Category archives for “Craft beer”

Comparing Apples and Pears

July 29, 2015

The cider and perry industry is booming. More and more producers are entering the market, and existing producers of other alcoholic beverages are expanding into cider and perry production. Although commonly associated with beer, cider and perry are actually considered wine under federal law, and can be interchangeably labeled as apple wine or cider, and pear wine or perry. Production of cider or perry requires a bonded winery permit from the Alcohol & Tobacco Tax and Trade Bureau (“TTB”). It must be made wholly from the alcoholic fermentation of sound, ripe apples, or sound ripe pears (the addition of sugar, water, or alcohol is permitted in specified quantities). The TTB recently updated its FAQs with a section on cider, which can be found HERE.

A cider or perry which is over 7% alcohol must be labeled in the same manner as wine, and a Certificate of Label Approval (“COLA”) must be obtained for the product from the TTB. If it is under 7%, the product is subject to Food and Drug Administration (“FDA”) labeling rules, including a required nutritional statement (see our recent blog posts on FDA alcoholic beverage labeling HERE and HERE). If any flavoring materials are added, like honey, spices, or artificial flavors, the product requires formula approval, even if it is under 7%.

Each state has its own regulatory framework for cider and perry. For example, in California, a Type 2 Winegrower can make cider and perry, and a licensed Type 1 Beer Manufacturer may also produce cider and perry without any additional state license (although they still need the TTB bonded winery permit). In New York, Breweries, Farm Breweries, and Farm Wineries can make cider and other “pome fruit” wines, including perry (again with the TTB winery permit). Interestingly, in New York, a product marketed as a cider or perry, up to 8.5% alcohol, must be brand label registered, and is not eligible for the standard wine exemption from registration.

If you have any questions about producing cider or perry, please contact one of the attorneys at Strike & Techel.

Imbiblog is published for general informational purposes only and is not intended as legal advice. Copyright © 2015 • All Rights Reserved •


How About a Bacon Flavored Beer?

July 09, 2014

“Ready-to-drink” alcoholic beverage categories are continuing to boom. Variously known as flavored malt beverages (FMBs), alcopops, progressive adult beverages (PABs) and ready-to-drink cocktails (RTDs), all sorts of flavors are being added to all sorts of products to create new taste sensations. Despite RTDs generally suffering some decline after Four Loko triggered state bans on adding caffeine to alcoholic beverages (covered here, here, here, here, and here), the category has well and truly picked up again in recent times.

If you are looking to produce a flavored product, we have put some tips together to keep in mind.

Formulation Issues

One of the key things under federal law to be aware of with FMBs is that most of the alcohol must come from the malt beverage base. If the product is below 6% alcohol, at least half of the alcohol must come from the production of the beverage itself and cannot come from nonbeverage items like flavorings (which often contain high alcohol levels). Above 6%, no more than 1.5% of the alcohol can be from nonbeverage ingredients.

For wine-based products, an important factor to keep in mind is to make sure that your formula leaves you with a product that you can sell in grocery stores in states that do not allow them to sell wine. In New York, for example, a wine product that can be sold in grocery stores must meet a strict definition which includes that it must be below 6% alcohol, and it must contain juice and carbon dioxide. If you can meet the definition, you fall outside price posting requirements in the state, but you still have to register the brand there. Similarly, in a state like New York, you should be aware that a distilled spirits based RTD, even if below 6% or 7% alcohol, can’t be sold at grocery, convenience and pharmacy type stores where most low alcohol products are sold.

Labeling Issues

It is important to know about the various regulatory agencies that monitor the labeling of alcoholic beverages. FMBs and wine coolers, depending on their alcohol content, could fall under the regulation of the Food and Drug Administration (FDA), the Alcohol and Tobacco Tax and Trade Bureau (TTB), or both. For example, labeling requirements for wines containing 7% or more alcohol are controlled by the TTB, but wine coolers under 7% alcohol are regulated by the FDA, because such products do not fall under the federal definition of wine. In addition, labeling requirements for beers not made from malted barley and hops are regulated by the FDA (such as sorghum beer), while malt based products and distilled spirit based products are subject principally to TTB requirements.

If your product falls under TTB’s labeling jurisdiction, you will need to get a Certificate of Label Approval (COLA) and you will likely need to get formula approval (see, for example, our previous blog on easing up of beer formula requirements here). If your product label is FDA regulated, you will have to include a nutrition facts statement and other information that would not be required under the TTB labeling regulations. Bear in mind that even products under FDA jurisdiction for labeling still may need TTB formula approval. You need to be careful about using any type of name which makes customers think that the product might be a spirit drink if it isn’t (including cocktail names like margarita or daiquiri).

Recycling

In addition to formulation and labeling issues, recycling laws surrounding FMBs and similar products can be tricky. Ten states, including California (with its CalRecycle program), Connecticut, Hawaii, Iowa, Maine, Massachusetts, Michigan, New York, Oregon, and Vermont, have container recycling laws that apply to a variety of alcoholic beverages. The specific products that are subject to the laws vary from state to state, as do the container marking requirements. Wine- and spirits-based products may be subject to recycling laws, even in states where wine and distilled spirits are exempted.

Conclusion

Before producing a flavored malt beverage or other ready to drink beverage, be sure to familiarize yourself with the special rules that apply to these products. For questions about any of these products, contact one of the attorneys at Strike & Techel.

Imbiblog is published for general informational purposes only and is not intended as legal advice. Copyright © 2014 · All Rights Reserved ·


TTB Loosens the Reins on Malt Beverage Formula Requirements

June 16, 2014

In an industry ruling issued June 5, the Alcohol and Tobacco Tax and Trade Bureau (TTB) announced that malt beverages made with certain ingredients, including honey and certain fruits and spices, would no longer be subject to formula approval requirements. Additionally, the ruling exempts beer aged in barrels previously used in the production of wine or distilled spirits from the need to get a formula approval. Under the TTB regulations, ingredients and processes used in the production of malt beverages must be deemed “traditional” in order to be exempt from formula and certain labeling requirements. Until the ruling was issued, TTB had a very limited view of what met the requirements for “traditional” malt beverage production.

The ruling stems from a years long battle with the Brewer’s Association, which petitioned back in 2006 and 2007 to exempt certain ingredients and processes from rigorous approval requirements in light of growing experimentation and trends in the beer industry. The petition identified the most popular ingredients and processes, and urged the TTB to broaden their definition of “traditional” brewing methods. Initially, the TTB gave a limited response and exempted beers with added brown sugar, candy sugar or lactose from approval and special labeling requirements. With the new ruling, the options for adding ingredients to standard beers and other malt beverages without needing to go through the formula approval process are greatly expanded. Additionally, there is an opportunity for brewers to request exemption from formula requirements even if their ingredients are not already on the approved list. A full list of the approved ingredients and processes can be viewed here.

Before the ruling, if flavors were added before, during, or after the fermentation process, that had to be included on the label. Now, the requirement for flavors is that the statement be truthful and in accordance with trade understanding. So for example, a brewer cannot say “ale brewed with cherries” if the cherries were added after the brewing process. To be clear, a statement must still appear on the label to show the addition of any non-standard beer ingredient; the ruling now simply allows for more relaxed processing and avoids the need for formula approval.

The TTB’s expanded ruling of “traditional” brewing ingredients and methods bodes well for brewers and importers looking to get a quick(er) approval for their products and will help speed up all formula approvals due to the reduced TTB workload. Currently approved formulas and labels will not be affected by the ruling.

For questions about brewing requirements, contact one of the attorneys at Strike & Techel.

Imbiblog is published for general informational purposes only and is not intended as legal advice. Copyright © 2014 · All Rights Reserved ·


More New York Industry Guidance on Limited Availability, Brand Registration and more

June 03, 2014

Following our blog post on May 6 (http://strikeandtechel.com/imbiblog/nysla-expands-suppliers-ability-to-entertain-consumers/), regarding the new advisory from New York covering supplier events, here are some more advisories recently published by New York. The advisories summarized here cover limited availability items and closeout sales, new brand registration rules, growler information for beer and cider, and the use of third party agents for consumer tastings.

Limited Availability Items – #2014-5

New York is one of a number of states around the country which continues to require its wholesalers to post prices for wine and spirits around five weeks in advance of sale. The retail posted pricing (from in-state manufacturers and wholesalers to retailers) is available to any retailer who wants to buy the products at the posted price. In the case of products with limited availability, or in the case of closeout sales with limited inventory, the SLA published an advisory in 2013 and now replaces it with this one.

A limited availability item is one where the New York manufacturer or wholesaler believes that demand will exceed supply. As an exception to the general, and strongly enforced, rule against channel pricing, limited availability items can be allocated differently between on- and off-premises retail buyers. A closeout sale occurs when the manufacturer or wholesaler intends to sell its entire remaining inventory of an older or seasonal item at a price at least 10% lower than the last posted price.

In the case of limited availability items, the SLA is switching over the whole current price posting system to create a new category for these types of items. The new system will allow a manufacturer or wholesaler to indicate how it will allocate limited availability items. The system will also allow a manufacturer or wholesaler to move items to limited availability after prices have been posted if there is an exceptional event like a high score from a trade or consumer publication or a celebrity endorsement. In the advisory, the SLA gives a number of examples of allocation methods which are permitted.

Brand Label Registration – #2014-7

In addition to federal certificate of label approval (COLA) requirements from the Alcohol and Tobacco Tax and Trade Bureau (TTB), New York requires brand labels to be registered with the state for almost all alcoholic beverages. Wines over 7% alcohol which have a COLA do not generally need to be registered. Many of the changes in the new advisory parallel recent TTB changes allowing a number of label alterations without requiring a new COLA.

Brand labels must contain the brand or trade name, the class and type of alcoholic beverage, the net contents and other labeling information required for a COLA. If there is any change to the brand name, the flavor description, age or geographic appellation, or if qualifiers like “kosher” or “organic” are added to a label, a new registration must be obtained. If the alcoholic content of a brand registered product changes more than 1.5%, or 0.5% in the case of a cider or a “wine product,” a new registration must be obtained. Unlike wine, “wine products” can be sold in grocery stores if they meet the state-specific definition, which requires things like carbonation and added flavoring materials. Registrations are filed by the brand owner, if they are a New York licensee, or otherwise by the New York wholesaler appointed by the brand owner to post prices for and sell the product.

Brand label registrations are valid for a set calendar year depending on the type of alcoholic beverage. Current registrations will remain in effect until they expire and will then be transitioned to the new schedule. There will be additional use-up periods allowed for non-compliant products.

Private labels owned by retailers who sell them exclusively are exempt from price posting requirements. The labels do not have to contain the retailer’s name, but the brand name must belong to the retailer or the retailer must have the legal right to use the name. A retailer can license the brand name from another entity but cannot license a brand name belonging to a manufacturer or wholesaler. The use of terms like “exclusively bottled for” or “exclusive to” cannot be used to try and create a private brand label for a retailer.

Growlers – #2014-11

The advisory covers the sale of beer and cider in growlers by off premise retailers authorized to sell those beverages and confirms that liquor and wine cannot be sold in growlers in New York. In the case of beer and cider, either the consumer can provide the container or the retailer can. Due to local open container laws, retailers serving growlers should provide sealed containers where applicable.

Authorized Agents for Tastings and Bottle Sales – #2014-13

Certain New York licensees, and certain out-of-state suppliers with supplier marketing permits, are allowed to provide tastings in accordance with an advisory published in July 2013. This new advisory confirms that the licensee or supplier can use another manufacturer or wholesaler licensee as its agent for such a tasting. The only exception is that a beer wholesaler is not allowed to act as an agent for a brewer.

Imbiblog is published for general informational purposes only and is not intended as legal advice. Copyright © 2014 · All Rights Reserved ·


Brewing Beer in California

April 14, 2014

With the explosive growth in craft beers and micro and nano and other really, really small breweries, we at Strike & Techel wanted to put together some helpful tips for anyone looking to brew beer in the state. If you want to make beer commercially, these guidelines will help you work out the best way to start your new business. You will find three ways to get going in the guidelines: small beer manufacturing, beer manufacturing (over 60,000 barrels of beer), and brewpub operations where you get to brew beer and sell it to people in a restaurant or pub setting.

Contact one of the attorneys at Strike & Techel if you have questions about brewing beer in California or other states.

Imbiblog is published for general informational purposes only and is not intended as legal advice. Copyright © 2014 · All Rights Reserved ·


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