[Federal Register Volume 70, Number 126 (Friday, July 1, 2005)]
[Proposed Rules]
[Pages 38058-38060]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-13041]


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DEPARTMENT OF THE TREASURY

Alcohol and Tobacco Tax and Trade Bureau

27 CFR Part 4

[Notice No. 49]
RIN 1513-AB11


Proposed Change to Vintage Date Requirements (2005R-212P)

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

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Alcohol and Tobacco Tax and Trade Bureau proposes to 
change the minimum content requirement for vintage date statements on 
some wine labels. We take this action in response to a petition from a 
trade association representing California wineries. We invite comments 
on this proposed amendment to our regulations.

DATES: We must receive your written comments on or before August 30, 
2005.

ADDRESSES: You may send comments to any of the following addresses:
     Chief, Regulations and Procedures Division, Alcohol and 
Tobacco Tax and Trade Bureau, Attn: Notice No. 49, P.O. Box 14412, 
Washington, DC 20044-4412.
     202-927-8525 (facsimile).
     [email protected] (e-mail).
     http://www.ttb.gov/alcohol/rules/index.htm. An online 
comment form is posted with this notice on our Web site.
     http://www.regulations.gov (Federal e-rulemaking portal; 
follow instructions for submitting comments).
    You may view copies of the petition, this notice, and any comments 
we receive about this notice by appointment at the TTB Library, 1310 G 
Street, NW., Washington, DC 20220. To make an appointment, call 202-
927-2400. You may also access copies of the petition, notice and 
comments online at http://www.ttb.gov/alcohol/rules/index.htm.
    See the Public Participation section of this notice for specific 
instructions and requirements for submitting comments, and for 
information on how to request a public hearing.

FOR FURTHER INFORMATION CONTACT: Marjorie D. Ruhf, Regulations and 
Procedures Division, Alcohol and Tobacco Tax and Trade Bureau, 1310 G 
Street NW., Washington, DC 20220; telephone 202-927-8202.

SUPPLEMENTARY INFORMATION:

Background on Wine Labeling

TTB Authority

    Section 105(e) of the Federal Alcohol Administration Act (the FAA 
Act, 27 U.S.C. 201 et seq.) requires that alcohol beverage labels 
provide consumers with adequate information regarding product identity 
and prohibits the use of misleading information on such labels. The FAA 
Act also authorizes the Secretary of the Treasury to issue regulations 
to carry out its provisions. The Alcohol and Tobacco Tax and Trade 
Bureau (TTB) administers these regulations.

Vintage Date Requirements

Current Requirements

    Part 4 of the TTB regulations (27 CFR part 4) contains the rules 
governing labeling of wine. The current rule for the use of a vintage 
date on a wine label is found in Sec.  4.27 (27 CFR 4.27). Section 4.27 
requires that 95 percent of the grapes in a vintage-dated wine be 
harvested in the calendar year shown on the label and that the wine be 
labeled with an appellation of origin other than a country.
    Before 1972, regulations in part 4 defined the phrase ``vintage 
wine'' as wine that was made ``wholly from grapes gathered in the same 
calendar year and grown and fermented in the same viticultural area, 
and conforming to the standards prescribed in Classes 1, 2, and 3 of 
Sec.  4.21.'' In T.D. 7185 (37 FR 7974), published on April 22, 1972, 
the Internal Revenue Service (IRS), which administered the FAA Act at 
the time, amended that definition to allow the addition of up to five 
percent of other wines to vintage wine. An industry association had 
requested this change in order to allow producers to replace wine lost 
by evaporation and leakage during the aging period. In adopting the 
change, the IRS recognized that requiring vintage wine to be derived 
wholly from grapes gathered in the stated year was ``unnecessarily 
restrictive when viewed in the light of practices in some of the 
principal wine producing countries of the world.'' The IRS also 
concluded that liberalization of the vintage date regulations ``would 
not be adverse to the consumer interest.''

Vintage Date Petition

    The Wine Institute, a trade association of California wineries, 
submitted a petition to TTB to amend paragraph (a) of Sec.  4.27 to 
allow wine labeled with a State, multistate, county, or multicounty 
appellation of origin (or the foreign equivalent of a State or county) 
to bear a vintage date if at least 85 percent of the wine is derived 
from grapes harvested in the labeled calendar year. The Wine Institute 
proposes to retain the current requirement that at least 95 percent of 
the grapes in a vintage-dated wine be harvested in the year shown on 
the label (the ``95 percent rule'') for wine with an American 
viticultural area (or its foreign equivalent) as an appellation of 
origin. An American viticultural area is a delimited grape growing 
region approved by TTB that is distinguishable by geographical 
features; the American viticultural areas are listed in part 9 of the 
TTB regulations (27 CFR part 9). A foreign equivalent of an American 
viticultural area is a delimited place or region, other than a 
political subdivision, which has been established by the country of 
origin.
    In support of its request, the petitioner provided information 
comparing the vintage date labeling requirement of the United States to 
those of other wine producing countries. This information shows that 
the 95 percent rule for vintage wine used by the United States is 
unusually high when compared to the vintage date requirements of other 
countries. Specifically, the petitioner notes that Australia, New 
Zealand, and the Member States of the European Union have an 85 percent 
same-year content requirement for vintage-dated wine, while Chile and 
South Africa require that only 75 percent of the grapes in a vintage-
dated wine be grown in the year shown on the label. The petitioner did 
not provide information on precedents for their proposed dual standard 
for vintage labeling of wine from viticultural areas and other 
appellations of origin. We note, however, that the TTB appellation of 
origin regulations use a multiple standard for the percentage of grapes 
that must be grown in the labeled appellation, that is, 85 percent for 
a wine labeled with a viticultural area appellation, 75 percent for 
single State or county appellations,

[[Page 38059]]

or 100 percent for multistate or multicounty appellations.
    The petitioner argues that the current 95 percent rule for vintage 
wine, as set forth in Sec.  4.27, places U.S. wine producers at a 
competitive disadvantage in two principal ways:
     The ability of domestic producers to blend wines for the 
best possible characteristics is limited by the 95 percent rule. The 
petitioner claims this is most important in ``mid-range wines, where 
consistency of flavor and mouthfeel is desirable between years and 
where a large proportion of the global wine market exists.'' In support 
of this point, the petitioner provided several examples of the use of 
small amounts of wine from a different vintage to give consistency and 
better value to consumers.
     Although the 95 percent rule applies equally to foreign 
vintage wines imported into the United States, regulators in the United 
States do not have access to the records of foreign producers to verify 
that they follow the 95 percent rule for wines they export to the 
United States. The petitioner suggests that domestic producers of 
vintage wine may be competing with foreign producers that do not 
conform to the 95 percent standard.

Proposed Regulatory Amendment

    In this notice, TTB proposes to revise paragraph (a) of Sec.  4.27 
in order to add the 85 percent standard as proposed in the petition. 
The proposed revision includes a reorganization of the text in order to 
accommodate the separate 85 and 95 percent vintage date rules.

Public Participation

Comments Invited

    We invite comments from interested members of the public on whether 
we should make the proposed change to the vintage date rules. We 
specifically invite comments on whether the proposed amendment will 
continue to ensure that consumers have adequate information about the 
identity of wines that are labeled with vintage dates, and are not 
misled by the use of vintage dates on wine labels. We are also 
interested in comments on the perceived effect on consumers of using 
two vintage date standards rather than the current single standard 
approach. In addition to comments on this specific proposal, we are 
interested in suggestions on other approaches that might achieve a 
similar result. We also invite comments on an appropriate delayed 
effective date. Finally we solicit comments on how any new rule should 
be applied. For example, should it apply to wines bottled after the 
effective date, or wines removed for consumption or sale after the 
effective date? Please provide specific information in support of your 
comments.

Submitting Comments

    Please submit your comments by the closing date shown above in this 
notice. Your comments must include this notice number and your name and 
mailing address. Your comments must be legible and written in language 
acceptable for public disclosure. We do not acknowledge receipt of 
comments, and we consider all comments as originals. You may submit 
comments in one of five ways:
     Mail: You may send written comments to TTB at the address 
listed in the ADDRESSES section.
     Facsimile: You may submit comments by facsimile 
transmission to 202-927-8525. Faxed comments must--
    (1) Be on 8.5 by 11 inch paper;
    (2) Contain a legible, written signature; and
    (3) Be no more than five pages long. This limitation assures 
electronic access to our equipment. We will not accept faxed comments 
that exceed five pages.
     E-mail: You may e-mail comments to [email protected]. Comments 
transmitted by electronic mail must--
    (1) Contain your e-mail address;
    (2) Reference this notice number on the subject line; and
    (3) Be legible when printed on 8.5 by 11 inch paper.
     Online form: We provide a comment form with the online 
copy of this notice on our Web site at http://www.ttb.gov/alcohol/rules/index.htm. Select the ``Send comments via e-mail'' link under 
this notice number.
     Federal e-rulemaking portal: To submit comments to us via 
the Federal e rulemaking portal, visit http://www.regulations.gov and 
follow the instructions for submitting comments.
    You may also write to the Administrator before the comment closing 
date to ask for a public hearing. The Administrator reserves the right 
to determine, in light of all circumstances, whether to hold a public 
hearing.

Confidentiality

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

Public Disclosure

    You may view copies of the petition, this notice, and any comments 
we receive by appointment at the TTB Library at 1310 G Street, NW., 
Washington, DC 20220. You may also obtain copies at 20 cents per 8.5 x 
11 inch page. Contact our librarian at the above address or by 
telephone at 202-927-2400 to schedule an appointment or to request 
copies of comments.
    For your convenience, we will post the petition, this notice, and 
any comments we receive on this proposal on the TTB Web site. We may 
omit voluminous attachments or material that we consider unsuitable for 
posting. In all cases, the full comment will be available in the TTB 
Library. To access the online copies of the petition, this notice, and 
the posted comments, visit http://www.ttb.gov/alcohol/rules/index.htm. 
Select the ``View Comments'' link under this notice number to view the 
posted comments.

Regulatory Flexibility Act

    We certify that this proposed amendment, if adopted, would not have 
a significant economic impact on a substantial number of small 
entities. The proposed amendment provides greater flexibility to wine 
producers and importers without imposing any new reporting, 
recordkeeping, or other administrative requirement. Therefore, no 
regulatory flexibility analysis is required.

Executive Order 12866

    This proposed rule is not a significant regulatory action as 
defined by Executive Order 12866, 58 FR 51735. Therefore, it requires 
no regulatory assessment.

Drafting Information

    Marjorie D. Ruhf of the Regulations and Procedures Division drafted 
this notice.

List of Subjects in 27 CFR Part 4

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

The Proposed Amendment

    For the reasons discussed in the preamble, we propose to amend 27 
CFR, chapter 1, part 4, as follows:

PART 4--LABELING AND ADVERTISING OF WINE

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

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

    2. Amend Sec.  4.27 by revising paragraph (a) to read as follows:

[[Page 38060]]

Sec.  4.27  Vintage wine.

    (a) General. Vintage wine is wine labeled with the year of harvest 
of the grapes and made in accordance with the standards prescribed in 
classes 1, 2, or 3 of Sec.  4.21. The wine must be labeled with an 
appellation of origin other than a country (which does not qualify for 
vintage labeling). The appellation must be shown in direct conjunction 
with the designation required by Sec.  4.32(a)(2), in lettering 
substantially as conspicuous as that designation. In no event may the 
quantity of wine removed from the producing winery, under labels 
bearing a vintage date, exceed the volume of vintage wine produced in 
that winery during the year indicated by the vintage date. The 
following additional rules apply to vintage labeling:
    (1) If an American or imported wine is labeled with a viticultural 
area appellation of origin, at least 95 percent of the wine must have 
been derived from grapes harvested in the labeled calendar year; or
    (2) If an American or imported wine is labeled with an appellation 
of origin other than a country or viticultural area, at least 85 
percent of the wine must have been derived from grapes harvested in the 
labeled calendar year.
* * * * *

    Signed: May 31, 2005.
John J. Manfreda,
Administrator.

    Approved: June 16, 2005.
Timothy E. Skud,
Deputy Assistant Secretary, (Tax, Trade, and Tariff Policy).
[FR Doc. 05-13041 Filed 6-30-05; 8:45 am]
BILLING CODE 4810-31-P