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Alcohol Advertising in Digital Media, Part 2: Federal Regulation

This past year brought examples of federal regulation and oversight of social media.  Both illustrate the general policy concerns of federal agencies that regulate alcohol beverage advertising.

TTB Industry Circular 2013-1, reviews the application of TTB regulations to beer, wine and spirits advertising in social media and other forms of digital advertising.  TTB’s primary concerns are the clear disclosure of the company responsible for an advertisement and prohibiting communication of false and misleading information.   The circular makes clear that TTB’s advertising regulations apply to digital advertising, including user-generated content.  Helpful references are provided to key sections of TTB advertising regulations for beer, wine and spirits.

FTC 2012 Special Order (FTC Matter No. P104518) requested a broad range of information on advertising expenditures and practices from companies in the alcohol beverage industry to make sure that they comply with the Federal Trade Commission Act and voluntary industry advertising codes.  The FTC has broad authority to prohibit and take enforcement action against advertising that is deceptive or unfair.  FTC officials have long maintained that this authority empowers the agency to limit exposure of persons under the legal drinking age to alcohol beverage advertising content in all media.  The Special Order requested information about online and social media activity at pages 4-6 and 9-10, and companies should recognize that advertising content, planning documents and placement information may be requested in similar special orders in the future.




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TTB Modifies Mandatory Information for Wine Labels

The Alcohol and Tobacco Tax and Trade Bureau (TTB) recently amended its regulations regarding the mandatory labeling requirements for wine.  Effective August 9, 2013, TTB regulations (27 C.F.R. § 4.32) no longer require that the alcohol content appear on the brand (front) label.  The alcohol content may now appear on other labels for wine products.  Of course, those other labels must be affixed to the container as required by 27 C.F.R. § 4.38.




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Alcohol Advertising in Digital Media, Part 1: Overview

Tremendous opportunities exist for advertising brands, events and other promotional activities in digital media, which includes traditional web sites, social networks and integrated advertising platforms.  Properly executed marketing efforts provide great flexibility to reach and interact with adults of legal drinking age on a range of devices.  “Properly executed” is the key, particularly in digital media where campaigns can go from the conceptual stage to dissemination to millions of consumers in a matter of days.

Many professionals in the rapidly evolving media landscape grew up in a culture of free expression unparalleled in human history and several generations removed from the post- Prohibition mindset that inspired existing restrictions on alcohol advertising.  Those who are anxious to use their creative talents in alcohol beverage advertising campaigns must become familiar with unique federal and state laws governing alcohol advertising as well as voluntary industry codes.  Failure to take basic compliance measures can result in a devastating delay or removal of an innovative app, social network site or geo-targeting plan.  In addition to the loss of a key part of a campaign, government enforcement actions can result in penalties and reputational damage.

  • At the federal level, the Alcohol and Tobacco Tax and Trade Bureau (TTB) and the Federal Trade Commission (FTC) regulate alcohol beverage advertising.  Both agencies have shown recent interest in online and social media.
  • Each state has alcohol beverage and consumer protection statutes and policies.
  • Several industry trade associations and many digital media outlets have self-regulatory codes or unique rules that apply to content and placement of alcohol beverage advertising.

Basic principles of government regulation and industry self-regulation include societal concerns over issues such as alcohol abuse and potential appeal of advertising content to underage audiences.  The power of digital media triggers additional issues such as privacy and data security.

The next three parts of this series will address federal regulation, state regulation and industry self-regulation.




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FDA Issues New Rules on Gluten Labeling

The U.S. Food and Drug Administration (FDA) has issued a final rule that defines what characteristics a food has to have to bear a label that proclaims it “gluten- free,” “without gluten,” “free of gluten” and “no gluten.”  The rule applies to all FDA-regulated alcohol beverages, which include wines (and ciders) below 7 percent alcohol by volume, and malt beverages that are not made with both barley and hops; but does not apply to alcohol beverages regulated by the Alcohol and Tobacco Tax and Trade Bureau (TTB), including all distilled spirits, wines that contain 7 percent or more alcohol by volume, and malted beverages that are made with both malted barley and hops.  The notice includes a commitment by the FDA to work with TTB to harmonize labeling issues.  The two agencies consult as needed under an interagency Memorandum of Understanding, and TTB may develop new guidance based on the FDA final rule.

For brewers, FDA intends to issue a proposed rule on gluten-free labeling of hydrolyzed and fermented foods (like beer).  This rule will address compliance when analytical methods are not available because the food is fermented or hydrolyzed or contains fermented or hydrolyzed ingredients.  FDA intends to address the “gluten-free” labeling of beers subject to FDA’s labeling requirements in that proposed rule.

In light of this, FDA will exercise enforcement discretion with respect to the requirements for “gluten-free” labeling for beers subject to FDA labeling requirements.  This will extend to beers that currently make a “gluten-free” claim and that are:  (1) made from a non-gluten-containing grain or (2) made from a gluten-containing grain, where the beer has been subject to processing that the manufacturer has determined will remove gluten.  This enforcement discretion pertains only to these beers subject to FDA labeling requirements that make a “gluten-free” claim as of August 5, 2013 pending completion of the rulemaking process with respect to fermented or hydrolyzed products.  To the extent that a beer manufacturer wants to make a new gluten-free claim that is not present on a label as of August 5, 2013, they should contact FDA regarding the possible expansion of FDA’s consideration for the exercise of enforcement discretion related to such labeling.

FDA expects beer manufacturers using a “gluten-free” claim to take appropriate measures to prevent cross-contact with gluten-containing grains during production, processing, storage or other handling practices.  Last, FDA notes that beer manufacturers whose beers are subject to FDA’s labeling requirements can make claims about the beer being processed to reduce gluten provided such statements are truthful and not misleading.  FDA cites as examples the statements in TTB’s interim policy on gluten content statements (“Product fermented from grains containing gluten and [processed or treated or crafted] to remove gluten.  The gluten content of this product cannot be verified, and this product may contain gluten.”)

For those interested in the application of FDA’s final rule to gluten-free claims about other FDA-regulated products, one of the criteria for using the claim “gluten-free,” is a gluten limit of less than [...]

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