With news last week that the NFL will now be allowing distilled spirits suppliers to advertise during televised football games, it is a good time for a reminder about some of the special issues that come up when advertising alcohol. Under federal law, there are several rules that regulate the advertising of alcohol by suppliers. The main one is that advertisements must include mandatory information about the responsible advertiser and about the product. If a supplier is advertising all of its brands, the only information needed is the advertiser’s name and address, as approved on its federal permit. If a single brand is being advertised, its class and type must appear, and a distilled spirits ad must also show the alcohol content of the product, and the percent and type of any neutral spirits it contains. The federal laws, and many state laws, also have general restrictions around legibility, comparative advertising, and around certain prohibited statements, including, for example, health claims or obscene or indecent statements. Advertising laws prevent the use of a supplier advertisement to provide something of value to a retail licensee, e.g., by giving information about retailers other than a basic mention of where to find the supplier’s products, including at least two, unaffiliated retailers. Suppliers and retailers cannot cooperate or share in the costs of advertising. At the state and local level, other concerns include things like the direct mailing or televising of alcohol advertisements, and advertising of pricing or discounting on products. A number of states require alcohol ads to be preapproved by the regulators there before they can be published. Many states will not allow any listing or mention of retailers in advertisements unless all known retailers of the product are mentioned. It is important to be aware of what exactly constitutes an advertisement. Don’t forget that social media posts by a brand are also subject to advertising rules. Third party posts by influencers and others are also ads, and are subject to Federal Trade Commission guidelines on making sure that readers know that the placement of the brand’s name was paid for. The same goes for sweepstakes and other competitions run by brands, where it must be clear in the post that a consumer has been incentivized to post content on their own social media pages in return for a chance to win a prize. The FTC recently sent letters to dozens of brands and influencers, warning that “material connections” between influencers and brands must be disclosed in social media posts promoting the brands. This suggests that the FTC is focused on the issue and could take enforcement action against companies that fail to comply. Each of the major supplier industry trade groups (Beer Institute, Wine Institute, and the Distilled Spirits Council) maintain voluntary compliance guidelines for advertising in the alcohol industry. These guides contain recommendations related to making sure that target audiences are over 21, that actors appear to be well over 21, and which recommend limiting certain content, for example, ads that encourage overconsumption or suggest that drinking leads to sporting or other success. The guides are extremely useful reading for all industry members, even if they are not members of the association in question. If you are looking for specific guidance on alcohol advertising, contact one of the attorneys at Strike & Techel.
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.
Mostly in our practice at Strike & Techel we work with clients making fairly traditional alcoholic beverage products, albeit with new flavors, production methods and quality drivers. These classic alcoholic beverages are distilled spirits, wines and beers, subject to regulation by the Alcohol and Tobacco Tax and Trade Bureau (TTB). More and more, however, we are called upon to work with alcohol products that fall outside the TTB’s jurisdiction, either because they don’t meet traditional definitions, or because they simply aren’t classified as beverages. Products that do not fit within TTB jurisdiction are subject to Food & Drug Administration (FDA) labeling requirements. Under TTB rules, wine must contain at least 7% alcohol, and beer must be malt-based. Because of these restricted definitions, common examples of drinks that are subject to FDA rules are wine coolers and ciders below 7% alcohol, and beers that aren’t made with malt. Any beers made with other grains, like sorghum, rice or wheat (usually to be sold as “gluten free” products), are under FDA rules. These beverages do not need to obtain label approval, as a standard alcoholic beverage would, but must comply with FDA rules on labeling, to avoid in-market audits for violations. In December 2014, the FDA finally published its guidance for industry on the labeling of non-malt-based beers, which had been in draft form since 2009 (LINK). It helpfully goes through all of the FDA labeling requirements that apply to such beers. These are the same requirements that apply to any FDA-regulated alcoholic beverage, including many ready to drink (RTD) beverages, as discussed in our recent blog post (LINK). Among the key distinctions from standard alcoholic beverage labeling are that the label must include an ingredient list and a nutritional statement. As well as regulating alcoholic beverages, FDA also regulates certain non-beverage alcoholic products. These are products which are consumed – often as cocktail ingredients – but which are not classified as beverages by the TTB because they have been deemed “unfit” for beverage purposes under TTB regulations. Common examples of these products are bitters and other alcohol-based flavorings. Attaining non-beverage status is a goal rather than a failure for these products because products eligible for non-beverage status are exempt from payment of federal excise taxes and they can be sold by retailers without an alcoholic beverage license. Products with a lot of sugar or other flavorings or ingredients that serve to make them more palatable as beverages may not make the cut as non-beverages and would remain subject to excise taxes and TTB label jurisdiction. TTB and FDA classifications of alcoholic products have significant implications on the way they are labeled, taxed and sold, so it is important to submit these products for TTB review before bringing them to market. For more advice on alcoholic beverages and non-beverages, 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 •
Under the Food Safety Modernization Act (“FSMA”), which was passed into law in 2011, all food facilities, including those where alcoholic beverages are produced or stored, are required to renew their FDA registrations by December 31, 2014. As we’ve previously blogged about here and here, the FSMA and related FDA laws include alcohol in the definition of “food,” and a “Food Facility” includes any “factory, warehouse, or establishment (including a factory, warehouse, or establishment of an importer) that manufactures, processes, packs, or holds food,” not including restaurants and other retail food establishments. Accordingly, many in the alcohol industry must register with the FDA, including wineries, breweries, distilled spirits plants, alcohol beverage distributors, importers, warehouses, and wholesalers. Note that foreign facilities that produce food or alcoholic beverages sent to the U.S. are among those required to register. The FSMA requires that all registered food facilities renew their registrations every two years between October 1 and December 31 of every even-numbered year. That means that even if your facility was first registered with the FDA in 2013, or even in early 2014, renewal is required before December 31, 2014. Renewal won’t be required again until October 1 through December 31, 2016. FDA registration and renewal is a simple process that can be completed online and there is no fee for either the initial registration process or renewal. The FDA does not issue a formal certificate once the process is completed, and instead simply issues a registration number to registered facilities, along with a PIN that all registrants should keep available for the renewal process. Many registrants may have received emails or other correspondence from third parties that may claim to be affiliated with the FDA and that attempt to collect fees for FDA registrations. The FDA has recently warned registrants that it is not affiliated with any third parties, and that registration is always free, so be on the lookout for emails requesting a fee or other information related to FDA registration. More information on FDA registration and renewal can be found here. Contact one of the attorneys at Strike & Techel if you have any questions about FDA registration or related issues. Imbiblog is published for general informational purposes only and is not intended as legal advice. Copyright © 2014 · All Rights Reserved ·
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