proof that are free from
impurities, including such spirits recovered by redistillation of
imperfect gin spirits; or
(2) Mixing gin with other distilled spirits;
(k) The treatment of gin by:
(1) The addition or abstraction of any substance or material other
than pure water after redistillation in a manner that would change its
class and type designation; or
(2) The addition of any substance or material other than juniper
berries or other natural aromatics or the extracted oils of such
materials, or the addition of pure water, before or during
redistillation, in a manner that would change its class and type
designation; and
(l) The recovery of spirits by redistillation from distilled
spirits products containing other alcoholic ingredients and from
spirits that have previously been entered for deposit. However, no
formula approval is required for spirits redistilled into any type of
neutral spirits other than vodka or for spirits redistilled at less
than 190 degrees of proof that lack the taste, aroma and other
characteristics generally attributed to whisky, brandy, rum, or gin and
that are designated as ``Spirits'' preceded or followed by a word or
phrase descriptive of the material from which distilled. Such spirits
may not be designated ``Spirits Grain'' or ``Grain Spirits'' on any
label.
Sec. 5.194 Adoption of predecessor's formulas.
A successor to a person listed in Sec. 5.191 may adopt a
predecessor's approved formulas by filing an application with the
appropriate TTB officer. The application must include a list of the
formulas for adoption and must identify each formula by formula number,
name of product, and date of approval. The application must clearly
show that the predecessor has authorized the use of the previously
approved formulas by the successor.
Subpart K--Standards of Fill and Authorized Container Sizes.
Sec. 5.201 General.
No person engaged in business as a distiller, rectifier
(processor), importer, wholesaler, bottler, or warehouseman and
bottler, directly or indirectly, or through an affiliate, may sell or
ship or deliver for sale or shipment in interstate or foreign commerce,
or otherwise introduce in interstate or foreign commerce, or receive
therein, or remove from customs custody for consumption, any distilled
spirits in containers, unless the distilled spirits are bottled in
conformity with Sec. Sec. 5.202 and 5.203.
Sec. 5.202 Standard liquor containers.
(a) General. Except as provided in paragraph (d) of this section
and in Sec. 5.205, distilled spirits must be bottled in standard
liquor containers, as defined in this paragraph. A standard liquor
container is a container that is made, formed, and filled in such a way
that it does not mislead purchasers as regards its contents. An
individual carton or other container of a bottle may not be so designed
as to mislead purchasers as to the size of the bottle it contains.
(b) Headspace. A filled liquor container of a capacity of 200
milliliters (6.8 fl. oz.) or more is deemed to mislead the purchaser if
it has a headspace in excess of 8 percent of the total capacity of the
container after closure.
(c) Design. Regardless of the correctness of the stated net
contents, a liquor container is deemed to mislead the purchaser if it
is made and formed in such a way that its actual capacity is
substantially less than the capacity it appears to have upon visual
examination under ordinary conditions of purchase or use.
(d) Exception for distinctive liquor bottles. The provisions of
paragraphs (b) and (c) of this section do not apply to liquor bottles
for which a distinctive liquor bottle approval has been issued pursuant
to Sec. 5.205.
Sec. 5.203 Standards of fill (container sizes).
(a) Authorized standards of fill. The following metric standards of
fill are authorized for distilled spirits, whether domestically bottled
or imported:
(1) Containers other than cans. For containers other than cans
described in paragraph (a)(2) of this section--
(i) 1.8 Liters.
(ii) 1.75 Liters.
(iii) 1.00 Liter.
(iv) 900 mL.
(v) 750 mL.
(v) 720 mL.
(vi) 700 mL.
(vii) 375 mL.
(viii) 200 mL.
(ix) 100 mL.
(x) 50 mL.
(2) Metal cans. For metal containers that have the general shape
and design of a can, that have a closure that is an integral part of
the container, and that cannot be readily reclosed after opening--
(i) 355 mL.
(ii) 200 mL.
(iii) 100 mL.
(iv) 50 mL.
(b) Spirits bottled using outdated standards. Paragraph (a) of this
section does not apply to:
(1) Imported distilled spirits in the original containers in which
entered into customs custody prior to January 1, 1980 (or prior to July
1, 1989 in the case of distilled spirits imported in 500 mL
containers); or
(2) Imported distilled spirits bottled or packed prior to January
1, 1980 (or prior to July 1, 1989 in the case of distilled spirits in
500 mL containers) and certified as to such in a statement signed by an
official duly authorized by the appropriate foreign government.
Sec. 5.204 [Reserved]
Sec. 5.205 Distinctive liquor bottle approval.
(a) General. A bottler or importer of distilled spirits in
distinctive liquor bottles may apply for a distinctive liquor bottle
approval from the appropriate TTB officer. The distinctive liquor
bottle approval will provide an exemption only from those requirements
that are specified in paragraph (b) of this section. A distinctive
liquor bottle is a container that is not the customary shape and that
may obscure the net contents of the distilled spirits.
(b) Exemptions provided by the distinctive liquor bottle approval.
The distinctive liquor bottle approval issued pursuant to this section
will provide that:
(1) The provisions of Sec. 5.202(b) and (c) do not apply to the
liquor containers
[[Page 7603]]
for which the distinctive liquor bottle approval has been issued; and
(2) The information required to appear in the same field of vision
pursuant to Sec. 5.63(a) may appear elsewhere on a distinctive liquor
bottle for which the distinctive liquor bottle approval has been
issued, if the design of the container precludes the presentation of
all mandatory information in the same field of vision.
(c) How to apply. A bottler or importer of distilled spirits in
distinctive liquor bottles may apply for a distinctive liquor bottle
approval as part of the application for a certificate of label approval
(COLA).
Subpart L [Reserved]
Sec. 5.211 [Reserved]
Sec. 5.212 [Reserved]
Subpart M--Penalties and Compromise of Liability
Sec. 5.221 Criminal penalties.
A violation of the labeling provisions of 27 U.S.C. 205(e) is
punishable as a misdemeanor. See 27 U.S.C. 207 for the statutory
provisions relating to criminal penalties, consent decrees, and
injunctions.
Sec. 5.222 Conditions of basic permit.
A basic permit is conditioned upon compliance with the requirements
of 27 U.S.C. 205, including the labeling and advertising provisions of
this part. A willful violation of the conditions of a basic permit
provides grounds for the revocation or suspension of the permit, as
applicable, as set forth in part 1 of this chapter.
Sec. 5.223 Compromise.
Pursuant to 27 U.S.C. 207, the appropriate TTB officer is
authorized, with respect to any violation of 27 U.S.C. 205, to
compromise the liability arising with respect to such violation upon
payment of a sum not in excess of $500 for each offense, to be
collected by the appropriate TTB officer and to be paid into the
Treasury as miscellaneous receipts.
Subpart N--Advertising of Distilled Spirits
Sec. 5.231 Application.
No person engaged in business as a distiller, rectifier
(processor), importer, wholesaler, bottler, or warehouseman and bottler
of distilled spirits, directly or indirectly or through an affiliate,
shall publish or disseminate or cause to be published or disseminated
by radio or television broadcast, or in any newspaper, periodical, or
any publication, by any sign or outdoor advertisement, or by electronic
or internet media, or any other printed or graphic matter, any
advertisement of distilled spirits, if such advertising is in, or is
calculated to induce sales in, interstate or foreign commerce, or is
disseminated by mail, unless such advertisement is in conformity with
this subpart: Provided, That such sections shall not apply to outdoor
advertising in place on September 7, 1984, but shall apply upon
replacement, restoration, or renovation of any such advertising; and
provided further, that such sections shall not apply to a retailer or
the publisher of any newspaper, periodical, or other publication, or
radio or television or internet broadcast, unless such retailer or
publisher or broadcaster is engaged in business as a distiller,
rectifier (processor), importer, wholesaler, or warehouseman and
bottler of distilled spirits, directly or indirectly, or through an
affiliate.
Sec. 5.232 Definition.
As used in this subpart, the term ``advertisement'' ``or
advertising'' includes any written or verbal statement, illustration,
or depiction which is in, or calculated to induce sales in, interstate
or foreign commerce, or is disseminated by mail, whether it appears in
a newspaper, magazine, trade booklet, menu, wine card, leaflet,
circular, mailer, book insert, catalog, promotional material, sales
pamphlet, internet or other electronic site or social network, or in
any written, printed, graphic, or other matter (such as hang tags)
accompanying, but not firmly affixed to, the bottle, representations
made on shipping cases or in any billboard, sign, other outdoor
display, public transit card, other periodical literature, publication,
or in a radio or television broadcast, or in any other media; except
that such term shall not include:
(a) Any label affixed to any bottle of distilled spirits; or any
individual covering, carton, or other container of the bottle which
constitute a part of the labeling under this part.
(b) Any editorial or other reading material (such as a news
release) in any periodical or publication or newspaper for the
publication of which no money or valuable consideration or thing of
value is paid or promised, directly or indirectly, by any permittee,
and which is not written by or at the direction of the permittee.
Sec. 5.233 Mandatory statements.
(a) Responsible advertiser. The advertisement must display the
responsible advertiser's name, city, and State or the name and other
contact information (such as, telephone number, website, or email
address) where the responsible advertiser may be contacted.
(b) Class and type. The advertisement shall contain a conspicuous
statement of the class to which the product belongs and the type
thereof corresponding with the statement of class and type which is
required to appear on the label of the product.
(c) Alcohol content--(1) Mandatory statement. The alcohol content
for distilled spirits must be stated as a percentage of alcohol by
volume, in the manner set forth in Sec. 5.65 of this chapter for
labels. Products that contain a significant amount of material, such as
solid fruit, that may absorb spirits after bottling must state the
alcohol content at the time of bottling as follows: ``Bottled at __
percent-alcohol-by-volume.''
(2) Optional statement. In addition, the advertisement may also
state the alcohol content in degrees of proof if this information
appears in the same field of vision as the statement expressed in
percent-alcohol-by-volume.
(d) Percentage of neutral spirits and name of commodity.
(1) In the case of distilled spirits (other than cordials,
liqueurs, flavored neutral spirits, including flavored vodka, and
distilled spirits specialty products) produced by blending or
rectification, if neutral spirits have been used in the production
thereof, there shall be stated the percentage of neutral spirits so
used and the name of the commodity from which such neutral spirits have
been distilled. The statement of percentage and the name of the
commodity shall be made in substantially the following form: ``__%
neutral spirits distilled from __ (insert grain, cane products, or
fruit, or other products as appropriate)''; or __% neutral spirits
(vodka) distilled from __ (insert grain, cane product, fruit, or other
commodity, as appropriate)''; or ``__% grain (cane products), (fruit)
neutral spirits''; or ``__% grain spirits''. The statement used under
this paragraph must be identical to that on the label of distilled
spirits to which the advertisement refers.
(2) In the case of gin manufactured by a process of continuous
distillation or in the case of neutral spirits, there shall be stated
the name of the commodity from which such gin or neutral spirits were
distilled. The statement of the name of the commodity shall be made in
substantially the following form: ``Distilled from grain'', or
``Distilled from cane products'', or ``Distilled from
[[Page 7604]]
fruit.'' The statement used under this paragraph must be identical to
that on the label of distilled spirits to which the advertisement
refers.
(e) Exception. (1) If an advertisement refers to a general
distilled spirits line or all of the distilled spirits products of one
company, whether by the company name or by the brand name common to all
the distilled spirits in the line, the only mandatory information
necessary is the responsible advertiser's name, city, and State or the
name and other contact information (such as telephone number, website,
or email address) where the responsible advertiser may be contacted.
This exception does not apply where only one type of distilled spirits
is marketed under the specific brand name advertised.
(2) On consumer specialty items (such as T-shirts, hats, bumper
stickers, or refrigerator magnets), the only information necessary is
the company name of the responsible advertiser or brand name of the
product.
Sec. 5.234 Legibility of mandatory information.
(a) Statements required under this subpart to appear in any
written, printed, or graphic advertisement shall be in lettering or
type size sufficient to be conspicuous and readily legible.
(b) In the case of signs, billboards, and displays the name and
address or name and other contact information (such as, telephone
number, website, or email) of the permittee responsible for the
advertisement may appear in type size of lettering smaller than the
other mandatory information, provided such information can be
ascertained upon closer examination of the sign or billboard.
(c) Mandatory information shall be so stated as to be clearly a
part of the advertisement and shall not be separated in any manner from
the remainder of the advertisement.
(d) Mandatory information for two or more products shall not be
stated unless clearly separated.
(e) Mandatory information shall be so stated in both the print and
audio-visual media that it will be readily apparent to the persons
viewing the advertisement.
Sec. 5.235 Prohibited practices.
(a) Restrictions. An advertisement of distilled spirits shall not
contain:
(1) Any statement that is false or untrue in any material
particular, or that, irrespective of falsity, directly, or by
ambiguity, omission, or inference, or by the addition of irrelevant,
scientific or technical matter tends to create a misleading impression.
(2) Any false or misleading statement that explicitly or implicitly
disparages a competitor's product. This does not prevent truthful and
accurate comparisons between products (such as, ``Our liqueur contains
more strawberries than Brand X'') or statements of opinion (such as,
``We think our rum tastes better than any other distilled spirits on
the market'').
(3) Any statement, design, device, or representation which is
obscene or indecent.
(4) Any statement, design, device, or representation of or relating
to analyses, standards or tests, irrespective of falsity, which the
appropriate TTB officer finds to be likely to mislead the consumer.
(5) Any statement, design, device, or representation of or relating
to any guarantee, irrespective of falsity, which the appropriate TTB
officer finds to be likely to mislead the consumer. Money-back
guarantees are not prohibited.
(6) The words ``bond'', ``bonded'', ``bottled in bond'', ``aged in
bond'', or phrases containing these or synonymous terms, unless such
words or phrases appear, pursuant to Sec. 5.88, on labels of the
distilled spirits advertised, and are stated in the advertisement in
the manner and form in which they are permitted to appear on the label.
(7) The word ``pure'' unless:
(i) It refers to a particular ingredient used in the production of
the distilled spirits, and is a truthful representation about the
ingredient; or
(ii) It is part of the bona fide name of a permittee or retailer
from whom the distilled spirits are bottled; or
(iii) It is part of the bona fide name of the permittee who bottled
the distilled spirits.
(8) The words ``double distilled'' or ``triple distilled'' or any
similar terms unless it is a truthful statement of fact. For purposes
of this paragraph only, a distillation means a single run through a pot
still or a single run through a column of a column (reflux) still. The
number of distillations may be understated but may not be overstated.
(b) Statements inconsistent with labeling. (1) Advertisements shall
not contain any statement concerning a brand or lot of distilled
spirits that is inconsistent with any statement on the labeling
thereof.
(2) Any label depicted on a container in an advertisement shall be
a reproduction of an approved label.
(c) Statement of age. The advertisement shall not contain any
statement, design, or device directly or by implication concerning age
or maturity of any brand or lot of distilled spirits unless a statement
of age appears on the label of the advertised product. When any such
statement, design, or device concerning age or maturity is contained in
any advertisement, it shall include (in direct conjunction therewith
and with substantially equal conspicuousness) all parts of the
statement, if any, concerning age and percentages required to be made
on the label under the provisions of Sec. 5.74. An advertisement for
any whisky or brandy (except immature brandies, pomace brandy, marc
brandy, Pisco brandy, and grappa brandy) which is not required to bear
a statement of age on the label or an advertisement for any rum or
agave spirits, which has been aged for not less than 4 years may,
however, contain inconspicuous, general representations as to age,
maturity or other similar representations even though a specific age
statement does not appear on the label of the advertised product and in
the advertisement itself.
(d) Health-related statements--(1) Definitions. When used in this
paragraph (d), terms are defined as follows:
(i) Health-related statement means any statement related to health
and includes statements of a curative or therapeutic nature that,
expressly or by implication, suggest a relationship between the
consumption of alcohol, distilled spirits, or any substance found
within the distilled spirits, and health benefits or effects on health.
The term includes both specific health claims and general references to
alleged health benefits or effects on health associated with the
consumption of alcohol, distilled spirits, or any substance found
within the distilled spirits, as well as health-related directional
statements. The term also includes statements and claims that imply
that a physical or psychological sensation results from consuming the
distilled spirits, as well as statements and claims of nutritional
value (e.g., statements of vitamin content). Statements concerning
caloric, carbohydrate, protein, and fat content do not constitute
nutritional claims about the product.
(ii) Specific health claim is a type of health-related statement
that, expressly or by implication, characterizes the relationship of
the distilled spirits, alcohol, or any substance found within the
distilled spirits, to a disease or health-related condition. Implied
specific health claims include statements, symbols, vignettes, or other
forms of communication that suggest, within the context in which they
are presented, that a relationship exists between distilled spirits,
alcohol, or any substance found within the distilled spirits, and a
disease or health-related condition.
(iii) Health-related directional statement is a type of health-
related
[[Page 7605]]
statement that directs or refers consumers to a third party or other
source for information regarding the effects on health of distilled
spirits or alcohol consumption.
(2) Rules for advertising--(i) Health-related statements. In
general, advertisements may not contain any health-related statement
that is untrue in any particular or tends to create a misleading
impression as to the effects on health of alcohol consumption. TTB will
evaluate such statements on a case-by-case basis and may require as
part of the health-related statement a disclaimer or some other
qualifying statement to dispel any misleading impression conveyed by
the health-related statement. Such disclaimer or other qualifying
statement must appear as prominent as the health-related statement.
(ii) Specific health claims. A specific health claim will not be
considered misleading if it is truthful and adequately substantiated by
scientific or medical evidence; sufficiently detailed and qualified
with respect to the categories of individuals to whom the claim
applies; adequately discloses the health risks associated with both
moderate and heavier levels of alcohol consumption; and outlines the
categories of individuals for whom any levels of alcohol consumption
may cause health risks. This information must appear as part of the
specific health claim and in a manner as prominent as the specific
health claim.
(iii) Health-related directional statements. A statement that
directs consumers to a third party or other source for information
regarding the effects on health of distilled spirits or alcohol
consumption is presumed misleading unless it--
(A) Directs consumers in a neutral or other non-misleading manner
to a third party or other source for balanced information regarding the
effects on health of distilled spirits or alcohol consumption; and
(B)(1) Includes as part of the health-related directional
statement, and in a manner as prominent as the health-related
directional statement, the following disclaimer: ``This statement
should not encourage you to drink or increase your alcohol consumption
for health reasons;'' or
(2) Includes as part of the health-related directional statement,
and in a manner as prominent as the health-related directional
statement, some other qualifying statement that the appropriate TTB
officer finds is sufficient to dispel any misleading impression
conveyed by the health-related directional statement.
(e) Place of origin. The advertisement shall not represent that the
distilled spirits were manufactured in or imported from a place or
country other than that of their actual origin, or were produced or
processed by one who was not in fact the actual producer or processor.
(f) Confusion of brands. Two or more different brands or lots of
distilled spirits shall not be advertised in one advertisement (or in
two or more advertisements in one issue of a periodical or newspaper,
or in one piece of other written, printed, or graphic matter) if the
advertisement tends to create the impression that representations made
as to one brand or lot apply to the other or others, and if as to such
latter the representations contravene any provisions of this subpart or
are in any respect untrue.
(g) Representations of the armed forces or flags. Advertisements
may not show an image of any government's flag or any representation
related to the armed forces of the United States if the representation,
standing alone or considered together with any additional language or
symbols, creates a false or misleading impression that the product was
endorsed by, made by, used by, or made under the supervision of, the
government represented by that flag or by the armed forces of the
United States. This section does not prohibit the use of a flag as part
of a claim of American origin or another country of origin.
(h) Deceptive advertising techniques. Subliminal or similar
techniques are prohibited. ``Subliminal or similar techniques,'' as
used in this subpart, refers to any device or technique that is used to
convey, or attempts to convey, a message to a person by means of images
or sounds of a very brief nature that cannot be perceived at a normal
level of awareness.
(i) Any use of the term ``organic'' in the advertising of distilled
spirits must comply with the United States Department of Agriculture's
(USDA) National Organic Program rules, 7 CFR part 205, as interpreted
by the USDA.
Sec. 5.236 Comparative advertising.
(a) General. Comparative advertising shall not be disparaging of a
competitor's product in a manner that is false or misleading.
(b) Taste tests. (1) Taste test results may be used in
advertisements comparing competitors' products unless they are
disparaging in a false or misleading manner; deceptive; or likely to
mislead the consumer.
(2) The taste test procedure used shall meet scientifically
accepted procedures. An example of a scientifically accepted procedure
is outlined in the Manual on Sensory Testing Methods, ASTM Special
Technical Publication 434, published by the American Society for
Testing and Materials, 1916 Race Street, Philadelphia, Pennsylvania
19103, ASTM, 1968, Library of Congress Catalog Card Number 68-15545.
(3) A statement shall appear in the advertisement providing the
name and address of the testing administrator.
Subpart O--Paperwork Reduction Act
Sec. 5.241 OMB control numbers assigned under the Paperwork
Reduction Act.
(a) Purpose. This subpart displays the control numbers assigned to
information collection requirements in this part by the Office of
Management and Budget (OMB) under the Paperwork Reduction Act of 1995,
Public Law 104-13.
(b) Table. The following table identifies each section in this part
that contains an information collection requirement and the OMB control
number that is assigned to that information collection requirement.
Table 1 to Paragraph (b)
------------------------------------------------------------------------
Current OMB
Section where contained control No.
------------------------------------------------------------------------
5.11.................................................... 1513-0111
5.21.................................................... 1513-0020
5.22.................................................... 1513-0020
5.23.................................................... 1513-0020
5.24.................................................... 1513-0020
1513-0064
5.25.................................................... 1513-0020
5.27.................................................... 1513-0020
5.28.................................................... 1513-0122
5.29.................................................... 1513-0020
5.30.................................................... 1513-0064
5.62.................................................... 1513-0087
5.63.................................................... 1513-0084
1513-0087
5.82.................................................... 1513-0121
5.83.................................................... 1513-0121
5.84.................................................... 1513-0087
5.87.................................................... 1513-0087
5.88.................................................... 1513-0087
5.89.................................................... 1513-0087
5.90.................................................... 1513-0087
5.91.................................................... 1513-0087
5.192................................................... 1513-0122
5.193................................................... 1513-0122
5.194................................................... 1513-0122
5.203................................................... 1513-0064
5.205................................................... 1513-0020
5.233................................................... 1513-0087
------------------------------------------------------------------------
0
2. Revise part 7 to read as follows:
PART 7--LABELING AND ADVERTISING OF MALT BEVERAGES
Sec.
7.0 Scope.
Subpart A--General Provisions
7.1 Definitions.
[[Page 7606]]
7.2 Territorial extent.
7.3 General requirements and prohibitions under the FAA Act.
7.4 Jurisdictional limits of the FAA Act.
7.5 Ingredients and processes.
7.6 Brewery products not covered by this part.
7.7 Other TTB labeling regulations that apply to malt beverages.
7.8 Malt beverages for export.
7.9 [Reserved]
7.10 Other related regulations.
7.11 Forms.
7.12 Delegations of the Administrator.
Subpart B--Certificates of Label Approval
Requirements for Malt Beverages Bottled in the United States
7.21 Requirement for certificates of label approval (COLAs) for malt
beverages bottled in the United States.
7.22 Rules regarding certificates of label approval (COLAs) for malt
beverages bottled in the United States.
7.23 [Reserved]
Requirements for Malt Beverages Imported in Containers
7.24 Certificates of label approval (COLAs) for malt beverages
imported in containers.
7.25 Rules regarding certificates of label approval (COLAs) for malt
beverages imported in containers.
Administrative Rules
7.27 Presenting certificates of label approval (COLAs) to Government
officials.
7.28 Formulas, samples, and documentation.
7.29 Personalized labels.
Subpart C--Alteration of Labels, Relabeling, and Adding Information to
Containers
7.41 Alteration of labels.
7.42 Authorized relabeling activities by brewers and importers.
7.43 Relabeling activities that require separate written
authorization from TTB.
7.44 Adding a label or other information to a container that
identifies the wholesaler, retailer, or consumer.
Subpart D--Label Standards
7.51 Requirement for firmly affixed labels.
7.52 Legibility and other requirements for mandatory information on
labels.
7.53 Type size of mandatory information and alcohol content
statements.
7.54 Visibility of mandatory information.
7.55 Language requirements.
7.56 Additional information.
Subpart E--Mandatory Label Information
7.61 What constitutes a label for purposes of mandatory information.
7.62 Packaging (cartons, coverings, and cases).
7.63 Mandatory label information.
7.64 Brand name.
7.65 Alcohol content.
7.66 Name and address for domestically bottled malt beverages that
were wholly fermented in the United States.
7.67 Name and address for domestically bottled malt beverages that
were bottled after importation.
7.68 Name and address for malt beverages that are imported in a
container.
7.69 Country of origin.
7.70 Net contents.
Subpart F--Restricted Labeling Statements
7.81 General.
Food Allergen Labeling
7.82 Voluntary disclosure of major food allergens.
7.83 Petitions for exemption from major food allergen labeling.
Production and Other Claims
7.84 Use of the term ``organic.''
7.85 [Reserved]
7.86 [Reserved]
7.87 [Reserved]
Subpart G--Prohibited Labeling Practices
7.101 General.
7.102 False or untrue statements.
7.103 Obscene or indecent depictions.
Subpart H--Labeling Practices That Are Prohibited if They Are
Misleading
7.121 General.
7.122 Misleading statements or representations.
7.123 Guarantees.
7.124 Disparaging statements.
7.125 Tests or analyses.
7.126 Depictions of government symbols.
7.127 [Reserved]
7.128 Claims related to distilled spirits.
7.129 Health-related statements.
7.130 Appearance of endorsement.
7.131 [Reserved]
7.132 [Reserved]
Subpart I--Classes and Types of Malt Beverages
7.141 Class and type.
7.142 Class designations.
7.143 Class and type--special rules.
7.144 Malt beverages fermented or flavored with certain traditional
ingredients.
7.145 Malt beverages containing less than 0.5 percent alcohol by
volume.
7.146 Geographical names.
7.147 Statement of composition.
Subparts J-L--[Reserved]
Subpart M--Penalties and Compromise of Liability
7.221 Criminal penalties.
7.222 Conditions of basic permit.
7.223 Compromise.
Subpart N--Advertising of Malt Beverages
7.231 Application.
7.232 Definitions.
7.233 Mandatory statements.
7.234 Legibility of mandatory information.
7.235 Prohibited practices.
7.236 Comparative advertising.
Subpart O--Paperwork Reduction Act
7.241 OMB control numbers assigned under the Paperwork Reduction
Act.
Authority: 27 U.S.C. 205 and 207.
Sec. 7.0 Scope.
This part sets forth requirements that apply to the labeling and
packaging of malt beverages in containers, including requirements for
label approval and rules regarding mandatory, regulated, and prohibited
labeling statements. This part also sets forth requirements that apply
to the advertising of malt beverages.
Subpart A--General Provisions
Sec. 7.1 Definitions.
When used in this part and on forms prescribed under this part, the
following terms have the meaning assigned to them in this section,
unless the terms appear in a context that requires a different meaning.
Any other term defined in the Federal Alcohol Administration Act (FAA
Act) and used in this part has the same meaning assigned to it by the
FAA Act.
Administrator. The Administrator, Alcohol and Tobacco Tax and Trade
Bureau, Department of the Treasury.
Advertisement or Advertising. See Sec. 7.232 for meaning of these
terms as used in subpart N of this part.
Appropriate TTB officer. An officer or employee of the Alcohol and
Tobacco Tax and Trade Bureau (TTB) authorized to perform any function
relating to the administration or enforcement of this part by the
current version of TTB Order 1135.7, Delegation of the Administrator's
Authorities in 27 CFR part 7, Labeling and Advertising of Malt
Beverages.
Bottler. Any brewer or wholesaler who places malt beverages in
containers.
Brand name. The name under which a malt beverage or a line of malt
beverages is sold.
Certificate holder. The permittee or brewer whose name, address,
and basic permit number, plant registry number, or brewer's notice
number appears on an approved TTB Form 5100.31.
Certificate of exemption from label approval. A certificate issued
on TTB Form 5100.31, which authorizes the bottling of wine or distilled
spirits, under the condition that the product will under no
circumstances be sold, offered for sale, shipped, delivered for
shipment, or otherwise introduced by the applicant, directly or
indirectly, into interstate or foreign commerce.
Certificate of label approval (COLA). A certificate issued on form
TTB Form 5100.31 that authorizes the bottling of wine, distilled
spirits, or malt beverages, or the removal of bottled wine, distilled
spirits, or malt beverages from customs custody for introduction into
commerce, as long as the product bears labels
[[Page 7607]]
identical to the labels appearing on the face of the certificate, or
labels with changes authorized by TTB on the certificate or otherwise
(such as through the issuance of public guidance available on the TTB
website at https://www.ttb.gov).
Container. Any can, bottle, box, cask, keg, barrel or other closed
receptacle, in any size or material, which is for use in the sale of
malt beverages at retail.
Customs officer. An officer of U.S. Customs and Border Protection
(CBP) or any agent or other person authorized by law to perform the
duties of such an officer.
Distinctive or fanciful name. A descriptive name or phrase chosen
to identify a malt beverage product on the label. It does not include a
brand name, class or type designation, statement of composition, or
designation known to the trade or consumers.
FAA Act. The Federal Alcohol Administration Act.
Gallon. A U.S. gallon of 231 cubic inches of malt beverages at 39.1
degrees Fahrenheit (4 degrees Celsius). All other liquid measures used
are subdivisions of the gallon as defined.
Interstate or foreign commerce. Commerce between any State and any
place outside of that State or commerce within the District of Columbia
or commerce between points within the same State but through any place
outside of that State.
Keg collar. A disk that is pushed down over the keg's bung or tap
cover.
Malt beverage. A beverage made by the alcoholic fermentation of an
infusion or decoction, or combination of both, in potable brewing
water, of malted barley with hops, or their parts, or their products,
and with or without other malted cereals, and with or without the
addition of unmalted or prepared cereals, other carbohydrates or
products prepared therefrom, and with or without the addition of carbon
dioxide, and with or without other wholesome products suitable for
human food consumption. See Sec. 7.5 for standards applying to the use
of processing methods and flavors in malt beverage production.
Net contents. The amount, by volume, of a malt beverage held in a
container.
Permittee. Any person holding a basic permit under the FAA Act.
Person. Any individual, corporation, partnership, association,
joint-stock company, business trust, limited liability company, or
other form of business enterprise, including a receiver, trustee, or
liquidating agent and including an officer or employee of any agency of
a State or political subdivision of a State.
Responsible advertiser. The permittee or brewer responsible for the
publication or broadcast of an advertisement.
State. One of the 50 States of the United States, the District of
Columbia, or the Commonwealth of Puerto Rico.
Tap cover. A cap, usually made of plastic, that fits over the top
of the tap (or bung) of a keg.
TTB. The Alcohol and Tobacco Tax and Trade Bureau of the Department
of the Treasury.
United States (U.S.). The 50 States, the District of Columbia, and
the Commonwealth of Puerto Rico.
Sec. 7.2 Territorial extent.
The provisions of this part apply to the 50 States, the District of
Columbia, and the Commonwealth of Puerto Rico.
Sec. 7.3 General requirements and prohibitions under the FAA Act.
(a) Certificates of label approval (COLAs). Subject to the
requirements and exceptions set forth in the regulations in subpart B
of this part, any brewer or wholesaler who bottles malt beverages, and
any person who removes malt beverages in containers from customs
custody for sale or any other commercial purpose, is required to first
obtain from TTB a certificate of label approval (COLA) covering the
label(s) on each container.
(b) Alteration, mutilation, destruction, obliteration, or removal
of labels. Subject to the requirements and exceptions set forth in the
regulations in subpart C of this part, it is unlawful to alter,
mutilate, destroy, obliterate, or remove labels on malt beverage
containers. This prohibition applies to any person, including
retailers, holding malt beverages for sale in interstate or foreign
commerce or any person holding malt beverages for sale after shipment
in interstate or foreign commerce.
(c) Labeling requirements for malt beverages. Subject to the
jurisdictional limits of the FAA Act, as set forth in Sec. 7.4, it is
unlawful for any person engaged in business as a brewer, wholesaler, or
importer of malt beverages, directly or indirectly, or through an
affiliate, to sell or ship, or deliver for sale or shipment, or
otherwise introduce or receive in interstate or foreign commerce, or
remove from customs custody, any malt beverages in containers unless
such containers are marked, branded, labeled, and packaged in
conformity with the regulations in this part.
(d) Labeled in accordance with this part. In order to be labeled in
accordance with the regulations in this part, a container of malt
beverages must be in compliance with the following requirements:
(1) It must bear one or more labels meeting the standards for
``labels'' set forth in subpart D of this part;
(2) One or more of the labels on the container must include the
mandatory information set forth in subpart E of this part;
(3) Claims on any label, container, or packaging (as defined in
Sec. 7.81) must comply with the rules for restricted label statements,
as applicable, set forth in subpart F of this part;
(4) Statements or any other representations on any malt beverage
label, container, or packaging (as defined in Sec. Sec. 7.101 and
7.121) may not violate the regulations in subparts G and H of this part
regarding certain practices on labeling of malt beverages; and
(5) The class and type designation on any label, as well as any
designation appearing on containers or packaging, must comply with the
standards for classes and types set forth in subpart I of this part.
Sec. 7.4 Jurisdictional limits of the FAA Act.
(a) Malt beverages sold in interstate or foreign commerce--(1)
General. The labeling provisions of this part apply to malt beverages
sold or shipped or delivered for shipment, or otherwise introduced into
or received in any State from any place outside thereof, only to the
extent that the laws or regulations of such State impose requirements
similar to the requirements of the regulations in this part, with
respect to the labels and labeling of malt beverages not sold or
shipped or delivered for shipment or otherwise introduced into or
received in such State from any place outside thereof.
(2) Similar State law. For purposes of this section, a ``similar''
State law may be found in State laws or regulations that apply
specifically to malt beverages or in State laws or regulations that
provide general labeling requirements that are not specific to malt
beverages but that do apply to malt beverages. In order to be
``similar'' to the Federal requirements, the State requirements need
not be identical to the Federal requirements. Nonetheless, if the label
in question does not violate the laws or regulations of the State or
States into which the brewer, wholesaler, or importer is shipping the
malt beverages, it does not violate this part.
(b) Malt beverages not sold in interstate or foreign commerce. The
labeling regulations in this part do not apply to domestically bottled
malt beverages that are not and will not be sold, or offered for sale,
or shipped or delivered for shipment, or otherwise
[[Page 7608]]
introduced in interstate or foreign commerce.
Sec. 7.5 Ingredients and processes.
(a) Use of nonbeverage flavors and other nonbeverage ingredients
containing alcohol. (1) Nonbeverage flavors and other nonbeverage
ingredients containing alcohol may be used in producing a malt beverage
(sometimes referred to as a ``flavored malt beverage''). Except as
provided in paragraph (a)(2) of this section, no more than 49 percent
of the overall alcohol content (determined without regard to any
tolerance otherwise allowed by this part) of the finished product may
be derived from the addition of nonbeverage flavors and other
nonbeverage ingredients containing alcohol. For example, a finished
malt beverage that contains 5.0 percent alcohol by volume must derive a
minimum of 2.55 percent alcohol by volume from the fermentation of
barley malt and other materials and may derive not more than 2.45
percent alcohol by volume from the addition of nonbeverage flavors and
other nonbeverage ingredients containing alcohol.
(2) In the case of malt beverages with an alcohol content of more
than 6 percent by volume (determined without regard to any tolerance
otherwise allowed by this part), no more than 1.5 percent of the volume
of the malt beverage may consist of alcohol derived from added
nonbeverage flavors and other nonbeverage ingredients containing
alcohol.
(b) Processing. Malt beverages may be filtered or otherwise
processed in order to remove color, taste, aroma, bitterness, or other
characteristics derived from fermentation.
Sec. 7.6 Brewery products not covered by this part.
Certain fermented products that are regulated as ``beer'' under the
Internal Revenue Code (IRC) do not fall within the definition of a
``malt beverage'' under the FAA Act and thus are not subject to this
part. See Sec. 7.7 for related TTB regulations that may apply to these
products. See Sec. Sec. 25.11 and 27.11 of this chapter for the
definition of ``beer'' under the IRC.
(a) Sak[eacute] and similar products. Sak[eacute] and similar
products (including products that fall within the definition of
``beer'' under parts 25 and 27 of this chapter) that fall within the
definition of a ``wine'' under the FAA Act are covered by the labeling
regulations for wine in 27 CFR part 4.
(b) Other beers not made with both malted barley and hops. The
regulations in this part do not cover beer products that are not made
with both malted barley and hops, or their parts or their products, or
that do not fall within the definition of a ``malt beverage'' under
Sec. 7.1 for any other reason. Bottlers and importers of alcohol
beverages that do not fall within the definition of malt beverages,
wine, or distilled spirits under the FAA Act should refer to the
applicable labeling regulations for foods issued by the U.S. Food and
Drug Administration. See 21 CFR part 101.
Sec. 7.7 Other TTB labeling regulations that apply to malt
beverages.
In addition to the regulations in this part, malt beverages must
also comply with the following TTB labeling regulations:
(a) Health warning statement. Alcoholic beverages, including malt
beverages, that contain at least 0.5 percent alcohol by volume, must be
labeled with a health warning statement in accordance with the
Alcoholic Beverage Labeling Act of 1988 (ABLA). The regulations
implementing the ABLA are contained in 27 CFR part 16.
(b) Internal Revenue Code requirements. The labeling and marking
requirements for beer under the Internal Revenue Code are found in 27
CFR part 25, subpart J (for domestic breweries) and 27 CFR part 27,
subpart E (for importers).
Sec. 7.8 Malt beverages for export.
The regulations in this part shall not apply to malt beverages
exported in bond.
Sec. 7.9 [Reserved]
Sec. 7.10 Other related regulations.
(a) TTB regulations. Other TTB regulations that relate to malt
beverages are listed in paragraphs (a)(1) through (8) of this section:
(1) 27 CFR part 1--Basic Permit Requirements Under the Federal
Alcohol Administration Act, Nonindustrial Use of Distilled Spirits and
Wine, Bulk Sales and Bottling of Distilled Spirits;
(2) 27 CFR part 13--Labeling Proceedings;
(3) 27 CFR part 16--Alcoholic Beverage Health Warning Statement;
(4) 27 CFR part 25--Beer;
(5) 27 CFR part 26--Liquors and Articles from Puerto Rico and the
Virgin Islands;
(6) 27 CFR part 27--Importation of Distilled Spirits, Wines, and
Beer;
(7) 27 CFR part 28--Exportation of Alcohol; and
(8) 27 CFR part 71--Rules of Practice in Permit Proceedings.
(b) Other Federal regulations. The regulations listed in paragraphs
(b)(1) through (8) of this section issued by other Federal agencies
also may apply:
(1) 7 CFR part 205--National Organic Program;
(2) 19 CFR part 11--Packing and Stamping; Marking;
(3) 19 CFR part 102--Rules of Origin;
(4) 19 CFR part 134--Country of Origin Marking;
(5) 21 CFR part 1--General Enforcement Provisions, Subpart H,
Registration of Food Facilities, and Subpart I, Prior Notice of
Imported Food;
(6) 21 CFR parts 70-82, which pertain to food and color additives;
(7) 21 CFR part 110--Current Good Manufacturing Practice in
Manufacturing, Packing, or Holding Human Food; and
(8) 21 CFR parts 170-189, which pertain to food additives and
secondary direct food additives for human consumption.
Sec. 7.11 Forms.
(a) General. TTB prescribes and makes available all forms required
by this part. Any person completing a form must provide all of the
information required by each form as indicated by the headings on the
form and the instructions for the form. Each form must be filed in
accordance with this part and the instructions for the form.
(b) Electronically filing forms. The forms required by this part
can be filed electronically by using TTB's online filing systems: COLAs
Online and Formulas Online. Anyone who intends to use one of these
online filing systems must first register to use the system by
accessing the TTB website at https://www.ttb.gov.
(c) Obtaining paper forms. Forms required by this part are
available for printing through the TTB website (https://www.ttb.gov) or
by mailing a request to the Alcohol and Tobacco Tax and Trade Bureau,
National Revenue Center, 550 Main Street, Room 8002, Cincinnati, OH
45202.
Sec. 7.12 Delegations of the Administrator.
Most of the regulatory authorities of the Administrator contained
in this part are delegated to ``appropriate TTB officers.'' To find out
which officers have been delegated specific authorities, see the
current version of TTB Order 1135.7, Delegation of the Administrator's
Authorities in 27 CFR part 7, Labeling and Advertising of Malt
Beverages. Copies of this order can be obtained by accessing the TTB
website (https://www.ttb.gov) or by mailing a request to the Alcohol
and Tobacco Tax
[[Page 7609]]
and Trade Bureau, National Revenue Center, 550 Main Street, Room 8002,
Cincinnati, OH 45202.
Subpart B--Certificates of Label Approval
Requirements for Malt Beverages Bottled in the United States
Sec. 7.21 Requirement for certificates of label approval (COLAs) for
malt beverages bottled in the United States.
(a) COLA requirement. Subject to the requirements and exceptions
set forth in paragraphs (b) and (c) of this section, a brewer or
wholesaler bottling malt beverages must obtain a certificate of label
approval (COLA) covering the malt beverages from TTB prior to bottling
the malt beverages or removing the malt beverages from the premises
where they were bottled.
(b) Malt beverages shipped or sold in interstate commerce. Persons
bottling malt beverages (other than malt beverages in customs custody)
for shipment, or delivery for sale or shipment, into a State (from
outside of that State) are required to obtain a COLA covering those
malt beverages only if the laws or regulations of the State require
that all malt beverages sold or otherwise disposed of in such State be
labeled in conformity with the requirements of subparts D through I of
this part. This requirement applies when the State has either adopted
subparts D through I of this part in their entireties or has adopted
requirements that are identical in effect to those set forth in
subparts D through I of this part. In accordance with Sec. Sec. 7.3
and 7.4, malt beverages that are not subject to the COLA requirements
of this section may still be subject to the substantive labeling
provisions of subparts D through I of this part to the extent that the
State into which the malt beverages are being shipped has similar State
laws or regulations.
(c) Products not shipped or sold in interstate commerce. Persons
bottling malt beverages that will not be shipped or delivered for sale
or shipment in interstate or foreign commerce are not required to
obtain a COLA or a certificate of exemption from label approval. (Note:
A certificate of exemption from label approval is a certificate issued
by TTB to cover a wine or distilled spirits product that will not be
sold, offered for sale, shipped, delivered for shipment, or otherwise
introduced, in interstate or foreign commerce.)
(d) Evidence of COLA. Upon request by the appropriate TTB officer,
a bottler or importer must provide evidence of label approval for a
label used on a container of malt beverages that is subject to the COLA
requirements of this part. This requirement may be satisfied by
providing original COLAs, photocopies, or electronic copies of COLAs,
or records showing the TTB identification number assigned to the
approved COLA.
Sec. 7.22 Rules regarding certificates of label approval (COLAs) for
malt beverages bottled in the United States.
(a) What a COLA authorizes. An approved TTB Form 5100.31 authorizes
the bottling of malt beverages covered by the certificate of label
approval (COLA), as long as the container bears labels identical to the
labels appearing on the face of the COLA, or labels with changes
authorized by TTB on the COLA or otherwise, (such as through the
issuance of public guidance available on the TTB website at https://www.ttb.gov).
(b) When to obtain a COLA. The COLA must be obtained prior to
bottling. No brewer or wholesaler may bottle malt beverages or remove
malt beverages from the premises where bottled unless a COLA has been
obtained.
(c) Application for a COLA. The bottler may apply for a COLA by
submitting an application to TTB on Form 5100.31, in accordance with
the instructions on the form. The bottler may apply for a COLA either
electronically by accessing TTB's online system, COLAs Online, at
https://www.ttb.gov, or by submitting the paper form. For procedures
regarding the issuance of COLAs, see part 13 of this chapter.
Sec. 7.23 [Reserved]
Requirements for Malt Beverages Imported in Containers
Sec. 7.24 Certificates of label approval (COLAs) for malt beverages
imported in containers.
(a) Application requirement. Any person removing malt beverages in
containers from customs custody for consumption must first apply for
and obtain a certificate of label approval (COLA) covering the malt
beverages from the appropriate TTB officer, or obtain authorization to
use the COLA from the person to whom the COLA is issued.
(b) Release of malt beverages from customs custody. Malt beverages,
imported in containers, are not eligible for release from customs
custody for consumption, and no person may remove such malt beverages
from customs custody for consumption, unless the person removing the
malt beverages has obtained a COLA covering the malt beverages and is
able to provide it (either electronically or on paper) upon request.
Products imported under another person's COLA are eligible for release
only if each bottle or individual container to be imported bears the
name (or trade name) and address of the person to whom the COLA was
issued by TTB, and only if the importer using the COLA to obtain
release of a shipment can substantiate that the person to whom the COLA
was issued has authorized its use by the importer.
(c) Filing requirements. If filing electronically, the importer
must file with U.S Customs and Border Protection (CBP), at the time of
filing the customs entry, the TTB-assigned identification number of the
valid COLA that corresponds to the label on the product or lot of malt
beverages being imported. If the importer is not filing electronically,
the importer must provide a copy of the COLA to CBP at the time of
entry. In addition, the importer must provide a copy of the applicable
COLA, and proof of the COLA holder's authorization if applicable, upon
request by the appropriate TTB officer or a customs officer.
(d) Evidence of COLA. Upon request by the appropriate TTB officer,
an importer must provide evidence of label approval for a label used on
a container of malt beverages that is subject to the COLA requirements
of this part. This requirement may be satisfied by providing original
COLAs, photocopies, or electronic copies of COLAs, or records showing
the TTB identification number assigned to the approved COLA.
(e) Scope of this section. The COLA requirement imposed by this
section applies only to malt beverages that are removed for sale or any
other commercial purpose. See 27 CFR 27.49, 27.74, and 27.75 for
labeling exemptions applicable to certain imported samples of malt
beverages.
(f) Relabeling in customs custody. Containers of malt beverages in
customs custody that are required to be covered by a COLA but are not
labeled in conformity with a COLA must be relabeled, under the
supervision and direction of customs officers, prior to their removal
from customs custody for consumption.
(g) State law. Paragraphs (a) through (c) of this section apply
only if the laws or regulations of the State in which the malt
beverages are withdrawn require that all malt beverages sold or
otherwise disposed of in such State be labeled in conformity with the
requirements of subparts D through I of this part. A State
[[Page 7610]]
requires that malt beverages be labeled in conformity with the
requirements of subparts D through I of this part when the State has
either adopted subparts D through I of this part in their entireties or
has adopted requirements identical in effect to those set forth in
subparts D through I in this part. In accordance with Sec. Sec. 7.3
and 7.4, malt beverages that are not subject to the COLA requirements
of this section may still be subject to the substantive labeling
provisions of subparts D through I of this part to the extent that the
State into which the malt beverages are being shipped has similar State
law or regulation.
Sec. 7.25 Rules regarding certificates of label approval (COLAs) for
malt beverages imported in containers.
(a) What a COLA authorizes. An approved TTB Form 5100.31 authorizes
the use of the labels covered by the certificate of label approval
(COLA) on containers of malt beverages, as long as the container bears
labels identical to the labels appearing on the face of the COLA, or
labels with changes authorized by the form or otherwise authorized by
TTB (such as through the issuance of public guidance available on the
TTB website at https://www.ttb.gov).
(b) When to obtain a COLA. The COLA must be obtained prior to the
removal of malt beverages in containers from customs custody for
consumption.
(c) Application for a COLA. The person responsible for the
importation of malt beverages must obtain approval of the labels by
submitting an application to TTB on Form 5100.31. A person may apply
for a COLA either electronically by accessing TTB's online system,
COLAs Online, at https://www.ttb.gov or by submitting the paper form.
For procedures regarding the issuance of COLAs, see part 13 of this
chapter.
Administrative Rules
Sec. 7.27 Presenting certificates of label approval (COLAs) to
Government officials.
A certificate holder must present the original or a paper or
electronic copy of the appropriate certificate of label approval (COLA)
upon the request of any duly authorized representative of the United
States Government.
Sec. 7.28 Formulas, samples, and documentation.
(a) Prior to or in conjunction with the review of an application
for a certificate of label approval (COLA) on TTB Form 5100.31, the
appropriate TTB officer may require a bottler or importer to submit a
formula, the results of laboratory testing of the malt beverage, or a
sample of any malt beverage or ingredients used in producing a malt
beverage. After the issuance of a COLA, or with regard to any malt
beverage required to be covered by a COLA, the appropriate TTB officer
may require a full and accurate statement of the contents of the
container.
(b) A formula may be filed electronically by using Formulas Online,
or it may be submitted on paper on TTB Form 5100.51. See Sec. 7.11 for
more information on forms and Formulas Online.
Sec. 7.29 Personalized labels.
(a) General. Applicants for label approval may obtain permission
from TTB to make certain changes in order to personalize labels without
having to resubmit labels for TTB approval. A personalized label is an
alcohol beverage label that meets the minimum mandatory label
requirements and is customized for customers. Personalized labels may
contain a personal message, picture, or other artwork that is specific
to the consumer who is purchasing the product. For example, a brewer
may offer individual or corporate customers labels that commemorate an
event such as a wedding or grand opening.
(b) Application. Any person who intends to offer personalized
labels must submit a template for the personalized label as part of the
application for label approval required under Sec. Sec. 7.21 or 7.24,
and must note on the application a description of the specific
personalized information that may change.
(c) Approval of personalized label. If the application complies
with the regulations, TTB will issue a certificate of label approval
(COLA) with a qualification allowing the personalization of labels. The
qualification will allow the certificate holder to add or change items
on the personalized label such as salutations, names, graphics,
artwork, congratulatory dates and names, or event dates without
applying for a new COLA. All of these items on personalized labels must
comply with the regulations of this part.
(d) Changes not allowed to personalized labels. Approval of an
application to personalize labels does not authorize the addition of
any information that discusses either the alcohol beverage or
characteristics of the alcohol beverage or that is inconsistent with or
in violation of the provisions of this part or any other applicable
provision of law or regulations.
Subpart C--Alteration of Labels, Relabeling, and Adding Information
to Containers
Sec. 7.41 Alteration of labels.
(a) Prohibition. It is unlawful for any person to alter, mutilate,
destroy, obliterate or remove any mark, brand, or label on malt
beverages in containers held for sale in interstate or foreign
commerce, or held for sale after shipment in interstate or foreign
commerce, except as authorized by Sec. Sec. 7.42, 7.43, or 7.44, or as
otherwise authorized by Federal law.
(b) Authorized relabeling. For purposes of the relabeling
activities authorized by this subpart, the term ``relabel'' includes
the alteration, mutilation, destruction, obliteration, or removal of
any existing mark, brand, or label on the container, as well as the
addition of a new label (such as a sticker that adds information about
the product or information engraved on the container) to the container,
and the replacement of a label with a new label bearing identical
information.
(c) Obligation to comply with other requirements. Authorization to
relabel under this subpart:
(1) In no way authorizes the placement of labels on containers that
do not accurately reflect the brand, bottler, identity, or other
characteristics of the product;
(2) Does not relieve the person conducting the relabeling
operations from any obligation to comply with the regulations in this
part and with State or local law: and,
(3) Does not relieve the person conducting the relabeling
operations from any obligation to obtain permission from the owner of
the brand where otherwise required.
Sec. 7.42 Authorized relabeling activities by brewers and importers.
(a) Relabeling at brewery premises. A brewer may relabel
domestically bottled malt beverages prior to removal from, and after
return to bond at, the brewery premises, with labels covered by a
certificate of label approval (COLA) without obtaining separate
permission from TTB for the relabeling activity, provided that the
brewer is the certificate holder (and bottler).
(b) Relabeling after removal from brewery premises. A brewer may
relabel domestically bottled malt beverages (or direct the relabeling
of such malt beverages by an authorized agent) after removal from
brewery premises with labels covered by a COLA, without obtaining
separate permission from TTB for the relabeling activity, provided that
[[Page 7611]]
the brewer is the certificate holder (and bottler).
(c) Relabeling in customs custody. Under the supervision of U.S.
customs officers, imported malt beverages in containers in customs
custody may be relabeled without obtaining separate permission from TTB
for the relabeling activity. Such containers must bear labels covered
by a certificate of label approval (COLA) upon their removal from
customs custody for consumption. See Sec. 7.24(b).
(d) Relabeling after removal from customs custody. The importer of
malt beverages in containers may relabel such malt beverages (or direct
the relabeling of such malt beverages by an authorized agent) after
removal from customs custody without obtaining separate permission from
TTB for the relabeling activity, as long as the labels are covered by a
COLA.
Sec. 7.43 Relabeling activities that require separate written
authorization from TTB.
(a) General. Any permittee or brewer holding malt beverages for
sale who needs to relabel the containers but is not the original
bottler may apply for written permission for the relabeling of malt
beverage containers. The appropriate TTB officer may permit relabeling
of malt beverages in containers if the facts show that the relabeling
is for the purpose of compliance with the requirements of this part or
State law, or for the purpose of replacing damaged labels.
(b) Application. The written application must include:
(1) Copies of the original and proposed new labels;
(2) The circumstances of the request, including the reason for
relabeling;
(3) The number of containers to be relabeled;
(4) The location where the relabeling will take place; and,
(5) The name and address of the person who will be conducting the
relabeling operations.
Sec. 7.44 Adding a label or other information to a container that
identifies the wholesaler, retailer, or consumer.
Any label or other information that identifies the wholesaler,
retailer, or consumer of the malt beverage may be added to containers
(by the addition of stickers, engraving, stenciling, etc.) without
prior approval from TTB and without being covered by a certificate of
label approval. Such information may be added before or after the
containers are removed from brewery premises or released from customs
custody. The information added:
(a) May not violate the provisions of subparts F, G, and H of this
part;
(b) May not contain any reference to the characteristics of the
product; and
(c) May not be added to the container in such a way that it
obscures any other label on the container.
Subpart D--Label Standards
Sec. 7.51 Requirement for firmly affixed labels.
(a) General rule. Except as otherwise provided in paragraph (b) of
this section, any label that is not an integral part of the container
must be affixed to the container in such a way that it cannot be
removed without thorough application of water or other solvents.
(b) Exception for keg labels. The following provisions apply to
labels on kegs with a capacity of 5.16 gallons or more that bear
mandatory information, as defined by Sec. 7.61(a)(5), and are in the
form of a keg collar or tap cover, as defined in Sec. 7.1.
(1) Such keg collars or tap covers are considered to be firmly
affixed if removal would break or destroy the keg collar or tap cover
in such a way that it cannot be reused.
(2) Such keg collars or tap covers are not required to be firmly
affixed, provided that the name of the bottler or importer of the malt
beverage, as applicable under Sec. Sec. 7.66-7.68, is permanently or
semi-permanently stated on the keg in the form of embossing, engraving,
stamping, or through the use of a sticker or ink jet method.
(c) This section in no way affects the requirements of part 16 of
this chapter regarding the mandatory health warning statement.
Sec. 7.52 Legibility and other requirements for mandatory
information on labels.
(a) Readily legible. Mandatory information on labels must be
readily legible to potential consumers under ordinary conditions.
(b) Separate and apart. Subject to the exceptions below, mandatory
information on labels, except brand names, must be separate and apart
from any additional information.
(1) This does not preclude the addition of brief optional phrases
of additional information as part of the class or type designation
(such as ``premium malt beverage''), the name and address statement
(such as ``Proudly brewed and bottled by ABC Brewing Co. in Pittsburgh,
PA, for over 30 years''), or other information required by Sec.
7.63(a). The statements required by Sec. 7.63(b) may not include
additional information.
(2) Mandatory information (other than an aspartame declaration
required by Sec. 7.63(b)(4)) may be contained among other descriptive
or explanatory information if the script, type, or printing of the
mandatory information is substantially more conspicuous than that of
the descriptive or explanatory information.
(c) Contrasting background. Mandatory information must appear in a
color that contrasts with the background on which it appears, except
that if the net contents or the name and address are blown into a glass
container, they need not be contrasting. The color of the container and
of the malt beverages must be taken into account if the label is
transparent or if mandatory label information is etched, engraved,
sandblasted, or otherwise carved into the surface of the container or
is branded, stenciled, painted, printed, or otherwise directly applied
on to the surface of the container. Examples of acceptable contrasts
are:
(1) Black lettering appearing on a white or cream background; or
(2) White or cream lettering appearing on a black background.
(d) Capitalization. Except for the aspartame statement when
required by Sec. 7.63(b)(4), which must appear in all capital letters,
mandatory information may appear in all capital letters, in all lower
case letters, or in mixed-case using both capital and lower-case
letters.
Sec. 7.53 Type size of mandatory information and alcohol content
statements.
(a) All capital and lowercase letters in statements of mandatory
information on labels must meet the following type size requirements.
(1) Minimum type size--Containers of more than one-half pint. All
mandatory information (including an alcohol content statement required
by Sec. 7.63(a)(3)) must be in script, type, or printing that is at
least two millimeters in height.
(2) Minimum type size--Containers of one-half pint or less. All
mandatory information (including an alcohol content statement required
by Sec. 7.63(a)(3)) must be in script, type, or printing that is at
least one millimeter in height.
(b) Maximum type size for mandatory and optional alcohol content
statements--(1) Containers of more than 40 fluid ounces. An alcohol
content statement, whether required or optional under this part, may
not appear in script, type, or printing that is more than four
millimeters in height on containers of malt beverages of more than 40
fluid ounces.
(2) Containers of 40 fluid ounces or less. An alcohol content
statement, whether required or optional under this
[[Page 7612]]
part, may not appear in script, type, or printing that is more than
three millimeters in height on containers of malt beverages of 40 fluid
ounces or less.
Sec. 7.54 Visibility of mandatory information.
Mandatory information on a label must be readily visible and may
not be covered or obscured in whole or in part. See Sec. 7.62 for
rules regarding packaging of containers (including cartons, coverings,
and cases). See subpart N of this part for regulations pertaining to
advertising materials.
Sec. 7.55 Language requirements.
(a) General. Mandatory information must appear in the English
language, with the exception of the brand name and except as provided
in paragraph (c) of this section.
(b) Foreign languages. Additional statements in a foreign language,
including translations of mandatory information that appears elsewhere
in English on the label, are allowed on labels and containers as long
as they do not in any way conflict with, or contradict, the
requirements of this part.
(c) Malt beverages for consumption in the Commonwealth of Puerto
Rico. Mandatory information may be stated solely in the Spanish
language on labels of malt beverages bottled for consumption within the
Commonwealth of Puerto Rico.
Sec. 7.56 Additional information.
Information (other than mandatory information) that is truthful,
accurate, and specific, and that does not violate subpart F, G, or H of
this part, may appear on labels. Such additional information may not
conflict with, modify, qualify or restrict mandatory information in any
manner.
Subpart E--Mandatory Label Information
Sec. 7.61 What constitutes a label for purposes of mandatory
information.
(a) Label. Certain information, as outlined in Sec. 7.63, must
appear on a label. When used in this part for purposes of determining
where mandatory information must appear, the term ``label'' includes:
(1) Material affixed to the container, whether made of paper,
plastic, metal, or other matter;
(2) For purposes of the net contents statement and the name and
address statement only, information blown, embossed, or molded into the
container as part of the process of manufacturing the container;
(3) Information etched, engraved, sandblasted, or otherwise carved
into the surface of the container;
(4) Information branded, stenciled, painted, printed, or otherwise
directly applied on to the surface of the container; and
(5) Information on a keg collar or a tap cover of a keg, only if it
includes mandatory information that is not repeated elsewhere on a
label firmly affixed to the container and only if it meets the
requirements of Sec. 7.51.
(b) Information appearing elsewhere on the container. Information
appearing on the following parts of the container is subject to all of
the restrictions and prohibitions set forth in subparts F, G, and H of
this part, but will not satisfy any requirements in this part for
mandatory information that must appear on labels:
(1) Material affixed to, or information appearing on, the bottom
surface of the container;
(2) Caps, corks, or other closures unless authorized to bear
mandatory information by the appropriate TTB officer; and
(3) Foil or heat shrink bottle capsules.
(c) Materials not firmly affixed to the container. Any materials
that accompany the container to the consumer but are not firmly affixed
to the container, including booklets, leaflets, and hang tags, are not
``labels'' for purposes of this part. Such materials are instead
subject to the advertising regulations in subpart N of this part.
Sec. 7.62 Packaging (cartons, coverings, and cases).
(a) General. The term ``packaging'' includes any covering, carton,
case, carrier, or other packaging of malt beverage containers used for
sale at retail, but does not include shipping cartons or cases that are
not intended to accompany the container to the consumer.
(b) Prohibition. Any packaging of malt beverage containers may not
contain any statement, design, device, or graphic, pictorial, or
emblematic representation that is prohibited on labels by regulations
in subpart F, G, or H of this part.
(c) Other information on packaging. The following requirements
apply to optional information on packaging.
(1) The packaging may display any information that is not in
conflict with the labeling on the container or containers within the
packaging.
(2) If the packaging displays a brand name, it must display the
brand name in its entirety. For example, if a brand name is required to
be modified with additional information on the container or containers
within the packaging, the packaging must also display the same
modifying language.
(3) If the packaging displays a class or type designation it must
be identical to the class or type designation appearing on the
container or containers within the packaging. For example, if the
packaging displays a class or type designation for a specialty product
for which a statement of composition is required on the container, the
packaging must include the statement of composition as well.
(d) Labeling of containers within the packaging. The container or
containers within the packaging are subject to all labeling
requirements of this part, including mandatory labeling information
requirements, regardless of whether the packaging bears such
information.
Sec. 7.63 Mandatory label information.
(a) Mandatory information. Malt beverage containers must bear a
label or labels (as defined in Sec. 7.61(a)) containing the following
information:
(1) Brand name, in accordance with Sec. 7.64;
(2) Class, type, or other designation, in accordance with subpart I
of this part;
(3) Alcohol content, in accordance with Sec. 7.65, for malt
beverages that contain any alcohol derived from added nonbeverage
flavors or other added nonbeverage ingredients (other than hops
extract) containing alcohol;
(4) Name and address of the bottler or importer (which may be
blown, embossed, or molded into the container as part of the process of
manufacturing the container), in accordance with Sec. 7.66, 7.67, or
7.68, as applicable; and
(5) Net contents (which may be blown, embossed, or molded into the
container as part of the process of manufacturing the container), in
accordance with Sec. 7.70.
(b) Disclosure of certain ingredients. Certain ingredients must be
declared on a label without the inclusion of any additional information
as part of the statement as follows:
(1) FD&C Yellow No. 5. If a malt beverage contains the coloring
material FD&C Yellow No. 5, the label must include a statement to that
effect, such as ``FD&C Yellow No. 5'' or ``Contains FD&C Yellow No.
5.''
(2) Cochineal extract or carmine. If a malt beverage contains the
color additive cochineal extract or the color additive carmine, the
label must include a statement to that effect, using the respective
common or usual name (such as, ``contains cochineal extract'' or
``contains carmine''). This requirement applies to labels when either
of the
[[Page 7613]]
coloring materials is used in a malt beverage that is removed from
bottling premises or from customs custody on or after April 16, 2013.
(3) Sulfites. If a malt beverage contains 10 or more parts per
million of sulfur dioxide or other sulfiting agent(s) measured as total
sulfur dioxide, the label must include a statement to that effect.
Examples of acceptable statements are ``Contains sulfites'' or
``Contains (a) sulfiting agent(s)'' or a statement identifying the
specific sulfiting agent. The alternative terms ``sulphites'' or
``sulphiting'' may be used.
(4) Aspartame. If the malt beverage contains aspartame, the label
must include the following statement, in capital letters, separate and
apart from all other information: ``PHENYLKETONURICS: CONTAINS
PHENYLALANINE.''
Sec. 7.64 Brand name.
(a) Requirement. The malt beverage label must include a brand name.
If the malt beverage is not sold under a brand name, then the name of
the bottler or importer, as applicable, appearing in the name and
address statement is treated as the brand name.
(b) Misleading brand names. Labels may not include any misleading
brand names. A brand name is misleading if it creates (by itself or in
association with other printed or graphic matter) any erroneous
impression or inference as to the age, origin, identity, or other
characteristics of the malt beverage. A brand name that would otherwise
be misleading may be qualified with the word ``brand'' or with some
other qualification if the appropriate TTB officer determines that the
qualification dispels any misleading impression that might otherwise be
created.
Sec. 7.65 Alcohol content.
(a) General. Alcohol content and the percentage and quantity of the
original gravity or extract may be stated on any malt beverage label,
unless prohibited by State law. When alcohol content is stated, and the
manner of statement is not required under State law, it must be stated
as prescribed in paragraph (b) of this section.
(b) How the alcohol content must be expressed. The following rules
apply to both mandatory and optional statements of alcohol content.
(1) A statement of alcohol content must be expressed as a
percentage of alcohol by volume. Other truthful, accurate, and specific
factual representations of alcohol content, such as alcohol by weight,
may be made, as long as they appear together with, and as part of, the
statement of alcohol content as a percentage of alcohol by volume.
(2) For malt beverages containing one half of one percent (0.5
percent) or more alcohol by volume, statements of alcohol content must
be expressed to the nearest one-tenth of a percentage point, subject to
the tolerance permitted by paragraph (c) of this section. For malt
beverages containing less than 0.5 percent alcohol by volume, alcohol
content may be expressed either to the nearest one-tenth or the nearest
one-hundredth of a percentage point, and such statements are not
subject to any tolerance. See paragraph (e) of this section for the
rules applicable to such statements.
(3)(i) The alcohol content statement must be expressed in one of
the following formats:
(A) ``Alcohol percent by volume'';
(B) ``percent alcohol by volume''; or
(C) ``Alcohol by volume: percent.''
(ii) Any of the words or symbols may be enclosed in parentheses and
authorized abbreviations may be used with or without a period. The
alcohol content statement does not have to appear with quotation marks.
(4) The statements listed in paragraph (b)(3) of this section must
appear as shown, except that the following abbreviations may be used:
Alcohol may be abbreviated as ``alc''; percent may be represented by
the percent symbol ``%''; alcohol and volume may be separated by a
slash ``/'' in lieu of the word ``by''; and volume may be abbreviated
as ``vol''.
(5) Examples. The following are examples of alcohol content
statements that comply with the requirements of this part:
(i) ``4.2% alc/vol'';
(ii) ``Alc. 4.0 percent by vol.'';
(iii) ``Alc 4% by vol''; and
(iv) ``5.9% Alcohol by Volume.''
(c) Tolerances. Except as provided by paragraph (d) of this
section, a tolerance of 0.3 percentage points will be permitted, either
above or below the stated alcohol content, for malt beverages
containing 0.5 percent or more alcohol by volume. However, any malt
beverage that is labeled as containing 0.5 percent or more alcohol by
volume may not contain less than 0.5 percent alcohol by volume,
regardless of any tolerance. The tolerance provided by this paragraph
does not apply in determining compliance with the provisions of Sec.
7.5 regarding the percentage of alcohol derived from added nonbeverage
flavors and other nonbeverage ingredients containing alcohol.
(d) Low alcohol and reduced alcohol. The terms ``low alcohol'' or
``reduced alcohol'' may be used only on labels of malt beverages
containing less than 2.5 percent alcohol by volume. The actual alcohol
content may not equal or exceed 2.5 percent alcohol by volume,
regardless of any tolerance permitted by paragraph (c) of this section.
(e) Non-alcoholic. The term ``non-alcoholic'' may be used on labels
of malt beverages only if the statement ``contains less than 0.5
percent (or .5%) alcohol by volume'' appears immediately adjacent to
it, in readily legible printing, and on a completely contrasting
background. No tolerances are permitted for malt beverages labeled as
``non-alcoholic'' and containing less than 0.5 percent alcohol by
volume. A malt beverage may not be labeled with an alcohol content of
0.0 percent alcohol by volume, unless it is also labeled as ``alcohol
free'' in accordance with paragraph (f) of this section, and contains
no alcohol.
(f) Alcohol free. The term ``alcohol free'' may be used only on
malt beverages containing no alcohol. No tolerances are permitted for
``alcohol free'' malt beverages.
Sec. 7.66 Name and address for domestically bottled malt beverages
that were wholly fermented in the United States.
(a) General. Domestically bottled malt beverages that were wholly
fermented in the United States and contain no imported malt beverages
must be labeled in accordance with this section. (See Sec. Sec. 7.67
and 7.68 for name and address requirements applicable to malt beverages
that are not wholly fermented in the United States.)
(b) Mandatory statement. A label on the container must state the
name and address of the bottler, in accordance with the rules set forth
in this section.
(c) Form of address. The address consists of the city and State and
must be consistent with the information reflected on the brewer's
notice required under part 25 of this chapter. Addresses may, but are
not required to, include additional information such as street names,
counties, zip codes, phone numbers, and website addresses. The postal
abbreviation of the State name may be used; for example, California may
be abbreviated as CA.
(d) Optional statements. The bottler may, but is not required to,
be identified by a phrase describing the function performed by that
person, such as ``bottled by,'' ``canned by,'' ``packed by,'' or
``filled by,'' followed by the name and address of the bottler. If one
person performs more than one function, the label may so indicate (for
[[Page 7614]]
example, ``brewed and bottled by XYZ Brewery.'') If different functions
are performed by more than one person, statements on the label may not
create the misleading impression that the different functions were
performed by the same person. The appropriate TTB officer may require
specific information about the functions performed if necessary to
prevent a misleading impression on the label.
(e) Principal place of business. The bottler's principal place of
business may be shown in lieu of the actual place where the malt
beverage was bottled if the address shown is a location where a
bottling operation takes place. The appropriate TTB officer may
disapprove the listing of a principal place of business if its use
would create a false or misleading impression as to the geographic
origin of the malt beverage. See 27 CFR 25.141 and 25.142 for coding
requirements applicable in these circumstances.
(f) Multiple breweries under the same ownership. If two or more
breweries are owned or operated by the same person, the place where the
malt beverage is bottled within the meaning of paragraph (a) of this
section may be shown in one of the following two ways:
(1) Listing of where bottled. The place where the malt beverage is
bottled may be shown as the only location on the label; or
(2) Listing of all brewer's locations. The place where the malt
beverage is bottled may appear in a listing of the locations of
breweries owned by that person if the place of bottling is not given
less emphasis than any of the other locations. See 27 CFR 25.141 and
25.142 for coding requirements applicable in these circumstances.
(g) Malt beverages bottled for another person. (1) If malt
beverages are bottled for another person, the label may state, in
addition to (but not in lieu of) the name and address of the bottler,
the name and address of such other person, immediately preceded by the
words ``brewed and bottled for'' or ``bottled for'' or another similar
appropriate phrase. Such statements must clearly indicate the
relationship between the two persons (for example, contract brewing).
(2) If the same brand of malt beverage is brewed and bottled by two
or more breweries that are not under the same ownership, the label for
each brewery may set forth all the locations where bottling takes
place, as long as the label uses the actual location (and not the
principal place of business) and as long as the nature of the
arrangement is clearly set forth.
(h) Use of trade names. The name of the person appearing on the
label may be the trade name or the operating name, as long as it is
identical to a trade or operating name appearing on the brewer's
notice.
Sec. 7.67 Name and address for domestically bottled malt beverages
that were bottled after importation.
(a) General. This section applies to domestically bottled malt
beverages that were bottled after importation. See Sec. 7.68 for name
and address requirements applicable to imported malt beverages that are
imported in a container. See 19 CFR parts 102 and 134 for U.S. Customs
and Border Protection country of origin marking requirements.
(b) Malt beverages that were subject to blending or other
production activities after importation. Malt beverages that were
subject, after importation, to blending or other production may not
bear an ``imported by'' statement on the label, but must instead be
labeled in accordance with the rules set forth in Sec. 7.66 with
regard to mandatory and optional labeling statements.
(c) Malt beverages bottled after importation without blending or
other production activities. The label on malt beverages that are
bottled without being subject to blending or other production
activities in the United States after the malt beverages were imported
must state the words ``imported by'' or a similar appropriate phrase,
followed by the name and address of the importer. The label must also
state the words ``bottled by'' or ``packed by,'' followed by the name
and address of the bottler, except that the following phrases are
acceptable in lieu of the name and address of the bottler under the
circumstances set forth below:
(1) If the malt beverages were bottled for the person responsible
for the importation, the words ``imported and bottled (canned, packed
or filled) in the United States for'' (or a similar appropriate phrase)
followed by the name and address of the principal place of business in
the United States of the person responsible for the importation;
(2) If the malt beverages were bottled by the person responsible
for the importation, the words ``imported and bottled (canned, packed
or filled) in the United States by'' (or a similar appropriate phrase)
followed by the name and address of the principal place of business in
the United States of the person responsible for the importation;
(3) In the situations set forth in paragraphs (c)(1) and (2) of
this section, the address shown on the label may be that of the
principal place of business of the importer who is also the bottler,
provided that the address shown is a location where bottling takes
place.
(d) Use of trade names. A trade name may be used if the trade name
is listed on the importer's basic permit.
Sec. 7.68 Name and address for malt beverages that are imported in a
container.
(a) General. This section applies to malt beverages that are
imported in a container, as defined in Sec. 7.1. See Sec. 7.67 for
rules regarding name and address requirements applicable to malt
beverages that are domestically bottled after importation. See 19 CFR
parts 102 and 134 for U.S. Customs and Border Protection country of
origin marking requirements.
(b) Mandatory labeling statement. The label on malt beverages
imported in containers, as defined in Sec. 7.1, must state the words
``imported by'' or a similar appropriate phrase, followed by the name
and address of the importer.
(1) For purposes of this section, the importer is the holder of the
importer's basic permit that either makes the original customs entry or
is the person for whom such entry is made, or the holder of the
importer's basic permit that is the agent, distributor, or franchise
holder for the particular brand of imported alcohol beverages and that
places the order abroad.
(2) The address of the importer must be stated as the city and
State of the principal place of business and must be consistent with
the address reflected on the importer's basic permit. Addresses may,
but are not required to, include additional information such as street
names, counties, zip codes, phone numbers, and website addresses. The
postal abbreviation of the State name may be used; for example,
California may be abbreviated as CA.
Sec. 7.69 Country of origin.
For U.S. Customs and Border Protection (CBP) rules regarding
country of origin marking requirements, see the CBP regulations at 19
CFR parts 102 and 134.
Sec. 7.70 Net contents.
The following rules apply to the net contents statement required by
Sec. 7.63.
(a) The volume of malt beverage in the container must appear on a
label as a net contents statement using the following measures:
(1) If less than one pint, the net contents must be stated in fluid
ounces or fractions of a pint.
(2) If one pint, one quart, or one gallon, the net contents must be
so stated.
(3) If more than one pint, but less than one quart, the net
contents must be
[[Page 7615]]
stated in fractions of a quart, or in pints and fluid ounces.
(4) If more than one quart, but less than one gallon, the net
contents must be stated in fractions of a gallon, or in quarts, pints,
and fluid ounces.
(5) If more than one gallon, the net contents must be stated in
gallons and fractions thereof.
(b) All fractions must be expressed in their lowest denominations.
(c) Metric measures may be used in addition to, but not in lieu of,
the U.S. customary units of measurement and must appear in the same
field of vision.
Subpart F--Restricted Labeling Statements
Sec. 7.81 General.
(a) Application. The labeling practices, statements, and
representations in this subpart may be used on malt beverage labels
only when used in compliance with this subpart. In addition, if any of
the practices, statements, or representations in this subpart are used
elsewhere on containers or in packaging, they must comply with the
requirements of this subpart. For purposes of this subpart:
(1) The term ``label'' includes all labels on malt beverage
containers on which mandatory information may appear, as set forth in
Sec. 7.61(a), as well as any other label on the container.
(2) The term ``container'' includes all parts of the malt beverage
container, including any part of a malt beverage container on which
mandatory information may appear, as well as those parts of the
container on which information does not satisfy mandatory labeling
requirements, as set forth in Sec. 7.61(b).
(3) The term ``packaging'' includes any carton, case, carrier,
individual covering, or other packaging of such containers used for
sale at retail, but does not include shipping cartons or cases that are
not intended to accompany the container to the consumer.
(b) Statement or representation. For purposes of this subpart, the
term ``statement or representation'' includes any statement, design,
device, or representation, and includes pictorial or graphic designs or
representations as well as written ones. The term ``statement or
representation'' includes explicit and implicit statements and
representations.
Food Allergen Labeling
Sec. 7.82 Voluntary disclosure of major food allergens.
(a) Definitions. For purposes of this section, the following terms
have the meanings indicated.
(1) Major food allergen means any of the following:
(i) Milk, egg, fish (for example, bass, flounder, or cod),
Crustacean shellfish (for example, crab, lobster, or shrimp), tree nuts
(for example, almonds, pecans, or walnuts), wheat, peanuts, and
soybeans; or
(ii) A food ingredient that contains protein derived from a food
specified in paragraph (a)(1)(i) of this section, except:
(A) Any highly refined oil derived from a food specified in
paragraph (a)(1)(i) of this section and any ingredient derived from
such highly refined oil; or
(B) A food ingredient that is exempt from major food allergen
labeling requirements pursuant to a petition for exemption approved by
the Food and Drug Administration (FDA) under 21 U.S.C. 343(w)(6) or
pursuant to a notice submitted to the FDA under 21 U.S.C. 343(w)(7),
provided that the food ingredient meets the terms or conditions, if
any, specified for that exemption.
(2) Name of the food source from which each major food allergen is
derived means the name of the food as listed in paragraph (a)(1)(i) of
this section, except that:
(i) In the case of a tree nut, it means the name of the specific
type of nut (for example, almonds, pecans, or walnuts);
(ii) In the case of Crustacean shellfish, it means the name of the
species of Crustacean shellfish (for example, crab, lobster, or
shrimp); and
(iii) The names ``egg'' and ``peanuts,'' as well as the names of
the different types of tree nuts, may be expressed in either the
singular or plural form, and the names ``soy,'' ``soybean,'' or
``soya'' may be used instead of ``soybeans.''
(b) Voluntary labeling standards. Major food allergens used in the
production of a malt beverage product may, on a voluntary basis, be
declared on a label. However, if any one major food allergen is
voluntarily declared, all major food allergens used in production of
the malt beverage product, including major food allergens used as
fining or processing agents, must be declared, except when covered by a
petition for exemption approved by the appropriate TTB officer under
Sec. 7.83. The major food allergens declaration must consist of the
word ``Contains'' followed by a colon and the name of the food source
from which each major food allergen is derived (for example,
``Contains: egg'').
(c) Cross reference. For mandatory labeling requirements applicable
to malt beverage products containing FD&C Yellow No. 5, sulfites,
aspartame, and cochineal extract or carmine, see Sec. 7.63(b).
Sec. 7.83 Petitions for exemption from major food allergen labeling.
(a) Submission of petition. Any person may petition the appropriate
TTB officer to exempt a particular product or class of products from
the labeling requirements of Sec. 7.82. The burden is on the
petitioner to provide scientific evidence (as well as the analytical
method used to produce the evidence) that demonstrates that the
finished product or class of products, as derived by the method
specified in the petition, either:
(1) Does not cause an allergic response that poses a risk to human
health; or
(2) Does not contain allergenic protein derived from one of the
foods identified in Sec. 7.82(a)(1)(i), even though a major food
allergen was used in production.
(b) Decision on petition. TTB will approve or deny a petition for
exemption submitted under paragraph (a) of this section in writing
within 180 days of receipt of the petition. If TTB does not provide a
written response to the petitioner within that 180-day period, the
petition will be deemed denied unless an extension of time for decision
is mutually agreed upon by the appropriate TTB officer and the
petitioner. TTB may confer with the Food and Drug Administration (FDA)
on petitions for exemption, as appropriate and as FDA resources permit.
TTB may require the submission of product samples and other additional
information in support of a petition; however, unless required by TTB,
the submission of samples or additional information by the petitioner
after submission of the petition will be treated as the withdrawal of
the initial petition and the submission of a new petition. An approval
or denial under this section will constitute final agency action.
(c) Resubmission of a petition. After a petition for exemption is
denied under this section, the petitioner may resubmit the petition
along with supporting materials for reconsideration at any time. TTB
will treat this submission as a new petition.
(d) Availability of information--(1) General. TTB will promptly
post to its website (https://www.ttb.gov) all petitions received under
this section as well as TTB's responses to those
[[Page 7616]]
petitions. Any information submitted in support of the petition that is
not posted to the TTB website will be available to the public pursuant
to the Freedom of Information Act (5 U.S.C. 552), except where a
request for confidential treatment is granted under paragraph (d)(2) of
this section.
(2) Requests for confidential treatment of business information. A
person who provides trade secrets or other commercial or financial
information in connection with a petition for exemption under this
section may request that TTB give confidential treatment to that
information. A failure to request confidential treatment at the time
the information in question is submitted to TTB will constitute a
waiver of confidential treatment. A request for confidential treatment
of information under this section must conform to the following
standards:
(i) The request must be in writing;
(ii) The request must clearly identify the information to be kept
confidential;
(iii) The request must relate to information that constitutes trade
secrets or other confidential, commercial, or financial information
regarding the business transactions of an interested person, the
disclosure of which would cause substantial harm to the competitive
position of that person;
(iv) The request must set forth the reasons why the information
should not be disclosed, including the reasons the disclosure of the
information would prejudice the competitive position of the interested
person; and
(v) The request must be supported by a signed statement by the
interested person, or by an authorized officer or employee of that
person, certifying that the information in question is a trade secret
or other confidential, commercial, or financial information and that
the information is not already in the public domain.
Production and Other Claims
Sec. 7.84 Use of the term ``organic.''
Use of the term ``organic'' is permitted if any such use complies
with the United States Department of Agriculture (USDA) National
Organic Program rules (7 CFR part 205), as interpreted by the USDA.
Sec. 7.85 [Reserved]
Sec. 7.86 [Reserved]
Sec. 7.87 [Reserved]
Subpart G--Prohibited Labeling Practices
Sec. 7.101 General.
(a) Application. The prohibitions set forth in this subpart apply
to any malt beverage label, container, or packaging. For purposes of
this subpart:
(1) The term ``label'' includes all labels on malt beverage
containers on which mandatory information may appear, as set forth in
Sec. 7.61(a), as well as any other label on the container;
(2) The term ``container'' includes all parts of the malt beverage
container, including any part of a malt beverage container on which
mandatory information may appear, as well as those parts of the
container on which information does not satisfy mandatory labeling
requirements, as set forth in Sec. 7.61(b); and
(3) The term ``packaging'' includes any carton, case, carrier,
individual covering, or other packaging of such containers used for
sale at retail but does not include shipping cartons or cases that are
not intended to accompany the container to the consumer.
(b) Statement or representation. For purposes of the practices in
this subpart, the term ``statement or representation'' includes any
statement, design, device, or representation, and includes pictorial or
graphic designs or representations as well as written ones. The term
``statement or representation'' includes explicit and implicit
statements and representations.
Sec. 7.102 False or untrue statements.
Malt beverage labels, containers, or packaging may not contain any
statement or representation that is false or untrue in any particular.
Sec. 7.103 Obscene or indecent depictions.
Malt beverage labels, containers, or packaging may not contain any
statement or representation that is obscene or indecent.
Subpart H--Labeling Practices That Are Prohibited if They Are
Misleading
Sec. 7.121 General.
(a) Application. The labeling practices that are prohibited if
misleading set forth in this subpart apply to any malt beverage label,
container, or packaging. For purposes of this subpart:
(1) The term ``label'' includes all labels on malt beverage
containers on which mandatory information may appear, as set forth in
Sec. 7.61(a), as well as any other label on the container;
(2) The term ``container'' includes all parts of the malt beverage
container, including any part of a malt beverage container on which
mandatory information may appear, as well as those parts of the
container on which information does not satisfy mandatory labeling
requirements, as set forth in Sec. 7.61(b); and
(3) The term ``packaging'' includes any carton, case, carrier,
individual covering, or other packaging of such containers used for
sale at retail but does not include shipping cartons or cases that are
not intended to accompany the container to the consumer.
(b) Statement or representation. For purposes of this subpart, the
term ``statement or representation'' includes any statement, design,
device, or representation, and includes pictorial or graphic designs or
representations as well as written ones. The term ``statement or
representation'' includes explicit and implicit statements and
representations.
Sec. 7.122 Misleading statements or representations.
(a) General prohibition. Malt beverage labels, containers, or
packaging may not contain any statement or representation, irrespective
of falsity, that is misleading to consumers as to the age, origin,
identity, or other characteristics of the malt beverage, or with regard
to any other material factor.
(b) Ways in which statements or representations may be found to be
misleading. (1) A statement or representation is prohibited,
irrespective of falsity, if it directly creates a misleading impression
or if it does so indirectly through ambiguity, omission, inference, or
by the addition of irrelevant, scientific, or technical matter. For
example, an otherwise truthful statement may be misleading because of
the omission of material information, the disclosure of which is
necessary to prevent the statement from being misleading.
(2) All claims, whether implicit or explicit, must have a
reasonable basis in fact. Any claim on malt beverage labels,
containers, or packaging that does not have a reasonable basis in fact
or cannot be adequately substantiated upon the request of the
appropriate TTB officer is considered misleading.
Sec. 7.123 Guarantees.
Malt beverage labels, containers, or packaging may not contain any
statement relating to guarantees if the appropriate TTB officer finds
it is likely
[[Page 7617]]
to mislead the consumer. However, money-back guarantees are not
prohibited.
Sec. 7.124 Disparaging statements.
(a) General. Malt beverage labels, containers, or packaging may not
contain any false or misleading statement that explicitly or implicitly
disparages a competitor's product.
(b) Truthful and accurate comparisons. This section does not
prevent truthful and accurate comparisons between products (such as
``Our ale contains more hops than Brand X'') or statements of opinion
(such as ``We think our beer tastes better than any other beer on the
market'').
Sec. 7.125 Tests or analyses.
Malt beverage labels, containers, or packaging may not contain any
statement or representation of or relating to analyses, standards, or
tests, whether or not it is true, that is likely to mislead the
consumer. An example of a misleading statement is ``tested and approved
by our research laboratories'' if the testing and approval does not in
fact have any significance.
Sec. 7.126 Depictions of government symbols.
Representations of the armed forces or flags. Malt beverage labels,
containers, or packaging may not show an image of any government's flag
or any representation related to the armed forces of the United States
if the representation, standing alone or considered together with any
additional language or symbols on the label, creates a false or
misleading impression that the product was endorsed by, made by, used
by, or made under the supervision of the government represented by that
flag or by the armed forces of the United States. This section does not
prohibit the use of a flag as part of a claim of American origin or
another country of origin.
Sec. 7.127 [Reserved]
Sec. 7.128 Claims related to distilled spirits.
(a) General. Except as provided in paragraph (b) of this section,
containers of malt beverages, or any labels on such containers, or any
carton, case, or individual covering of such containers, used for sale
at retail, or any written, printed, graphic, or other material
accompanying such containers to the consumer, must not contain any
statement, design, device, or representation that tends to create a
false or misleading impression that the malt beverage contains
distilled spirits or is a distilled spirits product.
(b) Exceptions. This section does not prohibit:
(1) A truthful and accurate statement of alcohol content, in
conformity with Sec. 7.65;
(2) The use of a brand name of a distilled spirits product as a
malt beverage brand name, provided that the overall label does not
create a misleading impression as to the identity of the product;
(3) The use of a cocktail name as a brand name or a distinctive or
fanciful name of a malt beverage, provided that the overall labeling
does not present a misleading impression about the identity of the
product; or
(4) The use of truthful and accurate statements about the
production of the malt beverage as part of a statement of composition
or otherwise, such as ``aged in whisky barrels,'' as long as such
statements do not create a misleading impression as to the identity of
the product.
Sec. 7.129 Health-related statements.
(a) Definitions. When used in this section, the following terms
have the meaning indicated:
(1) Health-related statement means any statement related to health
(other than the warning statement required under part 16 of this
chapter) and includes statements of a curative or therapeutic nature
that, expressly or by implication, suggest a relationship between the
consumption of alcohol, malt beverages, or any substance found within
the malt beverage, and health benefits or effects on health. The term
includes both specific health claims and general references to alleged
health benefits or effects on health associated with the consumption of
alcohol, a malt beverage, or any substance found within the malt
beverage product, as well as health-related directional statements. The
term also includes statements and claims that imply that a physical or
psychological sensation results from consuming the alcohol beverage
product, as well as statements and claims of nutritional value (for
example, statements of vitamin content). Numerical statements of the
calorie, carbohydrate, protein, and fat content of the product do not
constitute claims of nutritional value.
(2) Specific health claim means a type of health-related statement
that, expressly or by implication, characterizes the relationship of
malt beverages, alcohol, or any substance found within the malt
beverage, to a disease or health-related condition. Implied specific
health claims include statements, symbols, vignettes, or other forms of
communication that suggest, within the context in which they are
presented, that a relationship exists between alcohol, malt beverages,
or any substance found within the malt beverage, and a disease or
health-related condition.
(3) Health-related directional statement means a type of health-
related statement that directs or refers consumers to a third party or
other source for information regarding the effects on health of malt
beverage or alcohol consumption.
(b) Rules for malt beverage labels, containers, and packaging--(1)
Health-related statements. In general, malt beverage labels,
containers, or packaging may not contain any health-related statement
that is untrue in any particular or tends to create a misleading
impression as to the effects on health of alcohol consumption. TTB will
evaluate such statements on a case-by-case basis and may require as
part of the health-related statement a disclaimer or some other
qualifying statement to dispel any misleading impression conveyed by
the health-related statement.
(2) Specific health claims. (i) TTB will consult with the Food and
Drug Administration (FDA) as needed on the use of specific health
claims on labels, containers, or packaging. If FDA determines that the
use of such a claim is a drug claim that is not in compliance with the
requirements of the Federal Food, Drug, and Cosmetic Act, TTB will not
approve the use of that specific health claim on the malt beverage
label.
(ii) TTB will approve the use of a specific health claim on a malt
beverage label only if the claim is truthful and adequately
substantiated by scientific or medical evidence; is sufficiently
detailed and qualified with respect to the categories of individuals to
whom the claim applies; adequately discloses the health risks
associated with both moderate and heavier levels of alcohol
consumption; and outlines the categories of individuals for whom any
levels of alcohol consumption may cause health risks. This information
must appear as part of the specific health claim.
(3) Health-related directional statements. A health-related
directional statement is presumed misleading unless it:
(i) Directs consumers in a neutral or other non-misleading manner
to a third party or other source for balanced information regarding the
effects on health of malt beverage or alcohol consumption; and
(ii)(A) Includes as part of the health-related directional
statement the following disclaimer: ``This statement
[[Page 7618]]
should not encourage you to drink or to increase your alcohol
consumption for health reasons''; or
(B) Includes as part of the health-related directional statement
some other qualifying statement that the appropriate TTB officer finds
is sufficient to dispel any misleading impression conveyed by the
health-related directional statement.
Sec. 7.130 Appearance of endorsement.
(a) General. Malt beverage labels, containers, or packaging may not
include the name, or the simulation or abbreviation of the name, of any
living individual of public prominence or an existing private or public
organization, or any graphic, pictorial, or emblematic representation
of the individual or organization if its use is likely to lead a
consumer to falsely believe that the product has been endorsed, made,
or used by, or produced for, or under the supervision of, or in
accordance with the specifications of, such individual or organization.
This section does not prohibit the use of such names where the
individual or organization has provided authorization for their use.
(b) Disclaimers. Statements or other representations do not violate
this section if, taken as a whole, they create no misleading impression
as to an implied endorsement either because of the context in which
they are presented or because of the use of an adequate disclaimer.
(c) Exception. This section does not apply to the use of the name
of any person engaged in business as a producer, importer, bottler,
packer, wholesaler, retailer, or warehouseman, of malt beverages. This
section also does not apply to the use by any industry member of a
trade or brand name that is the name of any living individual of public
prominence, or existing private or public organization, provided such
trade or brand name was used by the industry member or its predecessors
in interest prior to August 29, 1935.
Sec. 7.131 [Reserved]
Sec. 7.132 [Reserved]
Subpart I--Classes and Types of Malt Beverages
Sec. 7.141 Class and type.
(a) Products known to the trade. The class of the malt beverage
must be stated on the label (see Sec. 7.63). The type of the malt
beverage may be stated, but is not required to appear on the label.
Statements of class and type must conform to the designation of the
product as known to the trade. All parts of the designation must appear
together.
(b) Malt beverage specialty products--(1) General. A malt beverage
specialty product is a malt beverage that does not fall under any of
the class designations set forth in Sec. Sec. 7.142 through 7.144 and
is not known to the trade under a particular designation, usually
because of the addition of ingredients such as colorings, flavorings,
or food materials or the use of certain types of production processes
where the appropriate TTB officer has not determined that such
ingredients or processes are generally recognized as traditional in the
production of a fermented beverage designated as ``beer,'' ``ale,''
``porter,'' ``stout,'' ``lager,'' or ``malt liquor.''
(2) Designation. A malt beverage specialty product must be
designated with a distinctive or fanciful name, together with a
statement of the composition of the product, in accordance with Sec.
7.147. This statement will be considered the class designation for the
purposes of this part. All parts of the designation must appear
together.
Sec. 7.142 Class designations.
The following class designations may be used in accordance with
this section:
(a) Any malt beverage, as defined in Sec. 7.1, may be designated
simply as a ``malt beverage.''
(b)(1) The class designations ``beer,'' ``ale,'' ``porter,''
``stout,'' ``lager,'' and ``malt liquor'' may be used to designate malt
beverages that contain at least 0.5 percent alcohol by volume and that
conform to the trade understanding of those designations. These
designations may be preceded or followed by descriptions of the color
of the product (such as ``amber,'' ``brown,'' ``red,'' or ``golden'')
as well as descriptive terms such as ``dry,'' ``export,'' ``cream,''
and ``pale.''
(2) No product other than a malt beverage fermented at a
comparatively high temperature, possessing the characteristics
generally attributed to ``ale,'' ``porter,'' or ``stout'' and produced
without the use of coloring or flavoring materials (other than those
recognized in standard brewing practices) may bear any of these class
designations.
Sec. 7.143 Class and type--special rules.
The following special rules apply to specified class and type
designations:
(a) Reconstituted malt beverages. Malt beverages that have been
concentrated by the removal of water therefrom and reconstituted by the
addition of water and carbon dioxide must for the purpose of this part
be labeled in the same manner as malt beverages which have not been
concentrated and reconstituted, except that there must appear
immediately adjacent to, and as a part of, the class designation the
statement ``PRODUCED FROM__ _CONCENTRATE'' (the blank to be filled in
with the appropriate class designation). All parts of the class
designation must appear in lettering of substantially the same size and
kind. However, ice beers, described in paragraph (c) of this section,
which are produced by the removal of less than 0.5 percent of the
volume of the beer in the form of ice crystals and that retain beer
character are not considered concentrated.
(b) Half and half. No product may be designated with the type
designation ``half and half'' unless it is in fact composed of equal
parts of two classes of malt beverages, the names of which are
conspicuously stated immediately adjacent to the designation ``half and
half'' (for example, ``Half and Half, Porter and Stout''). This does
not preclude the use of terms such as ``half and half'' as part of a
distinctive or fanciful name that refers to flavors added to a malt
beverage designated in accordance with trade understanding or with a
statement of composition.
(c) Ice beer. Malt beverages supercooled during the brewing process
to form ice crystals may be labeled with the type designation ``ice''
preceding the class designation (beer, ale, etc.).
(d) Black and tan. A product composed of two classes of malt
beverages may be designated with the type designation ``black and
tan,'' and the class and type designation is the names of the two
classes of malt beverages in conjunction with ``black and tan'' (for
example, ``Black and Tan, Stout and Ale'').
(e) Wheat beer. Any ``beer,'' ``ale,'' ``porter,'' ``stout,''
``lager,'' ``malt liquor,'' or other malt beverage made from a
fermentable base that consists of at least 25 percent by weight malted
wheat may be designated with the type designation ``wheat'' preceding
the applicable class designation.
(f) Rye beer. Any ``beer,'' ``ale,'' ``porter,'' ``stout,''
``lager,'' ``malt liquor,'' or other malt beverage made from a
fermentable base that consists of at least 25 percent by weight malted
rye may be designated with the type designation ``rye'' preceding the
applicable class designation.
(g) Barley wine ale. The term ``barley (or wheat or rye) wine ale''
or ``barley (or wheat or rye) wine style ale'' may be used in
accordance with trade understanding.
(h) Malt beverages aged in barrels--(1) General. Label designations
for malt beverages aged in barrels or with woodchips, spirals, or
staves derived
[[Page 7619]]
from barrels may, but are not required to, include a description of how
the product was aged. Thus, for example, acceptable designations for a
standard beer aged in an oak barrel would include ``beer,'' ``oak aged
beer,'' and ``beer aged in an oak barrel.''
(2) Barrels previously used in the production or storage of wine or
distilled spirits. Malt beverages aged in barrels previously used in
the production or storage of wine or distilled spirits, or with
woodchips, spirals, or staves derived from barrels previously used in
the production or storage of wine or distilled spirits, or from
woodchips previously used in the aging of distilled spirits or wine
may, but are not required to, include a description of how the product
was aged.
(i) Examples of acceptable designations for a standard beer aged in
a wine barrel include ``beer,'' ``beer aged in a wine barrel,'' and
``wine barrel aged beer.''
(ii) Examples of acceptable designations for an ale brewed with
honey and aged in a bourbon barrel include ``honey ale'' and ``bourbon
barrel aged honey ale'' but not simply ``ale'' or ``bourbon barrel aged
ale.''
(3) Misleading designations. Designations that create a misleading
impression as to the identity of the product by emphasizing certain
words or terms are prohibited. As set forth in Sec. 7.122,
designations may not mislead consumers as to the age, origin, identity,
or other characteristics of the malt beverage. Examples of designations
that would be prohibited under this provision are ``bourbon ale,''
``bourbon-flavored lager,'' ``Chardonnay lager,'' or ``lager with
whisky flavors.''
(i) Other designations. Other type designations (such as ``milk''
preceding the class designation ``stout'') may be applied in
conformance with trade understanding.
Sec. 7.144 Malt beverages fermented or flavored with certain
traditional ingredients.
(a) General. Any malt beverage that has been fermented or flavored
only with one or more ingredients (such as honey or certain fruits)
that the appropriate TTB officer has determined are generally
recognized as traditional ingredients in the production of a fermented
beverage designated as ``beer,'' ``ale,'' ``porter,'' ``stout,''
``lager,'' or ``malt liquor'' may be labeled in accordance with trade
understanding following the rules set forth in this section.
(1) A list of such traditional ingredients may be found on the TTB
website (https://www.ttb.gov).
(2) If the malt beverage has also been fermented or flavored with
ingredients that the appropriate TTB officer has not determined are
generally recognized as traditional ingredients in the production of a
fermented beverage designated as ``beer,'' ``ale,'' ``porter,''
``stout,'' ``lager,'' or ``malt liquor,'' it is a malt beverage
specialty and must be labeled in accordance with the statement of
composition rules in Sec. 7.147.
(b) Rules for designation. (1) A designation in accordance with
trade understanding must identify the base product, such as ``malt
beverage,'' ``beer,'' ``ale,'' ``porter,'' ``stout,'' ``lager,'' or
``malt liquor'' along with a modifier or explanation that provides the
consumer with adequate information about the fruit, honey, or other
food ingredient used in production of the malt beverage. The label may
include additional information about the production process (such as
``beer fermented with cherry juice'').
(2) Where more than one exempted ingredient is included, a
designation in accordance with trade understanding may identify each
ingredient (such as ``Ale with cherry juice, cinnamon, and nutmeg''),
refer to the ingredients by category (such as ``Fruit ale,'' ``Spiced
ale,'' or ``Ale with natural flavors''), or simply include the
ingredient or ingredients that the bottler or importer believes best
identify the product (such as ``Cherry ale,'' ``Cinnamon ale,'' or
``Nutmeg ale''). The designation must distinguish the product from a
malt beverage, beer, ale, porter, stout, lager, or malt liquor that is
not brewed or flavored with any of these ingredients; thus, unmodified
designations such as ``beer,'' ``stout,'' or ``ale'' would not be
acceptable.
(c) Other requirements. All parts of the designation must appear
together and must be readily legible on a contrasting background.
Designations that create a misleading impression as to the identity of
the product by emphasizing certain words or terms are prohibited.
Sec. 7.145 Malt beverages containing less than 0.5 percent alcohol
by volume.
(a) Products containing less than 0.5 percent of alcohol by volume
must bear the class designation ``malt beverage,'' ``cereal beverage,''
or ``near beer.''
(b) If the designation ``near beer'' is used, both words must
appear in the same size and style of type, in the same color of ink,
and on the same background.
(c) No product containing less than 0.5 percent of alcohol by
volume may bear the class designations ``beer,'' ``lager beer,''
``lager,'' ``ale,'' ``porter,'' ``stout,'' or any other class or type
designation commonly applied to malt beverages containing 0.5 percent
or more of alcohol by volume.
Sec. 7.146 Geographical names.
(a) Geographical names for distinctive types of malt beverages
(other than names found under paragraph (b) of this section to have
become generic) shall not be applied to malt beverages produced in any
place other than the particular region indicated by the name unless:
(1) In direct conjunction with the name there appears the word
``type'' or the word ``American'', or some other statement indicating
the true place of production in lettering substantially as conspicuous
as such name; and
(2) The malt beverages to which the name is applied conform to the
type so designated. The following are examples of distinctive types of
beer with geographical names that have not become generic; Dortmund,
Dortmunder, Vienna, Wien, Wiener, Bavarian, Munich, Munchner, Salvator,
Kulmbacher, Wurtzburger, Pilsen (Pilsener and Pilsner): Provided, That
notwithstanding the foregoing provisions of this section, beer which is
produced in the United States may be designated as ``Pilsen,''
``Pilsener,'' or ``Pilsner'' without further modification, if it
conforms to such type.
(b) Only such geographical names for distinctive types of malt
beverages as the appropriate TTB officer finds have by usage and common
knowledge lost their geographical significance to such an extent that
they have become generic shall be deemed to have become generic, e.g.,
India Pale Ale.
(c) Except as provided in Sec. 7.64(b), geographical names that
are not names for distinctive types of malt beverages shall not be
applied to malt beverages produced in any place other than the
particular place or region indicated in the name.
Sec. 7.147 Statement of composition.
(a) A statement of composition is required to appear on the label
for malt beverage specialty products, as defined in Sec. 7.141(b),
which are not known to the trade under a particular designation. For
example, the addition of flavoring materials, colors, or artificial
sweeteners may change the class and type of the malt beverage. The
statement of composition along with a distinctive or fanciful name
serves as the class and type designation for these products.
(b) When required by this part, a statement of composition must
contain all of the following information, as applicable:
[[Page 7620]]
(1) Identify the base class and/or type designation. The statement
of composition must clearly identify the base class and/or type
designation of the malt beverage product (e.g., ``beer,'' ``lager
beer,'' ``lager,'' ``ale,'' ``porter,'' ``stout,'' or ``malt
beverage'').
(2) Identify added flavoring material(s) used before, during, and
after fermentation. The statement of composition must disclose
fermentable or non-fermentable flavoring materials added to the malt
beverage base class.
(i) If the flavoring material is used before or during the
fermentation process, the statement of composition must indicate that
the malt beverage was fermented or brewed with the flavoring material
(such as ``Beer Fermented with grapefruit juice'' or ``Grapefruit
Ale''). If the flavoring material is added after fermentation, the
statement of composition must describe that process, using terms such
as ``added,'' ``with,'' ``infused,'' or ``flavored'' (such as
``Grapefruit-flavored ale.'').
(ii) If a single flavoring material is used in the production of
the malt beverage product, the flavoring material may be specifically
identified (such as ``Ale Fermented with grapefruit juice'') or
generally referenced (such as ``Ale with natural flavor''). If two or
more flavoring materials are used in the production of the malt
beverage, each flavoring material may be specifically identified (such
as ``lemon juice, kiwi juice'' or ``lemon and kiwi juice'') or the
characterizing flavoring material may be specifically identified and
the remaining flavoring materials may be generally referenced (such as
``kiwi and other natural and artificial flavor(s)''), or all flavors
may be generally referenced (such as ``with artificial flavors'').
(3) Identify added coloring material(s). The statement of
composition must disclose the addition of coloring material(s), whether
added directly or through flavoring material(s). The coloring materials
may be identified specifically (such as ``caramel color,'' ``FD&C Red
#40,'' ``annatto,'' etc.) or as a general statement, such as ``Contains
certified color'' for colors approved under 21 CFR subpart 74 or
``artificially colored'' to indicate the presence of any one or a
combination of coloring material(s). However, FD&C Yellow No. 5,
carmine, and cochineal extract require specific disclosure in
accordance with Sec. 7.63(b)(1) and (2) and that specific disclosure
may appear either in the statement of composition or elsewhere in
accordance with those sections.
(4) Identify added artificial sweeteners. The statement of
composition must disclose any artificial sweetener that is added to a
malt beverage product, whether the artificial sweetener is added
directly or through flavoring material(s). The artificial sweetener may
be identified specifically by either generic name or trademarked brand
name, or as a general statement (such as ``artificially sweetened'') to
indicate the presence of any one or combination of artificial
sweeteners. However, if aspartame is used, an additional warning
statement is required in accordance with Sec. 7.63(b)(4).
Subparts J-L--[Reserved]
Subpart M--Penalties and Compromise of Liability
Sec. 7.221 Criminal penalties.
A violation of the labeling provisions of 27 U.S.C. 205(e) is
punishable as a misdemeanor. See 27 U.S.C. 207 for the statutory
provisions relating to criminal penalties, consent decrees, and
injunctions.
Sec. 7.222 Conditions of basic permit.
A basic permit is conditioned upon compliance with the requirements
of 27 U.S.C. 205, including the labeling and advertising provisions of
this part. A willful violation of the conditions of a basic permit
provides grounds for the revocation or suspension of the permit, as
applicable, as set forth in part 1 of this chapter.
Sec. 7.223 Compromise.
Pursuant to 27 U.S.C. 207, the appropriate TTB officer is
authorized, with respect to any violation of 27 U.S.C. 205, to
compromise the liability arising with respect to such violation upon
payment of a sum not in excess of $500 for each offense, to be
collected by the appropriate TTB officer and to be paid into the
Treasury as miscellaneous receipts.
Subpart N--Advertising of Malt Beverages
Sec. 7.231 Application.
No person engaged in business as a brewer, wholesaler, or importer,
of malt beverages directly or indirectly or through an affiliate, shall
publish or disseminate or cause to be published or disseminated by
radio or television broadcast, or in any newspaper, periodical, or any
publication, by any sign or outdoor advertisement, or by electronic or
internet media, or in any other printed or graphic matter, any
advertisement of malt beverages, if such advertising is in, or is
calculated to induce sales in, interstate or foreign commerce, or is
disseminated by mail, unless such advertisement is in conformity with
this subpart: Provided, That such sections shall not apply to outdoor
advertising in place on September 7, 1984, but shall apply upon
replacement, restoration, or renovation of any such advertising; and
provided further, that this subpart shall apply to advertisements of
malt beverages intended to be sold or shipped or delivered for
shipment, or otherwise introduced into or received in any State from
any place outside thereof, only to the extent that the laws of such
State impose similar requirements with respect to advertisements of
malt beverages manufactured and sold or otherwise disposed of in such
State. And provided further that such sections shall not apply to a
retailer or the publisher of any newspaper, periodical, or other
publication, or radio or television or internet broadcast, unless such
retailer or publisher or broadcaster is engaged in business as a
brewer, wholesaler, bottler, or importer of malt beverages, directly or
indirectly, or through an affiliate.
Sec. 7.232 Definitions.
As used in this subpart, the term ``advertisement'' or
``advertising'' includes any written or verbal statement, illustration,
or depiction which is in, or calculated to induce sales in, interstate
or foreign commerce, or is disseminated by mail, whether it appears in
a newspaper, magazine, trade booklet, menu, wine card, leaflet,
circular, mailer, book insert, catalog, promotional material, sales
pamphlet, internet or other electronic site or social network, or in
any written, printed, graphic, or other matter (such as hang tags)
accompanying, but not firmly affixed to, the container, representations
made on shipping cases, or in any billboard, sign, or other outdoor
display, public transit card, other periodical literature, publication,
or in a radio or television broadcast, or in any other media; except
that such term shall not include:
(a) Any label affixed to any container of malt beverages; or any
coverings, cartons, or cases of containers of malt beverages used for
sale at retail which constitute a part of the labeling under this part.
(b) Any editorial or other reading material (such as a news
release) in any periodical or publication or newspaper, for the
publication of which no money or valuable consideration or thing of
value is paid or promised, directly or indirectly, by any permittee or
brewer, and which is not written by or at the direction of the
permittee or brewer.
[[Page 7621]]
Sec. 7.233 Mandatory statements.
(a) Responsible advertiser. The advertisement must display the
responsible advertiser's name, city, and State or the name and other
contact information (such as, telephone number, website, or email
address) where the responsible advertiser may be contacted.
(b) Class. The advertisement shall contain a conspicuous statement
of the class to which the product belongs, corresponding to the
statement of class which is required to appear on the label of the
product.
(c) Exception. (1) If an advertisement refers to a general malt
beverage line or all of the malt beverage products of one company,
whether by the company name or by the brand name common to all the malt
beverages in the line, the only mandatory information necessary is the
responsible advertiser's name, city, and State or the name and other
contact information (such as telephone number, website, or email
address) where the responsible advertiser may be contacted. This
exception does not apply where only one type of malt beverage is
marketed under the specific brand name advertised.
(2) On consumer specialty items, the only information necessary is
the company name or brand name of the product.
Sec. 7.234 Legibility of mandatory information.
(a) Statements required under this subpart that appear in any
written, printed, or graphic advertisement must be in lettering or type
size sufficient to be conspicuous and readily legible.
(b) In the case of signs, billboards, and displays the name and
address or name and other contact information (such as, telephone
number, website, or email) of the permittee responsible for the
advertisement may appear in type size of lettering smaller than the
other mandatory information, provided such information can be
ascertained upon closer examination of the sign or billboard.
(c) Mandatory information must be so stated as to be clearly a part
of the advertisement and may not be separated in any manner from the
remainder of the advertisement.
(d) Mandatory information for two or more products shall not be
stated unless clearly separated.
(e) Mandatory information must be so stated in both the print and
audiovisual media that it will be readily apparent to the persons
viewing the advertisement.
Sec. 7.235 Prohibited practices.
(a) General prohibition. An advertisement of malt beverages must
not contain:
(1) Any statement that is false or untrue in any material
particular, or that, irrespective of falsity, directly, or by
ambiguity, omission, or inference, or by the addition of irrelevant,
scientific or technical matter, tends to create a misleading
impression.
(2) Any false or misleading statement that explicitly or implicitly
disparages a competitor's product. This does not prevent truthful and
accurate comparisons between products (such as ``Our ale contains more
hops than Brand X'') or statements of opinion (such as ``We think our
beer tastes better than any other beer on the market'').
(3) Any statement, design, device, or representation which is
obscene or indecent.
(4) Any statement, design, device, or representation of or relating
to analyses, standards, or tests, irrespective of falsity, which the
appropriate TTB officer finds to be likely to mislead the consumer.
(5) Any statement, design, device, or representation of or relating
to any guarantee, irrespective of falsity, which the appropriate TTB
officer finds to be likely to mislead the consumer. Money-back
guarantees are not prohibited.
(6) [Reserved].
(7) [Reserved].
(8) Any statement, design, device, or representation that tends to
create a false or misleading impression that the malt beverage contains
distilled spirits or is a distilled spirits product. Advertisements may
include the types of statements that are listed as being not prohibited
on labels in Sec. 7.128(b).
(b) Statements inconsistent with labeling. (1) Advertisements shall
not contain any statement concerning a brand or lot of malt beverages
that is inconsistent with any statement on the labeling thereof.
(2) Any label depicted on a container in an advertisement shall be
a reproduction of an approved label, except that malt beverage labels
not required to be covered by a COLA in accordance with the rules in
Sec. 7.21 of this chapter may also appear on advertisements.
(c) [Reserved]
(d) Class. (1) No product containing less than 0.5 percent of
alcohol by volume shall be designated in any advertisement as ``beer'',
``lager beer'', ``lager'', ``ale'', ``porter'', or ``stout'', or by any
other class or type designation commonly applied to fermented malt
beverages containing 0.5 percent or more of alcohol by volume.
(2) No product other than a malt beverage fermented at
comparatively high temperature, possessing the characteristics
generally attributed to ``ale,'' ``porter,'' or ``stout'' and produced
without the use of coloring or flavoring materials (other than those
recognized in standard brewing practices) shall be designated in any
advertisement by any of these class designations.
(e) Health-related statements--(1) Definitions. When used in this
paragraph (e), terms are defined as follows:
(i) Health-related statement means any statement related to health
and includes statements of a curative or therapeutic nature that,
expressly or by implication, suggest a relationship between the
consumption of alcohol, malt beverages, or any substance found within
the malt beverage, and health benefits or effects on health. The term
includes both specific health claims and general references to alleged
health benefits or effects on health associated with the consumption of
alcohol, malt beverages, or any substance found within the malt
beverage, as well as health-related directional statements. The term
also includes statements and claims that imply that a physical or
psychological sensation results from consuming the malt beverage, as
well as statements and claims of nutritional value (e.g., statements of
vitamin content). Statements concerning caloric, carbohydrate, protein,
and fat content do not constitute nutritional claims about the product.
(ii) Specific health claim is a type of health-related statement
that, expressly or by implication, characterizes the relationship of
the malt beverage, alcohol, or any substance found within the malt
beverage, to a disease or health-related condition. Implied specific
health claims include statements, symbols, vignettes, or other forms of
communication that suggest, within the context in which they are
presented, that a relationship exists between malt beverages, alcohol,
or any substance found within the malt beverage, and a disease or
health-related condition.
(iii) Health-related directional statement is a type of health-
related statement that directs or refers consumers to a third party or
other source for information regarding the effects on health of malt
beverage or alcohol consumption.
(2) Rules for advertising--(i) Health-related statements. In
general, advertisements may not contain any health-related statement
that is untrue in any particular or tends to create a misleading
impression as to the effects
[[Page 7622]]
on health of alcohol consumption. TTB will evaluate such statements on
a case-by-case basis and may require as part of the health-related
statement a disclaimer or some other qualifying statement to dispel any
misleading impression conveyed by the health-related statement. Such
disclaimer or other qualifying statement must appear as prominent as
the health-related statement.
(ii) Specific health claims. A specific health claim will not be
considered misleading if it is truthful and adequately substantiated by
scientific or medical evidence; sufficiently detailed and qualified
with respect to the categories of individuals to whom the claim
applies; adequately discloses the health risks associated with both
moderate and heavier levels of alcohol consumption; and outlines the
categories of individuals for whom any levels of alcohol consumption
may cause health risks. This information must appear as part of the
specific health claim and in a manner as prominent as the specific
health claim.
(iii) Health-related directional statements. A statement that
directs consumers to a third party or other source for information
regarding the effects on health of malt beverage or alcohol consumption
is presumed misleading unless it--
(A) Directs consumers in a neutral or other non-misleading manner
to a third party or other source for balanced information regarding the
effects on health of malt beverage or alcohol consumption; and
(B)(1) Includes as part of the health-related directional
statement, and in a manner as prominent as the health-related
directional statement, the following disclaimer: ``This statement
should not encourage you to drink or increase your alcohol consumption
for health reasons;'' or
(2) Includes as part of the health-related directional statement,
and in a manner as prominent as the health-related directional
statement, some other qualifying statement that the appropriate TTB
officer finds is sufficient to dispel any misleading impression
conveyed by the health-related directional statement.
(f) Confusion of brands. Two or more different brands or lots of
malt beverages shall not be advertised in one advertisement (or in two
or more advertisements in one issue of a periodical or a newspaper or
in one piece of other written, printed, or graphic matter) if the
advertisement tends to create the impression that representations made
as to one brand or lot apply to the other or others, and if as to such
latter the representations contravene any provision of this subpart or
are in any respect untrue.
(g) Representations of the armed forces or flags. Advertisements
may not show an image of any government's flag or any representation
related to the armed forces of the United States if the representation,
standing alone or considered together with any additional language or
symbols, creates a false or misleading impression that the product was
endorsed by, made by, used by, or made under the supervision of, the
government represented by that flag or by the armed forces of the
United States. This section does not prohibit the use of a flag as part
of a claim of American origin or another country of origin.
(h) Deceptive advertising techniques. Subliminal or similar
techniques are prohibited. ``Subliminal or similar techniques,'' as
used in this part, refers to any device or technique that is used to
convey, or attempts to convey, a message to a person by means of images
or sounds of a very brief nature that cannot be perceived at a normal
level of awareness.
(i) Organic. Any use of the term ``organic'' in the advertising of
malt beverages must comply with the United States Department of
Agriculture's (USDA) National Organic Program rules, 7 CFR part 205, as
interpreted by the USDA.
Sec. 7.236 Comparative advertising.
(a) General. Comparative advertising shall not be disparaging of a
competitor's product in a manner that is false or misleading.
(b) Taste tests. (1) Taste test results may be used in
advertisements comparing competitors' products unless they are
disparaging in a false or misleading manner, deceptive, or likely to
mislead the consumer.
(2) The taste test procedure used shall meet scientifically
accepted procedures. An example of a scientifically accepted procedure
is outlined in the Manual on Sensory Testing Methods, ASTM Special
Technical Publication 434, published by the American Society for
Testing and Materials, 1916 Race Street, Philadelphia, Pennsylvania
19103, ASTM, 1968, Library of Congress Catalog Card Number 68-15545.
(3) A statement shall appear in the advertisement providing the
name and address of the testing administrator.
Subpart O--Paperwork Reduction Act
Sec. 7.241 OMB control numbers assigned under the Paperwork
Reduction Act.
(a) Purpose. This subpart displays the control numbers assigned to
information collection requirements in this part by the Office of
Management and Budget (OMB) under the Paperwork Reduction Act of 1995,
Public Law 104-13.
(b) Table. The following table identifies each section in this part
that contains an information collection requirement and the OMB control
number that is assigned to that information collection requirement.
Table 1 to Paragraph (b)
------------------------------------------------------------------------
Current OMB
Section where contained Control No.
------------------------------------------------------------------------
7.11.................................................... 1513-0111
7.21.................................................... 1513-0020
7.22.................................................... 1513-0020
7.24.................................................... 1513-0020
1513-0064
7.25.................................................... 1513-0020
7.27.................................................... 1513-0020
7.28.................................................... 1513-0122
7.29.................................................... 1513-0020
7.62.................................................... 1513-0087
7.63.................................................... 1513-0084
1513-0087
7.66.................................................... 1513-0085
7.67.................................................... 1513-0085
7.81.................................................... 1513-0087
7.82.................................................... 1513-0121
7.83.................................................... 1513-0121
7.84.................................................... 1513-0087
7.233................................................... 1513-0087
------------------------------------------------------------------------
Signed: January 7, 2022.
Mary G. Ryan,
Administrator.
Approved: January 7, 2022.
Timothy E. Skud,
Deputy Assistant Secretary (Tax, Trade, and Tariff Policy).
[FR Doc. 2022-00841 Filed 2-8-22; 8:45 am]
BILLING CODE 4810-31-P
