Tag archives for “Alcohol Labels”

TTB Publishes Industry Guidance for Producers of Hard Cider

Recently, the TTB published Industry Circular No. 2017-2, providing guidance for producers of hard cider. This guidance details the new criteria for the hard cider tax rate, which went into effect on January 1st of this year. We addressed those changes, as well as the old criteria for the hard cider tax rate, on our prior blog post, “Federal Definition of “Hard Cider” Will Be Expanded in 2017”. As a recap, the current definition of hard cider eligible for the lower hard cider tax rate, is a product that meets the following criteria:

  • Contains no more than 0.64 gram of carbon dioxide per 100 milliliters;
  • Is derived primarily from apples or pears, or from apple juice concentrate or pear juice concentrate and water;
  • Contains no fruit product or fruit flavoring other than apple or pear; and
  • Contains at least one-half of 1 percent and less than 8.5 percent alcohol by volume.
In addition to reiterating the current definition of hard cider, the TTB Industry Circular addresses guidance for hard cider producers on several other topics, including: Fruit Flavorings: The Industry Circular reminds hard cider producers that if hard cider contains fruit flavorings other than apple or pear, the product is not eligible for the hard cider tax rate. Fruit flavorings include natural fruit flavor, an artificial fruit flavor, or a natural flavor that artificially imparts the flavor of a fruit not contained in that flavor. Note that fruit flavorings do not include flavorings that impart a flavor other than a fruit flavor, such as spices, honey, or hops, so products that include those ingredients may still qualify for the hard cider tax rate. Labeling Requirements: Wines that contain 7% alcohol by volume or higher must conform to the labeling requirements found in 27 C.F.R. Part 4, and must obtain label approval from the TTB. The Industry Circular reminds hard cider producers that although the definition of hard cider that is eligible for the hard cider tax rate now includes hard ciders with up to 8.5% ABV, those cider products that contain 7% ABV or higher are still required to comply with the labeling requirements of 27 C.F.R. Part 4. TTB recognizes that the industry uses the term “hard cider” to include products that may not qualify for the hard cider tax rate. Moreover, TTB does not require that products qualifying for the hard cider tax rate be labeled with the words “hard cider.” In order to preserve this labeling flexibility without creating ambiguity regarding the appropriate tax class, TTB is imposing a new tax class statement on hard cider eligible for the hard cider tax rate: for hard cider removed from wine premises on or after January 1, 2018, the label must include the statement “Tax class 5041(b)(6).” This tax class statement may appear anywhere on any label, or may be on a sticker on the container. The addition of the tax class statement to an approved label does not require a new COLA. Formula Requirements: The Industry Circular also provides guidance on which cider products require formula approval. Generally, hard cider produced in a traditional method from apples or pears does not require formula approval. However, hard ciders that contain other ingredients, such as spices, honey, or hops, will require formula approval. Carbonation: Finally, the TTB’s guidance addresses several issues relating to a hard cider’s carbonation level. If a product contains more than 0.64 grams of carbon dioxide per 100 milliliters, that product is classified and taxed at the higher tax rates applicable to “sparkling wine” or “artificially carbonated wine.” The acceptable tolerance for error with respect to carbonation levels is 0.009 grams of carbon dioxide per 100 milliliters of hard cider. Producers of hard cider must test and keep records of carbonation levels. For more information regarding hard cider licensing and regulatory requirements, contact one of the attorneys at Strike & Techel.

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Michigan Relaxes Labeling and Shipping Requirements for Direct-to-Consumer Wine Shipments

Recently, we posted about Michigan Senate Bill 1088 here (“SB 1088”), which expands the delivery privileges of in-state retailers, and which authorizes third party providers and common carriers to assist with shipping and delivery on behalf of in-state retailers, subject to certain limitations. SB 1088 also amends Michigan’s winery direct-to-consumer shipping law, Mich. Comp. Laws § 436.1203(4). The revisions relax the labeling and packaging requirements for direct winery shipments, which will be welcome news to direct winery shippers as the Michigan Liquor Control Commission (“MLCC”) has actively enforced these labeling and packaging requirements in recent years. As of March 29, 2017, wineries no longer need to include their direct shipper license number or the order number on the outside label of each package shipped into Michigan. Direct shippers will still be required to label the top panel of the shipping package with the name and address of the individual placing the order and the name of the designated recipient, if different from the person placing the order. The outside label must also state “Contains Alcohol. Must be delivered to a person 21 years of age or older.” Inside each package to be shipped, the invoice or packing slip is no longer required to list the Michigan wine label registration number of approval for each wine shipped, although wineries will still be required to register their wine labels with the MLCC. SB 1088 also establishes new rules for common carriers. Common carriers acting on behalf of winery direct shipper licensees are subject to new recordkeeping and reporting requirements, as detailed in our prior post regarding SB 1088. If your winery is in need of assistance regarding direct shipping laws, contact one of the attorneys at Strike & Techel.

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New FDA Menu Labeling Regulations Will Be Enforced Beginning May 2017

The Food and Drug Administration (“FDA”) recently released final industry guidance on the new menu labeling requirements in accordance with 21 C.F.R. § 101.11, implemented to comply with a provision of the 2010 Affordable Care Act. The new menu labeling rules require chain restaurants to provide calorie information on the menu and provide, upon customer request, additional nutritional information for menu items. The FDA’s final guidance can be found here, and will help industry members comply with these new menu labeling rules, which the FDA will begin to enforce in May 2017. This blog post provides a summary of the menu labeling rules and the FDA’s industry guidance. What businesses must comply? The new menu labeling rules apply to restaurants or similar retail food establishments, such as a bakery, a convenience store selling foods intended for immediate consumption, or a concession stand, that are a part of a chain with 20 or more locations that do business under the same trade name and that offer substantially the same menu items for sale. Additionally, a restaurant or retail food establishment may voluntarily register to be subject to the menu labeling requirements. What is required of those businesses? Under the new menu labeling rules, these businesses will be required to include calorie information on menus for all standard menu items. Additionally, these businesses will be required to have written information available upon customer request, regarding nutritional information for standard menu items, including the amount of total calories, calories from fat, total fat, saturated fat, trans fat, cholesterol, sodium, total carbohydrates, dietary fiber, sugars, and protein. These requirements apply to standard menu items, and do not apply to daily specials, custom orders, alcoholic beverages on display that are not self-service, or temporary menu items that only appear on the menu for less than sixty days per calendar year. Are alcoholic beverages included? Yes, the new menu labeling rules apply to alcoholic beverages sold in a restaurant or similar retail food establishment that is required or has registered to comply with the menu labeling rules. The rules apply to all alcoholic beverages that are listed on the establishment’s menu, subject to the exceptions for daily specials, custom orders, alcoholic beverages on display that are not self-service, or temporary menu items that only appear on the menu for less than sixty days per calendar year. The exception for alcoholic beverages on display that are not self-service will be helpful for establishments preparing mixed drinks. If the liquor bottles are on display, and the drinks are not listed on the menu, the establishment will not be required to make available calorie or other nutritional information. How can calorie and nutrient information for alcoholic beverage products be obtained? An establishment must have a “reasonable basis” for determining the calorie and other nutritional information for standard menu items. Establishing a “reasonable basis” may include utilizing nutrient databases, published cookbooks that contain nutritional information for recipes in the cookbook, nutrition information determined by laboratory analyses, or any other means that is reasonable. The U.S. Department of Agriculture (“USDA”) maintains a nutrient database, available here, which the FDA’s guidance refers to as reasonable basis for calorie and nutrient calculations. How will alcoholic beverage producers be affected? The new menu labeling regulations will impact all alcoholic beverage producers that sell products to chain establishments with 20 or more locations. Those establishments will likely request that the alcoholic beverage producer provide the calorie and nutritional information for its products sold at the establishment. As most alcoholic beverages are not subject to the FDA rules governing labeling and nutritional information, this law will mainly affect alcoholic beverage producers that do not currently maintain calorie or nutritional information regarding the beverages that they produce. Alcoholic beverage producers should check the USDA database referenced above to see whether their products match entries currently listed in the database, as the database includes entries for several common types of alcoholic beverages. Additionally, the Brewers Association has announced that it will be running laboratory analyses for approximately 100 beer styles over the next year, which the Brewers Association plans to submit for inclusion in the USDA database. Alternatively, producers could submit their products for laboratory analyses in order to obtain accurate nutritional information. For more information about menu and product labeling requirements, contact one of the attorneys at Strike & Techel for a consultation.

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The Burden of Proof: TTB’s Annual Alcohol Sampling Program

Most of what consumers know about the alcoholic beverage products they buy comes from their interaction with the label, so it is important to get it right. The Alcohol and Tobacco Tax and Trade Bureau (TTB), which regulates the labeling of most beverage alcohol products, recently released their annual alcohol beverage sampling program results, highlighting the most common compliance issues with drinks labels in the marketplace. Every year, the TTB conducts a random survey of alcoholic beverage products available for sale to the public. They select a range of brands across the distilled spirits, wine and malt beverage categories, and crosscheck the information on the label against the beverage in the bottle (or can, or alternative packaging). In 2015, well over a third of the distilled spirits and malt beverages surveyed were non-compliant (at 62 out of 154, and 61 out of 158 respectively), and just under a quarter of the wines were non-compliant (at 34 out of 138). Many of the products in the market were found to have labels that were different from the certificates of label approval (COLAs) that the TTB had issued for those products. The TTB has worked hard in the last few years to balance its limited resources against ever increasing numbers of COLA submissions, and has published a long list of allowable changes that can be made to approved COLAs. However, some changes still require a new COLA. Some of the information on the label can be changed or removed, the shape and color can be altered, and statements and graphics can be moved, but it is difficult to add anything new without getting a new COLA. Leaving aside COLA compliance, however, far and away the biggest issue identified by the TTB was related to the alcoholic content claims of the products surveyed. Each category of alcoholic beverages has some room to maneuver with the stated alcohol content. In particular, wine and malt beverages have greater tolerances, because the regulations recognize that they are products which can and often do continue to evolve in the bottle. However, even with these permitted tolerances, over 20% of the samples had a stated alcoholic content that was non-compliant. A table wine between 7% and 14% alcohol by volume (ABV), is allowed to be up to 1.5% either above or below the stated alcoholic content on the label (provided the wine remains in the same tax class, below 14%). Wine with over 14% alcohol can still be up to 1% over or under the stated amount. Malt beverages can be up to 0.3% different from the labeled ABV, either higher or lower. In contrast to the permitted variations for wine and beer, distilled spirits are not allowed to contain any alcohol over the stated ABV. The regulations reflect TTB’s view that there is no reason why distilled spirits should not be able to be accurately proofed upon completion of production. Spirits are allowed a small 0.15% tolerance below the labeled amount, which reduction is only to recognize possible losses during bottling. The proofing and gauging of distilled spirits is key to the TTB’s principal aim of protecting the revenue, and is directly linked to how much tax is paid by the producer. The TTB offers a range of resources to help producers and bottlers with that process, and it is important to ensure that care is taken when your product is labeled. For any questions related to labeling of beverage alcohol, contact one of the attorneys at Strike & Techel.

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TTB Implements Changes to Break COLA Logjam

TTB recently released a new Certificate of Label Approval (COLA) form for alcoholic beverage labels, Form 5100.31, available here. The new form has several minor changes, but the most significant update is the expansion of the revisions that can be made to an approved label without having to submit a new COLA application. The new form should be a welcome change for industry members, who can now make more modifications to existing labels without waiting for TTB to approve the changes. The change is expected to significantly reduce the number of COLA applications submitted to TTB, thus reducing the turnaround time for new labels. The form became official early this month, and among the new revisions permitted to labels without the requirement of a new COLA application are: - Re-position of label information, including text, illustrations, and graphics. - Change of colors (background and text), font type and size, spelling and punctuation, and change from an adhesive label to one that is etched, painted, or printed directly on the container. - Add a vintage date for wine labels (note that changing or deleting a vintage date was previously permitted, and the new form is only a change to the extent a vintage date is added where there was no vintage date previously). - Change the optional “produced” or “made” by statements on wine labels to “blended,” “vinted,” “cellared,” or “prepared” by statements. - Add, delete, or change UPC barcodes and/or 2D mobile barcodes, e.g., QR codes or Microsoft Tags (previously, only “UPC codes” were explicitly listed). - Add, delete, or change trademark, copyright symbols (e.g., TM, ©), kosher symbols, company logos, and/or social media icons. - Add, delete, or change information about awards or medals. - Add, delete, or change holiday, and/or seasonal-themed graphics, artwork, and/or salutations. - The new form also removes the requirement for separate COLA applications for packages that are 237 mL and below or 3 liters and above. Contact one of the attorneys at Strike & Techel if you have questions about the new form or the COLA application process. Imbiblog is published for general informational purposes only and is not intended as legal advice. Copyright © 2012 · All Rights Reserved ·

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