Welcoming Citrus Wines into the Fruit Wines Family: TTB Begins Modernizing Beverage Alcohol Labeling and Advertising

In some news that is not about Emergency Use Authorizations, how to make a DIY face mask, or even about COVID-19, the Alcohol and Tobacco Tax and Trade Bureau (TTB) published a final rule amending its regulations governing the labeling and advertising of wine, distilled spirits, and malt beverages on April 2, 2020.  And yes, the new regulations eliminate the distinction between fruit wines and citrus wines and allow citrus wines to now be called “fruit wines.”

By way of quick background, the TTB is the primary federal agency that regulates alcohol, but it is part of a complex system of both federal and state regulation.  At the federal level, the TTB is joined by the FDA, USDA, FTC, and CBP in regulating beverage alcohol.  At the state level, each of the 50 states has the ability to regulate the distribution and sale of alcohol within their states, courtesy of the 21st Amendment to the Constitution.

The TTB first proposed modernizing the regulations in late 2018 and issued a proposed rule for comment (Notice No. 176: Modernization of the Labeling and Advertising Regulations for Wine, Distilled Spirits, and Malt Beverages, Nov. 26, 2018).  The final rule released on April 2, 2020 addresses the 1000+ comments TTB received.  The final rule does not address all the proposed changes.  Instead, it focuses on liberalizing and clarifying the regulations, and at the same time making the transition to the new regulations easier for manufacturers because the new regulations:

• do not require any current labels or advertisements to be changed
• were generally widely supported by commenters and stakeholders
• can be implemented relatively quickly, and
• will either give more flexibility to industry members or help industry members understand existing requirements

Specifically, the rule implements, among other things, the following proposed changes:

• an expanded alcohol content tolerance for distilled spirits to plus or minus 0.3 percentage points from between 0.15 and 0.25 depending on the product
• brand label placement flexibility for distilled spirits
• removing the current prohibition of age statements for most types of distilled spirits
• allowing vintage dates for wine imported in bulk, and
• removing the prohibition against the term “strong” for malt beverages

In addition, the rule identifies which proposals TTB did not adopt, including:

• the proposal to define an “oak barrel” for purposes of aging distilled spirits
• the proposal to require that statements of composition for distilled spirits specialty products list components in intermediate products
• the proposal to require that distilled spirits statements of composition (indicating the category of spirit) list distilled spirits and wines in order of predominance, and
• the proposal to adopt new policies on the use of cross-commodity terms (for example, imposing restrictions on the use of various types of distilled spirits terms, including homophones of distilled spirits classes, on wine or malt beverage labels)

In the category of an attempted clarification that did not work as drafted, TTB did not finalize its proposal to incorporate into the regulations the jurisdictional interaction between FDA determinations that a product is adulterated and TTB’s position that such products are mislabeled.  Commenters appeared to misunderstand this proposal and believed that TTB was proposing to take on a new role of interpreting FDA requirements.  This was not the case, and the TTB’s longstanding position that its review of labels and formulas does not relieve industry members from complying with FDA regulations regarding food additives, ingredient safety, and suitable container materials.  So, even if TTB approves a label, the company must still ensure that all ingredients in the product comply with FDA regulations. See our prior post here for more information.

As indicated in the title of the post, we haven’t seen the last of the modernization, as TTB does plan to address the remaining issues in the 2018 proposal at a later date.