On April 2, 2020, the Alcohol and Tobacco Tax and Trade Bureau (“TTB”) issued a final rule, Modernization of the Labeling and Advertising Regulations for Wine, Distilled Spirits, and Malt Beverages.  While it does not require any current labels or advertisements to be changed, the rule is intended to give more flexibility to industry members and provide clarity to existing requirements.  The final rule will be effective May 4, 2020.

There are a variety of interesting proposals adopted in the final rule:

• The final rule removes previous vodka classification requirements such that Vodka products are no longer prohibited from having a “distinctive character, aroma, taste, or color.”
• The final rule no longer prohibits malt beverage labels and advertisements from using the term “strong” and other indications of alcohol strength.
• The TTB removed a limitation on the way distilled spirits producers may count the distillations when making optional “multiple distillation” claims on their labels.
• The final rule creates a new class within the standards of identity called “agave spirits,” which encompasses two classes: “Tequila” and “Mezcal.”
• The TTB has established an approval process for creation of personalized labels (think weddings, promotional events) that do not require individualized submission and approval by TTB.
• The final rule increases the tolerance for the alcohol content of distilled spirits products to plus or minus 0.3 percentage points above or below the labeled alcohol content.
• The final rule clarifies that all imported alcoholic beverages (distilled spirits, malt beverages, and wine) must display a country of origin statement if the beverage is the product of a country other than the U.S.
• The final rule clarifies which wine and malt beverages meet the statutory definitions under the Federal Alcohol Administration Act. Products not meeting the definitions are not subject to the TTB labeling regulations and are instead subject to FDA labelling regulations.
• The final rule allows advertisements for wine, distilled spirits, and malt beverages to bear the advertisers phone number, website, or email address rather than currently-required city and state.

The TTB also declined to adopt certain proposals.  The TTB rejected a proposal to incorporate a definition of an “oak barrel,” which would have limited it to a “cylindrical oak drum of approximately 50 gallons capacity used to age bulk spirits.”  The TTB received a large amount of opposition to the proposal, with many arguing that the definition conflicts with innovative industry practices of using oak containers of various shapes and/or sizes to age bulk spirits.  The TTB likewise rejected a proposal that would have required whiskey be designated with a name where it meets the standard for one type of whisky.  For example, a whisky that meets the standard for “bourbon” would have been required to be designated a bourbon.  The TTB received opposition by many who stated that this change would require many current labels to change.  The TTB rejected the proposal and distillers will continue to have the option of using the general class “whisky” or one of the type designations that applies.

To see more information on all the adopted and rejected proposals, see here.  The TTB is still considering many regulatory changes that may be addressed in the future—including a proposal to establish a new section of the alcohol beverage regulations relating to advertising.

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