[Federal Register Volume 59, Number 60 (Tuesday, March 29, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-7275]


[[Page Unknown]]

[Federal Register: March 29, 1994]


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DEPARTMENT OF THE TREASURY

Bureau of Alcohol, Tobacco and Firearms

27 CFR Parts 4 and 9

[T.D. ATF-355; Re: Notice No. 742 & 745]
RIN 1512-AA31

 

Wine Labeling Amendments (88F-221P)

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

ACTION: Treasury decision, final rule.

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SUMMARY: This final rule amends the wine labeling regulations to allow 
the use of multicounty or multistate appellations of origin for other 
than grape wine; allow the use of the designation ``other than 
standard'' on a wine label; allow the use of a vineyard, orchard, farm 
or ranch name on a wine label; allow more than three grape varieties on 
a wine label; and revise the mailing address for obtaining U.S.G.S. 
maps.

EFFECTIVE DATE: April 28, 1994.

FOR FURTHER INFORMATION CONTACT: James A. Hunt, 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), parts 4 and 9. The last multiple issue 
revision of the wine labeling regulations was Treasury Decision ATF-53, 
43 FR 37672 (August 23, 1978), which was effective September 22, 1978.
    On June 19, 1992, ATF published Notice No. 742 (57 FR 27401) 
proposing wine labeling issues which were brought to our attention over 
a period of several years by industry members or other groups. The 
original 30 day comment period was extended an additional 30 days by 
the publication of Notice No. 745 (57 FR 33139).

Wine Labeling Amendments Proposed in Notice 742

1. Broadened Use of the ``Estate Bottled'' Designation

    The proposed revision of 27 CFR 4.26 would (1) allow a bonded wine 
premises proprietor located outside of a viticultural area to use the 
``Estate bottled'' designation for wine derived from primary winemaking 
material produced on land owned or controlled by the proprietor which 
is located contiguous to the proprietor's bonded wine premises, (2) 
allow proprietors producing wine from fruit and agricultural products 
other than grapes to use the ``Estate bottled'' designation on their 
wines, and (3) allow proprietors who have more than one bonded wine 
premises in the same viticultural area to use the ``Estate bottled'' 
designation for wine which prior to bottling was transferred in bond 
between their bonded wine premises located in the same viticultural 
area.

2. Harvest Year Designations for Fruit, Berry and Agricultural Wines

    The proposed addition of 27 CFR 4.28 would allow a harvest year 
designation for citrus fruit wines, other fruit and berry wines, and 
agricultural wines made in accordance with the standards prescribed in 
classes 4, 5 and 6 of 27 CFR 4.21.

3. Expanded Use of a Viticultural Area Designation

    The proposed amendment of section 4.25a(e)(3)(iv) would allow wine 
fully finished outside a viticultural area from where the grapes were 
grown to be labeled with a viticultural area designation as long as 
such wine was finished within the United States.

4. Multicounty or Multistate Appellations of Origin for Other Than 
Grape Wine

    The proposed revision of 27 CFR 4.25a(c) and (d) would allow 
proprietors to use multicounty and multistate appellations on fruit or 
other agricultural product wine labels instead of just being allowed 
for grape wines.

5. Designation ``Other Than Standard Wine'' on a Wine Label

    The proposed amendment of 27 CFR 4.21 would allow either the label 
designation ``Other than Standard'' or ``Substandard'' on a wine label 
for wines with the current standard of identity for ``substandard'' 
wine.

6. Use of a Vineyard, Orchard, Farm or Ranch Name on a Wine Label

    The proposed amendment to 27 CFR 4.39 would allow the use of a 
vineyard, orchard, farm or ranch name on a wine label if 95 percent of 
the primary winemaking material used to produce the wine came from such 
named place.

7. Brand Names With a Varietal (Grape Type) Name

    The proposed revision of 27 CFR 4.23a. would allow a proprietor to 
use a grape variety name in a brand name if such wine meets the 
varietal (grape type) labeling requirements.

8. More Than Three Grape Varieties on a Wine Label

    The proposed revision of 27 CFR 4.23(a) would allow for more than 
three grape variety names on a wine label.

9. Geographic Brand Names of Viticultural Area Significance

    The proposed revision of 27 CFR 4.39 would provide that a brand 
name of viticultural area significance, which cannot meet the 
appellation of origin requirements for the geographic area named, may 
continue to be used if the brand name was approved by a certificate of 
label approval prior to the regulatory establishment of the 
viticultural area bearing that name.

10. Changing the Address of Where To Obtain U.S.G.S. Maps for 
Viticultural Areas

    U.S.G.S. maps for describing the boundaries of viticultural areas 
are now obtained only from the Denver, Colorado office of the U.S. 
Geological Survey. Sections in 27 CFR parts 4 and 9 would be amended to 
reflect the change in where U.S.G.S. maps may be obtained.
Comments on Notice No. 742
    ATF received 42 written comments on Notice No 742. Three of the 
comments were from wine industry trade associations; Wine Institute 
writing on behalf of 475 California winery members, Association of 
American Vintners writing on behalf of approximately 300 wineries 
located in 33 States, and Federation des Exportateurs de Vins et 
Spiritueux de France (FEVS), a French national trade association 
representing exporters of wine and spirits.

Estate Bottled Designation, Harvest Dates, Varietal Brand Names, 
Viticultural Area Designations, and Geographical Brand Names

    The Wine Institute and FEVS, and a few other commenters, strongly 
opposed the five wine labeling amendments proposed in Notice No. 742 
which would: (1) Broaden use of the ``Estate bottled'' designation, (2) 
allow the use of a harvest year designation for fruit, berry and 
agricultural wines, (3) allow the use of a brand name with a varietal 
(grape type) name, (4) expand the use of a viticultural area 
designation, and (5) address the use of a geographic brand name which 
has a viticultural area significance. The primary reason for the Wine 
Institute's opposition was the lack of information available for their 
members to fully consider the impact of these major proposals. They 
concluded that after more information on the complex proposals is 
obtained additional time and public hearings will be necessary to allow 
all interested parties to participate in the rulemaking process. The 
Wine Institute requested a public hearing on the proposed amendment on 
geographic brand names as well as ATF's procedures to revoke 
certificates of label approval. The question of ATF's procedures on 
revoking label approvals is the subject of a separate rulemaking 
project. The FEVS opposition centered on the impact the proposals might 
have on the European Community wine negotiations with the United 
States. Other than the Association of American Vintners general 
support, there were only a few favorable comments for the five major 
proposals.
    While the comments indicate both pro and con views, ATF agrees that 
more information on the five wine labeling issues should be obtained 
and presented for comment before making any final decisions. Therefore, 
we have decided to include these issues along with the comments 
received concerning these issues and other issues raised in the 
comments in a forthcoming major project to review and revise all of the 
FAA Act labeling and advertising regulations.

Designation ``Other Than Standard Wine'' on a Wine Label

    There were 30 comments received in favor of allowing the use of the 
designation ``other than standard'' as an alternative to the 
designation ``substandard'' on a wine label. There was one comment from 
a wine industry member opposed to the proposal. This proposal was in 
response to a petition from a winemaker in Michigan who produces 
quality wines from high acid fruit. Currently, the designation ``other 
than standard wine'' may be used on wine labels where such wine is sold 
intrastate only. Due to a very high acid level in the winemaking 
material used to produce some wines, ameliorating material in excess of 
limitations allowed for standard wine is sometimes necessary. Such 
wines are permitted in the Internal Revenue Code to be produced as 
other than standard wine, but these wines are required to be labeled as 
substandard wine under 27 CFR part 4. The commenter opposed to the 
proposal believed that the term ``other than standard'' would not 
convey to the consumer that the wine is below the quality level of a 
standard wine. The petitioner and others in favor of the proposal 
wanted the revision because ``substandard'' was too derogatory a 
designation for quality wines produced from high acid fruit. 
Additionally, the commenters in favor wanted the designation 
``substandard'' to apply to wines that have a volatile acidity in 
excess of the maximum prescribed by regulation. ATF is not adopting 
this suggestion because we have not experienced any interest by the 
wine industry in producing a wine with an excess volatile acidity. ATF 
is adopting the use of ``other than standard wine'' on a wine label as 
proposed because we do not believe such a change will result in a 
jeopardy to the revenue or cause consumer deception or consumer 
confusion.

Vineyard, Orchard, Farm or Ranch Names

    Section 4.39(m) proposed that the name of a vineyard, orchard, farm 
or ranch may be used on a wine label if at least 95 percent of the wine 
in the container was produced from primary winemaking material grown on 
the named vineyard, orchard, farm or ranch. While the Wine Institute 
commented in favor of this proposal, they were concerned about adequate 
safeguards to protect trademark rights to such brand names. They 
questioned the proposals effect on the requirements and conditions for 
the use of a brand name that contains a named vineyard, orchard, farm 
or ranch, particularly when the brand name has no known or approved 
geographical or viticultural area significance. They also asked about 
instances when a brand name that may start out with no ``viticultural 
significance'' may later acquire ``viticultural significance'' long 
after it has been a recognized brand name and trademark. Section 
4.39(i)(3) provides that a name has viticultural significance if the 
Director so finds. Thus a brand name containing the name of a vineyard, 
orchard, farm or ranch is subject to scrutiny under Sec. 4.39(i)(1) 
only in cases where the Director determines that the particular name of 
the vineyard, orchard, farm or ranch has viticultural significance.
    A clarifying phrase was added to the proposed Sec. 4.39(m) to state 
that brand name requirements of sections Secs. 4.33(b) and 4.39(i) 
apply if the name of a vineyard, orchard, farm or ranch is used in the 
brand name and not when such name is used as additional information.

Other Proposals

    There were few comments concerning the other proposals, allowing 
the use of multicounty or multistate appellations of origin for other 
than grape wine, revising the mailing address for obtaining U.S.G.S. 
maps, and allowing more than three grape varieties on a wine label. ATF 
is adopting these 3 changes in 27 CFR Part 4 as proposed because we do 
not believe that the changes result in a jeopardy to the revenue or 
cause consumer deception or consumer confusion.

Executive Order 12866

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

Regulatory Flexibility Act

    The provisions of the Regulatory Flexibility Act relating to an 
initial and final regulatory flexibility analysis (5 U.S.C. 604) are 
not applicable to this final rule because it will not have a 
significant economic impact on a substantial number of small entities. 
This final rule will not impose, or otherwise cause, a significant 
increase in reporting, recordkeeping, or other compliance burdens on a 
substantial number of small entities.
    The final rule is not expected to have significant secondary or 
incidental effects on a substantial number of small entities. Any 
benefit derived by a small winemaker using the new options provided by 
this rule will be the result of the winemaker's own promotional efforts 
and consumer acceptance of the specific product. Accordingly, it is 
hereby certified under the provisions of Section 3 of the Regulatory 
Flexibility Act (5 U.S.C. 605(b)) that this final rule will not have a 
significant economic impact on a substantial number of small entities.

Paperwork Reduction Act

    The collection of information contained in this final rule was 
submitted to the Office of Management and Budget (OMB) for review in 
accordance with the Paperwork Reduction Act of 1980, (44 U.S.C. 
3504(h)).
    The estimated average burden associated with this collection of 
information is 0 hours per respondent or recordkeeper because this 
requirement is usual and customary for wine producers.

Drafting Information

    The author of this document is Coordinator James A. Hunt, Wine and 
Beer Branch, Bureau of Alcohol, Tobacco and Firearms.

List of Subjects

27 CFR Part 4

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

27 CFR Part 9

    Administrative practice and procedure, Consumer protection, 
Viticultural areas, Wine.

Authority and Issuance

    Part 4--Labeling and Advertising of Wine and Part 9--American 
Viticultural Areas are amended as follows:

PART 4--[AMENDED]

    Paragraph 1. The authority citation for 27 CFR part 4 continues to 
read as follows:

    Authority: 27 U.S.C. 205.

    Par. 2. The heading of Sec. 4.21(h) is revised to read as set forth 
below and paragraph (h)(2) of the section is amended by adding the 
phrase ``or `Other than standard wine''' immediately after the phrase 
```Substandard wine''':


Sec. 4.21  The standards of identity.

* * * * *
    (h) Class 8; imitation and substandard or other than standard wine.
* * * * *
    Par. 3. In the heading and the first sentence of Sec. 4.23a(d) 
introductory text remove the word ``three'' and add, in its place, the 
word ``more.''
    Par. 4. Section 4.25a is amended by revising paragraphs (c), (d)(1) 
and (e)(2)(v) as follows:


Sec. 4.25a  Appellations of origin.

* * * * *
    (c) Multicounty appellations. An appellation of origin comprising 
two or no more than three counties in the same State may be used if all 
of the fruit or other agricultural products were grown in the counties 
indicated, and the percentage of the wine derived from fruit or other 
agricultural products grown in each county is shown on the label with a 
tolerance of plus or minus two percent.
    (d) Multistate appellations. * * *
    (1) All of the fruit or other agricultural products were grown in 
the States indicated, and the percentage of the wine derived from fruit 
or other agricultural products grown in each State is shown on the 
label with a tolerance of plus or minus two percent;
* * * * *
    (e) Viticultural area. * * *
    (2) Establishment of American viticultural areas. * * * (v) a copy 
of the appropriate U.S.G.S. map(s) with the boundaries prominently 
marked. (For U.S.G.S. maps, write the U.S. Geological Survey, Branch of 
Distribution, Box 25286, Federal Center, Denver, Colorado 80225. If the 
map name is not known, request a map index by State.)
* * * * *
    Par. 5. Section 4.39 is amended by adding a new paragraph (m) to 
read as follows:


Sec. 4.39  Prohibited practices.

* * * * *
    (m) Use of a vineyard, orchard, farm or ranch name. When used in a 
brand name, a vineyard, orchard, farm or ranch name having geographical 
or viticultural significance is subject to the requirements of 
Secs. 4.33(b) and 4.39(i) of this part. Additionally, the name of a 
vineyard, orchard, farm or ranch shall not be used on a wine label, 
unless 95 percent of the wine in the container was produced from 
primary winemaking material grown on the named vineyard, orchard, farm 
or ranch.

PART 9--[AMENDED]

    Par. 6. The authority citation for 27 CFR part 9 continues to read 
as follows:

    Authority: 27 U.S.C. 205.

    Par. 7. Section 9.3(b)(5) is revised to read as follows:


Sec. 9.3  Relation to Parts 4 and 71 of this chapter.

* * * * *
    (b) * * *
* * * * *
    (5) A copy of the appropriate U.S.G.S. map(s) with the boundaries 
prominently marked. (For U.S.G.S. maps, write the U.S. Geological 
Survey, Branch of Distribution, Box 25286, Federal Center, Denver, 
Colorado 80225. If the map name is not known, request a map index by 
State.)

    Signed: February 24, 1994.
Daniel R. Black,
Acting Director.

    Approved: March 15, 1994.
John P. Simpson,
Deputy Assistant Secretary (Regulatory, Tariff and Trade Enforcement).
[FR Doc. 94-7275 Filed 3-28-94; 8:45 am]
BILLING CODE 4810-31-M