ALCOHOL LAW ADVISOR
ALCOHOL LAW ADVISOR
Regulatory and Distribution Law Updates for the Alcohol Industry
ALCOHOL LAW ADVISOR
Regulatory and Distribution Law Updates for the Alcohol Industry
TTB COLAs and Formulas
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TTB Reiterates Position on Gluten-Free Claims

by | Aug 26, 2013 | ,

On August 22, 2013, Alcohol and Tobacco Tax and Trade Bureau (TTB) announced that, pending further study, it intends to adhere to the restrictive policy towards gluten-free labeling and advertising statements that it first announced in May 2012.  Thus, although the Food & Drug Administration has finalized gluten-free regulations applicable to most foods on August 5, as of today TTB’s gluten-free position is outlined in its “interim policy” announced in TTB Ruling 2012-2 (May 24, 2012).  That policy applies to all alcohol beverages regulated under the Federal Alcohol Administration Act – i.e., all distilled spirits, all wine containing 7 percent alc./vol. or more, and all beers made with malted barley and hops.

Current TTB policy permits a gluten-free labeling claim only on products made from gluten-free materials.  Thus, for example, TTB will permit a vodka distilled completely from potatoes to make a gluten-free claim.  See id. at 4.  But where a product is made with “any amount of wheat, barley, rye or a crossbred hybrid of these grains, or any ingredient derived from these grains,” TTB considers a gluten-free claim misleading and will not approve labels making such claims.  Id. at 5.  TTB based this conclusion on FDA’s public expression of doubt that existing methods to test for glutens are effective when applied to fermented and hydrolyzed foods.  See 76 Fed. Reg. 46,671 at 46,673 (Aug. 3, 2011).  That conclusion was reinforced in FDA’s final gluten-free rule published earlier this month.

Thus, as of today TTB policy will not approve gluten-free claims on products made with a gluten-related ingredient.  Where a TTB-regulated product is made with a gluten-related ingredient but meets FDA’s 20 ppm threshold, TTB’s interim policy permits:

truthful and accurate statements that a product was “[Processed or Treated or Crafted] to remove gluten” for products that were produced from wheat, barley, rye, or a crossbred hybrid of these grains, or any ingredient derived from these grains, and then processed or treated or crafted to remove some or all of the gluten under the following conditions:

(1) One of the following qualifying statements must also appear legibly and conspicuously on the label or in the advertisement as part of the above statement:

“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.”

OR,

“This product was distilled from grains containing gluten, which removed some or all of the gluten. The gluten content of this product cannot be verified, and this product may contain gluten.”

TTB Ruling 2012-2 at 5-6.  TTB also requires any COLA application for a label making such claims to contain a detailed description of the method used to remove gluten from the product and Competitive R5 ELISA test results showing less than 20 ppm gluten.  Id.

The labeling of gluten-free foods remains a fast moving area.  Stay tuned here for further developments.



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Alcohol Advertising in Digital Media, Part 2: Federal Regulation

by | Aug 22, 2013 | , , ,

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

by | Aug 16, 2013 | ,

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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Recent TTB Announcements Effecting Label and Formula Applications

by | Jul 29, 2013 |

Several recent Alcohol and Tobacco Tax and Trade Bureau (TTB) announcements impact label and formulation applications.

First, as of March 8, 2013, TTB revised the turnaround times for labeling and formulation applications.  TTB’s current goals are to review label applications within 30 days and formula applications within 45 days of receipt.  It is important to note these timeframes are goals for processing times.  Year to date (as of July 26, 2013), TTB has received 89,338 Certificate of Label Applications (COLA) alone.  Due to the volume of label and formula applications, industry members are experiencing longer turnaround times and we would advise that you budget 20 days for malt beverage label applications and 45 days for wine and distilled spirits label applications.  Formula applications are being returned between 60-75 days.  Though these timeframes are outside of TTB’s stated goals, they are within the prescribed 90 days permitted by 27 C.F.R. § 13.21(b).

Second, effective July 1, 2013, TTB has revised their industry room hours for walk-in submissions and visits.  The new hours of operations are Tuesday, Wednesday and Thursdays:  10:00 AM to 11:00 AM and 1:00 PM to 2:00 PM.  The industry room is now closed on Mondays and Fridays.  Industry members may continue to schedule appointments outside of the industry room hours.



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TTB Proposal on Industrial Alcohol

by | Jul 2, 2013 | , , ,

On June 27, the Alcohol and Tobacco Tax and Trade Bureau (TTB) published a Notice of Proposed Rulemaking (NPRM) on specially denatured alcohol (SDA), completely denatured alcohol (CDA) and related amendments to federal regulations governing non-beverage “industrial” alcohol.  In the NPRM, the TTB makes a host of proposals to reduce regulatory burdens on the industrial alcohol industry and update regulations to align with current practice.

The NPRM contains a great many recommendations that you or someone on your staff should review with care.  Primary among the changes, however, are the following:

  1. Reclassifying two often-used SDA formulas, SDA # 12-A and SDA #35, as CDA formulas.  This change considerably reduces the regulatory burden associated with using these formulas.
  2. Issuing “general use” formulas for articles made with any of 15 SDA formulas.  Again, this change greatly reduces the regulatory burdens associated with using these SDA formulas.
  3. Issuing three new “general use” formulas for uses involving duplicating fluids, ink solvents and certain proprietary solvents.
  4. Authorizing the export of SDA by dealers, instead of only distilled spirits plants as currently authorized.
  5. Authorizing the export of articles that would not qualify for domestic distribution because they are not sufficiently denatured.  This change may substantially impact ethanol export operations, as some other countries’ standards for the denaturing of fuel alcohol are not as stringent as the TTB standard.
  6. Removing from the regulations SDA formulas no longer in use.

Taken together, the proposals represent a significant step towards simplifying TTB’s regulation of industrial alcohol production and distribution.  One can certainly envision a bolder liberalization, but in many instances Internal Revenue Code statutes prevent more radical changes to current regulations and policies.  Although not likely a high priority in today’s political environment, Congress would be wise to revisit those statutes, as many date back to Prohibition or just after repeal.

Current SDA and CDA producers and users should examine their current operations in light of the proposed regulations and should consider submitting comments to TTB, which are due on or before August 26, 2013.



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TTB Ruling on Voluntary Serving Fact Labeling

by | Jun 7, 2013 | , ,

On May 28, 2013, the Alcohol and Tobacco Tax and Trade Bureau (TTB) published a new Industry Circular, Number 2013-2, that authorizes voluntary “serving facts” labeling on alcohol beverages regulated by TTB under the Federal Alcohol Administration Act (i.e., it does not apply to wine below 7 percent alcohol by volume (ABV) or beers made without malted barley or hops).

The most relevant points:

  1. Everything discussed in Industry Circular 2013-2 concerns voluntary labeling statements.  It mandates no new labeling disclosures.
  2. The serving facts statement mostly contains the same information contained in the “statement of average analysis” required for “light” and similar products.
  3. TTB gives producers and importers the option of adding a statement showing the amount of pure alcohol per serving or per container of a product (e.g., 0.6 fl. oz. of alcohol per serving), accompanied by alcohol content (ABV) information.
  4. The serving facts can be displayed in a panel (FDA style) or “linear” fashion.
  5. Producers and importers have the option of showing serving facts as a substitute for the statement of average analysis required on “light” and similar products.
  6. TTB recognizes a wider range of serving sizes for wine, malt beverages and distilled spirits, depending on the strength of the product.  For example, instead of a 12 oz. serving size for all malt beverages, serving facts statements for higher-strength beers should use smaller serving sizes for progressively higher-alcohol products.
  7. If a producer or importer follows the format authorized by TTB, it can add serving facts to existing labels without the need for a new COLA.


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