At Whiskey Systems we strive to always keep the WS Family updated with any changes to TTB regulations. As you may know, the TTB has recently issued a 132 page list of proposed changes to current regulations. Many of these have big impacts to Distilled Spirits. The TTB is requesting feedback and comments.
After digesting all the proposed changes, we have created a Survey Monkey with some of the biggest changes to spirits regulations to give the Whiskey Systems family a chance to easily voice their opinions and comments. Please take a few minutes to read through the survey and enter your opinions and feedback before December 31, 2018. Once we consolidate the survey results, we will submit it to the ACSA Board. They are planning to make official comments to the TTB. If you enter your email on the survey, we will send you the meta consolidated data over email once it’s collected.
Link to the survey (Est time to complete: 4 min)
Here is a great, consolidated list of all the proposed changes:
- TTB proposes to require mandatory information on closed containers
- TTB proposes Exports in bond are not subject to COLA, but must be exported directly from the original bonded premise
- TTB proposes that any COLAs for personalized labels be submitted with a template and note what will change
- TTB proposes that DSPs may relabel their product with approved COLAs without obtaining permission for the activity this can take place before or after removal from bond
- TTB proposes to remove the regulation that bans use of the American flag or armed forces or symbols associated with the prior. Reiterating the prohibition of these symbols where they create the impressionthat there is some sort of endorsement or affiliation with the government
- TTB proposes that bottlers or importers must provide upon request approved labels to the TTB officer. Copies of COLAs must be kept for 5 years, need not be paper
- TTB proposes that all claims on labels must have a reasonable basis in fact and that if it does not have a reasonable basis in fact and cannot be substantiated will be considered misleading
- TTB proposes to modify the definition of age – spirits are only aged when stored in or with oak
- Spirits stored in barrels lined with paraffin are not aged
- TTB proposes to add a definition of “American proof” – proof listed should be measured using US standards, not another country’s standards
- TTB proposes to codify the position that spirits containing less that .5 percent ABV are not regulated as spirits
- TTB proposes to add a definition for grain that will include cereal grains as well as pseudocereal grains: amaranth, buckwheat and quinoa
- TTB proposes to define the term oak barrel as a “cylindrical drum of approximately 50 gallons used to age bulk spirits”
- TTB proposes to allow mandatory information to appear anywhere on the label so long as it is in the same field of vision, i.e., same side on the container where all pieces can be viewed without turning the container
- Also eliminates the requirement that mandatory information appear parallel to the base of the container
- TTB proposes that the statement of proof must appear immediately adjacent to the mandatory alcohol statement
- TTB proposes to expand tolerance for labeling alcohol content to 0.3 percent ABV above and below the labeled alcohol content
- “We note that while taxes on distilled spirits are generally determined on the basis on the labeled alcohol content of the product, we believe that the proposal does not present a risk to the revenue because there likely will be both overproof and underproof bottles and there is no economic incentive for intentionally overproofing bottles.”
- TTB proposes to clarify the terms used in bottled by statements:
- Produced by, blended by, made by, prepared by, manufactured by
- TTB proposes that the state or original distillation for certain whiskey products must be shown on the labels in one of the following ways:
- By including a distilled by (or distilled and bottled by) as a single location
- By including the name of the state immediately adjacent to the class and type, such as “Kentucky Bourbon Whiskey”
- By including a separate statement, “Distilled in…”
- TTB proposes to allow age statements on all distilled spirits, except for neutral spirits (other than grain spirits, which may contain an age statement)
- TTB proposes rules for the use of “barrel proof,” cask strength,” “original proof,” “original barrel proof,” “original cask strength,” and “entry proof” on distilled spirits
- Barrel proof – bottling proof is not less than 2 degrees lower than the proof at barrel dumping – tax determination
- Original proof, original barrel proof, entry proof – proof of original barrel and bottled product is the same proof
- TTB proposes to eliminate the rule that bond gin or vodka be stores in paraffin coated oak containers
- TTB proposes new rules for multiple distillation claims. Currently allowed if they are truthful statements. Proposes defining a distillation as a single run through a pot still or one run through a single distillation column of a column still
- TTB proposes that the use of Scotch whiskey be used on labels of specialty products where the specialty product uses Scotch Whiskey i.e., flavored scotch Whiskey (Scotch whiskey must continue to be made in Scotland under the UK rules)
- TTB proposes rules for the use of “pure.” Term pure may not be used unless truthful of a particular ingredient, part of the name of the permittee
- TTB proposes to clarify the standards of identity to a finished product without regard to whether an intermediate product is used in the manufacturing process. Clarify that blending ingredients together like spirits and wines fist in a “intermediate product’ is the same as adding ingredients separately for purposes of determining the standards of identity. TTB requires the disclosure of the intermediate product as part of the statement of composition.
- TTB proposes to clarify that some distilled spirits products conform to more than one class, and those products may be designated with any class which the product conforms.
i.e., orange flavored Vodka or Orange liqueur
- TTB proposes standards for neutral spirits clarify that neutral spirits products. Source materials may be included in the designation of the label, i.e. Apple Neutral spirits
- TTB proposes to that neutral spirits other than grain spirits that are stored in barrel are specialty products as they are no longer neutral due to the wood.
- TTB proposing to amend standards of identity of vodka.
Seeking comments on whether the requirement for vodka to be without distinctive character, aroma, taste, and color should be retained if no longer appropriate what the appropriate standard would be for distinguishing from neutral spirits
- TTB proposed that whiskey can be spelled “Whiskey” or “Whisky.”
- TTB proposes to require that where a whiskey meets the standard for one of the types of whiskies it must be designated with that type name, instead of the general “whiskey.” TTB believes that consumers expect that the type designation will appear on the container when it applies.
- TTB proposed to insert a chart for whiskey regulations
- TTB proposes a new whiskey type “white whiskey or Unaged Whiskey.” Under current regulations unaged product would not be eligible for the whiskey designation, other than corn whiskey.
- TTB proposes to remove Geneva Gin from the list of distilled gin
- TTB proposes to allow the use of the terms Slivovitz and Kirshwasser as optional designations for Brandy
- TTB proposes to add Armagnac, Brandy de Jerez and Calvados to the regulations for Brandy
- TTB proposes a new section called “agave spirits”, currently a DSS. Proposes that the mash be made from at least 51 percent agave and may contain up to 49 percent sugar.
- TTB proposes a new identity for Absinthe and will remove the requirement for analysis by TTB laboratory before approval
- TTB proposes standards for cordials and liqueurs. Certain cordials and liqueurs may be designated with a name known to consumers: Kummel, Ouzo, Anise, Anisette, Sambuca, Peppermint Schnapps, Triple sec, Curacao, Goldwasser, and crème de (predominant flavor)
- TTB proposed “flavored spirits” as a revised and expanded class. Allow any type of base spirit to be flavored in accordance with the standards of identity. Maintains a minimum alcohol content of 30 percent, may contain wine. Wine content over 2 ½ percent (brandy 12 ½ percent) must be disclosed on label.
- TTB proposes to establish a class as “diluted spirits” spirits that are bottled under the specified alcohol content. Required that the word diluted appear in a readily legible type size at least half size of the type and class.
- TTB proposes to provide that geographical names that are not generic may be used on products made outside the place indicated by the name:
- Aquavit, Zubrovka, Arrack, Kummel, Amaretto and Ouzo
- TTB proposes that these have NOT become generic:
- Andong Soju
- TTB proposes a new class of spirits called “distilled spirits specialty products.” Products are not required to be named with this class, must have the distinctive or fanciful name together with the statement of composition on the label
- TTB proposes to add the requirement for whiskey stored in two different types of barrels, i.e. whiskey stored in oak and then put into a maple barrel. This spirit becomes a distilled spirit specialty and must be labeled with a statement of composition
- TTB believe there may be formula requirements that no longer serve a labeling purpose. Seeking comment on whether certain formula requirements should be eliminated and the rationale for such a change.
- TTB proposes to eliminate the maximum headspace requirement and certain design requirements Eliminating the application requirements for distinctive liquor bottles
All sections below are for reference and include relevant text from:
Notice No. 176: Modernization of the Labeling and Advertising Regulations for Wine, Distilled Spirits, and Malt Beverages.” www.regulations.gov. 2018. December 14, 2018 <https://www.regulations.gov/document?D=TTB-2018-0007-0001>
“TTB proposes to define the term “oak barrel,” which is used with regard to the storage of certain bulk spirits. TTB and its predecessor agencies have traditionally considered a “new oak container,” as used in the current regulations, to refer to a standard whiskey barrel of approximately 50 gallons capacity. Accordingly, TTB proposes to define an oak barrel as a “cylindrical oak drum of approximately 50 gallons capacity used to age bulk spirits.” However, TTB seeks comment on whether smaller barrels or non-cylindrical shaped barrels should be acceptable for storing distilled spirits where the standard of identity requires storage in oak barrels.”
“The TTB regulations set forth certain rules for how age statements may appear on labels. TTB proposes to update the rule, currently found in § 5.40(d), which states that age, maturity, or similar statements may not appear on neutral spirits (except for grain spirits), gin, liqueurs, cordials, cocktails, highballs, bitters, flavored brandy, flavored gin, flavored rum, flavored vodka, flavored whisky, and specialties, because such statements are misleading. TTB has seen recent growth in the number of distilled spirits products, such as gin, being stored in oak containers. However, the prohibition in the current regulations means that a producer cannot use age statements to inform the public how long its product has been stored in oak containers, and TTB has approved labels using terms such as “finished” or “rested” for these types of products. TTB believes that consumers should be able to make their own determinations on how the aging would affect the product, and that age statements would provide truthful information to consumers. Accordingly, TTB proposes to allow age statements on all spirits except for neutral spirits (other than grain spirits, which may contain an age statement).”
“Proposed §§ 4.212, 5.212, and 7.212 set forth specific substantiation requirements, which are new to the regulations, but which reflect TTB’s current expectations as to the level of evidence that industry members should have to support labeling claims. The proposed regulations provide that all claims, whether implicit or explicit, must have a reasonable basis in fact. Claims that contain express or implied statements regarding the amount of support for the claim (e.g., “tests provide,” or “studies show”) must have the level of substantiation that is claimed.
Furthermore, the proposed regulations provide for the first time that any labeling claim that does not have a reasonable basis in fact, or cannot be adequately substantiated upon the request of the appropriate TTB officer, will be considered misleading.”
“TTB also proposes in § 5.65(c) to provide for an expanded tolerance for labeling of alcohol content. The current regulations in 27 CFR 5.37(b) provide a tolerance for a drop in alcohol content only, of 0.15 percent alcohol by volume for most distilled spirits and of 0.25 percent for spirits with a high solids content or for spirits bottled in small bottle sizes. The tolerance was established to allow for variations in alcohol content that occur due to losses in alcohol content during the bottling process.”
“The proposed rule amends the alcohol content regulations in part 5 to allow for an expanded alcohol content tolerance. TTB proposes to expand the alcohol content tolerance to 0.3 percent alcohol by volume above or below the labeled alcohol content.”
“TTB believes that this proposal would allow greater flexibility and business efficiencies for bottlers. We note that while taxes on distilled spirits are generally determined on the basis of the labeled alcohol content of the product, we believe that the proposal does not present risks to the revenue because there likely will be both overproof and underproof bottles and there is no economic incentive for intentionally overproofing bottles.”
“Current § 5.36(d) require the State of distillation to be listed on the label if it is not included in the mandatory name and address statement. However, because the name and address statement may be satisfied with a bottling statement, there is no way to know, simply by reviewing a proposed label, whether distillation actually occurred in the same State as the bottling location.
Accordingly, proposed § 5.66(f) would provide that the State of original distillation for certain whisky products must be shown on the label in at least one of the following ways:
• By including a “distilled by” (or “distilled and bottled by” or any other phrase including the word “distilled”) statement as part of the mandatory name and address statement, followed by a single location. This means that a principal place of business or a list with multiple locations would not suffice;
• By including the name of the State in which original distillation occurred immediately adjacent to the class or type designation (such as “Kentucky Bourbon whisky”), as long as distillation and any required aging occurred in that State; or
• By including a separate statement, such as “Distilled in [name of State].””
“Proposed § 5.87 prescribes rules for the use of the terms “barrel proof,” “cask strength,” “original proof,” “original barrel proof,” “original cask strength,” and “entry proof” on distilled spirits labels. The proposed text incorporates the holding, set forth in ATF Ruling 79-9 that the terms “original proof,” “original barrel proof,” and “entry proof,” when appearing on a distilled spirits product label, indicate that the proof of the spirits entered into the barrel and the proof of the bottled spirits are the same.
The ruling further held that the term “barrel proof” appearing on a distilled spirits label indicates that the bottling proof is not more than two degrees lower than the proof established at the time the spirits were gauged for tax determination.”
“Proposed § 5.89 would set forth new rules for the use of multiple distillation claims, such as “double distilled” or “triple distilled.” Current regulations, at § 5.42(b)(6), provide that such claims are allowable if they are truthful statements of fact and further provide that the terms “double distilled” or “triple distilled” shall not be permitted on labels of distilled spirits if the second or third distillation is “a necessary process for production of the product.””
“TTB is proposing in this rulemaking, at proposed § 5.89, to define a distillation as a single run through a pot still or one run through a single distillation column of a column (reflux) still. TTB believes that this definition is consistent with what consumers understand the terms to mean and also believes that this meaning most fully informs consumers as to the identity and quality of the distilled spirits product.”
“Proposed § 5.143 sets forth the standards for whiskies. TTB proposes to clarify that the word whisky may be spelled “whisky” or “whiskey.” TTB also proposes to require that, where a whisky meets the standard for one of the types of whiskies, it must be designated with that type name, except that Tennessee Whisky may be labeled as Tennessee Whisky even if it meets the standards for one of the type designations. Currently, TTB allows the term “Tennessee Whisky” to appear on labels, even if the product meets a more specific standard of identity, such as for bourbon whisky.
In the current regulations, when a whisky meets the standard for a type of whisky, it is unclear whether the label must use that type designation or may use the general class “whisky” on the label. TTB believes that consumers expect that the type designation will appear on the container when it applies.”
“TTB also proposes to provide for a new type designation of “white whisky or unaged whisky.” TTB has seen a marked increase in the number of products on the market that are distilled from grain but are unaged or that are aged for very short periods of time. Under current regulations, unaged products would not be eligible for a whisky designation (other than corn whisky) and would have to be labeled with a distinctive or fanciful name, along with a statement of composition. In order to provide guidance for these products, TTB proposes that products that are either unaged (so they are colorless) or aged and then filtered to remove color should be designated as “white whisky” or “unaged whisky,” respectively. This proposal represents a change in policy, because currently all whiskies (except corn whisky) must be aged, although there is no minimum time requirement for such aging. TTB believes that currently some distillers may be using a barrel for a very short aging process solely for the purpose of meeting the requirement to age for a minimal time.”
“TTB has also had a number of requests from industry members for guidance on labeling products that are stored in two different types of barrels. For example, whisky must be stored in oak containers, in accordance with the standard of identity. When a producer stores the whisky in oak containers and then stores it in a different type of container, such as a maple barrel, the spirit becomes a distilled spirits specialty product and must be labeled with a statement of composition, such as “Bourbon Whisky finished in maple barrels.” TTB proposes, in § 5.155(c), to add this requirement to the regulations.”
“Proposed § 5.148 is a new section that provides for a class called “agave spirits.” Currently, spirits that are distilled from agave are considered distilled spirits specialties, and the labels of the products must contain a statement of composition, such as “Spirits Distilled from Agave.” Because TTB’s standards of identity are generally distinguished by agricultural commodity, TTB believes it would be useful for consumers and for industry members if TTB created a class of spirits for spirits that are distilled from agave. TTB proposes that the mash for agave spirits be comprised of at least 51 percent agave and that it may contain up to 49 percent sugar (weight before the addition of water).”
“Exports in bond.The current regulations exempting products for export from the labeling regulations under the FAA Act are somewhat inconsistent. In existing §§ 4.80 and 7.60, wine and malt beverages “exported in bond” are exempted from the requirements of those respective parts. However, current § 5.1, which is entitled “General,” provides that part 5 “does not apply to distilled spirits for export.”
TTB believes that the exemptions in all three parts should be consistent and should be restricted to exportations in bond. In general, the bottler is required to obtain a COLA prior to removal of the product from the premises. Products that are removed subject to tax may subsequently be exported or may end up in the domestic market, and therefore are not exempted from the labeling requirements of the FAA Act.
Accordingly, proposed §§ 4.8, 5.8, and 7.8 provide that products exported in bond directly from a bonded wine premises, distilled spirits plant, or brewery, respectively, or from customs custody, are not subject to the regulations under these parts. The amendment clarifies that exportation in bond does not include exportation after wine, distilled spirits, or malt beverages have been removed for consumption or sale in the United States, with appropriate tax determination or payment. This is only a clarifying change in parts 4 and 7. With regard to part 5, TTB seeks comments on whether this proposed change will impact existing practices, and if so, what the impact will be.”
“d. Depictions of government symbols. Currently, representations relating to the American flag or the U.S. armed forces are prohibited from appearing on alcohol beverage labels in order to prevent misconceptions that the alcohol beverage is endorsed or otherwise supervised by the U.S. government or the armed forces. However, the regulations prohibit the use of flags from other countries only where it would be misleading. The regulations on U.S. and foreign flags are based on the same statutory provision of the FAA Act at 27 U.S.C. 205(e)(5) that prohibits deception of the consumer by use of a name or representation of individuals or organizations when such use creates a misleading impression of endorsement.
Consistent with the statutory prohibition on which these regulations are based, it is TTB’s current policy to enforce this regulatory prohibition only where such representations might tend to mislead consumers. Thus, TTB is proposing to amend the regulations to remove the blanket prohibition against the use of representations of, or relating to, the American flag, the armed forces of the United States, or other symbols associated with the American flag or armed forces. Instead, proposed §§ 4.126, 5.126, and 7.126 retain the prohibition against the use of such symbols or images where they create the impression that there was some sort of endorsement by, or affiliation with, the governmental entity represented. Furthermore, each of these proposed sections specifically provides that the section does not prohibit the use of a flag as part of a claim of American origin or another country of origin.”
“Proposed § 5.88 sets forth rules for the use of the terms “bottled in bond,” “bond,” “bonded,” or “aged in bond,” or other phrases containing these or synonymous terms. The use of these terms was originally restricted to certain products under the Bottled in Bond Act of 1897 (29 Stat. 626). The Bottled in Bond Act was intended to provide standards for certain spirits that would inform consumers that the spirits were not adulterated. Treasury Department officers monitored bonded distilled spirits plants. The Bottled in Bond Act was repealed by the Distilled Spirits Tax Revision Act of 1979 (see title VIII, subtitle A, Public Law 96-39, 93 Stat. 273). TTB’s predecessor agency, ATF, decided to maintain the rules concerning “bottled in bond” and similar terms, because consumers continued to place value on these terms on labels. Proposed § 5.88 maintains the requirements for the use of “bottled in bond” and similar terms and reorganizes them for clarity. Imported spirits may use “bottled in bond” and similar terms on labels when the imported spirits are produced under the same rules that would apply to domestic spirits.
In order to maintain parity between whisky that is aged and vodka and gin, which do not undergo traditional aging, vodka and gin are required to be stored in wooden containers in order to use “bond” or similar terms, but the wood containers must be coated or lined with paraffin or another substance to prevent the vodka or gin from coming into contact with the wood. TTB seeks comment on whether it should eliminate the requirement that bonded vodka or gin be stored in wooden containers. TTB rarely sees “bonded” vodka or gin; “bond” and similar terms are most frequently used on labels of whisky. Commenters may also wish to opine on whether TTB should maintain any special standards for the use of “bonded” or similar terms, since all domestic distilled spirits products are now bottled on bonded premises.”
“TTB proposes to clarify, in § 5.141, that the standards of identity apply to a finished product without regard to whether an intermediate product is used in the manufacturing process. This means that the intermediate product is treated as a mixture for the convenience of the manufacturer, but determinations as to the classification and labeling of the product will be made without regard to the fact that the elements of the intermediate product were first mixed together in the intermediate product. In the case of distilled spirits specialty products, TTB currently treats intermediate products as “natural flavoring materials” when they are blended into a product, for the purpose of disclosure as part of a truthful and adequate statement of composition. TTB has seen changes in the alcohol beverage industry and in various formulas and believes that treating intermediate products as natural flavoring materials does not provide adequate information to consumers, as required by the FAA Act. Accordingly, TTB proposes to clarify that blending components such as distilled spirits and wines together first in an “intermediate product” is the same as adding the ingredients separately for purposes of determining the standard of identity of the finished product. Additionally, TTB proposes to change its policy with regard to statements of composition for specialties to require the disclosure of elements of the intermediate product (including spirits, wines, flavoring materials, or other components) as part of the statement of composition.”