[Federal Register Volume 68, Number 41 (Monday, March 3, 2003)]
[Rules and Regulations]
[Pages 10076-10106]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-4836]



[[Page 10075]]

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Part II





Department of Treasury





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Alcohol and Tobacco and Trade Bureau



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27 CFR Parts 4, 5, and 7



Health Claims and Other Health-Related Statements in the Labeling and 
Advertising of Alcohol Beverages (99R-199P); Final Rule

  Federal Register / Vol. 68, No. 41 / Monday, March 3, 2003 / Rules 
and Regulations  

[[Page 10076]]


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DEPARTMENT OF THE TREASURY

Alcohol and Tobacco Tax and Trade Bureau

27 CFR Parts 4, 5, and 7

[TTB T.D.-1; Ref: ATF Notice Nos. 884, 892, and 896]
RIN: 1512-AB97


Health Claims and Other Health-Related Statements in the Labeling 
and Advertising of Alcohol Beverages (99R-199P)

AGENCY: Alcohol and Tobacco Tax and Trade Bureau (TTB), Treasury.

ACTION: Final rule, Treasury decision.

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SUMMARY: TTB is amending the regulations to prohibit the appearance on 
labels or in advertisements of any health-related statement, including 
a specific health claim, that is untrue in any particular or tends to 
create a misleading impression. A specific health claim on a label or 
in an advertisement is considered misleading unless the claim is 
truthful and adequately substantiated by scientific evidence; properly 
detailed and qualified with respect to the categories of individuals to 
whom the claim applies; adequately discloses the health risks 
associated with both moderate and heavier levels of alcohol 
consumption; and outlines the categories of individuals for whom any 
levels of alcohol consumption may cause health risks. In addition, TTB 
will consult with the Food and Drug Administration (FDA), as needed, on 
the use of specific health claims on labels. If FDA determines that a 
specific health claim is a drug claim that is not in compliance with 
the requirements of the Federal Food, Drug, and Cosmetic Act, TTB will 
not approve the use of such statement on a label.
    Health-related statements that are not specific health claims or 
health-related directional statements will be evaluated on a case-by-
case basis to determine if they tend to mislead consumers. The final 
rule provides that health-related directional statements (statements 
that direct or refer consumers to a third party or other source for 
information regarding the effects on health of alcohol consumption) 
will be presumed misleading unless those statements include a brief 
disclaimer advising consumers that the statement should not encourage 
consumption of alcohol for health reasons, or some other appropriate 
disclaimer to avoid misleading consumers. TTB believes that the final 
regulations will ensure that labels and advertisements do not contain 
statements or claims that would tend to mislead the consumer about the 
significant health consequences of alcohol consumption.

DATES: This rule is effective June 2, 2003.

FOR FURTHER INFORMATION CONTACT: William H. Foster, Regulations and 
Procedures Division, Alcohol and Tobacco Tax and Trade Bureau, 650 
Massachusetts Avenue, NW., Washington, DC 20226 (202-927-8210).

SUPPLEMENTARY INFORMATION: Please note: References to ``ATF'' are to 
the Bureau of Alcohol, Tobacco and Firearms as it existed before 
January 24, 2003. The new Alcohol and Tobacco Tax and Trade Bureau 
(TTB) has taken over the former ATF's responsibilities for alcohol 
beverage labeling regulations.

Table of Contents

I. Background
II. Health Consequences of Alcohol Consumption
III. Industry Circular 93-8
IV. Role of Other Federal Agencies With Respect to Specific Health 
Claims and Other Health-Related Statements
V. Fourth Edition of the Dietary Guidelines for Americans (1995)
VI. Competitive Enterprise Institute Petition
VII. Other Health-Related Statements on Alcohol Beverage Labels
VIII. Notice of Proposed Rulemaking
IX. Notice of Hearings
X. Recent Developments
XI. Analysis of Comments Received in Response to Notice No. 884
XII. Is There a Need To Engage in Rulemaking on This Issue?
XIII. Does the ABLA Preclude the Use of Specific Health Claims or 
Other Health-Related Statements on the Labels of Alcohol Beverages?
XIV. What Are the Effects on Health of Alcohol Consumption?
XV. Are Health Claims and Health-Related Statements in the Labeling 
and Advertising of Alcohol Beverages Inherently Misleading?
XVI. Are Health-Related Directional Statements Misleading?
XVII. Should the Same Standards Apply to Wines, Distilled Spirits, 
and Malt Beverages?
XVIII. Should TTB Adopt the Procedures Set Forth in FDA's 
Regulations?
XIX. Is the Final Rule Consistent With the First Amendment?
XX. Final Rule
XXI. Applications for and Certificates of Label Approval
XXII. Notes Appearing in Text of Supplementary Information
XXIII. How This Document Complies With the Federal Administrative
Requirements for Rulemaking
Disclosure
Drafting Information
List of Subjects
Authority and Issuance

I. Background

    The Federal Alcohol Administration Act (FAA Act), 27 U.S.C. 205(e) 
and (f), authorizes TTB to issue regulations on the packaging, labeling 
and advertising of alcohol beverages in order to prohibit deception of 
the consumer, and to prohibit, irrespective of falsity, statements 
relating to analyses, guarantees, and scientific or irrelevant matters 
that are likely to mislead the consumer. The FAA Act generally requires 
bottlers and importers of alcohol beverages to obtain certificates of 
label approval prior to the bottling or importation of alcohol 
beverages for sale in interstate commerce. Pre-approval of advertising 
is not required by the FAA Act.
    Regulations that implement the provisions of section 205(e) and 
(f), as they relate to the labeling and advertising of wine, distilled 
spirits, and malt beverages, are set forth in Title 27, Code of Federal 
Regulations (CFR), parts 4, 5, and 7, respectively. These current 
regulations prohibit the appearance on labels or in advertisements of 
any statement, design, representation, pictorial representation, or 
device representing that the use of wine, distilled spirits, or malt 
beverages has curative or therapeutic effects if the representation is 
untrue in any particular or tends to create a misleading impression. 
This standard originated more than 60 years ago with the initial 
labeling and advertising regulations issued under the FAA Act.
    TTB and its predecessor agencies have historically taken a very 
strict view of the regulatory prohibition on false or misleading 
curative or therapeutic claims about alcohol beverages. This strict 
interpretation is based on the view that ``distilled spirits, wines and 
malt beverages are, in reality, alcoholic beverages and not medicines 
of any sort, * * *.'' FA-129, dated January 5, 1938.
    In view of the undisputed health risks associated with alcohol 
consumption, we and our predecessors have always taken the position 
that statements attributing positive effects on health to the 
consumption of alcohol beverages are misleading unless such statements 
are appropriately qualified and properly balanced. TTB views statements 
that make substantive claims regarding health benefits associated with 
alcohol beverage consumption (e.g., ``moderate alcohol consumption is 
good for your health'') as making curative or therapeutic claims. 
Claims that set forth only a partial picture or representation might be 
as likely to mislead the consumer as those that are actually

[[Page 10077]]

false. A claim that is supported by scientific evidence might still 
mislead the consumer without appropriate qualification and detail. Any 
such claim is considered misleading unless it is properly qualified and 
balanced, sufficiently detailed and specific, and outlines the 
categories of individuals for whom any positive effects on health would 
be outweighed by numerous negative effects on health.

II. Health Consequences of Alcohol Consumption

    The risks associated with alcohol consumption are well documented. 
In Notice No. 884, ATF summarized these risks as set forth in an 
article by Charles H. Hennekens, M.D. as follows: \1\

    The hazards of heavy alcohol consumption are clear and 
substantial and have far-reaching health and social consequences. 
Alcohol is the second leading cause of preventable deaths in the 
United States as well as most industrialized countries, second only 
to cigarette smoking. Drinking increases the risk of cancer of the 
liver, mouth, tongue, and esophagus and has been implicated as a 
cause of 3 to 5 percent of all cancer deaths. Heavy alcohol 
consumption is also associated with increased risks of hemorrhagic 
stroke and cardiomyopathy, and it predisposes to hepatic cirrhosis, 
the ninth most common cause of death in the United States. In 
pregnant women, heavy alcohol consumption is associated with fetal 
alcohol syndrome. Alcohol drinking is also implicated in over 40 
percent of all fatal traffic crashes, which are a chief cause of 
premature deaths in younger people, and it is associated with 
suicides, industrial accidents, sex crimes, robberies, and murders. 
It is estimated that 14 million U.S. residents suffer from alcohol 
abuse and dependence, and 76 million are affected by its presence in 
a family member. (Citations omitted).

    It is true that heavier levels of alcohol consumption cause many of 
these health risks. It is also true that there are millions of 
Americans with alcohol dependency problems who find themselves unable 
or unwilling to control their consumption of alcohol. Given the serious 
health risks associated with higher levels of alcohol consumption, and 
given the fact that most medical studies agree that the effects of 
moderate consumption differ from individual to individual, it was ATF's 
longstanding, and is now our, position that any claim associating 
health benefits with moderate alcohol consumption must be carefully 
evaluated to ensure that it does not mislead the consumer about the 
various health consequences related to the consumption of alcohol 
beverages.
    Prior to engaging in this rulemaking, ATF recognized that there 
were several scientific studies establishing a link between moderate 
alcohol consumption and a reduced risk of coronary artery disease 
(``CAD'').\2\ However, it was ATF's conclusion that there was not 
significant scientific evidence to support an unqualified conclusion 
that moderate alcohol consumption has net health benefits for all or 
even most individual consumers. Some studies have suggested that only 
older drinkers will accrue any net health benefits from moderate 
alcohol consumption.\3\ This is because younger individuals have such a 
low risk for coronary artery disease, and are much more likely to be at 
risk from alcohol consumption, even at lower levels. This difference in 
risk factors has been explained as follows:\4\

    The net outcome of all-cause mortality associated with a certain 
alcohol consumption level therefore also depends on the drinker's 
absolute risk of dying from these various causes. Accordingly, older 
people--who are at high absolute risk of coronary heart disease and 
ischemic stroke and at low risk for injury, cirrhosis, and other 
alcohol-related diseases'are most likely to benefit from low levels 
of alcohol consumption. In contrast, for men and women under age 40, 
who have relatively low absolute risk of dying from strokes, heart 
disease, and alcohol-related diseases but a high absolute risk of 
dying from injury, all-cause mortality will increase even at 
relatively low alcohol-consumption levels. * * *. Finally, the 
absolute risk of death from injury or coronary heart disease is 
lower in young women than in young men, leading to an increase in 
all-cause mortality even in young women who are light drinkers (less 
than two drinks every 3 days) compared with abstainers. (Citations 
omitted).

    Overall, the available scientific literature establishes that there 
may be serious health risks associated with heavy as well as moderate 
alcohol consumption, depending on the individual.\5\

III. Industry Circular 93-8

    On August 2, 1993, ATF published Industry Circular 93-8. The 
circular generally restated ATF's longstanding position regarding 
misleading curative and therapeutic claims. ATF explained that claims 
that set forth only a partial picture, representation, or truth might 
be as likely to mislead the consumer as those that are actually false. 
Thus, a statement that attributed health benefits to the moderate 
consumption of alcohol beverages, even if backed up by medical 
evidence, might have an overall misleading effect if such statement was 
not properly qualified, did not give all sides of the issue, and did 
not outline the categories of individuals for whom any such positive 
effect would be outweighed by numerous negative effects on health.
    ATF also explained that its policy regarding health claims on 
labels had been reinforced by the 1988 enactment of the Alcoholic 
Beverage Labeling Act (ABLA), 27 U.S.C. 213 et seq. The ABLA contains a 
declaration of policy and purpose which states that the Congress finds 
that ``the American public should be informed about the health hazards 
that may result from the consumption or abuse of alcoholic beverages, 
and has determined that it would be beneficial to provide a clear, 
nonconfusing reminder of such hazards, and that there is a need for 
national uniformity in such reminders in order to avoid the 
promulgation of incorrect or misleading information and to minimize 
burdens on interstate commerce.'' 27 U.S.C. 213. As a result of this 
concern, the ABLA requires that any alcohol beverage container held for 
sale or distribution in the United States must bear the following 
statement on the label:

    Government Warning: (1) According to the Surgeon General, women 
should not drink alcoholic beverages during pregnancy because of the 
risk of birth defects. (2) Consumption of alcoholic beverages 
impairs your ability to drive a car or operate machinery, and may 
cause health problems.

    It is clear that one of the purposes of the ABLA was to avoid 
confusing the American public about the health hazards associated with 
the consumption of alcohol beverages. In order to effectuate this goal, 
Congress prescribed specific language that must appear on the labels of 
alcohol beverage containers. To the extent that the overall message of 
any health claim is inconsistent with the message of the Government 
warning statement, then it may result in label information that is 
confusing and could mislead the consumer, and would thus be prohibited 
under the FAA Act.
    In Industry Circular 93-8, ATF further noted that other Federal 
agencies, such as the Food and Drug Administration and the Federal 
Trade Commission, might have jurisdiction over certain aspects of 
advertising and labeling issues involving health claims. We will 
address this issue further in section IV (``Role of Other Federal 
Agencies with Respect to Specific Health Claims and other Health-
Related Statements'').
    ATF also stated that the distribution of advertising materials that 
included the full text of the April 1992 edition of ``Alcohol Alert,'' 
a publication of the National Institute on Alcohol Abuse and Alcoholism 
(NIAAA), would not be in violation of current regulations. This NIAAA 
publication provides a comprehensive discussion of the health 
consequences of moderate alcohol consumption. The industry circular

[[Page 10078]]

stated that if the advertising materials also contained editorializing, 
advertising slogans, or exhortations to consume the product, ATF would 
evaluate the additional text to determine whether or not the 
advertisement presented a balanced picture of the risks associated with 
alcohol consumption. In addition, ATF stated that the use of buttons, 
shelf talkers (additional product information placed on the retail 
shelf), table tents, and similar items that excerpt any portion of the 
NIAAA publication, contain health slogans or other inferential 
statements drawn from this publication, or are based on any other 
publication or article citing the health benefits of alcohol 
consumption, would be closely scrutinized to determine if they 
presented a balanced picture of the risks associated with alcohol 
consumption.
    ATF reminded industry members in Industry Circular 93-8 that 
substantive health claims on labels are considered to be misleading 
unless they are properly qualified, present all sides of the issue, and 
outline the categories of individuals for whom any positive effects on 
health would be outweighed by numerous negative effects on health. 
Finally, ATF stated that it intended to initiate rulemaking on this 
issue; however, pending rulemaking, ATF would continue to evaluate 
claims in labeling and advertising on a case-by-case basis.

IV. Role of Other Federal Agencies With Respect to Specific Health 
Claims and Other Health-Related Statements

    While TTB now has primary jurisdiction over the labeling and 
advertising of alcohol beverages, under certain circumstances the 
labeling and advertising of alcohol beverages may also be subject to 
the jurisdiction of the Food and Drug Administration (FDA) or the 
Federal Trade Commission (FTC). For example, since certain wine 
products containing less than 7 percent alcohol by volume are not wines 
subject to the FAA Act, the labeling of such products generally falls 
within FDA's jurisdiction. ATF always utilized, as TTB does now, the 
scientific and public health expertise of FDA in approving ingredients 
in alcohol beverages, requiring label disclosure of certain substances, 
and identifying adulterated alcohol beverages that are deemed 
mislabeled.
    By letter dated April 9, 1993, FDA advised ATF that certain 
curative, therapeutic, or disease-prevention claims for an alcohol 
beverage might place the product in the category of a drug under the 
Federal Food, Drug and Cosmetic Act (FFDC Act), 21 U.S.C. 321(g)(1)(B). 
FDA evaluates health claims on food labels pursuant to its authority 
under the FFDC Act, as amended by the Nutrition Labeling and Education 
Act (NLEA), Pub. L. 101-535 (1990). The law provides that a food 
product is misbranded if it bears a claim that characterizes the 
relationship of a nutrient to a disease or health-related condition, 
unless the claim is made in accordance with certain procedures mandated 
by FDA. 21 U.S.C. 343(r)(1)(B). FDA's regulations provide that FDA will 
approve a health claim when it determines, ``based on the totality of 
publicly available scientific evidence'' that there is ``significant 
scientific agreement, among experts qualified by scientific training 
and experience to evaluate such claims, that the claim is supported by 
such evidence.'' 21 CFR 101.14(c).
    FTC's general jurisdiction over advertising extends to alcohol 
beverages. In a policy statement published in the Federal Register on 
June 1, 1994 (59 FR 28394), FTC stated that it is necessary to examine 
``whether qualified claims are presented in a manner that ensures that 
consumers understand both the extent of the support for the claim and 
the existence of any significant contrary view within the scientific 
community.'' The FTC policy statement stated that an unqualified health 
claim in the advertising of a food was likely to be deceptive if the 
food also contained a nutrient that increased the risk for another 
disease or health-related condition, and the risk-increasing nutrient 
was closely related to the subject health claim.

V. Fourth Edition of the Dietary Guidelines for Americans (1995)

    The Fourth Edition (1995) of the ``Dietary Guidelines for 
Americans'' was published by the U.S. Department of Agriculture (USDA) 
and the U.S. Department of Health and Human Services (HHS) in 1996. 
This edition of the Guidelines contained a detailed discussion of the 
health consequences of alcohol consumption.
    The 1995 Guidelines acknowledged that ``[c]urrent evidence suggests 
that moderate drinking is associated with a lower risk for coronary 
heart disease in some individuals.'' The Guidelines then went on to 
discuss the ``serious health problems'' caused by higher levels of 
alcohol consumption, including increased risk for high blood pressure, 
stroke, and heart disease.
    The 1995 Guidelines recommended that if adults chose to drink 
alcohol beverages, they should consume them only in moderation. The 
term ``moderation'' was defined as no more than one drink per day for 
women and no more than two drinks per day for men. However, the 1995 
Guidelines stressed that many people should not drink alcohol beverages 
at all, including children and adolescents, women who are trying to 
conceive or who are pregnant, individuals who plan to drive or take 
part in activities that require attention or skill, and individuals 
using prescription and over-the-counter medications. Finally, the 1995 
Guidelines suggested that individuals of any age who could not restrict 
their drinking to moderate levels should not drink at all.

VI. Competitive Enterprise Institute Petition

    On May 9, 1995, the Competitive Enterprise Institute (CEI) 
submitted a petition asking ATF to issue a rule allowing alcohol 
beverage labels and advertisements to carry statements regarding the 
purported benefits of moderate alcohol consumption. More specifically, 
CEI proposed that ATF issue a rule specifically allowing the following 
statement to appear on labels and in advertisements: ``There is 
significant evidence that moderate consumption of alcoholic beverages 
may reduce the risk of heart disease.'' By letter dated November 10, 
1995, CEI submitted a survey purporting to show that less than 42 
percent of the general public was ``aware of the medical benefits of 
moderate consumption.''
    By letter dated January 13, 1997, ATF denied CEI's rulemaking 
petition. ATF determined that CEI's proposed claim was not 
appropriately qualified, in that it did not define the categories of 
individuals for whom there would be no appreciable benefits (such as 
younger individuals already at low risk of heart disease), or 
individuals for whom there would be significant risks associated with 
moderate alcohol consumption (such as recovering alcoholics and persons 
otherwise at risk for alcohol abuse, or people with certain medical 
conditions). The claim was not balanced, in that it did not explain the 
significant risks associated with higher levels of alcohol consumption, 
as well as the potential risks of moderate alcohol consumption for 
certain individuals. ATF found that the claim, taken in isolation, 
would tend to mislead the consumer about the significant health 
consequences of alcohol consumption.
    Before ATF had issued its denial of CEI's petition, CEI had filed 
suit (October 29, 1996) in the United States District Court for the 
District of Columbia, challenging ATF's delay in

[[Page 10079]]

acting on its petition. In 1997, CEI amended its complaint to challenge 
ATF's denial of the rulemaking petition. CEI also alleged that ATF had 
a ``de facto'' ban on the use of health claims, which violated the 
First Amendment and the FAA Act. In 1998, the district court granted 
the Government's motion for summary judgment on CEI's challenge to the 
denial of its rulemaking petition. Both parties filed motions for 
summary judgment on the remaining issues.

VII. Other Health-Related Statements on Alcohol Beverage Labels

    On February 4, 1999, ATF approved two applications for certificates 
of label approval bearing directional health-related statements 
directing consumers to the Dietary Guidelines or their family doctor 
for information about the ``health effects of wine consumption.'' ATF 
approved those labels based on its determination that the statements 
were not substantive health claims, but instead were neutral statements 
directing consumers to third parties for additional information 
regarding the effects on health of alcohol consumption. The first 
approved labeling statement read as follows:

    The proud people who made this wine encourage you to consult 
your family doctor about the health effects of wine consumption.

    The second labeling statement read as follows:

    To learn the health effects of wine consumption, send for the 
Federal Government's Dietary Guidelines for Americans, Center for 
Nutrition Policy and Promotion, USDA, 1120 20th Street, NW., 
Washington, DC 20036 or visit its web site: http://www.usda.gov/fcs/cnpp.htm.

    Prior to being approved, the two applications received a great deal 
of public attention. In July of 1997, both HHS and FTC urged ATF not to 
approve the labels until a consumer survey was conducted. In that same 
month, Senators Robert Byrd and Strom Thurmond wrote to the Secretary 
of the Treasury, also raising several concerns about the proposed 
labeling statements. ATF also received several letters from public 
health organizations concerned that the labels would encourage 
consumers to consume alcohol beverages for health reasons. In view of 
these concerns, ATF decided to defer final action on the labels pending 
the completion of a consumer survey by the Center for Substance Abuse 
Prevention (CSAP), a component of HHS.
    In January of 1998, CSAP transmitted to ATF the main findings from 
its consumer survey. The survey found that most subjects reported that 
they do not read wine labels, and that neither of the two labeling 
statements would likely induce wine drinkers to alter their drinking 
pattern, quantitatively or otherwise. However, several members of the 
focus groups reported that information about the positive effects on 
health of wine consumption from the media had led them to increase 
their wine intake.
    While the CSAP survey did not establish that the labeling 
statements would influence the drinking patterns of wine drinkers, it 
did indicate that heavy drinkers may justify or increase their 
consumption levels based on their independent understanding of 
information regarding the alleged health benefits of moderate 
consumption. Furthermore, the survey established that consumers would 
be no more likely to seek additional health information after reading 
the proposed labeling statements.
    Based on the evidence before it, including the consumer survey 
conducted by CSAP, ATF concluded that there was insufficient evidence 
in the record to establish that the directional statements tended to 
mislead consumers about the effects on health of alcohol consumption. 
Accordingly, the labels were approved.
    The approval of these labels generated considerable interest from 
Federal health officials, members of Congress, and public advocacy 
groups, who expressed concern about consumer perception of the label 
statements. Of particular note, former Surgeon General David Satcher 
expressed concern that people might draw an incorrect message from 
these labels.
    Moreover, ATF became aware of a number of press accounts 
interpreting the directional statements as actual health claims about 
the benefits of alcohol consumption. For example, on February 5, 1999, 
the ``Wall Street Journal'' wrote that the expected decision to approve 
the labels would allow ``wine producers to put labels on bottles that 
point to the potential health benefits of their product.'' On February 
5, 1999, the Associated Press reported the decision as follows: 
``Scientific studies have suggested it, and now winemakers finally may 
get a chance to tout it through their labeling: A glass or two of the 
grape each day could be good for you.'' On February 6, 1999, the ``Los 
Angeles Times'' reported that ``[t]he federal government approved 
changes Friday that will allow winemakers for the first time to tout on 
labels the connection between drinking wine and better health.'' That 
same date, the ``Washington Post'' reported that ATF had ``decided that 
winemakers may add another label to the bottle to encourage consumers 
to learn more about the possible benefits of drinking wine.'' In an 
article dated February 9, 1999, the ``San Francisco Examiner'' stated 
that ATF's decision ``would allow winemakers to carry bottle labels 
suggesting consumers check with their doctors or the government's 
nutritional guidelines on the possible health benefits of wine.''

VIII. Notice of Proposed Rulemaking

    On October 25, 1999, ATF invited comments on its current policy on 
health claims and health-related statements by publishing the policy as 
a proposed regulation in the Federal Register (Notice No. 884; 64 FR 
57413). As proposed, labels or advertisements could not contain any 
statement, design, representation, pictorial representation, or device, 
whether explicit or implicit, representing that consumption of alcohol 
beverages has curative or therapeutic effects if such statement is 
untrue in any particular or tends to create a misleading impression. A 
substantive claim regarding health benefits associated with the use of 
an alcohol beverage would be misleading unless such claim was properly 
qualified and balanced, sufficiently detailed and specific, and 
outlined the categories of individuals for whom any positive effects on 
health would be outweighed by numerous negative effects on health.
    ATF also sought comments on whether even balanced and qualified 
health claim statements should be prohibited because the negative 
consequences of alcohol consumption are so serious as to make any 
health-related statement on labels or in advertisements inherently 
misleading. In addition, ATF sought comments on whether health-related 
directional statements such as those approved in February 1999 tend to 
mislead consumers about the health consequences of alcohol consumption.
    The comment period for Notice No. 884, initially scheduled to close 
on February 22, 2000, was extended until June 30, 2000, pursuant to 
Notice No. 896. (See following section, ``Notice of Hearings.'')

IX. Notice of Hearings

    On December 9, 1999, ATF announced in a press release that after 
the close of the comment period, it would hold public hearings on the 
issue of health claims in the labeling and advertising of alcohol 
beverages. ATF stated that the hearings would provide it with a 
comprehensive record on

[[Page 10080]]

which to base final regulations on health claims.
    Because it was seeking public comments on this very issue, ATF 
announced that it would suspend action on any new applications for 
label approval bearing similar health-related directional statements 
pending the completion of the rulemaking proceeding. ATF noted that due 
to the adverse consequences of alcohol consumption, it was concerned 
about any risk of misperception resulting from the two approved 
statements.
    On February 28, 2000, ATF published a notice in the Federal 
Register announcing the dates and locations of five hearings that it 
planned to hold concerning the proposed regulations (Notice No. 892; 65 
FR 10434). ATF subsequently canceled the hearings that were scheduled 
for Atlanta, Chicago, and Dallas, due to the low number of requests to 
present oral comments in those locations (Notice No. 896; 65 FR 24158). 
In addition, the hearings scheduled for Washington, DC and San 
Francisco, California, were limited to two days each. The hearing in 
Washington, DC was held on April 25-26, 2000, and the hearing in San 
Francisco was held on May 23-24, 2000. ATF also extended the close of 
the comment period regarding Notice No. 884 from February 22, 2000, to 
June 30, 2000. Written comments addressing testimony presented at the 
hearings could also be submitted up until June 30, 2000.

X. Recent Developments

A. 1999 Alcohol Alert

    In 1999, NIAAA published an ``Alcohol Alert'' on ``Alcohol and 
Coronary Heart Disease'' (No. 45-1999). In this publication, NIAAA 
reaffirmed that ``[r]esearch has revealed an association between 
moderate alcohol consumption and lower risk for CHD.'' (Footnote 
omitted). However, NIAAA cautioned that ``[a]n association between 
moderate drinking and lower risk for CHD does not necessarily mean that 
alcohol itself is the cause of the lower risk. For example, a review of 
population studies indicates that the higher mortality risk among 
abstainers may be attributable to shared traits other than the 
participants' nonuse of alcohol.'' (Footnote omitted). NIAAA noted that 
``[t]he role of exercise in the alcohol-CHD association requires 
additional study.''
    NIAAA noted that ``[t]he apparent benefits of moderate drinking on 
CHD mortality are offset at higher drinking levels by increasing risk 
of death from other types of heart disease; cancer; liver cirrhosis; 
and trauma, including trauma from traffic crashes. Moderate drinking is 
not risk free. The trade-offs between risks and benefits can be 
exemplified by the fact that alcohol's anticlotting ability, 
potentially protective against heart attack, may increase the risk of 
hemorrhagic stroke, or bleeding within the brain.'' (Footnotes 
omitted).
    In a commentary that appeared with the Alert, NIAAA Director Enoch 
Gordis, M.D., offered the following advice with respect to the health 
implications of alcohol consumption:

    (1) Individuals who are not currently drinking should not be 
encouraged to drink solely for health reasons, because the basis for 
health improvements has not yet been established as deriving from 
alcohol itself;
    (2) Individuals who choose to drink and are not otherwise at 
risk for alcohol-related problems should not exceed the one-to two-
drink-per-day limit recommended by the U.S. Dietary Guidelines; and
    (3) Individuals who currently are drinking beyond the U.S. 
Dietary Guidelines' recommended limits should be advised to lower 
their daily alcohol intake to these limits.

B. Dietary Guidelines--Fifth Edition (2000)

    In the summer of 2000, USDA and HHS published the ``Dietary 
Guidelines for Americans, 2000.'' The 2000 Dietary Guidelines contain 
more specific guidance about alcohol consumption, and summarize the 
current medical evidence regarding the risks associated with alcohol 
consumption as follows:

    Alcoholic beverages supply calories but few nutrients. Alcoholic 
beverages are harmful when consumed in excess, and some people 
should not drink at all. Excess alcohol alters judgment and can lead 
to dependency and a great many other serious health problems. Taking 
more than one drink per day for women or two drinks per day for men 
* * * can raise the risk for motor vehicle crashes, other injuries, 
high blood pressure, stroke, violence, suicide, and certain types of 
cancer. Even one drink per day can slightly raise the risk of breast 
cancer. Alcohol consumption during pregnancy increases risk of birth 
defects. Too much alcohol may cause social and psychological 
problems, cirrhosis of the liver, inflammation of the pancreas, and 
damage to the brain and heart. Heavy drinkers are also at risk of 
malnutrition because alcohol contains calories that may substitute 
for those in nutritious foods. If adults choose to drink alcoholic 
beverages, they should consume them only in moderation * * * and 
with meals to slow alcohol absorption.

    The 2000 Dietary Guidelines also contain a discussion of the 
possible health benefits of alcohol consumption; however, the following 
excerpt from this section emphasizes that these benefits accrue 
primarily to older drinkers, and that there are other ways of reducing 
the risk of heart disease:

    Drinking in moderation may lower risk for coronary heart 
disease, mainly among men over age 45 and women over age 55. 
However, there are other factors that reduce the risk of heart 
disease, including a healthy diet, physical activity, avoidance of 
smoking, and maintenance of a healthy weight. Moderate consumption 
provides little, if any, health benefit for younger people. Risk of 
alcohol abuse increases when drinking starts at an early age. Some 
studies suggest that older people may become more sensitive to the 
effects of alcohol as they age.

    The 2000 Dietary Guidelines recommend that if adults choose to 
drink alcohol beverages, they should consume them only in moderation. 
The term ``moderation'' is defined as no more than one drink per day 
for women and no more than two drinks per day for men. The Dietary 
Guidelines also conclude that for some people, even moderate drinking 
is not recommended. Thus, many people should not drink alcohol 
beverages at all, including children and adolescents; individuals of 
any age who cannot restrict their drinking to moderate levels; women 
who may become pregnant or who are pregnant; individuals who plan to 
drive, operate machinery, or take part in other activities that require 
attention, skill, or coordination; and individuals taking prescription 
or over-the-counter medications that can interact with alcohol.

C. Recent Developments in the CEI Litigation

    On June 18, 2001, the district court granted the Government's 
motion for summary judgment on the remaining issues in the CEI 
litigation. The court ruled that the case was not ready for judicial 
review given the fact that ATF was in the middle of a rulemaking 
proceeding on the very issues raised by CEI in the litigation. The 
plaintiffs appealed this decision to the Court of Appeals. On May 10, 
2002, the appellate court upheld the district court's ruling that the 
case was not ripe (ready) for judicial review because ATF was nearing 
completion of a rulemaking proceeding on the use of health claims. 
Thereafter, the plaintiffs filed a petition for rehearing with the 
Court of Appeals that was denied.

XI. Analysis of Comments Received in Response to Notice No. 884

    In response to Notice No. 884, ATF received 535 comments. Comments 
were submitted by several United States Senators, two Federal agencies, 
an agency of a foreign government, consumers and consumer 
organizations,

[[Page 10081]]

medical professionals (including physicians, nurses, and local health 
departments), public health organizations, industry members, and 
others.
    As previously noted, in Notice No. 884 ATF sought comments on 
whether the serious health risks associated with alcohol consumption 
meant that any health claim, even a balanced and qualified one, was 
inherently misleading to consumers. In response, approximately 45 
commenters supported the use of substantive health claims or health-
related statements in the labeling and advertising of alcohol 
beverages. On the other side, approximately 120 commenters opposed the 
use of either substantive health claims or health-related directional 
statements in the labeling or advertising of alcohol beverages. Many of 
these commenters suggested that health statements were inherently 
misleading when used to market alcohol beverages.
    ATF specifically sought comments on whether health-related 
directional labeling statements such as the ones approved in February 
1999 tended to mislead consumers about the health consequences of 
alcohol consumption. The vast majority of the commenters focused 
exclusively on this issue. Approximately 355 comments supported the use 
of health-related directional statements on alcohol beverage labels. 
The major issues raised by the commenters, as well as the individuals 
who testified at the public hearings, are summarized below.

XII. Is There a Need To Engage in Rulemaking on This Issue?

A. Issue

    Four comments either opposed ATF's decision to engage in rulemaking 
on this issue or suggested that the notice of proposed rulemaking be 
withdrawn. These were comments submitted by the Beer Institute, a trade 
association for domestic and international brewers; the National 
Association of Beverage Importers (NABI), a trade association 
representing importers of beer, wine, and distilled spirits; the 
Distilled Spirits Council of the United States (DISCUS), a national 
trade association representing producers and marketers of distilled 
spirits and importers of wine; and a comment submitted jointly by CEI 
and Consumer Alert (CA).
    DISCUS, the Beer Institute, and NABI all questioned the necessity 
for engaging in rulemaking on the issue of health claims and health-
related statements in the labeling and advertising of alcohol 
beverages. (Comments 530, 396, and 522). These comments suggested that 
the authorization of any directional statement on a label would be in 
violation of the ABLA. TTB does not agree with this legal analysis. 
This issue will be discussed further in section XIII.
    DISCUS and Beer Institute also objected to the proposed advertising 
regulations. DISCUS suggested that ATF's proposal was ``insurmountably 
vague and ambiguous. It only would serve to interfere with the rights 
of advertisers to engage in truthful, non-misleading speech about their 
products that are consumed responsibly by over a hundred million 
Americans.'' DISCUS suggested that ``[a]n advertiser could run afoul of 
the provisions of BATF's proposed rule without making any type of 
curative or therapeutic claim,'' giving as an example an advertisement 
depicting attractive individuals relaxing in an enjoyable setting. The 
Beer Institute similarly suggested that the requirements for labeling 
and advertising should be separate, and that the proposed regulation 
complicated the existing advertising standard. The Beer Institute 
suggested that the current standard is readily understood and 
straightforward, and that instead of issuing new regulations, ATF 
should adopt a more formal review process of health statements on a 
case-by-case basis.
    These commenters also suggested that large portions of the alcohol 
beverage industry had no interest in using health claims in the 
labeling or advertising of their products. For example, the Beer 
Institute comment suggested that there was no need to amend the malt 
beverage regulations, since to its knowledge, none of its constituents 
had ever used such claims in the past, and none had any intention to do 
so in the future. NABI raised similar concerns, and stated that it did 
not support the proposed amendment to the regulations ``because any 
such support might imply the industry intends to make health-related 
statements on its labels and in its advertising.'' The comment from 
DISCUS stressed that ``America's distillers do not recommend that 
consumers drink beverage alcohol for health reasons.'' (Comment 530).
    CEI, a pro-market public interest group dedicated to advancing the 
principles of free markets and limited government, and CA, a free-
market consumer advocacy group, suggested that the proposed rule should 
be withdrawn because the issuance of a regulation based on the proposal 
would restrict commercial speech in a way that violates the First 
Amendment. (Comment 326). These issues will be discussed further in 
section XIX.

B. Decision

    After carefully considering the record, TTB has determined that it 
is important to issue a final rule on specific health claims and other 
health-related statements in the labeling and advertising of alcohol 
beverages. The rulemaking record confirms that alcohol abuse is an 
important public health issue. The use of health claims and health-
related statements in the labeling and advertising of alcohol beverages 
requires a balance between a producer's First Amendment right to label 
and advertise its products in a truthful and non-misleading fashion and 
the public's right to be informed of the significant health risks 
associated with alcohol consumption. Specific regulations on the use of 
health claims and other health-related statements in the labeling and 
advertising of alcohol beverages will ensure that both the industry and 
the public are aware of the restrictions on the use of labeling and 
advertising statements that might tend to mislead the consumer about 
the serious health risks associated with alcohol consumption.
    TTB recognizes that based on the administrative record, it does not 
appear that distillers and brewers are interested in using health 
claims or health-related statements in the labeling or advertising of 
alcohol beverages. However, as noted later in this preamble, both the 
Wine Institute and the American Vintners Association (AVA), two 
industry associations representing hundreds of wineries, supported 
ATF's proposed rule regarding substantive health claims. At least one 
individual testifying at the hearing, Mr. John Hinman, indicated that 
there were wineries interested in using a 664-word substantive health 
claim in advertising materials. The Wine Institute and AVA, as well as 
many individual wineries, commented in favor of allowing directional 
statements in the labeling of alcohol beverages. Thus, the record 
reflects that there may be some wineries interested in using 
substantive health claims in the advertising of alcohol beverages, and 
that many wineries are interested in using directional statements on 
labels. For this reason, TTB believes it is important to issue 
regulations that set forth the standards that must be met in the event 
that a specific health claim or other health-related statement is used 
in the labeling or advertising of alcohol beverages. As set forth later 
in section XVII, the same standards should apply to wines, distilled 
spirits, and malt beverages, even if there is no evidence that any 
members of the malt beverage or distilled spirits industries are

[[Page 10082]]

interested in using health claims or health-related statements. The 
rule does not require anyone to use such statements; it merely sets 
forth the standards that would apply in the event that an industry 
member wishes to use a specific health claim or a health-related 
statement on a label or in an advertisement.
    TTB does not agree that the proposed regulations would inject 
uncertainty with respect to the use of advertisements that do not 
involve health claims or health-related statements, such as the example 
provided by DISCUS of an advertisement that shows people relaxing in an 
attractive setting. There is nothing in the proposed rule that would 
extend the definition of a health claim or curative or therapeutic 
claim to cover such advertisements. However, we agree that the lack of 
any definition of a ``curative or therapeutic claim'' or ``health 
claim'' in the proposed rule might give rise to some uncertainty as to 
what types of advertising claims would be covered by the regulation. 
Accordingly, the final rule includes definitions of the terms ``health-
related statement'' (which includes statements of a curative or 
therapeutic nature), ``specific health claims,'' and ``health-related 
directional statements.'' We believe that these definitions should 
resolve any concerns by the commenters that the labeling or advertising 
regulations are intended to broaden ATF's traditional interpretation of 
a curative or therapeutic claim.

XIII. Does the ABLA Preclude the Use of Specific Health Claims or Other 
Health-Related Statements on the Labels of Alcohol Beverages?

A. Issue

    Five commenters, including Senator Thurmond (Comment 526), DISCUS 
(Comment 530), the Beer Institute (Comment 396), NABI (Comment 522), 
and Remy Amerique, Inc. (Comment 531), suggested that the use of any 
health claims or other health-related statements on alcohol beverage 
labels was foreclosed by the provisions of the ABLA. They argued that 
it was Congress' intent to foreclose the use of any other health-
related statements on alcohol beverage labels.

B. Decision

    TTB does not agree with those commenters who suggested that the 
ABLA specifically precludes the voluntary use by industry members of 
any health-related statements on alcohol beverage labels other than the 
required warning statement. The ABLA was enacted in 1988. Pursuant to 
27 U.S.C. 215, alcohol beverage containers distributed or sold in the 
United States must bear a Government warning statement, which warns 
that alcohol consumption during pregnancy may cause birth defects; that 
alcohol consumption impairs one's ability to drive a car or to operate 
machinery; and that consumption of alcohol beverages ``may cause health 
problems.''
    Some commenters argued that the ABLA provided ATF with authority to 
deny any statement on an alcohol beverage label that discusses the 
relationship between alcohol consumption and health. The ABLA provides 
that ``[n]o statement relating to alcoholic beverages and health, other 
than the statement required by section 204 [27 U.S.C. 215] of this 
title, shall be required under State law to be placed on any container 
of an alcoholic beverage, or on any box, carton, or other package, 
irrespective of the material from which made, that contains such a 
container.'' This section of the law preempts State governments from 
each requiring their own version of a health warning statement on 
alcohol beverage containers. However, it in no way precludes producers 
from voluntarily placing either additional warning statements or health 
claims on alcohol beverage labels. See also 27 U.S.C. 213 (setting 
forth Congress' policy to ensure that the public is adequately reminded 
about any health hazards that may be associated with alcohol 
consumption or abuse, and not impeded by ``diverse, nonuniform, and 
confusing requirements for warnings or other information on alcoholic 
beverage containers with respect to any relationship between the 
consumption or abuse of alcoholic beverages and health'').
    Some commenters argued that 27 U.S.C. 217 provides the exclusive 
method for allowing additional statements regarding alcohol consumption 
and health on the label. Section 217 provides that if the Secretary, 
after consulting with the Surgeon General, determines that there should 
be a change in the mandatory health warning statement, or if such 
statement should be deleted, he shall report such information to the 
Congress together with specific recommendations for necessary 
amendments to the ABLA. After soliciting public comments on this issue, 
ATF determined in 1993 that there was no need to seek changes to the 
required health warning statement. However, this provision applies only 
to the required health warning statement, not to voluntary statements 
that producers seek to place on alcohol beverage labels. Thus, it is 
clear that the statute does not specifically preclude the voluntary use 
of additional health-related statements on alcohol beverage labels.

XIV. What Are the Effects on Health of Alcohol Consumption?

A. Issue

    Most of the commenters who addressed this issue agreed that there 
was a link between moderate alcohol consumption and a reduced risk of 
heart disease in certain individuals. However, some commenters 
concluded that the risks associated with alcohol consumption greatly 
outweighed any purported cardiovascular benefits, while other 
commenters emphasized the benefits associated with moderate 
consumption.
    CEI and CA presented a review of the medical evidence summarized by 
Michael Gough (Ph.D.), which concluded that most adults would benefit 
from moderate alcohol consumption. Dr. Gough stated that ``with the 
exception of those well-defined groups of people who should avoid 
alcohol, there is clearly convincing evidence for the health benefits 
of moderate alcohol consumption.'' Dr. Gough acknowledged that 
individuals in their 20s and 30s do not accrue net benefits from 
consuming alcohol since they are at low risk for heart disease; 
however, he suggests that ``[b]ased on understanding of the biological 
basis for the protective effects of alcohol, it is likely that moderate 
alcohol consumption in the 20s and 30s is important to the beneficial 
effects seen in later years.''
    CEI attached numerous medical studies regarding the effects on 
health of alcohol consumption. In most important respects, the studies 
were consistent with ATF's summary of the medical evidence in Notice 
No. 884. Several of the studies reported an association between light 
to moderate alcohol consumption and a reduced risk of heart disease. 
However, many of these same studies supported the conclusion that the 
health benefits of alcohol consumption do not apply to certain groups.
    For example, the authors of one study began by noting that ``[m]en 
and women who drink alcoholic beverages regularly have, in comparison 
with abstainers, higher death rates from injuries, violence, suicide, 
poisoning, cirrhosis, certain cancers, and possibly hemorrhagic stroke, 
but lower death rates from coronary heart disease and thrombotic 
stroke. The net balance of

[[Page 10083]]

risks and benefits is likely to differ in different age groups and 
populations.'' \6\ (Footnotes omitted). One of the conclusions of the 
study is that ``the balance of adverse and beneficial effects of 
drinking on mortality from all causes depends not only on the amount of 
alcohol consumed but also on age and background cardiovascular risk.'' 
\7\
    Another article noted that it has not yet been determined how 
alcohol reduces the risk of coronary heart disease. The authors stated 
that: \8\

    Several possible mechanisms for a protective role of alcohol 
against coronary disease have been hypothesized, including alcohol-
mediated increases in HDL cholesterol levels. * * * Knowledge of the 
basic mechanisms by which alcohol exerts a protective effect against 
coronary heart disease is critical to assessing the potential 
importance of moderate alcohol consumption to the public health, 
particularly if the beneficial effects of alcohol can be achieved 
through other interventions. Because heavy consumption of alcohol 
has been implicated in accidents, cirrhosis, cancer, and other 
adverse outcomes, the difference between drinking small-to-moderate 
quantities of alcohol and drinking large amounts may mean the 
difference between preventing and causing disease. Any clinical 
recommendations based on this epidemiologic evidence should 
therefore be cautious. (Footnotes omitted).

    Among the more recent studies submitted by CEI and CA was one that 
focused on the effects on health of alcohol consumption on women. The 
authors noted that before beginning the study, it was unclear 
``[w]hether the apparent overall benefit of light-to-moderate alcohol 
intake among men'' could be extrapolated to women, noting that ``[a]s 
compared with men, women have a lower risk of coronary heart disease, 
attain higher blood alcohol concentrations for a given amount of 
alcohol consumed, and are more susceptible to alcoholic liver disease. 
Moreover, women who consume moderate quantities of alcohol have an 
increased risk of breast cancer.'' \9\ (Footnotes omitted). The results 
of the study showed that light to moderate female drinkers had a 
reduced risk of heart disease, with women who drank one to three drinks 
per week having the lowest risk of mortality.\10\ However, the study 
concluded that ``the apparent benefit of light-to-moderate alcohol 
consumption was mainly confined to women at greater risk for coronary 
heart disease, specifically older women and women with one or more 
coronary risk factors.'' \11\
    The Wine Institute, representing over 500 California winery and 
associate members, also submitted summaries of several medical studies 
that established a link between moderate alcohol consumption and 
reduced risk of cardiovascular disease (Comment 401). In its summary of 
these studies, the Wine Institute asserted that moderate drinkers have 
a 40-50 percent reduction in coronary artery disease risk compared with 
individuals who are abstinent, with a lower overall mortality rate as 
well.
    As ATF stated in Notice No. 884, the serious health risks 
associated with alcohol consumption are well established, and ATF 
received many comments from public health organizations that focused on 
those adverse consequences. The major points made by these commenters 
are summarized below.
    Many of the commenters focused on the serious public health risks 
associated with alcohol abuse. The National Council on Alcoholism and 
Drug Dependence, Inc. (NCADD) commented that ``[w]hile most people who 
choose to drink do so without negative health or life consequences, 
there are 13.8 million Americans over the age of 18 who have problems 
with drinking, including 8.1 million people who are alcoholic. Millions 
of others, because of a family history or the addictive potential of 
alcohol, are at risk for developing an addiction.'' (Comment 15). NCADD 
noted that alcohol contributes to 100,000 deaths annually, making it 
the third leading cause of preventable mortality in the United States, 
after tobacco and diet/activity patterns. While there are fewer deaths 
from alcohol-related causes than from cancer or heart disease, alcohol-
related deaths tend to occur at much younger ages.
    Some commenters focused on the cost to society associated with 
alcohol abuse. For example, the Center for Science in the Public 
Interest (CSPI) commented that ``[a] substantial body of evidence has 
shown a positive relationship between the aggregate consumption of 
alcohol in society and population rates of alcohol-related diseases, 
accidents, criminal violence, and suicide. According to the National 
Institute on Alcohol Abuse and Alcoholism (NIAAA), alcohol abuse and 
alcoholism cost society more than $166 billion annually and each year 
over 110,640 deaths have alcohol-related causes.'' (Comment 400). 
(Footnotes omitted).
    Many of the commenters set forth the serious risks associated with 
higher levels of alcohol consumption. NCADD noted that ``[h]eavy and 
chronic drinking can harm virtually every organ and system in the body, 
and is the single most important cause of illness and death from liver 
disease. It is also associated with cardiovascular diseases such as 
cardiomyopathy, hypertension, arrhythmias and stroke.'' The Marin 
Institute identified similar health risks associated with alcohol 
consumption. (Comment 324).
    Many recognized experts on the effects on health of alcohol 
consumption testified at the public hearings held by ATF in Washington, 
DC and San Francisco, California. Dr. David Satcher, former Assistant 
Secretary for Health and Surgeon General, testified about the public 
health dangers associated with alcohol consumption as follows:

    Although the majority of Americans who consume alcoholic 
beverages do so safely, alcohol is one of the nation's leading 
causes of preventable injury and premature death. Each year, over 
100,000 premature deaths result from alcoholism and alcohol abuse. 
Alcohol represents, therefore, the third leading cause of premature 
death, right behind tobacco and physical inactivity. Traffic crashes 
involving alcohol killed more than 16,000 people in 1997, and one in 
four victims of violent crime report that the offender had been 
drinking alcohol prior to committing the crime. Fetal alcohol 
syndrome continues to be the leading preventable cause of mental 
retardation. I think we fail to appreciate that the roots of 
alcoholism and alcohol abuse have their origins in adolescence and 
that children are especially vulnerable to its dangers. Alcohol is 
the nation's number one drug problem among youth, and it is involved 
in teen automobile crashes, homicides, and suicides, the three 
leading causes of teen death. (April 25, 2000; Washington, DC, pages 
72-73).

    Other physicians testified regarding the effects on health of 
alcohol consumption. Dr. Carlos Camargo, an emergency room physician 
and alcohol researcher, testified at the invitation of CSPI. He stated 
that ``there is persuasive evidence that moderate alcohol consumption 
reduces risk of coronary heart disease in some people. There is also 
persuasive evidence that even moderate drinking carries significant 
health risks for many people.'' (April 25, 2000; Washington, DC, page 
94).
    Dr. Michael Criqui, a physician, epidemiologist, and professor, 
also expressed concerns regarding the use of any health-related 
statement in connection with the labeling of alcohol beverages. Dr. 
Criqui stressed that when evaluating the potential health benefits 
associated with alcohol consumption, it is important to look at the 
effects of various diseases on the potential years of life lost before 
age 75. He noted that while heart disease is the single largest cause 
of death in developed countries, it usually occurs at older ages. Motor 
vehicle crashes and suicides together cause the loss of more potential 
years of

[[Page 10084]]

life in men than heart disease, and both are linked to alcohol use. In 
women, breast cancer and motor vehicle accidents each account for more 
potential years of life lost before age 75 than heart disease. (May 23, 
2000; San Francisco, CA, pages 53-54).
    Dr. Criqui also stressed the importance of evaluating the patterns 
of consumption among drinkers. He said that in the United States, about 
80% of men and 70% of women drink alcohol, with 50% of drinkers 
reporting temporary problems with alcohol. (Id. at page 55). About 10% 
of men and 5% of women are alcoholics. Furthermore, Dr. Criqui stated 
that ``half of all the alcohol consumed in the United States is 
consumed by the 10% of men and the 5% of women who are alcohol-
dependent.'' (Id. at page 57).
    Other medical professionals stressed the health benefits associated 
with moderate drinking for persons who do not belong in the categories 
of individuals for whom alcohol consumption is contraindicated. Dr. 
Curtis Ellison, a Professor of Medicine, testified that ``science 
clearly indicates that moderate drinkers have much lower risk of 
coronary heart disease and ischemic stroke. Because these are the 
number one and number three causes of death, it is not surprising that 
moderate drinkers will live longer in the United States.'' (April 26, 
2000; Washington, DC, page 109). Dr. Ellison suggested that ``if I am 
withholding from a patient information that may reduce that 
individual's risk of a heart attack by 30 or 40 percent and do not tell 
him about it, I am doing him a disservice.'' (Id. at page 110).

B. Decision

    The evidence presented by the medical experts, as well as the 
studies presented with some of the comments, indicate that there are 
differences of opinion as to how the relative risks and benefits of 
alcohol consumption should be weighed. The evidence reflects a broad 
consensus that heavy levels of alcohol consumption pose serious health 
risks. The record also reflects that there is a broad consensus that 
certain categories of people should not consume any alcohol. With 
regard to those individuals for whom alcohol consumption is not 
contraindicated, there was some difference among the experts as to how 
to weigh the relative risks and benefits of moderate consumption, with 
some experts stressing the protection against cardiovascular disease, 
and other experts stressing the increased risk of injury and certain 
cancers.
    Because TTB is not an expert on public health issues, we (and our 
predecessors) have generally deferred to the findings of the Department 
of Health and Human Services, including NIAAA, FDA, CSAP, and the 
Surgeon General, on issues related to the effects on health of alcohol 
consumption. In the case at hand, TTB finds that the evidence in the 
rulemaking record supports the findings of NIAAA's 1999 ``Alcohol 
Alert'' and the 2000 Dietary Guidelines published by USDA and HHS. The 
main points of these findings can be summarized as follows:
    [sbull] Alcohol beverages are harmful when consumed in excess, and 
some people should not drink at all. Excess alcohol alters judgment and 
can lead to dependency and many other serious problems. Heavy levels of 
alcohol consumption cause social and psychological problems, cirrhosis 
of the liver, inflammation of the pancreas, and damage to the brain and 
heart.
    [sbull] Taking more than one drink per day for women or two drinks 
per day for men can raise the risk for motor vehicle accidents, other 
injuries, high blood pressure, stroke, violence, suicide, and certain 
types of cancer. Even one drink per day can slightly raise the risk of 
breast cancer.
    [sbull] Alcohol consumption during pregnancy increases the risk of 
birth defects.
    [sbull] Certain individuals should not drink any alcohol; for these 
individuals, even moderate levels of alcohol consumption may cause 
health risks. Included in this category are children and adolescents; 
individuals of any age who cannot restrict their drinking to moderate 
levels; women who may become pregnant or who are pregnant; individuals 
who plan to drive, operate machinery, or take part in other activities 
that require attention, skill, or coordination; and individuals taking 
prescription or over-the-counter medications that can interact with 
alcohol.
    [sbull] Moderate levels of alcohol consumption are associated with 
a reduced risk of coronary artery disease for certain individuals, but 
causation has not been conclusively established.
    [sbull] To the extent that moderate consumption is linked to a 
lowered risk for coronary heart disease, the link appears mainly among 
men over 45 and women over age 55. Moderate consumption provides 
little, if any, health benefit for younger people.
    [sbull] The effects on health of alcohol consumption vary from 
individual to individual, depending on the individual's health profile 
and history, as well as the levels of consumption. Risk of alcohol 
abuse increases when drinking starts at an early age. Some studies 
suggest that older people may become more sensitive to the effects of 
alcohol as they age.
    Based on the above, it is TTB's conclusion that the medical data 
still supports ATF's longstanding (and now our) position that 
notwithstanding the data linking moderate alcohol consumption to a 
reduced risk of heart disease in some individuals, there are 
significant health risks associated with all levels of alcohol 
consumption. The medical data submitted by the commenters, as well as 
the testimony presented by experts at the public hearings, suggest that 
there is a link between moderate alcohol consumption and a reduced risk 
of heart disease in certain individuals; however, causation has not 
been conclusively established. The risk/benefit ratio varies with the 
individual's own health profile and the level of consumption. For 
example, moderate alcohol consumption confers few, if any, benefits on 
people at low risk for heart disease. The evidence also establishes 
that there are serious risks associated with higher levels of alcohol 
consumption, and that even moderate consumption poses health risks for 
certain individuals. Finally, there are certain categories of 
individuals for whom any level of alcohol consumption is not 
recommended.

XV. Are Health Claims and Health-Related Statements in the Labeling and 
Advertising of Alcohol Beverages Inherently Misleading?

A. Comments in Opposition to the Use of Health Claims and/or Health-
Related Statements

    Approximately 120 comments opposed the use of health claims and/or 
health-related statements (including directional statements) in the 
labeling and advertising of alcohol beverages. Many of these 
commenters, including the American Medical Association, the American 
Cancer Society, and the Center for Science in the Public Interest, 
commented in support of a complete ban on the use of such statements in 
the labeling or advertising of beverage alcohol. The primary arguments 
made by these commenters are summarized below.
1. It Has Not Been Proven That Moderate Alcohol Consumption Lowers the 
Risk of Heart Disease
    NCADD commented that the evidence for the alleged health benefits 
of alcohol consumption was ``far from concrete,'' noting that the 1999 
NIAAA report concludes that while there is ``an

[[Page 10085]]

association between moderate drinking and a lower risk of CHD, science 
has not confirmed that alcohol itself causes the lower risk.'' 
``Alcohol Alert,'' National Institute on Alcohol Abuse and Alcoholism, 
No. 45, October 1999. (Comment 15). Most other commenters, however, 
acknowledged that there was a link or association between moderate 
alcohol consumption and reduced risk of heart disease in some 
individuals.
2. Because the Negative Health Consequences of Alcohol Consumption 
Outweigh the Potential Benefits, Health Claims and Health-Related 
Statements Are Inherently Misleading and Should Be Banned
    Many of the commenters stated that health claims for alcohol 
beverages were inherently misleading because the health risks 
associated with alcohol consumption outweigh the purported 
cardiovascular benefits. For example, the American Cancer Society 
commented in favor of a ban on all health benefit claims and health-
related statements in the labeling and advertising of alcohol 
beverages. (Comment 527). They noted that ``[w]hile moderate intake of 
alcohol has been shown to reduce the risk of coronary heart disease in 
middle-aged adults, 100,000 deaths each year are attributed to alcohol-
related diseases.''
    The American Medical Association (AMA) strongly urged ATF to reject 
any type of beneficial claim for alcohol products on container labels, 
noting that such claims would be misleading, and for many persons, 
inaccurate. (Comment 534). AMA stated that ``[w]hile some research 
indicates that moderate drinking is associated with a decreased risk of 
some diseases, other research shows that such risks actually 
substantially increase for certain people.''
    Senator Strom Thurmond opposed the use of any health-related 
statements on alcohol beverage labels. (Comment 526). He testified that 
health claims were inherently misleading because of the serious health 
risks associated with alcohol consumption; because the supposed health 
benefits of moderate drinking have not been conclusively established; 
and because any explanatory statements are simply insufficient to 
clarify a misleading health claim. (April 25, 2000; Washington, DC, 
pages 14-16).
    CSPI argued that health claims are inherently misleading for five 
reasons:

    (1) There are serious health risks associated with alcohol 
consumption, even moderate consumption;
    (2) the health benefits of moderate alcohol consumption do not 
apply universally, but only to a discrete segment of the population;
    (3) there are many groups of people who should abstain from, or 
minimize, their consumption of alcohol;
    (4) allowing health claims would undermine the Government 
warning label; and
    (5) explanatory statements are insufficient to clarify a 
misleading health claim. (Comment 400).

    CSPI noted that researchers for the Centers for Disease Control and 
Prevention (CDC) found that, after decreasing during the late 1980s, 
alcohol consumption among pregnant women in the United States began to 
increase after 1991, and the lead author hypothesized that the 
increased consumption might be due to the media attention to the 
reports on the health benefits of moderate drinking. At the Washington, 
DC hearing, Mr. George Hacker, director of CSPI's Alcohol Policies 
Project, testified in opposition to the use of health claims. Mr. 
Hacker stressed the health risks associated with even moderate alcohol 
consumption, and stated that ``[a]lcohol is a potentially dangerous, 
potentially addictive, and potentially deadly drug. Any positive health 
statement about such a drug must be presented, if at all, only in a 
balanced and non-misleading manner.'' (April 25, 2000; Washington, DC, 
page 56).
    On behalf of its three million members and supporters, Mothers 
Against Drunk Driving (MADD) commented in favor of banning any health 
claims or directional statements in the labeling and advertising of 
alcohol beverages. (Comment 20). MADD commented that ``[t]he negative 
consequences and the risk associated with alcohol consumption greatly 
outweigh any purported `health benefits.' '' MADD quoted Gen. Barry 
McCaffrey, former Director of the Office of National Drug Control 
Policy, as telling an alcohol policy conference in 1997 that, 
``Undoubtedly, alcohol is the principal drug abuse problem in America 
today.''
    MADD also noted that in 1998, 15,935 people were killed in alcohol-
related traffic crashes and an estimated 850,000 were injured. These 
alcohol-related crashes result in an annual cost of $114,800,000 in the 
United States.
    The National Association for Children of Alcoholics commented that 
``the health risks of alcohol far outweigh the health benefits'' and 
advocated a complete ban on health-related claims on alcohol beverage 
containers. (Comment 29). This comment noted that 76 million Americans, 
about 43% of the U.S. adult population, have been exposed to alcoholism 
in the family. Almost one in five (18%) of American adults lived with 
an alcoholic while growing up. Its comment also noted the negative 
impact of alcoholism on family and marital relationships, the 
association between alcoholism and violent crime and child abuse, and 
the devastating impact of alcoholism on the children of alcoholics.
    The Marin Institute for the Prevention of Alcohol and Other Drug 
Problems (``Marin Institute'') commented in favor of a complete ban on 
all health-related statements (other than the required warning 
statement) in the labeling and advertising of alcohol beverages. 
(Comment 324). The Marin Institute commented that ``[s]tatements 
attributing positive health effects to the consumption of alcoholic 
beverages (as is the case with the previously approved wine labels) are 
misleading and potentially dangerous because media and marketing 
messages can be misinterpreted as public health recommendations.'' They 
stated that ``[s]implistic and misleading messages about the health 
effects of alcohol are dangerous to the health and safety of Americans 
and could increase the enormous toll of alcohol-related problems in 
this country. Because of the evidence regarding the risks associated 
with alcohol consumption, alcoholic beverages should not be held to a 
lower standard of accountability regarding health messages than well-
regulated prescription drugs. Banning all health claim-related 
statements on labels or in advertising of alcoholic beverages assures 
that public health information is accurate and free of potentially 
harmful misinformation.''
    Other public health organizations strongly urged a ban on health 
claims. See, Pacific Drug Policy Institute, Inc. (Comment 34); American 
Council on Alcohol Problems (Comment 37); and West Los Angeles Alcohol 
Policy Coalition (Comment 384).
    Many individuals made similar comments, noting the serious health 
risks associated with alcohol consumption. Some shared personal 
experiences with alcoholism or alcohol abuse. See comments 23, 28, and 
35.
    Many of the individuals testifying at the public hearings also 
emphasized the human costs associated with alcohol abuse. For example, 
Barrett Duke, Ph.D., testified on behalf of the Ethics and Religious 
Liberty Commission, the moral concerns agency for the Southern Baptist 
Convention. He shared his concerns from the perspective of the faith 
community, and noted that ``[m]ost faith communities deal with the

[[Page 10086]]

devastating consequences of alcohol abuse on a regular basis in their 
churches, missions, and benevolent ministries. * * * Families have been 
destroyed. Lives have been lost. Careers have been ruined. Men and 
women have left the ministry as a direct result of alcohol abuse. 
Furthermore, alcohol is often a primary contributing component to 
poverty, forcing faith communities to use precious limited resources to 
assist the alcohol abuser as well as the abuser's intended or 
unintended victims.'' (April 25, 2000; Washington, DC, page 151).
    Ms. Suzanne Harrington-Cole, Chair of the Vallejo Alcohol Policy 
Coalition, testified in favor of a complete ban on the use of health 
claims on alcohol beverage containers. She stated that alcohol is 
present in more than 50% of all incidents of domestic violence (May 24, 
2000; San Francisco, CA, page 245), and noted that ``[w]e do not need a 
government sanction on more drinking in the name of health.'' (Id. at 
page 243).
3. The Issue Is Too Complex To Be Summarized on an Alcohol Beverage 
Label Because the Effects on Health of Alcohol Consumption Vary From 
Person to Person
    Many of the commenters stated that a summary statement of health 
benefits on an alcohol beverage label would mislead consumers because 
the effects on health of alcohol consumption vary from person to 
person, based on various factors. These commenters also suggested that 
the issue was too complex to be summarized on an alcohol beverage 
label, rendering all such labeling statements inherently misleading. 
Thus, the American Cancer Society noted that the potential health 
impact of alcohol consumption varied from individual to individual, and 
that a ``brief message on any beverage container cannot provide a 
consumer with adequate information to make an informed decision about 
drinking `for health related reasons.''' (Comment 527).
    NCADD urged ATF to ``prohibit labels and advertisements that make 
claims regarding potential health benefits associated with the 
consumption of alcoholic beverages, because it would be impossible to 
adequately and appropriately convey the negative health consequences.'' 
(Comment 15). NCADD noted that elderly consumers have special concerns, 
and that NIAAA's definition of moderate drinking for women and men over 
the age of 65 is no more than one drink a day. They cited a study 
showing that among persons older than 65, moderate and heavy drinkers 
were 16 times more likely than nondrinkers to die of suicide.\12\
    Senator Thurmond also testified that the effects of alcohol 
consumption vary from individual to individual, and any clarifying 
statement along those lines would ``have to address factors such as 
age, sex, family, medical history, diet, weight, and activity.'' (April 
25, 2000; Washington, DC, page 16). MADD noted ATF's historic policy of 
requiring balance in health claims, and suggested that in ``order to 
`appropriately qualify and balance' the alleged health claim benefits 
with the negative consequences, the alcohol label would have to be the 
size of a billboard and advertising messages would be longer than the 
State of the Union Address.'' (Comment 20). Accordingly, MADD suggested 
that to avoid misleading consumers, such claims should be banned 
entirely.
    The United Communities Against Drug & Alcohol Abuse commented that 
``[n]o brief message on any beverage container can possibly provide a 
consumer with adequate information to make a decision about drinking 
`for health-related reasons.''' Instead, they suggested that in order 
to balance a health message, ``consumers would need to be provided with 
a detailed multi-page document (similar to those now provided by 
manufacturers of prescription medication) in order to make [an] 
informed choice about whether or not a decision to consume an 
alcoholic-beverage for health reasons would be, on balance, a good or a 
bad decision.'' (Comment 31). The Marin Institute (Comment 324) agreed, 
commenting that ``[d]etailed, balanced and cautionary information about 
potential harmful effects would be required (as it is with 
advertisements of prescription drugs) in order to offset the 
demonstrated confusion of the general public about the health effects 
of alcohol. The volume of information needed could hardly be legible if 
it were displayed on a bottle of wine or beer.''
4. Even if Moderate Alcohol Consumption Is Linked to a Reduced Risk of 
Heart Disease, There Are Safer Ways To Achieve the Same Reduction 
Without the Risks Associated With Alcohol Consumption
    Many commenters suggested that even if alcohol consumption resulted 
in health benefits for certain individuals, there were less risky ways 
to obtain those benefits. For example, the Central Nebraska Council on 
Alcoholism, Inc. (Comment 14) noted that ``[t]here are simply less 
risky ways to attain the same health benefits that consuming small 
amounts of alcoholic beverages provide to a limited group of people. It 
would be irresponsible for the government to allow a health-claims 
statement on alcoholic beverages that urge the most risk laden way of 
obtaining those benefits.''
    CSPI also suggested that there were safer methods of reducing one's 
risk of heart disease, stating that the ``discrete category of people 
who may benefit from moderate drinking could also lower their risk of 
heart disease by other less risky alternatives, such as quitting 
smoking, reducing fat in the diet, getting regular exercise, taking a 
daily low dose aspirin, or reducing stress. All of those methods are 
much less likely to cause accidents or other health problems than 
consuming alcohol, even in moderation.'' (Comment 400).
    The Tangipahoa Alcohol and Drug Abuse Council (Comment 24) noted 
that consumers often look for ``the easy way out,'' and that many may 
believe that drinking alcohol will get the same benefits as an overall 
healthy lifestyle. The Pacific Drug Policy Institute, Inc. commented 
that ``smoking cessation, good diet, exercise, and stress management 
techniques provide cardiac benefits with much lower risk of adverse 
consequences. When there are low risk ways to attain the health 
benefits attributed to wine, it would appear absurd to allow 
advertisement of medicinal value in high-risk alcohol consumption.'' 
(Comment 34).
    Ted Miller, PhD, an economist, testified at the hearings that a 
more cost-effective way to obtain the purported benefits associated 
with consumption of wine would be to walk a mile, drink a glass of 
juice, or eat one cup of vegetables every day. (April 25, 2000; 
Washington, DC, pages 179-183).
5. Health Claims and Health-Related Messages Would Be Misconstrued by 
Consumers, Particularly Those With a History of Alcoholism or Who Are 
Susceptible to Alcohol Abuse Problems, as an Endorsement To Consume or 
Abuse Alcohol
    Many professionals in the field of addiction medicine commented 
that health claims and health-related messages were likely to be 
misinterpreted by those most susceptible to problem drinking. Many of 
these commenters were particularly concerned with the risk that 
recovering alcoholics would use information about the purported health 
benefits of alcohol consumption to justify their continued use of 
alcohol. For example, a physician who has worked in the alcohol and 
substance abuse treatment field for 18 years stated that any message 
about purported health benefits sends the

[[Page 10087]]

wrong message to the public, especially the alcohol abuser or 
alcoholic. He expressed concern that such a message ``would only 
encourage the alcoholic to drink more to `help his heart''' and feared 
that ``many current alcoholics who are in total recovery and abstinence 
may use this as a justification to begin drinking alcohol again, 
thinking they can control it.'' (Comment 381). Another doctor made a 
similar point, (Comment 385) as follows:

    The American public has become accustomed to warning labels on 
harmful products * * *. A label touting health benefits of use of 
alcoholic beverages in controlled and low amounts, is likely to be 
misinterpreted by problem drinkers, especially by alcoholics, whose 
belief systems about their drinking distort reality with respect to 
the relative benefits and risks of consumption. * * * I do not deny 
the scientific validity of reports of health benefits of consumption 
of one glass of wine per day for females or two glasses of wine per 
day for males. However, the risk of misinterpretation by the 
drinking public is far greater than any public health or public 
information benefit that may be alleged to accrue from adding labels 
to products that promote health benefits from drinking.

    The National Association for Children of Alcoholics (Comment 29) 
also suggested that health claims can lead to confusion among children 
of alcoholics about the role of alcohol, and can reinforce and 
perpetuate the denial process of the alcohol-addicted person.
6. The Use of the Term ``Moderate'' in a Specific Health Claim Would Be 
Misleading Unless the Term Is Defined
    Many public health organizations commented that the use of the term 
``moderate'' in a health claim could mislead consumers who did not 
understand the definition of the term. The United Communities Against 
Drug & Alcohol Abuse noted that ``moderate'' drinking was poorly 
defined. It noted that the Substance Abuse and Mental Health Services 
Administration (SAMSHA) study showed that ``virtually all drinkers 
define their personal level of consumption as `moderate,' whether they 
consume one drink per week or five per day.'' (Comment 31). CSPI also 
noted that consumers had varying definitions of the term ``moderate.'' 
(Comment 400). Rather than recommending moderate consumption, CSPI 
suggested that any health claims should provide specific quantities of 
alcohol that constitute moderate consumption, including a 
recommendation that consumers drink no more than one drink per day.
    Nancy Piotrowski, PhD, testified that she had been conducting 
research on alcohol consumption for the past 16 years, and is in the 
middle of ongoing research on the perceptions of drinkers regarding 
moderate alcohol consumption. She noted that previous studies had shown 
that perceptions of moderate drinking were clearly related to drinkers' 
current drinking patterns and their history of problems relating to 
drinking. (May 23, 2000; San Francisco, page 37).

B. Comments in Favor of Health Claims

    A few commenters specifically supported ATF's proposal to allow 
qualified, detailed and balanced health claims in the labeling and 
advertising of alcohol beverages. One comment, from CEI and CA, 
specifically supported the use of summary health claim statements 
without qualification or disclosure of the adverse effects on health 
caused by alcohol consumption. Finally, approximately 45 commenters 
supported the general use of health claims with respect to alcohol 
beverages.
1. Comments in Favor of Allowing Balanced Health Claims, as Set Forth 
in the Proposed Rule
    The comments in favor of the substantive health claim provisions of 
the proposed rule generally stated that ATF had struck an appropriate 
balance in dealing with a difficult issue. For example, the National 
Consumers League (NCL), a national nonprofit consumer advocacy 
organization that was founded in 1899 to represent consumers in the 
marketplace and workplace, recognized the difficult nature of the issue 
as follows:

    NCL believes that the proposed rule raises a serious public 
policy question for which there is no easy answer. NCL understands 
ATF's concern as to whether health claims should be permitted on 
alcoholic beverages at all. While there is a body of research 
showing that moderate consumption of alcohol reduces the risk of 
coronary heart disease (CHD), there is also evidence that moderate 
drinking may increase the risk of certain cancers. Moreover, as ATF 
notes, moderate drinking is risky for certain individuals who are 
prone to alcoholism, some of whom may not realize that they are. 
Excessive alcohol consumption is unquestionably harmful. Whether a 
properly qualified health claim should be permitted on alcoholic 
beverage labels is a serious policy question that has been debated 
by public health experts for years.

NCL concluded that while it ``has reservations about authorizing any 
health claim for alcoholic beverages, we believe a properly qualified 
and balanced claim would be of value to many consumers. * * * A 
healthclaim that includes the elements specified in the proposed rule 
would provide these consumers with useful information.'' (Comment 388).
    Two major associations representing the wine industry also 
commented in support of the substantive health claims provisions of the 
proposed rule. The Wine Institute commented ``that the public should 
receive the whole story regarding the responsible consumption of wine 
and applaud[ed] ATF's efforts, as reflected in the additional proposed 
regulation language, to refine and focus the conditions which must be 
met before any substantive claim regarding health benefits can be made 
on wine labels or in advertisements.'' (Comment 401).
    The AVA also stated it had no objection to the proposed amendment 
to the regulations to reflect current ATF policy, noting that ``[a]s 
our members have been required to conform to these policies for some 
years, converting them to regulation would pose no further hardship.'' 
(Comment 417).
    A comment from the Washington Legal Foundation (WLF) focused 
primarily on legal issues, noting that if the rule was properly 
implemented, it would pass muster under the First Amendment. (Comment 
390). This comment will be discussed further under section XIX.
2. Comment Supporting Summary Health Claims Without Qualification or 
Disclosure of Adverse Effects
    Only CEI and CA specifically argued in favor of allowing summary 
health claims without qualification or disclosure of adverse effects in 
the labeling and advertising of alcohol beverages. CEI and CA opposed 
ATF's notice on the grounds that it would serve to suppress truthful 
and non-misleading speech. (Comment 326). CEI and CA argued that the 
cardiovascular and overall health benefits associated with moderate 
alcohol consumption are amply supported by the medical evidence, and 
summary statements of these benefits are protected by the First 
Amendment.
    CEI and CA suggested that those individuals who would not benefit 
from moderate drinking ``know who they are and are unlikely to be 
misled.'' CEI and CA also suggested that the CSAP survey supports a 
conclusion that consumers would not be misled by directional 
statements, that such statements would not change the drinking patterns 
of consumers, and that the population studied understands the risks of 
drinking, particularly that drinking is counter-indicated during 
pregnancy.
    CEI and CA claimed that other Federal agencies have approved 
summary health statements without the

[[Page 10088]]

extensive qualifications that would be required under ATF's proposed 
rule. As examples, they pointed to health claims approved by FDA for 
diets low in saturated fat and cholesterol and diets low in sodium. 
They also suggested that the ``balance'' ATF is ostensibly seeking 
would automatically be provided by the mandatory health warning 
statement on alcohol beverage containers.
    The CEI and CA comment suggested that the proposed rule would 
result in regulations that violated the First Amendment; thus, the 
proposed rule should be withdrawn. At the public hearing, Mr. Ben 
Lieberman testified on behalf of CEI and stated that CEI believed that 
the rulemaking should result in a ``policy allowing a wide range of 
accurate summary statements about moderate drinking and health to 
appear on alcoholic beverage labels and ads.'' (April 25, 2000; 
Washington, DC, page 119). Mr. Lieberman also suggested that ATF had 
not accurately summarized the evidence demonstrating the health 
benefits associated with moderate alcohol consumption, but instead 
spent ``much of its time identifying and somewhat exaggerating every 
conceivable category of individual who is not likely to benefit from 
moderate drinking, such as adults too young to be at risk for heart 
disease, pregnant women, and recovering alcoholics.'' (Id. at page 
120).
    In response to a question from the panel, Mr. Lieberman confirmed 
that it was CEI's belief that a health claim regarding cardiovascular 
benefits, such as ``there is significant evidence that moderate 
consumption of alcoholic beverages may reduce the risk of 
cardiovascular disease,'' could appear on a label with no disclaimer 
and still not mislead consumers. He stated that ``it is well known that 
people understand the limitations of advertising and labeling and that 
they would be skeptical. They would also read the government warning, 
which does at least allude to the other side of this story.'' (April 
25, 2000; Washington, DC, pages 133-134).
3. Other Comments in Favor of Health Claims
    Approximately 45 comments supported the use of substantive health 
claims in the labeling and advertising of alcohol beverages. However, 
these commenters did not specifically support the type of summary 
health claim advocated by CEI and CA. Instead, they commented in favor 
of the general principle that health claims for alcohol beverages are 
not inherently misleading. In some cases, it was difficult to determine 
whether these commenters meant to support directional statements only 
or whether they specifically supported the use of substantive health 
claims on labels or in advertisements.
    Most of the comments that favored a rule allowing the use of 
substantive health claims reflected a general perception that consumers 
were entitled to information about potential health benefits associated 
with moderate alcohol consumption. For example, one individual 
suggested that ``consumers have the right to know and can be trusted to 
handle this scientific information.'' (Comment 300). Another comment 
supported ``the rights of wineries to list the health benefits of their 
product on the labels.'' (Comment 277).
    Some of the individuals commenting in favor of health claims 
specifically supported the concept that the claims be balanced, 
although it was unclear whether they were suggesting that the balance 
would come from qualifications in the claims or the required Government 
warning statement. For example, one individual stated that ``[i]t is 
only fair and proper that the labels on the bottle contain the positive 
health benefits as well as the proper health warnings.'' (Comment 143). 
Another commenter expressed his support for ``producers of wine to be 
able to print both the adverse and the positive effects of consuming 
wine.'' (Comment 340).
    Many of the commenters suggested that consumers need to be made 
aware of health-related information, including the positive and 
negative effects of alcohol consumption, in order to make informed 
decisions regarding its use. For example, one commenter, a psychologist 
and attorney, stated that it was ``necessary to rationally accept that 
alcohol has benefits as well as dangers * * *. Since Americans can 
easily and legally drink, and most in fact do so, the need to inform 
them of the range of drinking consequences and the related drinking 
limits for each is both prudent and democratic.'' (Comment 243). A 
doctor commented as follows:

    It makes more sense to put more information on the label in 
order for the consumer to make a better decision. As a physician, I 
implore my patients to read labels. There are certainly some 
potential health benefits to wine as well as potential downsides in 
individuals. (Comment 145).

    Two commenters argued that alcohol producers have a First Amendment 
right to market the health benefits of alcohol consumption, provided 
that such information is presented in a non-misleading manner. However, 
neither of these comments suggested that industry members were entitled 
to use summary health claims without any qualification or disclosure of 
adverse effects. The First Amendment issues raised by these commenters 
will be addressed separately in section XIX.
    Among the medical experts who testified at the hearings in favor of 
allowing health claims or health-related statements on labels or in 
advertisements, some specifically noted that consumers should be made 
aware of both the risks and purported benefits of moderate alcohol 
consumption. For example, Dr. Ellison suggested that an appropriate 
message on a label would be `` `[w]hile light to moderate alcohol 
consumption can be consistent with a healthy lifestyle for most 
individuals and has been shown to dramatically reduce the risk of heart 
disease, certain individuals should not drink at all.' Then, you should 
go through the list of the people that we are advising not to drink.'' 
(April 26, 2000; Washington, DC, page 116).
    Finally, Mr. John Hinman testified on behalf of the American Wine 
Alliance for Research and Education as well as the Coalition for Truth 
and Balance, a group of California wineries. Mr. Hinman suggested that 
it was the Government warning statement, rather than the directional 
statements, which misled consumers about the health consequences of 
alcohol consumption. (May 23, 2000; San Francisco, CA, page 149). Mr. 
Hinman was also one of the few individuals responding to ATF's question 
about whether it was possible to craft a balanced substantive health 
claim. He noted that he had submitted a 664-word statement to ATF for 
review in 1993, entitled ``Wine and Health--Behind the French 
Paradox.'' (Id. at page 151). Mr. Hinman stated that ``considering that 
664 words makes for a very wordy wine label, we seriously doubt whether 
any wine maker really has an interest in providing such a statement on 
the bottle. However, the statement can and should be available to hand 
out to those customers who request more information or are interested 
in the subject matter.'' (Id. at page 152). Accordingly, Mr. Hinman 
stated he was resubmitting the statement to ATF for review, and later 
clarified in response to a question from the panel that he would put 
the statement on an application for label approval. (Id. at pages 152, 
165).
    In response to a question from the panel, Mr. Hinman stated that 
neither the American Wine Alliance nor the Coalition for Truth and 
Balance was ``interested, to my knowledge, in necessarily using CEI's 
proposed label. * * * On the other hand, as a lawyer * * * that's an 
absolutely accurate statement that CEI is using on that

[[Page 10089]]

particular thing, and I would support their First Amendment right to 
utilize it. It's going to be up to them to find people that are, in 
fact, going to use it.'' (Id. at page 167).

C. Decision

    After careful consideration of the record, TTB finds that the 
comments and testimony on this issue establish that the use of health 
claims in the labeling or advertising of alcohol beverages has the 
potential to mislead consumers as to the very serious health 
consequences associated with alcohol abuse and consumption. In 
particular, TTB finds that the rulemaking record overwhelmingly 
supports the conclusion that the type of detail, qualification, and 
balance required by the proposed rule would be necessary to avoid 
misleading consumers about the serious health risks associated with 
alcohol consumption.
    Based on the comments on this issue, however, TTB is adopting 
certain changes to the final rule to set forth more specifically how a 
substantive health claim would comply with the requirements of the 
regulation. For example, TTB agrees with the NCADD comment that it has 
not been proven that alcohol itself lowers the risk of heart disease in 
certain people; this comment is consistent with the 1999 ``Alcohol 
Alert'' published by NIAAA. The 2000 Dietary Guidelines state only that 
``[d]rinking in moderation may lower risk for coronary heart disease, 
mainly among men over age 45 and women over age 55.'' The final rule 
provides that a specific health claim would not be approved unless it 
is truthful and adequately substantiated by scientific or medical 
evidence. Thus, TTB would not approve any claim implying that alcohol 
consumption itself caused a reduced risk of heart disease in the 
absence of scientific or medical evidence substantiating such a claim.
    TTB also agrees with those commenters who suggested that the 
effects on health of alcohol consumption vary from person to person, 
and that any labeling or advertising statement that failed to take this 
into account would mislead consumers. Consistent with the 2000 Dietary 
Guidelines, many commenters noted that moderate consumption provided 
little, if any, health benefit for younger people, who are at low risk 
of heart disease. As noted above, the Dietary Guidelines provide that 
``[d]rinking in moderation may lower risk for coronary heart disease, 
mainly among men over age 45 and women over age 55.''
    In consideration of these comments, the final rule specifically 
provides that a claim will not be approved unless it is sufficiently 
detailed and qualified with respect to the categories of individuals to 
whom the claim applies. For example, assuming that the evidence 
continues to indicate that the potential health benefits associated 
with moderate alcohol consumption are mainly associated with men over 
age 45 and women over age 55, then the claim would have to specifically 
set forth this qualification. Furthermore, the concerns expressed in 
the comments regarding the definition of the term ``moderate'' would 
also be addressed by requiring, where necessary, sufficient detail in 
the claim itself regarding the meaning of this term. This level of 
detail could include specific information as to what constitutes 
``moderate'' levels of consumption, possibly including separate 
definitions for men, women, and the elderly.
    Many commenters suggested that there are safer ways to reduce the 
risk of heart disease without the negative health consequences 
associated with alcohol consumption. Again, this is a point noted in 
the 2000 Dietary Guidelines, which remind consumers that ``there are 
other factors that reduce the risk of heart disease, including a 
healthy diet, physical activity, avoidance of smoking, and maintenance 
of a healthy weight.'' In reviewing whether a health claim tends to 
mislead consumers, TTB will certainly consider whether the health claim 
misstates the role played by these factors in reducing one's risk of 
heart disease.
    Several commenters suggested that any health claim might be 
misinterpreted by alcoholics and other abusers of alcohol as a 
rationalization for their own consumption levels. TTB recognizes the 
possibility that certain consumers will selectively interpret data 
regarding the health consequences of alcohol consumption to justify 
their own behavior. We believe that summary health benefit claims that 
do not disclose the adverse health consequences of alcohol consumption 
would be particularly susceptible to this type of misinterpretation. We 
recognize the possibility that certain abusers of alcohol may use 
information regarding the potential cardiovascular benefits of alcohol 
consumption to justify alcohol abuse that clearly poses significant 
health risks. However, it is our conclusion that the best way to 
prevent this type of misinterpretation of a health claim, by both 
alcohol abusers as well as consumers who do not abuse alcohol, is to 
require detailed information regarding the health risks associated with 
various levels of alcohol consumption.
    Accordingly, the final rule provides that a specific health claim 
must adequately disclose the health risks associated with both moderate 
and heavier levels of alcohol consumption. It is misleading to imply 
that moderate alcohol consumption confers only health benefits; the 
administrative record establishes that there are significant risks 
associated with moderate consumption, including an increased risk of 
certain cancers. Even if a claim is made regarding only moderate 
consumption, consumers should be advised of the health risks of heavier 
levels of alcohol consumption. The record reveals that a high 
percentage of the alcohol consumed in this country is consumed at 
levels that exceed ``moderate drinking.'' The Marin Institute comment 
states that alcohol is consumed at heavy levels (3 or more drinks per 
day, or more than 5 drinks at one time) in 78 percent of all drinking 
occasions. (Comment 324). Furthermore, Dr. Criqui testified that half 
of all the alcohol consumed in the United States is consumed by the 10% 
of men and the 5% of women who are alcohol-dependent. (May 23, 2000; 
San Francisco, CA, page 57). Finally, a study submitted by CEI and CA 
noted that ``[i]n the United States, less than 10% of the population 
reports drinking more than two drinks per day, the cutoff for `heavy 
drinking' in national survey research. This means that `moderate' 
drinkers, because of their much greater numbers, probably account for 
well over half of all alcohol problems, a finding that led researchers 
at the Institute of Medicine to observe in a groundbreaking report that 
`if all the clinically diagnosed alcoholics were to stop drinking 
tomorrow, a substantial fraction of what we understand as alcohol 
problems would still remain.' ''\13\ These statistics make it clear 
that a specific health claim touting the potential health benefits of 
moderate alcohol consumption would be misleading without a referral to 
the health risks associated with both moderate and higher levels of 
alcohol consumption.
    In addition, the administrative record establishes that there are 
certain categories of individuals for whom any alcohol consumption at 
all is not recommended. Accordingly, the final rule provides that any 
specific health claim must outline the categories of individuals for 
whom any levels of alcohol consumption may cause health risks. The Beer 
Institute commented that ATF's proposed standard on this issue made it 
unclear whether ``disclaimers

[[Page 10090]]

are required only for categories of individuals whose potential 
negative health effects are literally numerous or whether the potential 
negative health effects would be aggregated for the purposes of 
performing the balancing test envisioned by the proposed regulation.'' 
(Comment 396). Accordingly, the final rule clarifies that this 
requirement is intended to cover the categories of individuals for whom 
alcohol consumption is not recommended (e.g., pregnant women, 
individuals taking certain medications, etc.).
    We do not agree with CEI and CA that it is unnecessary to set forth 
this information in conjunction with a health claim because these 
people know who they are. For example, it is not at all clear that most 
consumers know that alcohol can interact harmfully with a variety of 
prescription and over-the-counter medications. It is TTB's conclusion 
that any labeling or advertising statement that makes a substantive 
health claim regarding alcohol consumption would mislead consumers if 
it does not set forth this important information about the adverse 
consequences of alcohol consumption. Notwithstanding the above, we find 
that the rulemaking record does not support a conclusion that health 
claims in the labeling and advertising of alcohol beverages are 
inherently misleading. Nor does the record support a conclusion that 
the potentially misleading nature of such claims cannot be cured with 
the appropriate use of disclaimers and qualifying statements.
    Initially, it should be noted that none of the commenters who 
supported a total ban on the use of health claims in the labeling and 
marketing of alcohol beverages presented consumer data on the use of 
substantive health claims in the labeling or advertising of alcohol 
beverages. Thus, we have no consumer data establishing that consumers 
would be misled by the use of properly qualified health claims that are 
sufficiently detailed and specific, and which disclose the adverse 
health consequences of alcohol consumption.
    A complete ban on the use of health claims or health-related 
statements in the labeling and advertising of alcohol beverages would 
prohibit even the most qualified, detailed, and balanced discussion of 
health consequences in advertising materials. For example, in Industry 
Circular 93-8, ATF advised industry members that the regulations did 
not prohibit them from including the entire text of NIAAA's April 1992 
edition of ``Alcohol Alert'' in advertising materials. This NIAAA 
publication presents a comprehensive overview of the benefits and risks 
associated with alcohol consumption. If the regulations imposed a 
complete ban on advertising materials that included health-related 
statements, then industry members would no longer be allowed to include 
this NIAAA publication in advertising materials. Yet TTB finds nothing 
in the record to establish that the inclusion of this type of 
comprehensive discussion of effects on health in an advertisement in 
any way misleads consumers as to the health risks of alcohol 
consumption. Accordingly, we find that the record does not support an 
overall ban on the use of specific health claims and health-related 
statements in the advertising of alcohol beverages.
    A closer issue is presented by the labeling of alcohol beverages. 
As ATF noted in Industry Circular 93-8, we believe that it would be 
difficult to compose a health claim that is detailed and specific 
enough to meet our standards, yet short enough to fit on a traditional 
alcohol beverage label. In addition, TTB will not approve any labeling 
health claim that contradicts the message of the required Government 
warning statement.
    TTB agrees with the commenters who suggested that a summary 
substantive health claim which does not include sufficient detail and 
qualification would mislead consumers about the serious health 
consequences of alcohol consumption. However, we do not believe that 
this provides a basis for banning all substantive health claims on 
alcohol beverage labels. Instead, as set forth above, TTB is making 
changes to the final rule to clearly provide that a specific health 
claim will not be allowed unless it is truthful and adequately 
substantiated by scientific or medical evidence; sufficiently detailed 
and qualified with respect to the categories of individuals to whom the 
claim applies; adequately discloses the health risks associated with 
both moderate and heavier levels of alcohol consumption; and outlines 
the categories of individuals for whom any levels of alcohol 
consumption may cause health risks.
    We disagree with the arguments made by CEI and CA, the only 
commenters who specifically favored allowing industry members to make 
summary statements regarding health benefits that contained no 
qualification, balance, or disclosure of adverse effects. In the first 
place, the record did not establish that there was any concrete 
interest on the part of the alcohol beverage industry in using the 
summary health claim proposed in the CEI petition. Secondly, we find 
that statements such as the one proposed by CEI would mislead consumers 
by not disclosing the significant adverse effects on health associated 
with alcohol consumption, which are set forth in great detail in this 
rulemaking record.
    TTB has not drafted a model health claim for use on alcohol 
beverage labels because this extensive rulemaking record has revealed 
little, if any, interest on the part of industry members in using 
substantive health claims on alcohol beverage labels. In fact, industry 
members not only failed to express such an interest, in many cases, 
they specifically disavowed any interest in using substantive health 
claims. Furthermore, as discussed further in section XVIII, any such 
claim might well subject the product to regulation as a drug under FDA 
regulations.
    Accordingly, TTB will leave it to any interested industry members 
to seek approval of a substantive health claim through the label 
approval process. The final rule sets forth the standards that would 
apply to any such labeling statement. If an industry member wishes to 
use a substantive health claim on a label in compliance with the 
standards set forth in the final rule, it should apply for a 
certificate of label approval.
    ATF announced in Industry Circular 93-8 that dissemination of the 
full text of the April 1992 edition of ``Alcohol Alert'' as published 
by NIAAA, would not be in violation of the regulations. The final rule 
does not change this policy. Furthermore, dissemination of the entire 
Dietary Guidelines as advertising materials by industry members, or 
dissemination of the two pages from the current Guidelines dealing with 
alcohol beverages (pages 36 and 37) would not violate the final rule. 
Both of these materials provide a comprehensive discussion of the 
health consequences of alcohol consumption. The information in these 
materials regarding the health consequences of alcohol consumption is 
truthful and supported by scientific evidence. The information is 
sufficiently detailed, qualified and specific, and sets forth the 
health risks associated with both moderate and heavier levels of 
alcohol consumption. Both of these publications further set forth the 
categories of individuals for whom any level of alcohol consumption may 
pose health risks. Accordingly, these materials comply with the 
standards set forth in the regulations.
    As ATF stated in Industry Circular 93-8, we will continue to 
evaluate any additional text that accompanies these materials, such as 
editorializing, advertising slogans, or exhortations to consume the 
product, to determine

[[Page 10091]]

whether or not the advertisement as a whole presents truthful and non-
misleading information regarding the risks associated with alcohol 
consumption. Furthermore, the use of any buttons, shelf talkers, table 
tents, and similar items that excerpt any portion of the NIAAA 
publication or the Dietary Guidelines, or that are based on any other 
publication or article about the health consequences of alcohol 
consumption, will be closely scrutinized to determine if they tend to 
mislead consumers about the serious risks associated with alcohol 
consumption.

XVI. Are Health-Related Directional Statements Misleading?

    As previously noted, the vast majority of the commenters addressed 
the issue of health-related directional statements, such as the ones 
approved by ATF in 1999, rather than the issue of substantive health 
claims. Approximately 355 commenters expressed support for the use of 
directional statements on alcohol beverage labels. Many commenters 
stated that directional statements are not substantive health claims 
and that they merely refer consumers to other sources for information 
about the effects on health of alcohol consumption. As such, the 
commenters maintain that directional statements are not misleading to 
consumers. On the other hand, most of the approximately 120 comments in 
opposition to the use of health claims also opposed the use of health-
related directional statements in the labeling and advertising of 
alcohol beverages.

A. Comments and Testimony in Favor of the Use of Health-Related 
Directional Statements

    Most of the comments in support of directional statements shared 
the view set forth in the Wine Institute's comment as follows:

    Directing consumers to consult with their doctors or to refer to 
the Dietary Guidelines regarding the health effects of wine 
consumption constitutes a responsible and neutral message. Far from 
misleading the public, such statements are designed to educate and 
empower each individual to make fully informed choices regarding the 
consumption of wine. (Comment 401).

    The Wine Institute's comment also stated that health-related 
directional statements were ``certainly not misleading because they do 
not constitute substantive health claims in the first instance.'' They 
cited the CSAP survey, which concluded that the drinking patterns of 
88.3% of the participants would not be influenced by directional 
statements, with an additional 3.9% indicating they would drink less.
    In response to ATF's question of whether the negative consequences 
of alcohol consumption and abuse disqualified alcohol beverages from 
entitlement to health claims or health-related statements, the Wine 
Institute submitted extensive summaries of scientific studies on 
moderate consumption of wine and alcohol for the Dietary Guidelines 
Review Process. An updated compilation of that submission was attached 
to their comment. The Wine Institute stated that it ``fully subscribes 
to an open and vigorous dialogue driven by the findings of the 
scientific community on the health effects of alcohol consumption.''
    The Wine Institute submitted a supplemental comment in which it 
stated that it wished ``to underscore how critical it is to make the 
distinction between health-related statements and those in which a 
substantive claim of health benefits is advanced. A substantial number 
of submissions you have received to date appear to blur this crucial 
difference and argue against directional labels by incorrectly 
classifying such labels as health claims.'' (Comment 401b).
    Mr. John DeLuca, President and CEO of the Wine Institute, testified 
at both the Washington, DC and San Francisco, California hearings. Mr. 
DeLuca stated that he believed that wineries have a First Amendment 
right to use the directional label, and pointed to the CSAP survey as 
evidence that consumers would not increase consumption as a result of 
directional statements. (April 25, 2000; Washington, DC, page 32). He 
urged the empowerment of the public through dissemination of 
information, and urged that the public should be trusted ``to handle 
this information.'' (Id. at pages 32-33).
    When asked about substantive health claims, Mr. DeLuca stated that 
``we are not trying to sell wine as health food or as a medicine.'' 
(Id. at page 37). He said that ``we should be erring on the side of 
making it as hard as possible for someone to make a health claim. It 
really is not the province of the industry to be talking that way. We 
want third-party peer review journals research to be what is presented 
to the public, not what we put to the public.'' (Id. at page 38). In 
response to a question about whether the directional statements were 
perceived as health claims, Mr. DeLuca stated that the Wine Institute 
had withdrawn its original label submission, which included the phrase 
``health benefits,'' because they ``knew it was going to lead to a 
cascade of criticism'' and that the phrase ``health effects'' came from 
the Appropriations Committee's language in appropriating funds for NIH 
and NIAAA to research the effects on health of moderate drinking. (Id. 
at page 40).
    When asked about consumer reaction to the directional statements, 
Mr. DeLuca noted that only 17 companies had received approval from ATF 
for using directional statements before the moratorium went into 
effect--5 received approval for the Dietary Guidelines statement, and 
12 utilized the family doctor statement. (May 23, 2000; San Francisco, 
CA, pages 14-15). Mr. DeLuca stressed that the Wine Institute did not 
encourage wineries to use the label, noting that ``[w]e always thought 
of this as a voluntary option for our members. They were designed 
primarily for public policy, not for public relations, a distinction 
with an enormous difference.'' (Id. at 15).
    The AVA, a trade association of American wineries representing 
approximately 600 members, also noted that it had been involved on 
behalf of one of its members in the ATF review process for the 
directional statements approved in 1999. (Comment 417). AVA stated that 
it agreed with the applicant, Mr. Patrick Campbell, that the 
directional statement ``makes no claim, pro or con, therapeutic or 
curative, true or false. The COLA [certificate of label approval] makes 
no claim at all. It merely (and sensibly) encourages consumers to 
consult with their family doctor about their personal use of the 
product. * * * Since this COLA makes no claim, questions about its 
potential to mislead are irrelevant.'' (Comment 417). The President of 
AVA, Mr. Simon Siegl, testified at the public hearings in support of a 
winery's right to use a directional label. (April 26, 2000; Washington, 
DC, page 65).
    Many winemakers also commented in support of the use of directional 
statements. Some emphasized the neutral content of the directional 
statements. The Associated Vintage Group asked ``what can be a better 
message than referring them [consumers] to our own government's 
nutritional guides or, even better, checking with their doctors.'' 
(Comment 173). Mr. Kent Rosenblum commented that ``[d]irectional labels 
do not constitute health claims, and government survey data indicate no 
changes in drinking patterns would occur.'' (Comment 151). He then went 
on to note that ``[t]here is a developing scientific consensus that 
moderate wine and alcohol consumption can be part of

[[Page 10092]]

a healthy diet and lifestyle for those who choose to drink.''
    Other wineries specifically referenced the directional statements 
as providing balance to the Government warning statement, or referring 
to the ``benefits'' of consumption. For example, De Rose Vineyards 
commented that ``[t]he U.S. Dietary Guidelines for Americans 
constitutes a responsible and neutral message.'' The winery also stated 
that ``[t]here is a very substantial body of scientific data that 
verifies the efficacy and healthfulness of moderate wine consumption. 
Withholding this most helpful and beneficial information, and instead 
only emphasizing the harmful effects of wine consumption, is ludicrous 
and ultimately destructive and irresponsible. A forthright balance of 
both positive and negative simply educates an informed public and 
allows them to make responsible decisions.'' (Comment 172). Two other 
wine producers made similar comments (Comments 214 and 387).
    Many commenters who did not identify themselves as being part of 
the wine industry also supported the directional statements. Some 
supported the general concept of directing consumers to the Dietary 
Guidelines or their physician for more information about the effects on 
health of alcohol consumption. One suggested that ``[t]he wording is 
neutral and not positive, thereby serving as education rather than 
propaganda.'' (Comment 332). Several commenters referred to the 
consumer survey conducted by CSAP as evidence that the statements did 
not mislead consumers.
    Some commenters argued that consumers have a right to know all the 
scientific information available on both the positive and negative 
effects of various levels of alcohol consumption, and that such 
information allows consumers to make informed decisions regarding 
alcohol consumption. For example, one commenter stated that ``people 
are generally capable of making sensible decisions, if assisted by 
complete information. * * * Moreover, the small minority who do not 
make sensible decisions will not be deterred by suppressing the 
presentation of accurate, balanced information.'' (Comment 423). An 
individual suggested that ``in an era when we all are trying to 
eliminate governmental control of those areas of our lives where we can 
be treated as adults, it seems odd for you to be against a neutral 
statement that wine drinkers should consult their doctors about the 
possible health benefits of wine.'' (Comment 136).
    Many of the commenters suggested that the directional statements or 
other positive health-related statements were necessary to ``balance'' 
the negative information provided by the Government warning statement. 
For example, one commenter supported the directional statements because 
the warning statement should be supplemented with ``equally valid'' 
information ``explaining the benefits and positive effects of 
responsible consumption.'' (Comment 296). Another individual supported 
the use of ``positive health related statements'' and stated that 
``[t]he wine industry deserves to be afforded an opportunity to address 
the latest beneficial health aspects of moderate wine consumption, as 
outlined in the U.S. dietary guidelines, on its products. The entire 
thrust of Government Warning labels has been entirely negative.'' 
(Comment 240).
    Finally, some commenters argued that the Government should 
encourage consumers to seek the best advice possible from the most 
credible sources available on any health issue. With respect to the 
consumption of alcohol beverages, the National Association of Beverage 
Retailers suggested that ``[p]hysicians and the U.S. Dietary Guidelines 
are among the most credible sources available to give professional, 
objective, responsible and balanced advice on an important health 
issue.'' (Comment 424).
    At the hearings, several doctors testified in support of the 
directional labeling statements. Some specifically supported the 
statement encouraging consumers to consult with their physician. For 
example, Dr. Michael Apstein, a gastroenterologist and liver doctor, 
testified that advice regarding alcohol consumption should be targeted 
to specific populations rather than generalized for the entire 
population. He stated that ``[t]hese are complex issues that can't 
easily be summarized on a label that goes on a wine bottle. They need 
to be discussed with a person's physician and individualized to that 
person's situation. Therefore, I am in favor of a directional label 
that advises individuals to discuss this topic with their physicians, 
because I am hopeful that a directional label will stimulate another 
kind of educational experience, so people can use alcohol responsibly 
if they so desire and avoid it if they should be avoiding it.'' (April 
25, 2000; Washington, DC, page 167).
    Similarly, Dr. Harvey Finkel, a physician and clinical professor of 
medicine, testified that both directional statements should be allowed, 
stressing the importance of advising consumers to consult their 
doctors, because the public has a right to be fully informed about the 
health consequences of alcohol consumption. (April 26, 2000; 
Washington, DC, pages 30-33). Mr. George Linn, a consumer, also 
testified in support of the concept of referring consumers to their 
physicians for more individualized advice about alcohol consumption. 
(May 24, 2000; San Francisco, CA, page 256). On the other hand, Dr. 
Paul Scholten, an associate professor of obstetrics, gynecology, 
reproductive medicine, and nursing, testified in support of the 
directional statement referring consumers to the Dietary Guidelines, 
but expressed concerns about whether doctors were well trained to 
advise patients about the health consequences of alcohol consumption. 
(May 23, 2000; San Francisco, CA, pages 170-171).
    Some individuals commented in support of the general concept of 
directional statements. Dr. Dwight Heath, a Professor of Anthropology, 
testified that while he opposed the use of substantive health claims, 
he favored the use of the directional statements on labels. (April 26, 
2000; Washington, DC, page 13). Dr. Heath suggested that the more 
people know about alcohol consumption, the less likely they are to have 
alcohol-related problems. (Id. at page 5). Similarly, Professor R.L. 
Williams, of the Oenological Research Facility of Old Dominion 
University, stated that in his opinion, ``the level of scientific 
information regarding the positive health effects of moderate 
consumption of wine is now quite overwhelming. * * * This information 
should be made more available to the consumers in regard to the 
directional health statements.'' (April 26, 2000; Washington, DC, page 
91). Mr. Archie Brodsky, a senior research associate in psychiatry and 
the law, testified in favor of the use of directional statements on 
alcohol beverage labels. He stated that the CSAP survey confirmed that 
the labels would have a ``negligible'' influence on consumers'' 
drinking habits. (April 26, 2000; Washington, DC, page 171).
    Mr. Patrick Campbell of Laurel Glen Winery, who submitted the first 
directional statement to ATF for approval in 1995, testified on behalf 
of the Coalition for Truth and Balance. Mr. Campbell stated that 
discussion of the health benefits or risks of alcohol consumption was 
not relevant to a discussion of the directional statements, since ``the 
approved messages do not constitute health-related statements or make 
substantive claims regarding health benefits.'' (May 23, 2000; San 
Francisco, CA, page 75). He asserted that the message encouraging 
consumers to consult with their family doctors ``is neither true nor 
false. It makes no claim

[[Page 10093]]

* * * positive or negative, therapeutic or curative, pro or con.'' (Id. 
at 76). Mr. Campbell argued that the message was not misleading in that 
it ``presumes nothing. It presupposes nothing. It in no way directs the 
outcome of any consultation the consumer may or may not undertake with 
his or her family physician. For all the winery knows, the doctor might 
tell all of his or her patients never to touch the stuff * * *. It's a 
thoroughly neutral and impartial message.'' (Id. at 76-77).
    Mr. Campbell expressed surprise at the controversy over the 
message, and said he would have expected that ``every health 
professional and governmental agency in the country would welcome it. * 
* * After all, if you can't trust your family doctor for truthful and 
not misleading advice on health issues who can you trust?'' (Id. at 
78). Mr. Campbell noted that the American Heart Association ``publishes 
a section on alcohol in their dietary guidelines that explicitly 
recommends that patients consult with their personal physician on 
questions of alcohol use * * *.'' (Id. at 80).
    Mr. Campbell stated that on June 3, 1999, before the moratorium on 
approving directional statements went into effect, ATF approved a 
version of the directional statement which omitted the language about 
``the proud people who made this wine'' and instead read as follows: 
``We encourage you to consult with your family doctor about the health 
effects of wine consumption.'' (Id. at page 74). He stated that he now 
preferred this version, since he believes that it fits better in the 
label, it's not pompous, and it was an appropriate response to the 
people who argued that the ``proud people'' language constituted an 
implicit endorsement of alcohol consumption. (Id. at page 87).
    In response to a question from the panel, Mr. Campbell stated that 
he had gotten no feedback from consumers as to how they viewed the 
directional statements. He said that ``[n]obody's said anything, it's 
unbelievable. I mean, it cost a lot of money to put these on the 
label.'' (Id. at page 88).
    Mr. Jack Stuart testified on behalf of the Napa Valley Vintners 
Association. He stated that ``we think that the directional warning is 
a good thing. We don't consider it to be a positive health claim. If 
you take out the phrase 'proud people,' certainly it's a neutral 
statement, it's simply a way of getting information, and we think it's 
a good idea for anyone who is proposing to drink, or who does drink, or 
who does any other thing having to do with food, their diet, their 
lifestyle, to consult their physician about the choices they make in 
that regard.'' (May 24, 2000; San Francisco, California, page 200). In 
response to a question from the panel, Mr. Stuart suggested that ``to 
have a balanced message, to me the ideal would be to somehow combine 
both the warning and the directional message.'' (Id. at page 210).
    Mr. Mark Chandler, the Executive Director of the Lodi-Woodbridge 
Winegrape Commission, also testified in favor of the directional 
statements. He stated that ``[g]rowers and wineries have no intention 
to market their products as health food. But, unlike other food 
products, we are prevented by regulation from even mentioning our 
product's positive health attributes, thus the need for directional 
labels.'' (May 24, 2000; San Francisco, CA, page 250). Mr. Gordon 
Murchie testified on behalf of the Virginia Wineries Association in 
favor of the use of directional statements, calling them public service 
announcements that ``direct the concerned citizen to another source of 
professional non-biased, balanced information.'' (April 26, 2000; 
Washington, DC, page 78). In response to a question from the panel, Mr. 
Murchie said his members would be interested in using directional 
statements on labels, but were reluctant to do so until they saw that 
the statements were accepted by the Government and the public. (Id. at 
pages 86-87).
    Dr. Ellen Mack, a physician and part owner of a winery, testified 
that ``[i]f wine were considered a medication--and I'm not at all 
advocating that it should be--it would be like most other medications, 
the dose is critical. Too little may not have the desired effect, and 
too much can be dangerous or even deadly.'' (May 23, 2000; San 
Francisco, CA, page 132). Dr. Mack suggested that ``the directional 
wine labels are effective agents in that the sources of information--
the U.S. Dietary Guidelines and personal physicians--will clearly make 
the point that the beneficial health effects result from moderate 
consumption of alcohol, and these sources will define moderate as no 
more than one drink per day for women and no more than two drinks per 
day for men.'' Id.
    Various other individuals testified in favor of the directional 
statement. For example, Ms. Annette Shafer, author of ``The Wine Sense 
Diet'' testified in favor of a ``more balanced message on the bottle,'' 
suggesting that the warning label is ``very one-sided.'' (May 24, 2000; 
San Francisco, CA, page 212).

B. Comments and Testimony in Opposition to Directional Statements

    Public health organizations and other commenters raised the 
following specific objections to the use of directional health-related 
statements in the labeling and advertising of alcohol beverages.
1. Directional Statements Are Implicit Health Claims That Reinforce the 
Inaccurate Perceptions of Consumers About Alcohol and Health
    CSPI commented that the directional statements were actually 
implied health claims. Its comment argued that the ``reference to the 
'health effects of wine consumption' offers no useful information, but 
simply reinforces existing inaccurate knowledge about the health 
benefits of alcohol consumption, as spread through the media and the 
wine industry's misleading publicity campaign, and implies that those 
benefits are substantial and universal.'' (Comment 400).
    The American Cancer Society noted that ``[w]ith the publicity in 
the past few years about the health benefits of consuming alcoholic 
beverages, any less-detailed claim or reference to health impacts or 
benefits might be interpreted by the uninformed consumer as a 
suggestion that people should drink alcohol for their health. 
Sufficient information is needed to allow consumers to make a well-
educated decision regarding their risk from consumption of this 
product.'' (Comment 527). Accordingly, the American Cancer Society 
concluded that directional labels ``may mislead the general public 
regarding the health benefits of alcohol consumption by providing 
inadequate information regarding the risks.''
    Senator Thurmond commented that the directional statements were 
inherently misleading. He stated that it was unlikely that consumers 
who read the directional statements would actually send for the Dietary 
Guidelines or consult their physicians. Instead, Senator Thurmond 
suggested that ``consumers may be left with the impression that these 
statements refer to studies that suggest drinking alcohol may have some 
positive health benefits.'' He noted that ``[t]his impression may 
reinforce inaccurate assertions about the health benefits of alcohol 
consumption spread through the media. These statements may also be 
inappropriately viewed as the government's endorsement of drinking. 
However, any suggestion that the government endorses drinking for 
health reasons is false.'' (Comment 526).

[[Page 10094]]

2. Directional Statements Undermine the Mandatory Government Warning 
Statement and May Be in Violation of the Alcoholic Beverage Labeling 
Act
    NCADD's comment stated that the directional statements approved by 
ATF in 1999 ``are misleading and potentially confusing to consumers in 
juxtaposition to the federally mandated government warning on all 
alcoholic beverage containers sold in the United States.'' (Comment 
15). Similarly, MADD commented that ``[t]he public and particularly 
youth are being given a mixed message with the inclusion of `health 
messages' in alcohol advertising and on warning labels and the net 
result is consumer confusion.'' (Comment 20). MADD also noted that 
``[w]arning labels on alcoholic beverages were created for a specific 
purpose--to make the consumer aware of the potential harm they could 
suffer as a result of the use or abuse of the product.''
    The United Communities Against Drug & Alcohol Abuse commented that 
``Congress has already required a warning statement on alcoholic-
beverage containers. Any other reference to health impacts or benefits 
is likely to confuse consumers and undermine the impact of the existing 
warning statement.'' (Comment 31). The American Council on Alcohol 
Problems urged ATF ``not to contribute to confusion by allowing any 
insinuation of health benefits from alcohol consumption.'' (Comment 
37).
    Dr. Thomas Greenfield, a psychologist, testified in opposition to 
the use of health-related statements. He stated he was principal 
investigator of the Impact of Alcoholic Beverage Warning Labels 
Research Project from 1991-1997. He stated that research showed that 
the mandatory Government warning statement had ``fragile but beneficial 
effects'' and that ``one must be concerned that a vague health effects 
message, by implication positive, may wipe out the small gains in 
reminding the public of situational hazards of drinking when driving or 
pregnant, and also the health risks.'' (May 24, 2000; San Francisco, 
CA, pages 182-183). He suggested that in order to be truly neutral, a 
directional statement ``should have a tone that would be to look at the 
health risks and health benefits, and potential health benefits. And 
one would have to do it in such a way that it emphasized that--which 
is, we believe, strongly the case--that the health benefits [are] * * * 
relatively small in comparison to the health harms.'' (Id. at page 
191).
    CSPI commented that if ATF allowed any health claim or health-
related statement on a label, it ``should be worded and displayed in a 
manner that does not overshadow, contradict, or undermine the 
government warning label. For example, the claim should appear in the 
same type size and style as the government warning label, and should 
not contain any claim that contradicts any of the statements in the 
warning label.'' (Comment 400).
    Senator Thurmond testified that the purpose of the ABLA was to 
provide ``a clear, non-confusing reminder of the health hazards 
associated with alcohol consumption.'' (April 25, 2000; Washington, DC, 
page 17). Senator Thurmond suggested that ``the two directional 
statements which the ATF approved last year dilutes the required 
warnings and, worse, may be seen as the government's endorsement of 
drinking. As one of the authors of the Alcohol Beverage Labeling Act, 
let me stress that the intent of the legislation was to exclude such 
misleading statements.'' Id. In response to the First Amendment 
concerns raised by some individuals, Senator Thurmond suggested that at 
a minimum, ``groups supporting health-related statements should be 
required to prove beyond any reasonable doubt that such claims are not 
misleading and do not detract from the government warning.'' (Id. at 
page 18).
    In addition to Senator Thurmond's comment, a letter signed by 
Senators Thurmond, Byrd, and Helms supported a ban on all health-
related statements and directional health statements on labels. 
(Comment 526). In this comment, the three Senators stated that the 
directional statements approved by ATF in 1999 ``dilute the required 
government warning and mislead consumers. In fact, these labels might 
inappropriately be seen as the government's endorsement of alcohol 
consumption.'' The comment also noted the difficulty of presenting a 
balanced statement on the effects on health of alcohol consumption on 
an alcohol beverage label. The Senators stated that ``Congress has 
spoken clearly on this important public health issue. The purpose of 
the ABLA should not be subverted.''
3. Directional Statements Are Misleading Because Drinkers Are Unlikely 
To Seek Health Information
    Many commenters suggested that the directional statements were 
misleading because the CSAP consumer survey established that consumers 
who read the directional labels were unlikely to seek additional 
information from their doctors or send for the Dietary Guidelines. For 
example, CSPI argued that ``referring consumers to a government 
publication which offers balanced information is only credible if there 
is a reasonable likelihood that such referral will in fact result.'' 
(Comment 400). CSPI suggested that ``according to consumer research, 
few people would actually look at or write for the Dietary Guidelines 
on the basis of the label language.'' CSPI and others questioned 
whether consumers would get complete information from either the 
Dietary Guidelines or their doctors.
    Similar points were raised in the testimony of Mr. James Mosher on 
behalf of the California Council on Alcohol Policy, a nonprofit 
membership organization dedicated to promoting public health approaches 
to the prevention of alcohol-related problems. Mr. Mosher argued that 
the directional labels were inherently misleading and thus did not 
constitute protected commercial speech under the First Amendment. 
Because the directional statements themselves make no claim about the 
effects on health of alcohol consumption, Mr. Mosher suggested that the 
key to determining whether they would mislead consumers depends upon 
``the sources to be consulted, the likelihood of consumers actually 
consulting them, and the possibility that the wording will lead to 
consumer confusion, misleading or deceptive impressions.'' (May 23, 
2000; San Francisco, CA, page 92).
4. Directional Statements Are Misleading Because Drinkers Are Likely To 
Rationalize Their Consumption Patterns
    As previously mentioned, several doctors who have been certified by 
the American Society of Addiction Medicine commented in opposition to 
the use of both health claims and health-related directional statements 
in the labeling and advertising of wines. These commenters suggested 
that health claims and directional statements could be misconstrued by 
problem drinkers in order to rationalize their own levels of 
consumption. For example, one doctor suggested that these statements 
could be misconstrued by consumers, because ``consumers, especially 
those with a vulnerability to alcoholism, may take the message as an 
endorsement of excessive drinking.'' Accordingly, he urged that ATF 
``prohibit the alcoholic-beverage industry from making these misleading 
and potentially dangerous claims.'' (Comment 167).
    Another medical doctor urged ATF to rescind approval of the 
directional labeling statements, stating that ``[a] brief message on 
any beverage container will not provide consumers with adequate 
information about use of alcohol for health-related reasons. Due

[[Page 10095]]

to the publicity in the past few years about the health benefits of 
moderate alcohol consumption, a brief label may be interpreted by the 
uninformed consumer as a government-authorized statement supporting 
consumption of alcohol for health benefit.'' (Comment 410).
    NCADD also cited the CSAP study as establishing that focus group 
members were ``generally aware'' of the reports on positive effects on 
health of wine consumption, and that the heavier drinkers were more 
aware of the media reports. NCADD suggested that heavy drinkers would 
use these ``beliefs'' about the effects on health of wine consumption 
to justify their drinking levels. (Comment 15).
    Ms. Joan Kiley, coordinator of the Alcohol Policy Network of 
Alameda County, testified in favor of a complete ban on health claims 
or health-related statements in the labeling or advertising of alcohol 
beverages. She stated that the directional statements were inherently 
misleading, since they were ``incomplete statements that do not put 
research results in their proper context.'' (May 24, 2000; San 
Francisco, CA, page 228). Ms. Kiley noted that ``[c]onsumers are not 
always aware of the effect that images and attitudes promoted in 
advertising have on their own desires.'' (Id. at page 232). In response 
to a question from the panel, Ms. Kiley said that in her experience, 
people with alcohol problems were ``very skilled at finding good 
reasons to drink. They * * * can use a multiple number of reasons to 
drink, that might just be another one.'' (Id. at page 239).
5. Directional Statements Could Be Interpreted as the Government's 
Endorsement of Alcohol Consumption
    The former Surgeon General, Dr. David Satcher, testified that it 
was important to ``carefully consider any action, whether it involves 
the health warning or claims that could encourage underage drinking or 
mislead about the very real, adverse health consequences.'' (April 25, 
2000; Washington, DC, page 73). Dr. Satcher stated he was ``concerned 
that references to the U.S. dietary guidelines on the labels of certain 
wine products could wrongly lead consumers to conclude that consumption 
of wine would reduce health risks or that it was recommended by 
guidelines or by family physicians. References to alcohol in the 
guidelines should not be construed as evidence of health benefits nor 
encouragement that consumers drink. * * * In fact, the Public Health 
Service does not recommend consumption of alcohol beverages.'' (Id. at 
page 74).
    The Marin Institute for the Prevention of Alcohol and Other Drug 
Problems (Comment 324) suggested that the directional statements 
attributed positive effects on health to the consumption of alcohol 
beverages, and were thus ``misleading and potentially dangerous because 
media and marketing messages can be misinterpreted as public health 
recommendations.'' The Marin Institute stated that the ``60 Minutes'' 
report on the possible heart protective effects of drinking red wine 
led to a 44 percent increase in red wine sales. They quoted the 
marketing manager of a winery as stating in ``Impact'' magazine in 1997 
that information about health benefits was ``increasing consumption 
more than anything else.'' Ms. Hilary Abramson testified on behalf of 
the Marin Institute at the San Francisco hearing that the so-called 
French Paradox (``the apparent coexistence in France of a low heart 
disease rate and a diet rich in saturated fat, and the belief that 
alcohol [red wine] is the explanation for it'') had been overestimated, 
and the French heart disease statistics underestimated. She stated that 
after the 60 Minutes Broadcast in November 1991 on the French Paradox, 
``sales of red wine in the United States rocketed 44%, and a Gallup 
poll showed that 58% of Americans were aware of research linking 
moderate drinking to lower rates of heart disease.'' (May 23, 2000; San 
Francisco, CA, pages 115-116).
    Similarly, the Greater Spokane Substance Abuse Council's Prevention 
Center commented that ``[a]ny statement or labeling in reference to 
supposed `health benefits' could be construed by an uninformed consumer 
population as a government endorsement to consume a likely harmful 
product.'' (Comment 32). The American Council on Alcohol Problems also 
commented that ``[i]f health claims are allowed on labels or even 
implied, many uninformed consumers would interpret this as a government 
sanctioned statement suggesting that people drink alcohol for their 
health. Quite to the contrary, research clearly shows that any measure 
which increases the level of alcohol consumption will result in 
increased levels of disease and accidents.'' (Comment 37).
6. Other Testimony Against Directional Statements
    Many of the medical experts who testified at the public hearings 
expressed concerns that the directional statements would mislead 
consumers about the effects on health of alcohol consumption. For 
example, Dr. Camargo concluded that ``with all of these variety of 
factors influencing the net health effect of alcohol, I think it is 
really quite foolhardy to believe that any one-sentence generic health 
claim about moderate wine consumption would serve public-health 
interests, or even provide reliable consumer advice. In addition to the 
gross simplification of a complex risk/benefit analysis, the labels 
will also lead to several other levels of confusion.'' (April 25, 2000; 
Washington, DC, page 90). In particular, he noted that few consumers 
would actually consult the Dietary Guidelines for information on the 
effects of alcohol consumption, that many people who notice the label 
would interpret the phrase ``health effects'' as ``healthy effects,'' 
that there is considerable confusion about what constitutes moderate 
drinking, and that if consumers do consult their family physician, ``it 
is very unlikely the physician will be in a position to provide 
accurate, up-to-date information about all of the risks and benefits of 
moderate drinking.'' (April 25, 2000; Washington, DC, pages 91-92). Dr. 
Camargo also noted that ``generic health claims are likely to be 
misinterpreted by those at greatest risk of alcohol problems, a group 
that would likely use the health claim to justify continued or 
increased consumption of excessive alcohol with all of its attendant 
health hazards.'' (Id. at page 92).
    Dr. Criqui also testified that because of the negative health 
consequences associated with alcohol consumption and abuse, the 
directional statements are inherently misleading. (May 23, 2000; San 
Francisco, CA, page 60). He stated that the approved directional 
statements appear to implicitly endorse the value of alcohol as a 
pharmacological protective agent. (Id. at page 59). Dr. Criqui offered 
his opinion that consumers interpret the approved statements as 
substantive health claims, which means that at least for most people 
drinking is good and has health benefits and that the Government 
endorses this position. Because the directional statements are recent 
and come in the context of media discussion about the possible benefits 
of alcohol consumption, Dr. Criqui stated that the statements are 
likely to be interpreted as implicitly endorsing alcohol consumption as 
being potentially healthy, since they do not emphasize or even mention 
the dangers of alcohol consumption. (Id. at pages 59-60).
    Some people suggested that consumers would interpret the 
directional statements as making positive health-related claims simply 
because of an assumption that the industry would not use the statements

[[Page 10096]]

unless they were positive. For example, Dr. Duke, representing the 
Ethics and Religious Liberty Commission, the moral concerns agency for 
the Southern Baptist Convention, suggested that the directional 
statements were misleading because they ``create an impression of 
endorsement of the health claims made by the alcohol industry. * * * 
The average person would not conclude that the alcohol industry would 
direct people to information damaging to their claim. Consequently, the 
average person will assume a doctor would agree that drinking alcohol 
is good for one's health.'' (April 25, 2000; Washington, DC, 154-155).
    Ms. Diana Conti testified on behalf of the American Public Health 
Association in support of a ban on all health-related statements on 
labels and in advertisements, other than the required warning 
statement. Ms. Conti suggested that the directional statement regarding 
the Dietary Guidelines ``provides no specific information, no 
definition of moderate drinking, and no cautions to those who should 
not drink. The message is confusing and it's contradictory to the 
warning label.'' (May 23, 2000; San Francisco, CA, page 106). She 
stated that ``[t]he lack of substantive information creates the 
impression that the government says moderate wine consumption is good 
for your health, and few, if any, will actually read the guidelines for 
the more complete information.'' (Id. at page 107).

C. Decision

    When ATF approved the directional statements in 1999, it concluded 
that the record did not establish that the statements would mislead 
consumers about the risks associated with alcohol consumption. ATF 
relied heavily upon the CSAP consumer survey, which concluded that the 
directional statements would not encourage most consumers to alter 
their consumption levels or patterns.
    After careful consideration of the comments and testimony on this 
issue, it is TTB's conclusion that while the two directional statements 
approved in 1999 were worded in a way that was intended to represent a 
neutral referral to doctors or the Dietary Guidelines for additional 
information, the statements were capable of being interpreted in a very 
different fashion. In particular, the statements could be interpreted 
as encouraging the consumption of alcohol for health reasons.
    While the CSAP survey established that the vast majority of 
consumers would not alter their consumption patterns after exposure to 
the two directional statements, it did not explore whether consumers 
would interpret the statements as encouraging the consumption of 
alcohol for health reasons. Since TTB has no consumer data on this 
issue, we must rely upon the secondary data that is available to us, 
including the opinions of medical and public health experts in the 
field of alcohol and health.
    Initially, TTB would note that many media reports about approval of 
the directional statements referred to these statements as health 
claims or references to health benefits. See section VII, infra. We 
recognize that these reports only indirectly reflect consumer reactions 
to the directional statements, and that they may have been influenced 
by the industry's or the public health sector's characterizations of 
the statements. Nonetheless, to the extent that these media reports 
both reflect and shape the perceptions of consumers, we believe that 
these reports are persuasive evidence that the directional statements 
are perceived by many as making a positive claim about the effects on 
health of alcohol consumption.
    We are also persuaded by the opinions of many of the foremost 
public health experts in the nation. These public health experts 
believe that the allegedly neutral directional statements in fact 
communicated a message that the Government endorsed drinking for health 
reasons, or that the Dietary Guidelines or a family physician would 
endorse the consumption of alcohol for health reasons. For example, the 
former United States Surgeon General testified that he was ``concerned 
that references to the U.S. dietary guidelines on the labels of certain 
wine products could wrongly lead consumers to conclude that consumption 
of wine would reduce health risks or that it was recommended by 
guidelines or by family physicians.'' (April 25, 2000; Washington, DC, 
page 74). Similarly, the American Cancer Society noted that ``[w]ith 
the publicity in the past few years about the health benefits of 
consuming alcoholic beverages, any less-detailed claim or reference to 
health impacts or benefits might be interpreted by the uninformed 
consumer as a suggestion that people should drink alcohol for their 
health'' and concluded that directional labels ``may mislead the 
general public regarding the health benefits of alcohol consumption by 
providing inadequate information regarding the risks.'' (Comment 527). 
Other commenters, including the American Medical Association and the 
Marin Institute, supported a ban on directional statements for similar 
reasons.
    TTB also finds persuasive the testimony of many of the foremost 
experts on the medical research regarding alcohol and health. For 
example, Dr. Camargo testified that in his opinion, consumers would 
interpret the phrase ``health effects'' to mean ``healthy effects.'' 
(April 25, 2000; Washington, DC, pages 90-92). Dr. Criqui offered his 
opinion that the approved directional statements appear to implicitly 
endorse the value of alcohol as a pharmacological protective agent, and 
that consumers interpret the approved statements as substantive health 
claims meaning that at least for most people drinking is good and has 
health benefits and that the Government endorses this position. Because 
the directional statements are recent and come in the context of media 
discussion about the possible benefits of alcohol consumption, Dr. 
Criqui stated that the statements are likely to be interpreted as 
implicitly endorsing alcohol consumption as being potentially healthy, 
since they do not emphasize or even mention the dangers of alcohol 
consumption. (May 23, 2000; San Francisco, CA, pages 59-60).
    TTB does not disregard the testimony of those medical 
professionals, including Dr. Apstein, Dr. Finkel, and Dr. Scholten, who 
testified in favor of the use of directional statements. We agree that 
industry members have the right to suggest, in labels or in 
advertisements, that consumers refer to third party sources for 
additional information regarding the effects on health of alcohol 
consumption. The question presented is how to make such referrals 
without misleading consumers.
    We would also note that many of the comments in favor of the use of 
directional statements referred to the need to provide ``balance'' to 
the negative message of the health warning statement, and thus 
implicitly recognized that the directional statements were meant to 
convey a positive message about the effects on health of alcohol 
consumption. In this regard, it is noteworthy that in a comment 
submitted after the hearings were held, Beer Institute suggested that 
the position of several proponents of directional statements that such 
statements did not constitute health claims was inconsistent with those 
same proponents' attempts ``to defend the directional statements by 
relying on well-known published medical literature that attributes 
certain health benefits to the moderate consumption of alcohol 
beverages. Given the history of this issue and the evidence cited by 
supporters of the directional statements, it seems impossible to 
characterize the directional statements as anything but health claims 
subject to the automatic

[[Page 10097]]

qualifying provisions of the proposed new regulations.'' (Comment 
396b).
    After careful consideration of the comments and testimony in the 
rulemaking record, it is TTB's view that the directional statements 
approved in 1999 may be interpreted as advocating the consumption of 
alcohol beverages for health reasons. We recognize that producers of 
alcohol beverages have contended that they have a constitutionally 
protected right to advocate that consumers drink their products for 
health reasons. However, if such a claim is made on a label or in an 
advertisement, it must be made in a truthful and non-misleading 
fashion. Furthermore, such a claim would fall within the category of a 
specific health claim, and would be subject to the requirements in the 
final rule applicable to such claims. To the extent that producers 
instead wish to make a neutral referral to third parties for additional 
information regarding the effects on health of alcohol consumption, we 
believe that it is necessary to provide a disclaimer that clarifies 
that the labeling or advertising statement should not encourage 
consumption of alcohol for health reasons.
    Accordingly, the final rule provides that directional statements 
will not be allowed in the labeling or advertising of alcohol beverages 
unless accompanied by a disclaimer. The final rule provides a model 
disclaimer that alcohol beverage producers may use in conjunction with 
a general statement that directs consumers in a neutral or other non-
misleading manner to a third party for balanced information regarding 
the effects on health of alcohol (wine, distilled spirits, or malt 
beverage) consumption: ``This statement should not encourage you to 
drink or to increase your alcohol consumption for health reasons.'' It 
should be noted that in some cases, an acceptable disclaimer might be 
incorporated into the language of the directional statement itself; 
thus, if the directional statement makes it clear that it is not 
advocating consumption of alcohol for health reasons, then an 
additional disclaimer may not be necessary.

XVII. Should the Same Standards Apply to Wines, Distilled Spirits, and 
Malt Beverages?

A. Issue

    The DISCUS comment opposed the Bureau's suggested ``case-by-case'' 
approach, noting that the effects on health of alcohol consumption 
apply across the board to all beverage alcohol products. Accordingly, 
DISCUS suggested that public policy and regulatory policy require fair 
and equal treatment for each form of beverage alcohol, and any label 
statement for a beverage alcohol container should apply equally to each 
type of beverage alcohol. (Comment 530).

B. Decision

    Both the proposed and final rules make it clear that the same 
standards apply to wine, distilled spirits, and malt beverages. The 
rulemaking record does not provide a basis for setting forth different 
standards for these types of alcohol beverages. The two directional 
statements approved by ATF in 1999 were both submitted by wineries, and 
thus both referred to the effects on health of ``wine consumption.'' To 
the extent that a directional statement complies with the standards set 
forth in this final rule, it may be used in the labeling of a wine, 
distilled spirit, or malt beverage product.

XVIII. Should TTB Adopt the Procedures Set Forth in FDA's Regulations?

A. Issue

    Several commenters suggested that ATF should adopt the substantive 
standards already in place in FDA's regulations governing the use of 
health claims in the labeling of foods. FDA also raised several 
concerns about consistency between ATF's proposed regulations and its 
own health claim regulations.
    FDA (Comment 327) commented that it was ``imperative that [ATF] 
regulate these claims in a manner consistent with the provisions of the 
Federal Food, Drug, and Cosmetic Act (FFDC Act) to ensure the 
meaningful and non-misleading use of such claims.'' FDA pointed out 
that pursuant to the Nutrition Labeling and Education Act (NLEA), a 
manufacturer may make a health claim on a food label only if FDA 
determines ``based on the totality of publicly available scientific 
evidence (including evidence from well-designed studies conducted in a 
manner which is consistent with generally recognized scientific 
procedures and principles), that there is significant scientific 
agreement, among experts qualified by scientific training and 
experience to evaluate such claims, that the claim is supported by such 
evidence.'' 21 U.S.C. 343(r)(3)(B)(i).
    FDA also noted that the use of claims for foods that may have a 
negative health impact generally is not appropriate under the NLEA. The 
statute provides that a health claim may not be made for a food that 
contains, as determined by regulation, any nutrient in an amount that 
increases to persons in the general population the risk of a disease or 
health-related condition that is diet-related. 21 U.S.C. 
343(r)(3)(A)(ii). FDA may grant an exception to allow foods with 
disqualifying nutrient levels to bear a health claim if the claim is 
accompanied by a disclosure statement regarding the disqualifying 
nutrient and FDA has determined by regulation that such a claim would 
assist consumers in maintaining healthy dietary practices. 21 U.S.C. 
343(r)(3)(A)(ii) and 343(r)(2)(B). FDA requires rigorous evidence to 
support a conclusion that a health claim on a food with a disqualifying 
nutrient level would assist consumers in maintaining healthy dietary 
practices.
    FDA expressed the following concern about the use of health claims 
on alcohol beverage labels:

    Alcohol beverages are foods for which there is evidence of a 
substantial number of undisputed negative health effects. FDA has 
not evaluated the evidence supporting the putative health benefits 
of alcohol beverages. Therefore, we cannot say whether health claims 
for an alcohol beverage would be prohibited under FDA's existing 
health claim authorization process, or if not prohibited, could be 
authorized with a disclosure statement of the type required by 21 
U.S.C. 343(r)(2)(B). We are concerned, however, that the evidence 
for the well-known direct causative relationships between alcohol 
and numerous health risks would be a significant hurdle to our 
concluding that label information about a relationship between 
consumption of alcohol and a health claim could assist consumers in 
maintaining healthy dietary practices.

FDA also noted that the absence of any significant nutritive value of 
alcohol products would be another obstacle to FDA authorizing a health 
claim for alcohol beverages.
    FDA stated that it was concerned that ``certain therapeutic or 
curative claims sought by manufacturers of alcohol beverages may in 
fact be claims that would require regulation of the alcohol beverages 
as drugs.'' It noted that FDA has authority and responsibility under 
the FFDC Act to regulate all products bearing drug claims, and that the 
term ``drug'' is defined by statute to include an article ``intended 
for use in the diagnosis, cure, mitigation, treatment or prevention of 
disease.'' 21 U.S.C. 321(g)(1)(B). FDA concluded that ``[a]lcohol 
beverages could fall within this definition if their labeling contains 
drug claims.''
    FDA expressed a concern that certain health claims that would be 
allowed under ATF's proposed rule might render the product a drug 
subject to regulation under the FFDC Act. The FFDC Act

[[Page 10098]]

provides that any drug that is not generally recognized by qualified 
experts as safe and effective for use under the conditions prescribed, 
recommended, or suggested in its labeling, or that has not been used to 
a material extent or for a material time under such conditions, is a 
``new drug.'' 21 U.S.C. 321(p). A new drug may not be legally marketed 
unless FDA has approved a new drug application for such a drug. 21 
U.S.C. 331(d) and 355(a). FDA noted that the FFDC Act requires 
substantial evidence of effectiveness and evidence that the drug is 
safe for its intended use before FDA will approve a new drug 
application. 21 U.S.C. 355(d). FDA suggested that this standard 
differed from the ``not misleading'' standard proposed by the ATF 
notice of proposed rulemaking.
    FDA advised that ATF should explicitly articulate in its 
regulations the processes by which it would review claims intended for 
alcohol beverages. It stated that it was unable to determine, based on 
the proposed rule, whether the proposed process for a review of health-
related statements would be consistent with FDA's statutory and 
regulatory authorities. Accordingly, FDA urged ATF to clarify the 
process and criteria it intends to use to substantiate the validity of 
any health claims or other health-related statements before finalizing 
the proposed rule.
    The former Surgeon General, Dr. David Satcher, also testified in 
support of adopting standards ``consistent with that relied upon by the 
Food and Drug Administration or for regulated health claims for foods 
and drugs.'' (April 25, 2000; Washington, DC, page 77). Accordingly, 
``[c]laims should be based on significant scientific agreement, and 
they should be qualified to identify those categories of persons for 
whom the claims are relevant, as well as to identify those for whom the 
negative consequences would outweigh any positive effect.'' (Id. at 
page 78). In response to a question from the panel, Dr. Satcher agreed 
that there were problems with consumers self-medicating without knowing 
all the facts, noting that ``with alcohol, you also have the added 
effect that you are dealing with an addictive drug.'' (Id. at page 80). 
Senator Thurmond also commented that ``[a]pplication of the FFDC Act to 
this issue would appear to prohibit any health-related statements on 
alcohol beverage labels. It is absurd that the government would prevent 
whole milk from making health-related claims but allow such claims by 
alcohol beverages.'' (Comment 526).
    CSAP commented that ``[a]lcohol abuse and alcoholism continue to be 
among the most vexing public health problems facing the United States. 
Indeed, alcohol is the nation's number one drug problem among youth.'' 
While CSAP did not take a position on any of the issues on which 
comment was sought, it noted that ``[o]ne of the key issues challenging 
our efforts is the mixed or misleading messages that consumers receive 
from a variety of sources. The addition of health related information 
on beverage alcohol labels must be carefully considered in relation to 
the general public's understanding of alcohol-related health risk.'' 
(Comment 430).
    CSPI suggested that ATF adopt regulations similar to FDA's 
regulations under the NLEA, noting that USDA did so on a voluntary 
basis for health claims on meat and poultry. CSPI stated that under 
regulations similar to those of FDA, health claims would be prohibited 
because alcohol consumption increases the risk of other diseases, 
noting that ``[t]o allow health claims for alcohol, America's most 
devastating drug, while health claims for foods such as whole milk are 
prohibited, would be indefensible and would make a mockery of the 
federal government's health-claim regime.''
    CSPI also noted that if an alcohol beverage label or advertisement 
claims that alcohol may reduce the risk of disease, the beverage may be 
regulated as a drug by FDA. CSPI argued that, ``aside from its 
regulatory classification, alcohol is a drug. Depending on a variety of 
factors such as dose and schedule of use, individual metabolism, 
personality factors, and situation, alcohol is variously a stimulant 
and depressant, euphorigan and soporific, irritant and anxiety reducer. 
Alcohol, like other intoxicants, can produce such dependency phenomena 
as persistent search behavior, withdrawal, relapse, and loss of 
control.''

B. Decision

    After giving careful consideration to these comments, and 
consulting with FDA, TTB does not agree that its health claim 
regulations should be identical to those of FDA. FDA regulations were 
promulgated pursuant to a very specific grant of authority by Congress 
under the NLEA. Because of the differences in statutory authority, as 
well as the differences in the products regulated under these two 
statutes, TTB's regulatory scheme for health claim labeling will differ 
from FDA's regulatory scheme.
    However, TTB agrees with the FDA comment in several respects. Most 
importantly, we agree that it is important to ensure that alcohol 
beverage producers do not violate the new drug provisions of the FFDC 
Act when seeking to use specific health claims on alcohol beverage 
labels. It would be where the use of that claim would render the 
product subject to FDA's jurisdiction over drugs. Furthermore, FDA's 
authority over new drugs has significant public health and safety 
consequences. TTB does not wish to create any confusion on the part of 
industry members regarding their obligations to comply with FDA's 
requirements over drug claims.
    In the past, ATF merely advised industry members that they should 
be aware of the fact that the use of a health claim on an alcohol 
beverage label may subject the product to FDA's jurisdiction. However, 
after reviewing the comments on this issue, we met with FDA to discuss 
a process whereby TTB and FDA could consult on the use of specific 
health claims on alcohol beverage labels. In this way, FDA would have 
an opportunity to object to the use of a specific health claim, based 
on its jurisdiction over drugs, prior to any TTB action.
    Accordingly, the final rule now provides that TTB will consult with 
FDA, as needed, on the use of specific health claims on labels. If FDA 
determines that a specific health claim is a drug claim that is not in 
compliance with the requirements of the FFDC Act, TTB will not approve 
the use of such statement on a label. There is no similar provision in 
the advertising regulations, since advertisers are not required to 
obtain prior approval from TTB. We will of course consult with FDA, as 
appropriate, if the question arises as to whether an advertisement is 
in violation of the FFDC Act.

XIX. Is the Final Rule Consistent With the First Amendment?

A. Issue

    As previously noted, many commenters suggested that the proposed 
rule did not comply with the protection accorded truthful and non-
misleading commercial speech under the First Amendment. CEI and CA 
argued that ATF is precluded from placing any restrictions on the 
dissemination of truthful information about health benefits in the 
labeling and advertising of alcohol beverages. Beer Institute, DISCUS, 
and NABI suggested that the proposed advertising regulations would 
restrict protected commercial speech. Mr. Rex Davis, representing the 
President's Forum of the Beverage Alcohol Industry, testified that he 
believes the proposed rule violates the First Amendment because it 
would

[[Page 10099]]

restrict the industry from communicating the benefits of alcohol 
consumption through labels and advertisements. (April 26, 2000; 
Washington, DC, pages 133-141). Many other commenters defended the 
constitutionality of a complete ban on the use of health-related 
statements in the labeling and advertising of alcohol beverages.
    Some of the comments that (or commentators who) addressed the First 
Amendment issue suggested that while ATF would have authority to 
restrict the use of misleading health claims, a complete ban on the use 
of health-related statements would be unconstitutional. For example, 
the Washington Legal Foundation concluded that an outright ban on the 
use of truthful health claims would be unconstitutional, but stated 
that the proposed regulations, ``if properly implemented, strike the 
appropriate balance in ensuring the First Amendment rights of industry 
and consumers, and the dissemination of important information regarding 
the health benefits proven to flow from moderate consumption of alcohol 
beverages.'' (Comment 390). A comment submitted on behalf of the Oregon 
Winegrower's Association also stated that a ban on the use of health 
claims on labels or in advertisements would be unconstitutional; 
however, the comment stated that the agency should instead ``adhere to 
a policy of allowing labeling and advertising claims about such health-
related benefits to be fairly and objectively evaluated for 
substantiation, balance and qualification.'' (Comment 380).
    A comment from Mr. Erik Bierbauer (Comment 395) attached a copy of 
a note that he wrote for the New York University Law Review as a third-
year law student, entitled ``Liquid Honesty: The First Amendment Right 
to Market the Health Benefits of Moderate Alcohol Consumption,'' 74 
N.Y.U.L. Rev. 1057 (1999). The note concludes that alcohol producers 
have a First Amendment right to market the health benefits of moderate 
drinking, as long as they do so accurately and include certain limited 
disclaimers. Mr. Bierbauer suggested that while such limited 
disclaimers would be constitutionally authorized, ``the sort of 
disclosure described in ATF's Industry Circular 93-8 probably would be 
too burdensome to comply with the First Amendment.'' However, Mr. 
Bierbauer's comment suggested that ``[t]he Constitution would permit 
the government to require health-related alcohol advertisements and 
labels to mention lesser-known risks that are present at moderate 
levels of drinking. For example, the government might legitimately 
require a disclaimer warning consumers of the possible link between 
moderate drinking and breast cancer, and also a statement warning 
certain vulnerable consumers not to drink at all.'' Mr. Bierbauer 
concluded that ``[a]ds and labels that merely direct the consumer to 
other sources of information, such as the wine labels approved by ATF 
in February 1999, clearly would enjoy First Amendment protection.''

B. Decision

    As set forth in this final rule, TTB is not imposing a complete ban 
on the use of health claims or other health-related statements in the 
labeling and advertising of alcohol beverages. Accordingly, it is not 
necessary to consider whether such a ban would be constitutional. 
Instead, the final rule requires TTB to evaluate health claims on a 
case-by-case basis to determine if such claims would tend to mislead 
the consumer.
    The final rule codifies ATF's longstanding position that any 
substantive health benefit claim is considered misleading unless it is 
truthful and adequately substantiated by scientific or medical 
evidence; sufficiently detailed and qualified with respect to the 
categories of individuals to whom the claim applies; adequately 
discloses the health risks associated with alcohol consumption; and 
outlines the categories of individuals for whom any levels of alcohol 
consumption may cause health risks. The final rule clarifies that the 
identified health risks must include those associated with both 
moderate and higher levels of consumption. Thus, the rule would require 
any such claim to include appropriate qualifications and disclaimers 
about the health risks associated with alcohol consumption. In 
addition, health-related directional statements that are not 
substantive health claims must nonetheless include a disclaimer to 
clarify that the statement does not advocate the consumption of alcohol 
beverages for health reasons, or some other appropriate disclaimer to 
avoid misleading consumers. The rule's requirements for appropriate 
disclaimers and qualifications in order to avoid consumer deception 
about a health issue comport completely with the safeguards articulated 
by the Supreme Court to protect non-misleading commercial speech.
    Commercial speech is defined as speech that proposes a commercial 
transaction. Virginia State Board of Pharmacy v. Virginia Citizens 
Consumer Council, Inc., 425 U.S. 748, 762 (1976). Information on 
alcohol beverage labels is considered commercial speech. Rubin v. Coors 
Brewing Co., 514 U.S. 476, 481 (1995). Commercial speech is generally 
protected by the First Amendment; however, it enjoys a more limited 
measure of protection. Florida Bar v. Went For It, Inc., 515 U.S. 618 
(1995). Nonetheless, the Government bears the burden of justifying a 
restriction on commercial speech. See Greater New Orleans Broadcasting 
Ass'n v. United States, 527 U.S. 173, 183 (1999).
    In order to regulate commercial speech, the Government must satisfy 
a 4-prong test. Central Hudson Gas & Electric Corp. v. Public Serv. 
Comm'n, 447 U.S. 557, 563-566 (1980). First, the expression is 
protected by the First Amendment only if it concerns lawful activity 
and is not misleading. Second, the Government must establish a 
substantial interest. Third, the regulation must directly advance the 
governmental interest asserted. Finally, the regulation must be no more 
extensive than necessary to serve the interest asserted.
    In two recent cases involving alcohol beverages, the Supreme Court 
has struck down bans on truthful and non-misleading commercial speech. 
In Rubin v. Coors Brewing Co., 514 U.S. 476, 491 (1995), the Supreme 
Court applied the Central Hudson analysis in striking down the FAA 
Act's prohibition against statements of alcohol content on malt 
beverage labels unless required by State law. In 44 Liquormart, Inc. v. 
Rhode Island, 517 U.S. 484 (1996), the Supreme Court struck down Rhode 
Island's ban on advertising the price of alcohol beverages on First 
Amendment grounds. More recently, in Lorillard Tobacco Co. v. Reilly, 
533 U.S. 525 (2001), the Supreme Court struck down certain restrictions 
imposed by the State of Massachusetts on the advertisement of tobacco 
products on First Amendment grounds. However, none of these decisions 
restricts the Government's authority to regulate misleading or 
potentially misleading commercial speech.
    If commercial speech is actually misleading, then it is not 
protected by the First Amendment. If commercial speech is potentially 
misleading, the Government may regulate such commercial messages if the 
restrictions are ``no broader than reasonably necessary to prevent the 
deception.'' In re R.M.J., 455 U.S. 191, 203 (1982). Potentially 
misleading speech cannot be banned ``if the information also may be 
presented in a way that is not deceptive'' through the use of 
``disclaimers or explanation.'' Id. Requirements for disclaimers have 
been

[[Page 10100]]

upheld as long as the disclaimers are ``reasonably related to the 
State's interest in preventing deception'' and do not constitute an 
undue burden on the advertiser. Zauderer v. Office of Disciplinary 
Counsel, 471 U.S. 626, 651-53 (1985).
    TTB recognizes that under the commercial speech doctrine, there is 
a preference for disclosure over suppression. See e.g., Zauderer and 
Pearson v. Shalala, 164 F.3d 650 (D.C. Cir. 1999). In Pearson, the 
Court of Appeals for the D.C. Circuit required the Food and Drug 
Administration to consider appropriate disclaimers for health claims on 
dietary supplement labels. The Court noted that ``the government's 
interest in preventing the use of labels that are true but do not 
mention adverse effects would seem to be satisfied--at least 
ordinarily--by inclusion of a prominent disclaimer setting forth those 
adverse effects.'' 164 F.3d at 659.
    Consistent with the Supreme Court cases cited above, as well as the 
DC Circuit's ruling in the Pearson case, the final rule requires any 
industry member who wishes to make an explicit or implicit health claim 
on a label or in an advertisement to make a more complete disclosure of 
the adverse effects on health caused by alcohol consumption. The final 
rule does not impose any additional requirements on industry members 
who do not wish to make such claims. However, given the very serious 
health risks associated with alcohol consumption, TTB believes that the 
use of health claims without such qualifications and disclaimers would 
be misleading to consumers.
    The final rule is completely consistent with the preference 
expressed by the courts for disclosure over suppression in the 
commercial speech arena. The Supreme Court has held that more speech, 
not less, is the preferred means of ensuring that consumers have 
sufficient information to make informed choices in the commercial 
arena. In re R.M.J., 455 U.S. at 203. The final rule does not ``ban'' 
any type of speech regarding health claims or health-related statements 
in the labeling or advertising of alcohol beverages. Instead, the rule 
simply requires disclaimers for specific health claims and health-
related directional statements.
    CEI and CA suggested that there is no need for disclaimers in 
connection with health claims in the labeling or advertising of alcohol 
beverages. They point to the fact that the Government warning statement 
required on alcohol beverage containers already advises consumers that 
``Consumption of alcoholic beverages impairs your ability to drive a 
car or operate machinery, and may cause health problems.'' CEI and CA 
further suggest that consumers are well aware of the health risks 
associated with alcohol abuse, and there is no need to remind them of 
such risks.
    TTB does not agree with this comment. The administrative record 
contains overwhelming evidence of the serious health risks associated 
with alcohol consumption. These risks are not merely hypothetical; they 
are well documented. Among other things, the comments established that 
over 8 million American adults are alcoholics; alcohol is a known human 
carcinogen; and alcohol contributes to the deaths of more than 100,000 
Americans each year. Furthermore, alcohol abuse has devastating effects 
on innocent third parties. In 1998, 15,935 people were killed in 
alcohol-related traffic crashes, and an estimated 850,000 were injured. 
Mothers Against Drunk Driving commented that the NIH estimated that the 
overall societal costs of alcohol abuse and alcoholism in 1995 ($167 
billion) were more than 50 percent higher than the costs to society of 
illegal drug use ($110 billion). The health risks associated with 
alcohol consumption are not simply hypothetical; on the contrary, they 
present a serious public health problem in this country. Accordingly, 
the record supports a conclusion that a health claim that does not 
include information about these serious health risks would tend to 
mislead consumers about the health consequences of alcohol consumption.
    TTB also disagrees with the suggestion by CEI and CA that health-
related statements presented a necessary ``balance'' to the warning 
presented by the mandatory Government warning statement. The warning 
statement was intended by Congress to present a clear and nonconfusing 
reminder of the health hazards associated with consumption or abuse of 
alcohol beverages. See 27 U.S.C. 213. The use of health claims or other 
health-related statements without qualification or disclosure of 
adverse effects to ``balance'' the mandatory warning statement not only 
undermines the intent of the ABLA; it also tends to confuse consumers 
about the very real health risks associated with alcohol consumption.
    The administrative record contains significant evidence that 
truthful statements about certain health benefits associated with 
moderate consumption of alcohol beverages for certain individuals will 
tend to mislead consumers unless such statements are truthful and 
adequately substantiated by scientific or medical evidence; 
sufficiently detailed and qualified with respect to the categories of 
individuals to whom the claim applies; adequately disclose the health 
risks associated with both moderate and heavier levels of alcohol 
consumption; and outline the categories of individuals for whom any 
levels of alcohol consumption may cause health risks. Most consumers 
are unable to conduct or verify health research for themselves to 
determine whether a health claim is valid as to their own alcohol 
consumption, and are ill equipped to interpret the medical data, 
evaluate the potential benefits, or identify and weigh the other 
medical factors that may bear upon their individual decision to use 
alcohol for therapeutic reasons. See In re R.M.J., 455 U.S. at 202 (the 
public's comparative lack of knowledge regarding the product being 
advertised is an important factor in determining whether speech is 
misleading). A requirement for disclaimers of this nature in such a 
situation is clearly directly related to the Government's interest in 
ensuring that consumers are not misled by health statements on alcohol 
beverage labels.
    Some commenters suggested that the types of disclaimers and 
qualifications required by the proposed regulations would overly burden 
industry members who wish to make health claims about alcohol 
consumption, making such requirements unconstitutional. CEI and CA 
suggested that ``summary'' health claims for alcohol consumption are 
just as truthful as other short health claims allowed by FDA for diets 
low in saturated fat and cholesterol, as well as diets low in sodium. 
Other commenters suggested that because an alcohol beverage label is 
not large enough to include the volume of information necessary in 
order to give consumers a complete picture of the effects on health of 
alcohol consumption, such statements should be banned completely from 
alcohol beverage labels.
    TTB agrees that the regulations make it difficult to present a 
substantive health claim (for example, one involving cardiovascular 
benefits associated with moderate alcohol consumption) on an alcohol 
beverage label, because of the level of qualification and explanation 
that would be necessary to set forth the risks associated with such 
consumption. TTB would also note that there seems to be an overwhelming 
lack of interest on the part of the alcohol beverage industry in using 
such health claims on alcohol beverage labels. The comments from major 
trade associations representing wineries, importers, brewers, and 
distillers did not indicate a concrete

[[Page 10101]]

interest in using substantive health claims in the labeling or 
advertising of alcohol beverages. One lawyer testified in support of a 
664-word labeling statement regarding effects on health and asserted 
that members of the wine industry had the right to make such 
statements; however, in response to questioning, he conceded that such 
a long statement would not be likely to be used on a label.
    In the absence of any concrete indications of industry interest in 
using substantive health claims on alcohol beverage labels, there is no 
reason for TTB to draft a model health claim for use by industry 
members. Discussions of whether the regulations would unduly burden the 
industry's ability to use qualified and truthful health claims in the 
labeling of alcohol beverages will be better informed if and when 
industry members submit such statements to TTB for review. Nothing in 
the regulation itself indicates that the requirements for qualification 
and balance are unduly burdensome. Furthermore, it must be concluded 
that the length of any required disclaimers and qualifications are 
directly related to the serious health risks associated with alcohol 
consumption, rather than any desire by the Government to suppress 
speech. In particular, the comparison made by CEI and CA with claims 
regarding diets low in saturated fat and cholesterol or diets low in 
sodium is not persuasive in the absence of any suggestion that such 
diets are associated with the types of documented health risks 
associated with alcohol consumption. Accordingly, TTB concludes that 
the requirements of the regulations do not unduly burden speech about 
the effects on health of alcohol consumption.
    Because the directional statements do not make substantive health 
claims, but instead have been interpreted as implicitly encouraging the 
consumption of alcohol for health reasons, TTB does not believe it is 
necessary to require the same level of detail in the disclaimers 
required to ensure that such statements do not mislead consumers. In 
addition, there clearly is interest on the part of several industry 
members in using the directional statements. Accordingly, we have 
provided a model disclaimer that may be used by industry members in 
conjunction with such directional statements in order to avoid 
misleading consumers. This one-sentence disclaimer is not overly 
burdensome, and complies with the court cases allowing the Government 
to mandate disclosures necessary to prevent consumer deception. TTB 
will consider other disclaimers on a case-by-case basis.
    Accordingly, the final rule is in accordance with the case law 
under the commercial speech doctrine. Because the rule does not ban any 
speech, but merely sets forth the type of qualification, detail, and 
disclosure required in order to set forth a non-misleading health-
related statement in the labeling or advertising of alcohol beverages, 
the rule is completely consistent with the First Amendment protection 
accorded truthful and non-misleading commercial speech. On the other 
hand, the rule is also consistent with TTB's statutory responsibility 
to protect consumers from misleading commercial speech regarding the 
serious effects on health of alcohol consumption.

XX. Final Rule

    Accordingly, this final rule amends the regulations to provide that 
labels and advertisements may not contain any health-related statement, 
including a specific health claim, that is untrue in any particular or 
tends to create a misleading impression. A specific health claim on an 
alcohol beverage label or advertisement will be considered misleading 
unless it is truthful and adequately substantiated by scientific or 
medical evidence; sufficiently detailed and qualified with respect to 
the categories of individuals to whom the claim applies; adequately 
discloses the health risks associated with both moderate and heavier 
levels of alcohol consumption; and outlines the categories of 
individuals for whom any alcohol consumption poses risks. This 
information must appear as part of the specific health claim and, in 
the case of advertising, must also appear as prominent as the specific 
health claim. In addition, TTB will consult with FDA, as needed, on the 
use of specific health claims on labels. If FDA determines that a 
specific health claim is a drug claim that is not in compliance with 
the requirements of the FFDC Act, TTB will not approve the use of such 
statement on a label.
    The final rule provides that a health-related statement that is not 
a specific health claim or a health-related directional statement will 
be allowed in the labeling or advertising of alcohol beverages only if 
TTB determines that the claim is not untrue in any particular and does 
not tend to create a misleading impression as to the effects on health 
of alcohol consumption. We will evaluate such statements on a case-by-
case basis and may require as part of the health-related statement a 
disclaimer or other qualifying statement to dispel any misleading 
impression created by the health-related statement.
    With regard to the ``directional'' statements approved by ATF in 
1999, we recognize that the producers of alcohol beverages may have a 
protected right under the First Amendment to convey the message on 
labels and in advertisements that consumers should refer to their 
doctors or the Government's Dietary Guidelines for additional 
information about the effects on health of alcohol consumption, as long 
as that message is conveyed in a fashion that does not mislead 
consumers about the health consequences of alcohol consumption. As 
discussed above, TTB has also determined that without disclaimers, the 
directional statements approved in 1999 tended to mislead consumers 
about the health consequences of alcohol consumption.
    Accordingly, the final rule provides that a health-related 
directional statement is presumed misleading unless it directs 
consumers in a neutral or other non-misleading manner to a third party 
or other source for balanced information regarding the effects on 
health of alcohol consumption and includes as part of the health-
related directional statement a brief disclaimer stating that the 
statement should not encourage consumption of alcohol for health 
reasons, or some other appropriate disclaimer to avoid misleading 
consumers.
    As a clarifying change, the final rule uses the term ``health-
related statement'' instead of ``curative or therapeutic claim.'' 
However, the definition of a ``health-related statement'' in the final 
rule incorporates ATF's historic position on what constitutes a 
statement of a curative or therapeutic nature, as set forth in the 
preamble of it's final rule concerning the labeling and advertising 
regulations under the FAA Act (T.D. ATF-180, 49 FR 31667; August 8, 
1984). Accordingly, a health-related statement includes any claim of a 
curative or therapeutic nature that, expressly or by implication, 
suggests a relationship between the consumption of alcohol, wine, 
distilled spirits, malt beverages, or any substance found within the 
alcohol beverage, and health benefits or effects on health. The term 
``health-related statement'' also includes both specific health claims 
and general references to alleged health benefits or effects on health 
associated with the consumption of alcohol, wine, distilled spirits, 
malt beverages, or any substance found within the alcohol beverage, as 
well as health-related directional statements. The term also includes 
statements and claims that imply that a physical or psychological 
sensation results from consuming wine, distilled spirits, or

[[Page 10102]]

malt beverages, as well as statements and claims of nutritional value. 
Statements concerning caloric, carbohydrate, protein, and fat content 
of alcohol beverages are not considered nutritional claims about the 
product. However, statements of vitamin content are considered 
nutritional value claims, and will be prohibited if presented in a 
fashion that tends to mislead consumers as to the nutritional value of 
the product.
    The term ``specific health claim'' is defined as a type of health-
related statement that, expressly or by implication, characterizes the 
relationship of the alcohol beverage (e.g., wine, distilled spirits, or 
malt beverage), alcohol, or any substance found within the alcohol 
beverage, to a disease or health-related condition. Implied specific 
health claims include statements, symbols, vignettes, or other forms of 
communication that suggest, within the context in which they are 
presented, that a relationship exists between the alcohol beverage 
(wine, distilled spirits, or malt beverages), alcohol, or any substance 
found within the alcohol beverage, and a disease or health-related 
condition.
    The term ``health-related directional statement'' is defined as a 
type of health-related statement that directs or refers consumers to a 
third party or other source for information regarding the effects on 
health of alcohol consumption.
    The definitions in the final rule also clarify that TTB is not 
expanding its traditional interpretation of a curative or therapeutic 
claim to cover, for example, advertisements in which people are shown 
relaxing in an enjoyable setting while consuming alcohol beverages. 
Accordingly, the final rule in no way impinges on the right of industry 
members to advertise their products in a truthful and non-misleading 
fashion.

XXI. Applications for and Certificates of Label Approval

    Upon the effective date of this final rule, applications for 
certificates of label approval must be in compliance with the 
regulations. In accordance with the provisions of 27 CFR 13.51 and 
13.72(a)(2), upon the effective date of this final rule, certificates 
of label approval that are not in compliance with the regulations will 
be revoked by operation of regulation. Certificate holders must 
voluntarily surrender all certificates that are no longer in compliance 
and submit new applications for certificates that are in compliance 
with the new requirements.

XXII. Notes Appearing in Text of Supplementary Information

    1. Hennekens, C.H., ``Alcohol and Risk of Coronary Events,'' 
Research Monograph No. 31, ``Alcohol and the Cardiovascular System'' 
at 15 (National Institutes of Health, National Institute on Alcohol 
Abuse and Alcoholism, Bethesda, MD, 1996).
    2. See, e.g., Boffetta, P. & Garfinkel, L., ``Alcohol drinking 
and mortality among men enrolled in an American Cancer Society 
prospective study,'' ``Epidemiology'' 1(5):342-348, 1990; Stampfer, 
M.J.; Colditz, G.A.; Willett, W.C.; Speizer, F.E. & Hennekens, C.H., 
``A prospective study of moderate alcohol consumption and the risk 
of coronary disease and stroke in women,'' ``New England Journal of 
Medicine,'' 319(5):267-273, 1988; Klatsky, A.L.; Armstrong, M.A.; 
and Friedman, G.D., ``Alcohol and Mortality,'' ``Annals of Internal 
Medicine,'' 117(8):646-654, 1992. See generally National Institute 
on Alcohol Abuse and Alcoholism, ``Moderate Drinking,'' ``Alcohol 
Alert,'' No. 16, April 1992, at 2, and studies cited therein.
    3. See, e.g., Criqui, M.H., ``Moderate Drinking: Benefits and 
Risks,'' ``Alcohol and the Cardiovascular System,'' at 117-118 
(``Clearly, younger persons cannot possibly benefit much from 
alcohol consumption, at least in the short term, because their risk 
of ischemic CVD events is low.'')
    4. DuFour, M.C., ``Risks and Benefits of Alcohol Use Over the 
Life Span,'' ``Alcohol Health & Research World,'' Vol. 20, No. 
3:145-150 at 147, 1996.
    5. See, e.g., Hennekens, C.H., ``Alcohol and risk of coronary 
events,'' Research Monograph No. 31, ``Alcohol and the 
Cardiovascular System'' at 20 (National Institutes of Health, 
National Institute on Alcohol Abuse and Alcoholism, Bethesda, MD 
1996) (``while the health risks of excessive drinking are clear, 
there may also be hazards associated with moderate intake that must 
be weighed, on an individual basis, against the apparent protection 
against CHD.'').
    6. Thun, M.J.; Peto, R.; Lopez, A.D.; Monaco, J.H.; Henley, 
S.J.; Heath, C.W.; and Doll, R; ``Alcohol Consumption and Mortality 
Among Middle-Aged and Elderly U.S. Adults,'' ``The New England 
Journal of Medicine,'' 337(24):1705-1714 at 1705, 1997.
    7. Id. at 1712.
    8. Manson, J.E.; Tosteson, H.; Ridker, P.M.; Satterfield, S; 
Hebert, P.; O'Connor, G.T.; Buring, J.E.; and Hennekens, C.H.; ``The 
Primary Prevention of Myocardial Infarction,'' ``The New England 
Journal of Medicine,'' 326(21):1406-1416 at 1412, 1992.
    9. Fuchs, C.S.; Stampfer, M.J.; Colditz, G.A.; Giovannucci, 
E.L.; Manson, J.E.; Kawachi, I.; Hunter, D.J.; Hankinson, S.E.; 
Hennekens, C.H.; Rosner, B; Speizer, F.E.; and Willett, W.C.; 
``Alcohol Consumption and Mortality Among Women,'' ``The New England 
Journal of Medicine,'' 332(19):1245-1250 at 1245, 1995.
    10. Id. at 1246.
    11. Id. at 1249.
    12. Grabbe, L; Demi, A; Camann, M.A.; et al. ``The health status 
of elderly persons in the last year of life; A comparison of deaths 
by suicide, injury, and natural causes.'' ``American Journal of 
Public Health'' 87(3):434-437, 1997.
    13. Stampfer, M.J.; Rimm, E.B.; Walsh, D.C.; ``Commentary: 
Alcohol, the Heart, and Public Policy,'' ``American Journal of 
Public Health,'' 83(6): 801-804 at 803, 1993.

XXIII. How This Document Complies With the Federal Administrative 
Requirements for Rulemaking

A. Executive Order 12866

    TTB has determined that this final rule is not a significant 
regulatory action as defined in E.O. 12866. Therefore, a regulatory 
assessment is not required.

B. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) requires an agency to conduct 
a regulatory flexibility analysis of any rule subject to notice and 
comment rulemaking requirements unless the agency certifies that the 
rule will not have a significant economic impact on a substantial 
number of small entities. Small entities include small businesses, 
small not-for-profit enterprises, and small governmental jurisdictions. 
TTB has certified that this final rule will not have a significant 
economic impact on a substantial number of small entities. In general, 
the final regulations merely clarify TTB's existing policy concerning 
the use of health claims in the labeling and advertising of alcohol 
beverages and impose no burdens on the industry. With respect to 
health-related statements, TTB believes that the burden imposed by the 
additional wording required by a disclaimer or other qualifying 
statement is minimal. Accordingly, a regulatory flexibility analysis is 
not required.

C. Paperwork Reduction Act

    The provisions of the Paperwork Reduction Act of 1995, Public Law 
104-13, 44 U.S.C. Chapter 35, and its implementing regulations, 5 CFR 
part 1320, do not apply to this final rule because no requirement to 
collect information is imposed.

Disclosure

    Copies of the notice of proposed rulemaking, all comments, the 
hearing transcripts, and this final rule will be available for public 
inspection by appointment during normal business hours at: TTB Public 
Reading Room, Room 6480, 650 Massachusetts Avenue, NW., Washington, DC; 
202-927-7890.

Drafting Information

    The originating drafter of this document is James P. Ficaretta, 
Regulations Division, Bureau of Alcohol, Tobacco and Firearms.

[[Page 10103]]

However, personnel from other offices of the Bureau participated in 
developing this Treasury decision.

List of Subjects

27 CFR Part 4

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

27 CFR Part 5

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

27 CFR Part 7

    Advertising, Consumer protection, Customs duties and inspection, 
Imports, and Labeling.

Authority and Issuance

    For the reasons discussed in the preamble, TTB amends 27 CFR Parts 
4, 5, and 7 as follows:

PART 4--LABELING AND ADVERTISING OF WINE

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

    Authority: 27 U.S.C. 205.

    2. Section 4.39 is amended by revising paragraph (h) to read as 
follows:


Sec.  4.39  Prohibited practices.

* * * * *
    (h) Health-related statements. (1) Definitions. When used in this 
paragraph (h), terms are defined as follows:
    (i) Health-related statement means any statement related to health 
(other than the warning statement required by Sec.  16.21 of this 
chapter) and includes statements of a curative or therapeutic nature 
that, expressly or by implication, suggest a relationship between the 
consumption of alcohol, wine, or any substance found within the wine, 
and health benefits or effects on health. The term includes both 
specific health claims and general references to alleged health 
benefits or effects on health associated with the consumption of 
alcohol, wine, or any substance found within the wine, as well as 
health-related directional statements. The term also includes 
statements and claims that imply that a physical or psychological 
sensation results from consuming the wine, as well as statements and 
claims of nutritional value (e.g., statements of vitamin content). 
Statements concerning caloric, carbohydrate, protein, and fat content 
do not constitute nutritional claims about the product.
    (ii) Specific health claim is a type of health-related statement 
that, expressly or by implication, characterizes the relationship of 
the wine, alcohol, or any substance found within the wine, to a disease 
or health-related condition. Implied specific health claims include 
statements, symbols, vignettes, or other forms of communication that 
suggest, within the context in which they are presented, that a 
relationship exists between wine, alcohol, or any substance found 
within the wine, and a disease or health-related condition.
    (iii) Health-related directional statement is a type of health-
related statement that directs or refers consumers to a third party or 
other source for information regarding the effects on health of wine or 
alcohol consumption.
    (2) Rules for labeling. (i) Health-related statements. In general, 
labels may not contain any health-related statement that is untrue in 
any particular or tends to create a misleading impression as to the 
effects on health of alcohol consumption. TTB will evaluate such 
statements on a case-by-case basis and may require as part of the 
health-related statement a disclaimer or some other qualifying 
statement to dispel any misleading impression conveyed by the health-
related statement.
    (ii) Specific health claims. (A) TTB will consult with the Food and 
Drug Administration (FDA), as needed, on the use of a specific health 
claim on a wine label. If FDA determines that the use of such a 
labeling claim is a drug claim that is not in compliance with the 
requirements of the Federal Food, Drug, and Cosmetic Act, TTB will not 
approve the use of that specific health claim on a wine label.
    (B) TTB will approve the use of a specific health claim on a wine 
label only if the claim is truthful and adequately substantiated by 
scientific or medical evidence; sufficiently detailed and qualified 
with respect to the categories of individuals to whom the claim 
applies; adequately discloses the health risks associated with both 
moderate and heavier levels of alcohol consumption; and outlines the 
categories of individuals for whom any levels of alcohol consumption 
may cause health risks. This information must appear as part of the 
specific health claim.
    (iii) Health-related directional statements. A statement that 
directs consumers to a third party or other source for information 
regarding the effects on health of wine or alcohol consumption is 
presumed misleading unless it--
    (A) Directs consumers in a neutral or other non-misleading manner 
to a third party or other source for balanced information regarding the 
effects on health of wine or alcohol consumption; and
    (B)(1) Includes as part of the health-related directional statement 
the following disclaimer: ``This statement should not encourage you to 
drink or to increase your alcohol consumption for health reasons;'' or
    (2) Includes as part of the health-related directional statement 
some other qualifying statement that the appropriate TTB officer finds 
is sufficient to dispel any misleading impression conveyed by the 
health-related directional statement.
* * * * *
    3. Section 4.64 is amended by revising paragraph (i) to read as 
follows:


Sec.  4.64  Prohibited practices.

* * * * *
    (i) Health-related statements. (1) Definitions. When used in this 
paragraph (i), terms are defined as follows:
    (i) Health-related statement means any statement related to health 
and includes statements of a curative or therapeutic nature that, 
expressly or by implication, suggest a relationship between the 
consumption of alcohol, wine, or any substance found within the wine, 
and health benefits or effects on health. The term includes both 
specific health claims and general references to alleged health 
benefits or effects on health associated with the consumption of 
alcohol, wine, or any substance found within the wine, as well as 
health-related directional statements. The term also includes 
statements and claims that imply that a physical or psychological 
sensation results from consuming the wine, as well as statements and 
claims of nutritional value (e.g., statements of vitamin content). 
Statements concerning caloric, carbohydrate, protein, and fat content 
do not constitute nutritional claims about the product.
    (ii) Specific health claim is a type of health-related statement 
that, expressly or by implication, characterizes the relationship of 
the wine, alcohol, or any substance found within the wine, to a disease 
or health-related condition. Implied specific health claims include 
statements, symbols, vignettes, or other forms of communication that 
suggest, within the context in which they are presented, that a 
relationship exists between wine, alcohol, or any substance found 
within the wine, and a disease or health-related condition.
    (iii) Health-related directional statement is a type of health-
related

[[Page 10104]]

statement that directs or refers consumers to a third party or other 
source for information regarding the effects on health of wine or 
alcohol consumption.
    (2) Rules for advertising. (i) Health-related statements. In 
general, advertisements may not contain any health-related statement 
that is untrue in any particular or tends to create a misleading 
impression as to the effects on health of alcohol consumption. TTB will 
evaluate such statements on a case-by-case basis and may require as 
part of the health-related statement a disclaimer or some other 
qualifying statement to dispel any misleading impression conveyed by 
the health-related statement. Such disclaimer or other qualifying 
statement must appear as prominent as the health-related statement.
    (ii) Specific health claims. A specific health claim will not be 
considered misleading if it is truthful and adequately substantiated by 
scientific or medical evidence; sufficiently detailed and qualified 
with respect to the categories of individuals to whom the claim 
applies; adequately discloses the health risks associated with both 
moderate and heavier levels of alcohol consumption; and outlines the 
categories of individuals for whom any levels of alcohol consumption 
may cause health risks. This information must appear as part of the 
specific health claim and in a manner as prominent as the specific 
health claim.
    (iii) Health-related directional statements. A statement that 
directs consumers to a third party or other source for information 
regarding the effects on health of wine or alcohol consumption is 
presumed misleading unless it--
    (A) Directs consumers in a neutral or other non-misleading manner 
to a third party or other source for balanced information regarding the 
effects on health of wine or alcohol consumption; and
    (B)(1) Includes as part of the health-related directional 
statement, and in a manner as prominent as the health-related 
directional statement, the following disclaimer: ``This statement 
should not encourage you to drink or increase your alcohol consumption 
for health reasons;'' or
    (2) Includes as part of the health-related directional statement, 
and in a manner as prominent as the health-related directional 
statement, some other qualifying statement that the appropriate TTB 
officer finds is sufficient to dispel any misleading impression 
conveyed by the health-related directional statement.
* * * * *

PART 5--LABELING AND ADVERTISING OF DISTILLED SPIRITS

    4. The authority citation for 27 CFR Part 5 continues to read as 
follows:

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

    5. Section 5.42 is amended by revising paragraph (b)(8) to read as 
follows:


Sec.  5.42  Prohibited practices.

* * * * *
    (b) * * *
    (8) Health-related statements. (i) Definitions. When used in this 
paragraph (b)(8), terms are defined as follows:
    (A) Health-related statement means any statement related to health 
(other than the warning statement required by Sec.  16.21 of this 
chapter) and includes statements of a curative or therapeutic nature 
that, expressly or by implication, suggest a relationship between the 
consumption of alcohol, distilled spirits, or any substance found 
within the distilled spirits, and health benefits or effects on health. 
The term includes both specific health claims and general references to 
alleged health benefits or effects on health associated with the 
consumption of alcohol, distilled spirits, or any substance found 
within the distilled spirits, as well as health-related directional 
statements. The term also includes statements and claims that imply 
that a physical or psychological sensation results from consuming the 
distilled spirits, as well as statements and claims of nutritional 
value (e.g., statements of vitamin content). Statements concerning 
caloric, carbohydrate, protein, and fat content do not constitute 
nutritional claims about the product.
    (B) Specific health claim is a type of health-related statement 
that, expressly or by implication, characterizes the relationship of 
the distilled spirits, alcohol, or any substance found within the 
distilled spirits, to a disease or health-related condition. Implied 
specific health claims include statements, symbols, vignettes, or other 
forms of communication that suggest, within the context in which they 
are presented, that a relationship exists between distilled spirits, 
alcohol, or any substance found within the distilled spirits, and a 
disease or health-related condition.
    (C) Health-related directional statement is a type of health-
related statement that directs or refers consumers to a third party or 
other source for information regarding the effects on health of 
distilled spirits or alcohol consumption.
    (ii) Rules for labeling. (A) Health-related statements. In general, 
labels may not contain any health-related statement that is untrue in 
any particular or tends to create a misleading impression as to the 
effects on health of alcohol consumption. TTB will evaluate such 
statements on a case-by-case basis and may require as part of the 
health-related statement a disclaimer or some other qualifying 
statement to dispel any misleading impression conveyed by the health-
related statement.
    (B) Specific health claims. (1) TTB will consult with the Food and 
Drug Administration (FDA), as needed, on the use of a specific health 
claim on a distilled spirits label. If FDA determines that the use of 
such a labeling claim is a drug claim that is not in compliance with 
the requirements of the Federal Food, Drug, and Cosmetic Act, TTB will 
not approve the use of that specific health claim on a distilled 
spirits label.
    (2) TTB will approve the use of a specific health claim on a 
distilled spirits label only if the claim is truthful and adequately 
substantiated by scientific or medical evidence; sufficiently detailed 
and qualified with respect to the categories of individuals to whom the 
claim applies; adequately discloses the health risks associated with 
both moderate and heavier levels of alcohol consumption; and outlines 
the categories of individuals for whom any levels of alcohol 
consumption may cause health risks. This information must appear as 
part of the specific health claim.
    (C) Health-related directional statements. A statement that directs 
consumers to a third party or other source for information regarding 
the effects on health of distilled spirits or alcohol consumption is 
presumed misleading unless it--
    (1) Directs consumers in a neutral or other non-misleading manner 
to a third party or other source for balanced information regarding the 
effects on health of distilled spirits or alcohol consumption; and
    (2)(i) Includes as part of the health-related directional statement 
the following disclaimer: ``This statement should not encourage you to 
drink or to increase your alcohol consumption for health reasons;'' or
    (ii) Includes as part of the health-related directional statement 
some other qualifying statement that the appropriate TTB officer finds 
is sufficient to dispel any misleading

[[Page 10105]]

impression conveyed by the health-related directional statement.
* * * * *

    Par. 6. Section 5.65 is amended by revising paragraph (d) to read 
as follows:


Sec.  5.65  Prohibited practices.

* * * * *
    (d) Health-related statements. (1) Definitions. When used in this 
paragraph (d), terms are defined as follows:
    (i) Health-related statement means any statement related to health 
and includes statements of a curative or therapeutic nature that, 
expressly or by implication, suggest a relationship between the 
consumption of alcohol, distilled spirits, or any substance found 
within the distilled spirits, and health benefits or effects on health. 
The term includes both specific health claims and general references to 
alleged health benefits or effects on health associated with the 
consumption of alcohol, distilled spirits, or any substance found 
within the distilled spirits, as well as health-related directional 
statements. The term also includes statements and claims that imply 
that a physical or psychological sensation results from consuming the 
distilled spirits, as well as statements and claims of nutritional 
value (e.g., statements of vitamin content). Statements concerning 
caloric, carbohydrate, protein, and fat content do not constitute 
nutritional claims about the product.
    (ii) Specific health claim is a type of health-related statement 
that, expressly or by implication, characterizes the relationship of 
the distilled spirits, alcohol, or any substance found within the 
distilled spirits, to a disease or health-related condition. Implied 
specific health claims include statements, symbols, vignettes, or other 
forms of communication that suggest, within the context in which they 
are presented, that a relationship exists between distilled spirits, 
alcohol, or any substance found within the distilled spirits, and a 
disease or health-related condition.
    (iii) Health-related directional statement is a type of health-
related statement that directs or refers consumers to a third party or 
other source for information regarding the effects on health of 
distilled spirits or alcohol consumption.
    (2) Rules for advertising. (i) Health-related statements. In 
general, advertisements may not contain any health-related statement 
that is untrue in any particular or tends to create a misleading 
impression as to the effects on health of alcohol consumption. TTB will 
evaluate such statements on a case-by-case basis and may require as 
part of the health-related statement a disclaimer or some other 
qualifying statement to dispel any misleading impression conveyed by 
the health-related statement. Such disclaimer or other qualifying 
statement must appear as prominent as the health-related statement.
    (ii) Specific health claims. A specific health claim will not be 
considered misleading if it is truthful and adequately substantiated by 
scientific or medical evidence; sufficiently detailed and qualified 
with respect to the categories of individuals to whom the claim 
applies; adequately discloses the health risks associated with both 
moderate and heavier levels of alcohol consumption; and outlines the 
categories of individuals for whom any levels of alcohol consumption 
may cause health risks. This information must appear as part of the 
specific health claim and in a manner as prominent as the specific 
health claim.
    (iii) Health-related directional statements. A statement that 
directs consumers to a third party or other source for information 
regarding the effects on health of distilled spirits or alcohol 
consumption is presumed misleading unless it--
    (A) Directs consumers in a neutral or other non-misleading manner 
to a third party or other source for balanced information regarding the 
effects on health of distilled spirits or alcohol consumption; and
    (B)(1) Includes as part of the health-related directional 
statement, and in a manner as prominent as the health-related 
directional statement, the following disclaimer: ``This statement 
should not encourage you to drink or increase your alcohol consumption 
for health reasons;'' or
    (2) Includes as part of the health-related directional statement, 
and in a manner as prominent as the health-related directional 
statement, some other qualifying statement that the appropriate TTB 
officer finds is sufficient to dispel any misleading impression 
conveyed by the health-related directional statement.
* * * * *

PART 7--LABELING AND ADVERTISING OF MALT BEVERAGES

    7. The authority citation for 27 CFR Part 7 continues to read as 
follows:

    Authority: 27 U.S.C. 205.


    8. Section 7.29 is amended by revising paragraph (e) to read as 
follows:


Sec.  7.29  Prohibited practices.

* * * * *
    (e) Health-related statements. (1) Definitions. When used in this 
paragraph (e), terms are defined as follows:
    (i) Health-related statement means any statement related to health 
(other than the warning statement required by Sec.  16.21 of this 
chapter) and includes statements of a curative or therapeutic nature 
that, expressly or by implication, suggest a relationship between the 
consumption of alcohol, malt beverages, or any substance found within 
the malt beverage, and health benefits or effects on health. The term 
includes both specific health claims and general references to alleged 
health benefits or effects on health associated with the consumption of 
alcohol, malt beverages, or any substance found within the malt 
beverage, as well as health-related directional statements. The term 
also includes statements and claims that imply that a physical or 
psychological sensation results from consuming the malt beverage, as 
well as statements and claims of nutritional value (e.g., statements of 
vitamin content). Statements concerning caloric, carbohydrate, protein, 
and fat content do not constitute nutritional claims about the product.
    (ii) Specific health claim is a type of health-related statement 
that, expressly or by implication, characterizes the relationship of 
the malt beverage, alcohol, or any substance found within the malt 
beverage, to a disease or health-related condition. Implied specific 
health claims include statements, symbols, vignettes, or other forms of 
communication that suggest, within the context in which they are 
presented, that a relationship exists between malt beverages, alcohol, 
or any substance found within the malt beverage, and a disease or 
health-related condition.
    (iii) Health-related directional statement is a type of health-
related statement that directs or refers consumers to a third party or 
other source for information regarding the effects on health of malt 
beverage or alcohol consumption.
    (2) Rules for labeling. (i) Health-related statements. In general, 
labels may not contain any health-related statement that is untrue in 
any particular or tends to create a misleading impression as to the 
effects on health of alcohol consumption. TTB will evaluate such 
statements on a case-by-case basis and may require as part of the 
health-related statement a disclaimer or some other qualifying 
statement to dispel any misleading

[[Page 10106]]

impression conveyed by the health-related statement.
    (ii) Specific health claims. (A) TTB will consult with the Food and 
Drug Administration (FDA), as needed, on the use of a specific health 
claim on a malt beverage label. If FDA determines that the use of such 
a labeling claim is a drug claim that is not in compliance with the 
requirements of the Federal Food, Drug, and Cosmetic Act, TTB will not 
approve the use of that specific health claim on a malt beverage label.
    (B) TTB will approve the use of a specific health claim on a malt 
beverage label only if the claim is truthful and adequately 
substantiated by scientific or medical evidence; sufficiently detailed 
and qualified with respect to the categories of individuals to whom the 
claim applies; adequately discloses the health risks associated with 
both moderate and heavier levels of alcohol consumption; and outlines 
the categories of individuals for whom any levels of alcohol 
consumption may cause health risks. This information must appear as 
part of the specific health claim.
    (iii) Health-related directional statements. A statement that 
directs consumers to a third party or other source for information 
regarding the effects on health of malt beverage or alcohol consumption 
is presumed misleading unless it--
    (A) Directs consumers in a neutral or other non-misleading manner 
to a third party or other source for balanced information regarding the 
effects on health of malt beverage or alcohol consumption; and
    (B)(1) Includes as part of the health-related directional statement 
the following disclaimer: ``This statement should not encourage you to 
drink or to increase your alcohol consumption for health reasons;'' or
    (2) Includes as part of the health-related directional statement 
some other qualifying statement that the appropriate TTB officer finds 
is sufficient to dispel any misleading impression conveyed by the 
health-related directional statement.
* * * * *

    9. Section 7.54 is amended by revising paragraph (e) to read as 
follows:


Sec.  7.54  Prohibited statements.

* * * * *
    (e) Health-related statements. (1) Definitions. When used in this 
paragraph (e), terms are defined as follows:
    (i) Health-related statement means any statement related to health 
and includes statements of a curative or therapeutic nature that, 
expressly or by implication, suggest a relationship between the 
consumption of alcohol, malt beverages, or any substance found within 
the malt beverage, and health benefits or effects on health. The term 
includes both specific health claims and general references to alleged 
health benefits or effects on health associated with the consumption of 
alcohol, malt beverages, or any substance found within the malt 
beverage, as well as health-related directional statements. The term 
also includes statements and claims that imply that a physical or 
psychological sensation results from consuming the malt beverage, as 
well as statements and claims of nutritional value (e.g., statements of 
vitamin content). Statements concerning caloric, carbohydrate, protein, 
and fat content do not constitute nutritional claims about the product.
    (ii) Specific health claim is a type of health-related statement 
that, expressly or by implication, characterizes the relationship of 
the malt beverage, alcohol, or any substance found within the malt 
beverage, to a disease or health-related condition. Implied specific 
health claims include statements, symbols, vignettes, or other forms of 
communication that suggest, within the context in which they are 
presented, that a relationship exists between malt beverages, alcohol, 
or any substance found within the malt beverage, and a disease or 
health-related condition.
    (iii) Health-related directional statement is a type of health-
related statement that directs or refers consumers to a third party or 
other source for information regarding the effects on health of malt 
beverage or alcohol consumption.
    (2) Rules for advertising. (i) Health-related statements. In 
general, advertisements may not contain any health-related statement 
that is untrue in any particular or tends to create a misleading 
impression as to the effects on health of alcohol consumption. TTB will 
evaluate such statements on a case-by-case basis and may require as 
part of the health-related statement a disclaimer or some other 
qualifying statement to dispel any misleading impression conveyed by 
the health-related statement. Such disclaimer or other qualifying 
statement must appear as prominent as the health-related statement.
    (ii) Specific health claims. A specific health claim will not be 
considered misleading if it is truthful and adequately substantiated by 
scientific or medical evidence; sufficiently detailed and qualified 
with respect to the categories of individuals to whom the claim 
applies; adequately discloses the health risks associated with both 
moderate and heavier levels of alcohol consumption; and outlines the 
categories of individuals for whom any levels of alcohol consumption 
may cause health risks. This information must appear as part of the 
specific health claim and in a manner as prominent as the specific 
health claim.
    (iii) Health-related directional statements. A statement that 
directs consumers to a third party or other source for information 
regarding the effects on health of malt beverage or alcohol consumption 
is presumed misleading unless it--
    (A) Directs consumers in a neutral or other non-misleading manner 
to a third party or other source for balanced information regarding the 
effects on health of malt beverage or alcohol consumption; and
    (B)(1) Includes as part of the health-related directional 
statement, and in a manner as prominent as the health-related 
directional statement, the following disclaimer: ``This statement 
should not encourage you to drink or increase your alcohol consumption 
for health reasons;'' or
    (2) Includes as part of the health-related directional statement, 
and in a manner as prominent as the health-related directional 
statement, some other qualifying statement that the appropriate TTB 
officer finds is sufficient to dispel any misleading impression 
conveyed by the health-related directional statement.
* * * * *

    Signed: February 13, 2003.
Arthur J. Libertucci,
Administrator.
    February 25, 2003,
Timothy E. Skud,
Deputy Assistant Secretary, (Regulatory, Tariff and Trade Enforcement).
[FR Doc. 03-4836 Filed 2-28-03; 8:45 am]
BILLING CODE 4810-31-P