Now in effect, Phase 2 of the Alcohol and Tobacco Tax and Trade Bureau’s multi-year initiative to update its liquor labeling and advertising regulations covers distilled spirits and malt beverages. Our Food & Beverage team keeps tabs on what’s in the final rule – and what’s not.
- Phase 2 aims to amend, simplify and restructure existing regulatory requirements on distilled spirits and malt beverages
- Phase 2 Final Rule Should Not Require Changes to TTB-Compliant Labels and Ads
- The TTB leaves a number of issues the liquor industry will face to be resolved another day
If you’re like us and enjoy browsing through Parts 5 and 7 of Title 27 of the Code of Federal Regulations, don’t worry if they look a little different. You are likely attending Phase 2 of the Alcohol and Tobacco Tax and Trade Bureau’s (TTB) ongoing regulatory initiative to update and modernize labeling and advertising for wine, distilled spirits and malt beverages, which came into force on March 11.
In 2018, the TTB introduced in its Notice No. 176 a multi-year regulatory effort to modify, simplify and restructure the existing regulatory requirements on wine, distilled spirits and malt beverages and, in doing so, reduce the burden regulation of industry members. The TTB implemented “Phase 1” of its regulatory plan on April 2, 2020, which (for the sake of brevity) increased the alcohol content tolerance for distilled spirits, relaxed restrictions on the placement of brand label on distilled spirits, allowed age statements for some distilled spirits and vintage dates for some wines, and eliminated its ban on “strength” claims for malt beverages.
“Phase 2” of this TTB modernization effort covers distilled spirits and malt beverages, but with the same concern for simplifying the regulatory burden on industry members and without the regulatory headache of requiring industry that they make positive changes to TTB-compliant labels or advertisements. .
Now in effect, the final Phase 2 rule modernizes labeling requirements for distilled spirits and malt beverages by: (1) removing certain mandatory disclosure requirements on the “brand label” of distilled spirits and malt beverages; (2) allowing industry members not eligible for a Certificate of Label Approval (COLA) – such as retailers or non-bottling registrants – to obtain written permission to relabel products in certain circumstances; (3) authorizing the addition of labels on malt beverages identifying wholesalers, retailers or consumers; and (4) relaxing keg labeling restrictions (i.e. “keg collars” and “tap lids”) so that kegs can be reused by different brewers.
The final rule also clarifies certain labeling regulations for members of the industry: (1) expand the definition of “grain” in the Distilled Spirits Regulations to include all cereal grains and certain “pseudo-cereals”; (2) incorporation of TTB guidelines (industry decisions and circulars) into regulations; (3) adapting its regulations prohibiting the use of “disparaging” statements on competitors’ products and the use of the American flag on labels and advertisements to prohibit only false or misleading claims; (4) align malt beverage labeling with “commercial understanding” and terminology instead of compositional statements; and (5) allowing the use of descriptive terms (such as “amber”, “red”, “dry” and “cream”) on the labels of malt beverages.
Equally interesting is what is do not in the Phase 2 settlement. For example, the TTB specifically declined to consider a number of comments as out of scope, such as facts of service, allergen warnings, and a number of member requests. industry to recognize new categories of distilled spirits. Additionally, after receiving a series of comments from members of the industry, the TTB backtracked on the proposed rules regarding what a COLA allows and does not allow, believing that they created more confusion than clarity.
The TTB is currently working on rolling out “Phase 3” of its regulatory effort. According to the agency, this next phase will restructure wine labeling regulations, address other wine-related labeling issues, and finalize some regulations related to the advertising of wine, distilled spirits, and malt beverages. The TTB is also committed to reviewing its public guidance on distilled spirits and malt beverages and input from industry members for the future development of industry rules and guidance. Although sometimes a deliberate and methodical process, TTB’s work in a rapidly changing industry is far from done. We’ll be keeping tabs on what the TTB is up to in its next round of updates and bringing you the latest on new rules and changes.
Download the PDF of the notice[View source.]