[Federal Register Volume 59, Number 52 (Thursday, March 17, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-6159]


[[Page Unknown]]

[Federal Register: March 17, 1994]


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DEPARTMENT OF THE TREASURY
27 CFR Part 4

[Notice No. 792]
RIN 1512-AB25

 

Use of the Term ``Reserve'' on Wine Labels (93F-033P)

AGENCY: Bureau of Alcohol, Tobacco and Firearms (ATF), Treasury.

ACTION: Advance notice of proposed rulemaking.

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SUMMARY: The Bureau of Alcohol, Tobacco and Firearms (ATF) is 
considering amending the regulations to include a definition for the 
term ``reserve'' when used on wine labels. Based on a petition it has 
received, the Bureau wishes to gather information by inviting comments 
from the public and industry as to whether the regulations should be 
amended to provide for a definition of this term.

DATES: Written comments must be received on or before June 15, 1994.

ADDRESSES: Send written comments to: Chief, Wine and Beer Branch; 
Bureau of Alcohol, Tobacco and Firearms; P.O. Box 50221; Washington, DC 
20091-0221; Attn: Notice No. 792.

FOR FURTHER INFORMATION CONTACT: James P. Ficaretta, Wine and Beer 
Branch, Bureau of Alcohol, Tobacco and Firearms, 650 Massachusetts 
Avenue, NW., Washington, DC 20226 (202-927-8230).

SUPPLEMENTARY INFORMATION:

Background

    Section 105(e) of the Federal Alcohol Administration Act (FAA Act), 
27 U.S.C. 205(e), vests broad authority in the Director of ATF, as a 
delegate of the Secretary of the Treasury, to prescribe regulations 
intended to prevent deception of the consumer, and to provide the 
consumer with adequate information as to the identity and quality of 
the product. Regulations which implement the provisions of section 
105(e), as they relate to wine, are set forth in Title 27, Code of 
Federal Regulations (CFR), part 4.

Petition

    ATF has received a petition, dated June 4, 1993, filed on behalf of 
the Wine Institute, a trade association of California wineries which 
represents approximately 80 percent of the total U.S. wine production. 
According to the petitioner, a regulatory definition of ``reserve'' is 
necessary to permit U.S. ``reserve''--designated wines to be sold for 
export in European Communities (EC) countries.
    Specifically, Council Regulation (EEC) No. 2392/89 of July 24, 
1989, Article 26(2)(c) allows for supplemental information on imported 
wine labels, subject to certain restrictions. Details ``regarding 
superior quality'' are allowed on the label ``in so far as they are 
prescribed by the national provisions of the third country in which the 
wine originates for the domestic market of that country and are 
recognized by the Community.''
    ATF has been informed that the EC considers that the term 
``reserve'' is a term which refers to ``superior quality.'' In the 
absence of a regulatory definition of the term ``reserve'' in the U.S., 
which would apply to wines produced for domestic consumption, products 
bearing this term can be prohibited from being sold in EC member 
countries. The petitioner states that Germany, for example, prohibits 
the importation of U.S. wines that bear the term ``reserve'' on the 
label. The petition does not state whether other EC member nations have 
taken this position.
    The petitioner also believes that defining the term in the 
regulations would provide for uniform meaning and, consequently, be of 
benefit to consumers. They contend that the use of the term ``reserve'' 
is so prolific in the marketplace that its meaning has been lost, 
resulting in consumer confusion.
    In analyzing attempts by foreign countries at defining the term the 
petitioner has concluded that, although many foreign countries 
generally provide for rather broad, subjective tests to determine the 
``reserve'' character of table wine, there is no consistent 
international standard for use of the term.
    Although not defined in the regulations, ATF has permitted the use 
of such terms as ``reserve,'' ``vintner's select,'' ``barrel select,'' 
``premium,'' etc. on wine labels. The Bureau considers these terms to 
be mere ``puffery.'' It has been ATF's position that consumers 
recognize these terms as expressing the proprietor's subjective 
evaluation of the wine, rather than as terms denoting any objective 
standards.

Wine Institute Proposal

    Based on the reasons mentioned above, the Wine Institute has 
proposed the following definition for the term ``reserve'' when used on 
wine labels:

    For U.S. appellations, any table wine which is a vintage dated 
grape table wine that is either varietal, or which contains multiple 
varieties where each of the varieties is listed by percentage of 
total content, may be designated ``reserve'' wine.
    However, a state, county, or viticultural area may establish 
more stringent regulations governing the designation of ``reserve'' 
under rules and regulations to be established by individual states 
or local agencies.

    Although the Wine Institute's proposed definition applies to 
domestic wines only, ATF notes that any amendment of the regulations to 
provide for a definition of the term ``reserve'' would apply to 
domestic wine, as well as to foreign wine imported into the U.S. ATF 
believes that for purposes of consistency a uniform meaning of the term 
is necessary.
    ATF would also point out that the proposed definition applies to 
grape table wine only, i.e., grape wine having an alcoholic content of 
between 7 and 14 percent by volume. Consequently, if the petitioner's 
proposed definition is adopted into the regulations the term could not 
be used on labels of any other type of wine, such as sparkling wine 
(e.g., champagne).

Discussion

    ATF is requesting information from consumers and industry members 
on the desirability of amending the regulations to provide for a 
definition of the term ``reserve'' when used on wine labels. While ATF 
has traditionally taken the position that the use of subjective puffery 
on the label does not result in consumer confusion, ATF wishes to 
solicit comments from both consumers and industry members on whether 
the term ``reserve'' is being used in a confusing or misleading fashion 
on labels. Although ATF is soliciting comments on the following 
specific questions, the Bureau is also requesting any relevant 
information on the subject.
    1. What does the term ``reserve'' mean to consumers?
    2. What does the term mean to members of the wine industry?
    3. Should the term be defined in the wine regulations? If so, 
should there be a different standard for still wines and sparkling 
wines?
    4. Do other similar terms such as ``vintner's select,'' ``barrel 
select,'' ``premium,'' etc., mean anything to consumers? What about to 
members of the industry?
    5. Should these terms be defined in the regulations?
    6. The term ``reserve'' also appears on labels of malt beverages 
and distilled spirits. What does it mean to consumers when it appears 
on these products? What does it mean to members of the malt beverage 
and distilled spirits industries who label their products with this 
term?
    7. Should the term be defined in the regulations for malt beverages 
and distilled spirits?
    8. How much American wine labeled with the ``reserve'' designation 
is exported into EC member nations? Have exporters of American wine 
encountered problems in Germany or any other EC member nations 
concerning wine which is labeled with the term ``reserve?''
    9. ATF has observed that the term ``reserve'' often appears on 
labels of foreign wines imported into the U.S. Do the countries where 
these wines originate have any laws or regulations governing the use of 
this term?

Executive Order 12866

    It has been determined that this advance notice is not a 
significant regulatory action as defined by Executive Order 12866. 
Accordingly, this advance notice is not subject to the analysis 
required by this Executive Order.

Public Participation

    ATF requests comments from all interested persons. Comments 
received on or before the closing date will be carefully considered. 
Comments received after that date will be given the same consideration 
if it is practical to do so, but assurance of consideration cannot be 
given except as to comments received on or before the closing date.
    ATF will not recognize any material in comments as confidential. 
Comments may be disclosed to the public. Any material which the 
commenter considers to be confidential or inappropriate for disclosure 
to the public should not be included in the comment. The name of the 
person submitting a comment is not exempt from disclosure.

Drafting Information

    The principal author of this document is James P. Ficaretta, Wine 
and Beer Branch, Bureau of Alcohol, Tobacco and Firearms.

Disclosure

    Copies of the petition, this notice, and the written comments will 
be available for public inspection during normal business hours at: ATF 
Public Reading Room, room 6480, 650 Massachusetts Avenue, NW., 
Washington, DC.

List of Subjects in 27 CFR Part 4

    Advertising, Consumer protection, Customs duties and inspection, 
Imports, Labeling, Packaging and containers, and Wine.

Authority and Issuance

    This advance notice of proposed rulemaking is issued under the 
authority in 27 U.S.C. 205.

    Dated: January 21, 1994.
Daniel R. Black,
Acting Director.
    Dated: February 9, 1994.
John P. Simpson,
Deputy Assistant Secretary, (Regulatory, Tariff and Trade Enforcement).
[FR Doc. 94-6159 Filed 3-16-94; 8:45 am]
BILLING CODE 4810-31-U