[Federal Register Volume 76, Number 214 (Friday, November 4, 2011)]
[Proposed Rules]
[Pages 68373-68376]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-28645]


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DEPARTMENT OF THE TREASURY

Alcohol and Tobacco Tax and Trade Bureau

27 CFR Part 4

[Docket No. TTB-2011-0008; Notice No. 122]
RIN 1513-AB84


Proposed Revision to Vintage Date Requirements

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 amend 
its wine labeling regulations to allow a vintage date to appear on a 
wine that is labeled with a country as an appellation of origin. The 
proposal would provide greater grape sourcing and wine labeling 
flexibility to winemakers, both domestic and foreign, while still 
ensuring that consumers are provided with adequate information as to 
the identity and quality of the wines they purchase.

DATES: Comments must be received on or before January 3, 2012.

ADDRESSES: You may send comments on this notice to one of the following 
addresses:
     http://www.regulations.gov (via the online comment form 
for this notice as posted within Docket No. TTB-2011-0008 at 
``Regulations.gov,'' the Federal e-rulemaking portal);
     Director, Regulations and Rulings Division, Alcohol and 
Tobacco Tax and Trade Bureau, P.O. Box 14412, Washington, DC 20044-
4412; or
     Hand Delivery/Courier in Lieu of Mail: Alcohol and Tobacco 
Tax and Trade Bureau, 1310 G Street NW., Suite 200E, Washington, DC 
20005.
    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.
    You may view copies of this notice and any comments TTB receives 
about this proposal at http://www.regulations.gov within Docket No. 
TTB-2011-0008. A direct link to this docket is also available on the 
TTB Web site at http://www.ttb.gov/wine/wine-rulemaking.shtml under 
Notice No. 122. You may also view copies of this notice and any 
comments received about this proposal by appointment at the TTB 
Information Resource Center, 1310 G Street NW., Washington, DC 20005. 
Please call 202-453-2270 to make an appointment.

FOR FURTHER INFORMATION CONTACT: Jennifer Berry, Alcohol and Tobacco 
Tax and Trade Bureau, Regulations and Rulings Division, P.O. Box 18152, 
Roanoke, VA, 24014; telephone 202-453-1039.

SUPPLEMENTARY INFORMATION:

Background on Wine Labeling

TTB Authority

    Section 105(e) of the Federal Alcohol Administration Act (FAA Act), 
27 U.S.C. 205(e), authorizes the Secretary of the Treasury to prescribe 
regulations for the labeling of wine, distilled spirits, and malt 
beverages. The FAA Act requires that these regulations, among other 
things, prohibit consumer deception and the use of misleading 
statements on labels, and ensure that labels provide the consumer with 
adequate information as to the identity and quality of the product. The 
Alcohol and Tobacco Tax and Trade Bureau (TTB) administers the FAA Act 
and the regulations promulgated under it.

Current Vintage Date Requirements

    Part 4 of the TTB regulations (27 CFR part 4) sets forth the 
standards promulgated under the FAA Act for the labeling and 
advertising of wine. Section 4.27 of the TTB regulations (27 CFR 4.27) 
sets forth rules regarding the use of a vintage date on wine labels. 
Section 4.27(a) provides that vintage wine is wine labeled with the 
year of harvest of the grapes and that the wine ``must be labeled with 
an appellation of origin other than a country (which does not qualify 
for vintage labeling).'' Rules regarding appellation of origin labeling 
are contained in Sec.  4.25 of the TTB regulations (27 CFR 4.25).
    In addition, Sec.  4.27(a)(1) provides that for American or 
imported wines labeled with a viticultural area appellation of origin 
(or its foreign equivalent), at least 95 percent of the wine must have 
been derived from grapes harvested in the labeled calendar year. For 
American or imported wines labeled with an appellation of origin other 
than a country or viticultural area (or its foreign equivalent), Sec.  
4.27(a)(2) provides that at least 85 percent of the wine must have been 
derived from grapes harvested in the labeled calendar year.

[[Page 68374]]

    The requirement that vintage wine must be labeled with an 
appellation of origin other than a country derives from T.D. ATF-53, 
published in the Federal Register (43 FR 37672) by TTB's predecessor 
agency, the Bureau of Alcohol, Tobacco and Firearms (ATF), on August 
23, 1978. Prior to that time the applicable regulations required that 
grapes used to make vintage wine must have been grown in the same 
``viticultural area,'' a term then undefined by the regulations.
    In amended Notice No. 304, a notice of proposed rulemaking 
preceding T.D. ATF-53 and published in the Federal Register (42 FR 
30517) on June 15, 1977, ATF noted that the wine industry advocated 
that the then current requirement that 95 percent of the grapes used to 
make vintage wine be grown in the labeled appellation area be reduced 
to 75 percent. This mirrored the requirement that to bear an 
appellation of origin, at least 75 percent of the grapes used to make a 
wine must be grown in the appellation area indicated on the label. The 
industry position, according to ATF, was that ``vintage means only that 
the grapes were grown in the specified year, and that the place in 
which the grapes were grown is unimportant.'' ATF stated in that notice 
that it did not agree, commenting as follows

    A good year in one part of California, for example, does not 
necessarily mean a good year in another part, any more than a good 
year in Burgundy means a good year in Bordeaux. For a vintage to be 
meaningful to consumers, they must have assurance that the grapes 
were grown in the place stated on the label. We believe that a 95 
percent requirement provides greater assurance than a 75 percent 
requirement.

    However, in T.D. ATF-53, the agency modified its position somewhat 
stating that it concurred with the industry position that a vintage 
date should refer only to the year of harvest. Accordingly, a new 
regulatory provision regarding appellations of origin, also adopted in 
T.D. ATF-53, required that the percentage of grapes required to come 
from the labeled appellation area depended upon whether the appellation 
was a viticultural area (85 percent), a State, county or foreign 
equivalent (75 percent), or a multicounty or multistate appellation 
(100 percent), but in each case without reference to vintage date 
usage. The rulemaking record for T.D. ATF-53 does not explain why ATF 
decided that vintage wine must be labeled with an appellation other 
than a country, but it does indicate that the agency believed that a 
vintage date should provide consumers information about harvest 
conditions.

European Commission Petition

    The European Commission submitted a petition to TTB to amend Sec.  
4.27(a) to allow the use of a country appellation for vintage labeling. 
The petitioner states that the current regulation prohibiting a country 
appellation presents a significant difficulty for its member countries.
    The petitioner notes that some of its member countries are much 
smaller in size than certain U.S. States, counties, and even certain 
American viticultural areas (AVAs). To illustrate this, it compares the 
areas of Malta (246 sq. km), Luxembourg (2,586 sq. km), and Austria 
(83,871 sq. km) with the Lodi AVA (2,230 sq. km) and the Ohio River 
Valley AVA (67,000 sq. km). The petitioner argues that there is no 
convincing rationale for a rule that allows vintage dating for a wine 
with an appellation of ``California'' (423,970 sq. km), but not for a 
wine labeled with the appellation ``Portugal'' (92,391 sq. km).
    The petitioner also contrasts the vintage date rule in question 
with the general varietal (grape type) labeling rule contained in 27 
CFR 4.23(a), under which the names of one or more grape varieties may 
be used as the type designation of a grape wine only if the wine is 
also labeled with an appellation of origin as defined in Sec.  4.25. 
Because Sec.  4.25 includes countries within the definition of an 
appellation of origin, a wine labeled with a varietal designation may 
be labeled with a country appellation. The petitioner contends that 
these regulatory rules are inconsistent and that it would seem more 
logical to apply a coherent approach and allow vintage labeling for 
wines labeled with a country appellation.
    Finally, the petitioner asserts that the language in Article 7(1) 
of the 2006 agreement on trade in wine between the United States and 
the European Community (EC) supports the proposed change. (See http://www.ttb.gov/agreements/eu-wine-agreement.pdf.) TTB notes that Article 7 
concerns names of origin, which include the country names of the Member 
States of the European Union. However, because the use of vintage dates 
is not specifically addressed in that provision, TTB does not consider 
this assertion to be particularly supportive of the proposed change.

TTB Analysis

    TTB believes that the petitioner has generally presented persuasive 
arguments for consideration of the proposed change and that there are 
three reasons why the proposed change would be consistent with the FAA 
Act mandate to ensure that consumers have adequate information about 
the quality and identity of the product.
    First, TTB believes that its most recent rulemaking action 
regarding vintage date requirements supports a reconsideration of this 
issue since the current proposal, like the earlier action, would 
liberalize the vintage date requirements in Sec.  4.27. See T.D. TTB-
45, published in the Federal Register (71 FR 25748) on May 2, 2006. In 
that earlier rulemaking, TTB liberalized the vintage date requirements 
by reducing the percentage of wine derived from grapes required to be 
harvested in the labeled calendar year from 95 percent to 85 percent 
for wine labeled with an appellation of origin other than a country or 
a viticultural area (or its foreign equivalent). The percentage 
remained at 95 for wines bearing a viticultural area (or its foreign 
equivalent) as an appellation of origin. Blending wine from different 
vintages could result in a more consistent product and provide a better 
value for consumers, according to the proponents of the earlier 
liberalization of vintage date labeling.
    Similarly, under the current proposal, winemakers, domestic or 
foreign, would have the flexibility to use grapes from a wider area to 
produce more consistent wines for consumers while still providing the 
year date of harvest information to the consumer.
    Second, as noted in the public comment discussion in the preamble 
of T.D. TTB-45, not all consumers use vintage dates as an indication of 
harvest conditions. That discussion quoted two commenters as stating 
that many consumers, particularly those who purchase moderately priced 
wines, use the vintage date to ensure that they are not purchasing a 
wine that is too old or too young for their preferences. The consumer 
makes this particular use of the vintage date regardless of whether the 
appellation of origin is a country or a smaller region within a 
country.
    Finally, TTB believes that the use of a country appellation of 
origin on vintage wine would not detract from the statutory mandate to 
provide consumers with adequate information as to the identity and 
quality of the wines they purchase. Even though the use of a country 
appellation for a large country such as the United States or Australia 
might not be a useful indication of harvest conditions, it would not 
necessarily be misleading to consumers: purchasers of a wine labeled 
``United States'' likely understand that harvest conditions are not 
uniform for the entire United States. On the other hand,

[[Page 68375]]

vintage dates for smaller appellations, such as Napa Valley or 
Bordeaux, will still provide useful information to consumers who do 
make purchases based on harvest conditions attributable to a particular 
vintage.
    Based on the above, TTB believes the petitioner's proposal merits 
consideration and public comment. Accordingly, this document sets forth 
proposed amendments to Sec.  4.27 to allow vintage labeling for wines 
labeled with a country as an appellation of origin. In addition, the 
proposed amendments to Sec.  4.27 require a conforming amendment in 
Sec.  4.34(b)(5) to remove the reference to the requirement that an 
appellation of origin for vintage wine shall be other than a country.

Public Participation

Comments Sought

    TTB requests comments from interested members of the public. TTB is 
particularly interested in how effectively the proposed changes will 
serve the mandate under the FAA Act of providing consumers with 
adequate information about the identity and quality of wines and 
preventing consumer confusion. Please provide specific information in 
support of your comments.

Submitting Comments

    You may submit comments on this notice by using one of the 
following three methods:
     Federal e-Rulemaking Portal: You may send comments via the 
online comment form linked to this notice within Docket No. TTB-2011-
0008 on ``Regulations.gov,'' the Federal e-rulemaking portal, at http://www.regulations.gov. A link to the docket is available under Notice 
No. 122 on the TTB Web site at http://www.ttb.gov/wine/wine-rulemaking.shtml. Supplemental files may be attached to comments 
submitted via Regulations.gov. For information on how to use 
Regulations.gov, click on the site's Help or FAQ tabs.
     U.S. Mail: You may send comments via postal mail to the 
Director, Regulations and Rulings Division, Alcohol and Tobacco Tax and 
Trade Bureau, P.O. Box 14412, Washington, DC 20044-4412.
     Hand Delivery/Courier: You may hand-carry your comments or 
have them hand-carried to the Alcohol and Tobacco Tax and Trade Bureau, 
1310 G Street NW., Suite 200E, Washington, DC 20005.
    Please submit your comments by the closing date shown above in this 
notice. Your comments must reference Notice No. 122 and include your 
name and mailing address. Your comments also must be made in English, 
be legible, and be written in language acceptable for public 
disclosure. TTB will not acknowledge receipt of comments, and will 
consider all comments as originals.
    If you are commenting on behalf of an association, business, or 
other entity, your comment must include the entity's name as well as 
your name and position title. If you comment via Regulations.gov, 
please include the entity's name in the ``Organization'' blank of the 
comment form. If you comment via postal mail, please submit your 
entity's comment on letterhead.
    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 whether to hold a public hearing.

Confidentiality

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

Public Disclosure

    On the Federal e-rulemaking portal, Regulations.gov, TTB will post, 
and the public may view, copies of this notice, selected supporting 
materials, and any electronic or mailed comments received about this 
proposal. A direct link to the Regulations.gov docket containing this 
notice and the posted comments received on it is available on the TTB 
Web site at http://www.ttb.gov/wine/wine-rulemaking.shtml under Notice 
No. 122. You may also reach the docket containing this notice and the 
posted comments received on it through the Regulations.gov search page 
at http://www.regulations.gov. All posted comments will display the 
commenter's name, organization (if any), city, and State, and, in the 
case of mailed comments, all address information, including email 
addresses. TTB may omit voluminous attachments or material that it 
considers unsuitable for posting.
    You and other members of the public may view copies of this notice, 
all related petitions, maps and other supporting materials, and any 
electronic or mailed comments received about this proposal by 
appointment at the TTB Information Resource Center, 1310 G Street NW., 
Washington, DC 20005. You may also obtain copies for 20 cents per 8.5- 
x 11-inch page. Contact TTB's information specialist at the above 
address or by telephone at 202-453-2270 to schedule an appointment or 
to request copies of comments or other materials.

Regulatory Flexibility Act

    TTB certifies under the provisions of the Regulatory Flexibility 
Act (5 U.S.C. 601 et seq.) that this proposed rule will not have a 
significant economic impact on a substantial number of small entities. 
The proposed amendments merely provide optional, additional flexibility 
in wine labeling decisions. Accordingly, a regulatory flexibility 
analysis is not required.

Executive Order 12866

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

Drafting Information

    Jennifer Berry of the Regulations and Rulings Division, Alcohol and 
Tobacco Tax and Trade Bureau, drafted this document.

List of Subjects in 27 CFR Part 4

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

Proposed Amendments to the Regulations

    For the reasons discussed in the preamble, TTB proposes to amend 27 
CFR, chapter I, part 4 as set forth below:

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, unless otherwise noted.


Sec.  4.27  [Amended]

    2. Section 4.27 is amended:
    a. In the second sentence of the introductory text of paragraph 
(a), by removing the words ``other than a country (which does not 
qualify for vintage labeling)''; and
    b. In paragraph (a)(2), by removing the words ``country or''.
    3. Section 4.34(b)(5) is amended by removing the last sentence.


[[Page 68376]]


    Signed: September 10, 2010.
John J. Manfreda,
Administrator.
    Approved: October 8, 2011.
Timothy E. Skud,
Deputy Assistant Secretary, Tax, Trade, and Tariff Policy.
[FR Doc. 2011-28645 Filed 11-3-11; 8:45 am]
BILLING CODE 4810-31-P