[Federal Register Volume 72, Number 175 (Tuesday, September 11, 2007)]
[Proposed Rules]
[Pages 51732-51735]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-17909]


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DEPARTMENT OF THE TREASURY

Alcohol and Tobacco Tax and Trade Bureau

27 CFR Parts 4, 5, and 7

[Notice No. 74]
RIN 1513-AB36


Modification of Mandatory Label Information for Wine, Distilled 
Spirits, and Malt Beverages

AGENCY: Alcohol and Tobacco Tax and Trade Bureau, Treasury.

ACTION: Notice of proposed rulemaking; solicitation of comments.

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SUMMARY: In this notice, the Alcohol and Tobacco Tax and Trade Bureau 
(TTB) proposes to amend its regulations regarding the mandatory 
labeling requirements for alcoholic beverages. The proposed regulatory 
changes would permit alcohol content to appear on other labels affixed 
to the container rather than on the brand label as currently required. 
These regulatory changes will provide greater flexibility in alcoholic 
beverage labeling, and will conform the TTB wine labeling regulations 
to the recent agreement reached by members of the World Wine Trade 
Group regarding the presentation of certain information on wine labels.

DATES: Comments must be received on or before November 13, 2007.

ADDRESSES: You may send comments on this notice to one of the following 
addresses:
     http://www.regulations.gov (Federal e-rulemaking portal; 
follow the instructions for submitting comments); or
     Director, Regulations and Rulings Division, Alcohol and 
Tobacco Tax and Trade Bureau, P.O. Box 14412, Washington, DC 20044-
4412.
    See the Public Participation section of this notice for specific 
instructions and requirements for submitting comments, and for 
information on how to request a public hearing.
    You may view copies of this notice and any comments we receive 
about this proposal at http://www.regulations.gov. You also may view 
copies of this notice and any comments we receive about this proposal 
by appointment at the TTB Information Resource Center, 1310 G Street, 
NW., Washington, DC 20220. To make an appointment, call 202-927-2400.

FOR FURTHER INFORMATION CONTACT: Mari A. Kirrane, Wine Trade and 
Technical Advisor, Alcohol and Tobacco Tax and Trade Bureau, 221 Main 
Street, Suite 1340, San Francisco, CA 94105; telephone (415) 625-5793.

SUPPLEMENTARY INFORMATION:

Background

TTB Authority

    Section 105(e) of the Federal Alcohol Administration Act (FAA Act), 
27 U.S.C. 205(e), authorizes the Secretary of the Treasury to prescribe 
regulations for the labeling of wine, distilled spirits, and malt 
beverages. The FAA Act provides that these regulations should, among 
other things, prohibit consumer deception and the use of misleading 
statements on labels, and ensure that labels provide the consumer with 
adequate information as to the identity and quality of the product. The 
Alcohol and Tobacco Tax and Trade Bureau (TTB) administers the 
regulations promulgated under the FAA Act.

Current TTB Mandatory Brand Labeling Requirements for Wine

    Part 4 of the TTB regulations (27 CFR part 4) sets forth the 
requirements for labeling and advertising wine promulgated under the 
FAA Act. Section 4.10 (27 CFR 4.10) defines a brand label as the label 
carrying, in the usual distinctive design, the brand name of the wine. 
Section 4.32 (27 CFR 4.32) prescribes mandatory label information. 
Section 4.32(a) requires a statement of the following on the brand 
label:
     The brand name, in accordance with Sec.  4.33;
     The class, type, or other designation, in accordance with 
Sec.  4.34;
     The alcohol content, in accordance with Sec.  4.36; and
     On blends consisting of American and foreign wines, if any 
reference is made to the presence of foreign wine, the exact percentage 
by volume.
    In addition, Sec.  4.32(b) lists other mandatory label information, 
which may appear on any label affixed to the container.

Current TTB Mandatory Brand Labeling Requirements for Distilled Spirits

    Part 5 of the TTB regulations (27 CFR part 5) sets forth the 
requirements for labeling and advertising distilled spirits promulgated 
under the FAA Act. Section 5.11 (27 CFR 5.11) defines a brand label as 
the principal display panel that is most likely to be displayed, 
presented, shown, or examined under normal and customary conditions of 
display for retail sale, and any other label appearing on the same side 
of the bottle as the principal display panel. The principal display 
panel appearing on a cylindrical surface is that 40 percent of the 
circumference which is most likely to be displayed, presented, shown, 
or examined under normal and customary conditions of display for retail 
sale. Section 5.32 (27 CFR 5.32) prescribes mandatory label 
information. Section 5.32(a) requires a statement of the following on 
the brand label:
     The brand name;
     The class and type, in accordance with Sec.  5.35; and
     The alcohol content, in accordance with Sec.  5.37.
    In addition, Sec.  5.32(b) lists the mandatory label information 
that must appear on either the brand label or the back label, including 
net contents and the country of origin of imported spirits.

Current TTB Mandatory Brand Labeling Requirements for Malt Beverages

    Part 7 of the TTB regulations (27 CFR part 7) sets forth the 
requirements for labeling and advertising malt beverages promulgated 
under the FAA Act. Section 7.10 (27 CFR 7.10) defines a brand label as 
the label carrying, in the usual distinctive design, the brand name of 
the malt beverage. Section 7.22 (27 CFR 7.22) prescribes mandatory 
label information. Section 7.22(a) requires a statement of the 
following on the brand label:
     The brand name, in accordance with Sec.  7.23;

[[Page 51733]]

     The class, in accordance with Sec.  7.24;
     The name and address (except when branded or burned in the 
container) in accordance with Sec.  7.25, except as provided in Sec.  
7.22(b);
     The net contents (except when blown, branded, or burned, 
in the container) in accordance with Sec.  7.27; and
     The alcohol content in accordance with Sec.  7.71, for 
malt beverages that contain any alcohol derived from added flavors or 
other added nonbeverage ingredients (other than hops extract) 
containing alcohol.
    In addition, Sec.  7.22(b) lists mandatory label information that 
must appear on either the brand label or on a separate label (front or 
back).

World Wine Trade Group Agreement

    The World Wine Trade Group (WWTG) is a six-member informal group 
composed of both government officials and industry representatives from 
Argentina, Australia, Canada, Chile, New Zealand, and the United 
States. The WWTG was formed to discuss and address issues relating to 
international wine trade, including reducing and preventing non-tariff 
barriers to wine trade.
    An inter-agency team composed of representatives from, among 
others, TTB, the Food and Drug Administration, and the Departments of 
Commerce, State, and Agriculture, represents the U.S. Government during 
WWTG discussions. The Office of the U.S. Trade Representative heads the 
inter-agency team.
    The WWTG recently concluded negotiations on a wine labeling 
agreement intended to facilitate further wine trade among members. The 
WWTG Agreement on Requirements for Wine Labelling, hereinafter referred 
to as the ``Agreement,'' was initialed on September 20, 2006, and was 
signed in Canberra, Australia, on January 23, 2007. A full copy of the 
Agreement can be viewed at http://www.ita.doc.gov/td/ocg/WWTG-wine%20Labelling%20Agreement.pdf. These negotiations proceeded from the 
view that common labeling requirements would provide industry members 
with the opportunity to use the same label when shipping wine to each 
of the WWTG member countries.
    In the course of the negotiations, it was recognized that certain 
items of information are considered mandatory by most members. Referred 
to as ``Common Mandatory Information'' in the WWTG Agreement 
(hereinafter CMI), these four items are country of origin, alcohol 
content (by percentage of volume), net contents, and product name. The 
negotiated Agreement also incorporates the ``Single Field of Vision'' 
concept for the placement of the CMI. A ``Single Field of Vision'' is 
any part of the surface of the container, excluding its base and cap, 
that can be seen without having to turn the container. Under this 
approach, as long as all four of the CMI elements are visible at the 
same time, they will meet the placement requirements (if any) of each 
member country. According to the terms of the Agreement, each country 
must permit the CMI for an imported wine to appear on any label 
anywhere on the wine container (except the base or cap), provided all 
four CMI items are in a Single Field of Vision.

Conforming TTB Regulations to the WWTG Agreement

    The United States will not be in compliance with the Agreement if 
the TTB regulations are in conflict with the CMI terms of the 
Agreement. Accordingly, TTB has reviewed its regulations to determine 
if any change is necessary in order for the United States to meet its 
obligation to permit these four pieces of information to appear in a 
single field of vision on labels of imported wines, as outlined in the 
Agreement. The TTB regulations do not require the inclusion of the 
country of origin on wine labels. This requirement is contained in 
statutory and regulatory provisions administered by the U.S. Bureau of 
Customs and Border Protection (CBP; see 19 U.S.C. 1304 and 19 CFR part 
134). Consistent with these requirements, the country of origin may 
appear on any label affixed to a container of imported wine. The 
product name under the Agreement is the word ``wine'' and the TTB 
regulations contain no specific requirements for, or restrictions on, 
the use of ``wine'' alone on wine labels. As already noted in this 
document, the TTB regulations permit net contents to appear on any 
label affixed to the container. Thus, the only conflict that the TTB 
wine label regulations have with the CMI terms of the Agreement is in 
the regulatory requirement for alcohol content to appear on the brand 
label.
    Although the Agreement applies only to imported wine, we note that 
the provisions in the TTB regulations described above that concern the 
labeling of wine, distilled spirits, and malt beverages all contain 
similar provisions regarding the placement of alcohol content on the 
brand label. TTB considered the question of whether allowing alcohol 
content to appear on a label other than the brand label for all three 
beverage groups would continue to provide consumers with adequate 
information regarding product identity and quality, as required under 
the FAA Act. In this regard, TTB notes that consumers currently may 
have to look beyond the brand label for alcohol beverage product 
identity and quality information. Specifically, under Sec.  4.32, the 
required FD&C Yellow No. 5 statement may appear on a brand label or 
back label, the required declaration of sulfites may appear on a front, 
back, strip, or neck label, and the net contents generally may appear 
on any label affixed to the container. Under Sec.  5.32, the required 
FD&C Yellow No. 5 statement may appear on the brand label or back 
label, the required declaration of sulfites may appear on a strip label 
or neck label in lieu of appearing on the front or back label, and the 
net contents may appear on the brand label or on a back label in the 
case of distilled spirits packaged in containers conforming to the 
standards of fill prescribed in Sec.  5.47 or Sec.  5.47a. Under Sec.  
7.22, the required FD&C Yellow No. 5 statement may appear on the brand 
label or on a separate label on the back or front.
    We believe that it is preferable, to the greatest extent possible, 
to have consistency among the labeling regulations for wine, distilled 
spirits, and malt beverages. Accordingly, we are proposing 
corresponding changes to all of those provisions regarding alcohol 
content statements on brand labels.
    In this document, we are proposing to move the alcohol content 
requirements from paragraph (a) of Sec. Sec.  4.32, 5.32, and 7.22 
(label information required to appear on a brand label) to paragraph 
(b) of each of those sections, which prescribes in each case mandatory 
label requirements for information that need not appear on the brand 
label. The change in Sec.  4.32 will allow industry members to apply 
the WWTG ``Single Field of Vision'' concept concerning the placement of 
CMI on labels. The additional changes in Sec. Sec.  5.32, and 7.22 will 
foster consistency in the labeling requirements among all TTB-regulated 
alcohol beverage products.
    This proposal is limited to removing the placement requirement for 
alcohol content. All other formatting requirements, such as type size 
and legibility, would remain the same. As previously noted, consumers 
are already looking beyond the brand label for product information. 
Moreover, the proposed rule would provide industry members with the 
flexibility to place alcohol content on container labels in close 
proximity to other consumer information, such as sulfite and FD&C 
Yellow No. 5 information.

[[Page 51734]]

    Finally, we note that alcohol beverage industry members would not 
be required to make any changes to their current labels as a result of 
this regulatory change because, under the proposal, alcohol content 
information could still be placed on the brand label. The Agreement 
does not require that U.S. wine producers or importers place the four 
CMI elements in a Single Field of Vision, only that each country accept 
imported wines labeled in that way. The Single Field of Vision concept 
is an optional labeling format and the proposed changes to our 
regulations will accommodate those who wish to label their wines in 
that manner.

Effect on Currently Approved Labels

    Sections 4.40, 4.50, 5.51, 5.55, 7.31 and 7.41 of the TTB 
regulations (27 CFR 4.40, 4.50, 5.51, 5.55, 7.31 and 7.41) generally 
require that regulated industry members obtain a certificate of label 
approval (COLA) from TTB prior to the bottling or removal of domestic 
wines, distilled spirits, or malt beverages, or the release of imported 
wines, distilled spirits, or malt beverages, in containers, from 
customs custody for consumption. No COLA is required for alcoholic 
beverages labeled for export. It is the position of TTB that, if the 
proposed regulatory amendment is adopted as a final rule, a new COLA 
would not be required if the only change made to the labels appearing 
on a previously issued COLA is moving the alcohol content to a label 
other than the brand label.

Public Participation

Comments Invited

    We invite comments from interested members of the public on this 
proposed rulemaking.

Submitting Comments

    You may submit comments on this notice by one of the following two 
methods:
     Federal e-Rulemaking Portal: To submit a comment on this 
notice using the online Federal e-rulemaking portal, visit http://www.regulations.gov. and select ``Alcohol and Tobacco Tax and Trade 
Bureau'' from the agency drop-down menu and click ``Submit.'' In the 
resulting docket list, click the ``Add Comments'' icon for the 
appropriate Docket number and complete the resulting comment form. You 
may attach supplemental files to your comment. More complete 
information on using Regulations.gov., including instructions for 
accessing open and closed dockets and for submitting comments, is 
available through the site's ``User Tips'' link.
     Mail: You may send written comments to the Director, 
Regulations and Rulings Division, Alcohol and Tobacco Tax and Trade 
Bureau, P.O. Box 14412, Washington, DC 20044-4412.
    Please submit your comments by the closing date shown above in this 
notice. Your comments must include this notice number and your name and 
mailing address. Your comments must be legible and written in language 
acceptable for public disclosure. We do not acknowledge receipt of 
comments, and we consider all comments as originals.
    If you are commenting on behalf of an association, business, or 
other entity, your comment must include the entity's name as well as 
your name and position title. If you comment via http://www.regulations.gov., please enter the entity's name in the 
``Organization'' blank of the comment form. If you comment via mail, 
please submit your entity's comment on letterhead.
    You may also write to the Administrator before the comment closing 
date to ask for a public hearing. The Administrator reserves the right 
to determine whether to hold a public hearing.

Confidentiality

    All submitted comments and attachments are part of the public 
record and subject to disclosure. Do not enclose any material in your 
comments that you consider to be confidential or inappropriate for 
public disclosure.

Public Disclosure

    On the Federal e-rulemaking portal, we will post, and you may view, 
copies of this notice and any electronic or mailed comments we receive 
about this proposal. To view a posted document or comment, go to http://www.regulations.gov. and select ``Alcohol and Tobacco Tax and Trade 
Bureau'' from the agency drop-down menu and click ``Submit.'' In the 
resulting docket list, click the appropriate docket number, then click 
the ``View'' icon for any document or comment posted under that docket 
number.
    All submitted and posted comments will display the commenter's 
name, organization (if any), city, and State, and, in the case of 
mailed comments, all address information, including e-mail addresses. 
We may omit voluminous attachments or material that we consider 
unsuitable for posting.
    You also may view copies of this notice and any electronic or 
mailed comments we receive about this proposal by appointment at the 
TTB Information Resource Center, 1310 G Street, NW., Washington, DC 
20220. You may also obtain copies at 20 cents per 8.5- x 11-inch page. 
Contact our information specialist at the above address or by telephone 
at 202-927-2400 to schedule an appointment or to request copies of 
comments or other materials.

Regulatory Analysis and Notices

Executive Order 12866

    We have determined that this proposed rule is not a significant 
regulatory action as defined in Executive Order 12866. Therefore, a 
regulatory assessment is not required.

Regulatory Flexibility Act

    Pursuant to the requirements of the Regulatory Flexibility Act (5 
U.S.C. chapter 6), we certify that this notice of proposed rulemaking 
will not have a significant economic impact on a substantial number of 
small entities. The propose rule will not impose, or otherwise cause, a 
significant increase in reporting, recordkeeping, or other compliance 
burdens on a substantial number of small entities. Accordingly, a 
regulatory flexibility analysis is not required.

Paperwork Reduction Act

    The collection of information in this rule has been previously 
approved by the Office of Management and Budget (OMB) under the title 
``Labeling and Advertising Requirements Under the Federal Alcohol 
Administration Act,'' and assigned control number 1513-0087. This 
proposed regulation would not result in a substantive or material 
change in the previously approved collection action, since the nature 
of the mandatory information that must appear on labels affixed to the 
container remains unchanged.

Drafting Information

    Maria Mahone of the Knowledge Management Staff drafted this 
document.

List of Subjects

27 CFR Part 4

    Advertising, Customs duties and inspection, Imports, Labeling, 
Packaging and containers, Reporting and recordkeeping requirements, 
Trade practices, Wine.

27 CFR Part 5

    Advertising, Customs duties and inspection, Imports, Labeling, 
Liquors, Packaging and containers, Reporting and recordkeeping 
requirements, Trade practices.

[[Page 51735]]

27 CFR Part 7

    Advertising, Beer, Customs duties and inspection, Imports, 
Labeling, Reporting and recordkeeping requirements, Trade practices.

Amendment to the Regulations

    For the reasons discussed in the preamble, TTB proposes to amend 27 
CFR, parts 4, 5, and 7, as follows:

PART 4--LABELING AND ADVERTISING OF WINE

    1. The authority citation for part 4 continues to read as follows:

    Authority: 27 U.S.C. 205, unless otherwise noted.

    2. In Sec.  4.32:
    a. Paragraph (a)(3) is removed and reserved; and
    b. A new paragraph (b)(3) is added to read as follows:


Sec.  4.32  Mandatory label information.

* * * * *
    (b) * * *
    (3) Alcohol content, in accordance with Sec.  4.36.
* * * * *

PART 5--LABELING AND ADVERTISING OF DISTILLED SPIRITS

    3. The authority citation for part 5 continues to read as follows:

    Authority: 26 U.S.C. 5301, 7805, 27 U.S.C. 205.

    4. In Sec.  5.32:
    a. Paragraph (a)(3) is removed and reserved; and
    b. Paragraph (b)(6) is added to read as follows:


Sec.  5.32  Mandatory label information.

* * * * *
    (b) * * *
    (6) Alcohol content, in accordance with Sec.  5.37.
* * * * *

PART 7--LABELING AND ADVERTISING OF MALT BEVERAGES

    5. The authority citation for part 7 continues to read as follows:


    Authority: 27 U.S.C. 205.

    6. In Sec.  7.22:
    a. Paragraph (a)(5) is removed and reserved; and
    b. Paragraph (b)(3) is revised to read as follows:


Sec.  7.22  Mandatory label information.

* * * * *
    (b) * * *
    (3) Alcohol content, in accordance with Sec.  7.71, when required 
by State law or for malt beverages that contain any alcohol derived 
from added flavors or other added nonbeverage ingredients (other than 
hops extract) containing alcohol.
* * * * *

    Signed: January 8, 2007.
John J. Manfreda,
Administrator.
    Approved: May 21, 2007.
Timothy E. Skud,
Deputy Assistant Secretary (Tax, Trade, and Tariff Policy).

    Editorial Note: This document was received at the Office of the 
Federal Register on September 6, 2007.

 [FR Doc. E7-17909 Filed 9-10-07; 8:45 am]
BILLING CODE 4810-31-P