[Federal Register Volume 84, Number 126 (Monday, July 1, 2019)]
[Proposed Rules]
[Pages 31264-31273]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-13767]
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DEPARTMENT OF THE TREASURY
Alcohol and Tobacco Tax and Trade Bureau
27 CFR Parts 5, 7, 26, and 27
[Docket No. TTB-2019-0005; Notice No. 183]
RIN 1513-AC45
Elimination of Certain Standards of Fill for Distilled Spirits;
Amendment of Malt Beverage Net Contents Labeling Regulation
AGENCY: Alcohol and Tobacco Tax and Trade Bureau, Treasury.
ACTION: Notice of proposed rulemaking.
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SUMMARY: In this document, the Alcohol and Tobacco Tax and Trade Bureau
(TTB) addresses numerous petitions requesting that TTB amend the
regulations that govern distilled spirits containers to provide for
additional authorized standards of fill. TTB is proposing to eliminate
all but minimum and maximum standards of fill for distilled spirits
containers and thus eliminate unnecessary regulatory requirements and
provide consumers broader purchasing options. TTB welcomes comments on
this proposed deregulation, and it also seeks comments on the relative
merits of alternatives, such as adding new authorized standards of fill
and developing an expedited process for adding additional standards in
the future. All of these approaches would eliminate restrictions that
inhibit competition and the movement of goods in domestic and
international commerce.
TTB is also proposing to amend the labeling regulations for
distilled spirits and malt beverages to specifically provide that
distilled spirits may be labeled with the equivalent standard United
States (U.S.) measure in addition to the mandatory metric measure, and
that malt beverages may be labeled with the equivalent metric measure
in
[[Page 31265]]
addition to the mandatory U.S. measure. Such labeling is currently
allowed, but that is not explicitly stated in current regulations. This
revision will align the distilled spirits and malt beverage labeling
regulations with current policy and also with the wine labeling
regulations. The wine labeling regulations state that wine may be
labeled with the equivalent standard U.S. measure in addition to the
mandatory metric measure.
DATES: Comments must be received on or before August 30, 2019.
ADDRESSES: Please send your comments on this proposed rule to one of
the following addresses:
Internet: https://www.regulations.gov (via the online
comment form for this document as posted within Docket No. TTB-2019-
0005 at ``Regulations.gov,'' the Federal e-rulemaking portal);
U.S. Mail: Director, Regulations and Rulings Division,
Alcohol and Tobacco Tax and Trade Bureau, 1310 G Street NW, Box 12,
Washington, DC 20005; or
Hand delivery/courier in lieu of mail: Alcohol and Tobacco
Tax and Trade Bureau, 1310 G Street NW, Suite 400E, Washington, DC
20005.
See the Public Participation section of this document for specific
instructions and requirements for submitting comments, and for
information on how to request a public hearing.
You may view copies of this proposed rule and any comments TTB
receives about this proposal at https://www.regulations.gov within
Docket No. TTB-2019-0005. A link to that docket is posted on the TTB
website at https://www.ttb.gov/wine/wine-rulemaking.shtml under Notice
No. 183. You also may view copies of this proposed rule and any
comments TTB receives about this proposal by appointment at the TTB
Information Resource Center, 1310 G Street NW, Washington, DC 20005.
Please call 202-453-2135 to make an appointment.
FOR FURTHER INFORMATION CONTACT: Jennifer Berry, Alcohol and Tobacco
Tax and Trade Bureau, Regulations and Rulings Division; telephone 202-
453-1039, ext. 275.
SUPPLEMENTARY INFORMATION:
Background
TTB Authority
The Alcohol and Tobacco Tax and Trade Bureau (TTB) administers
regulations setting forth bottle size and related standards of fill for
containers of distilled spirits distributed within the United States.
The authority to establish these standards is based on two provisions
of law: (1) Section 5301(a) of the Internal Revenue Code of 1986 (IRC),
codified at 26 U.S.C. 5301(a), and (2) section 105(e) of the Federal
Alcohol Administration Act (FAA Act), codified at 27 U.S.C. 205(e).
Section 5301(a) of the IRC authorizes the Secretary of the Treasury to
prescribe regulations ``to regulate the kind, size, branding, marking,
sale, resale, possession, use, and reuse of containers (of a capacity
of not more than 5 wine gallons) designed or intended for use for the
sale of distilled spirits . . .'' when the Secretary determines that
such action is necessary to protect the revenue. Section 105(e) of the
FAA Act authorizes the Secretary of the Treasury to prescribe
regulations relating to the ``size and fill'' of alcohol beverage
containers ``as will prohibit deception of the consumer with respect to
such products or the quantity thereof . . . .'' TTB administers these
IRC and FAA Act provisions pursuant to section 1111(d) of the Homeland
Security Act of 2002, as codified at 6 U.S.C. 531(d). In addition, the
Secretary of the Treasury has delegated certain administrative and
enforcement authorities to TTB through Treasury Order 120-01, dated
January 24, 2013 (superseding Treasury Order 120-01, dated January 24,
2003).
Current Standards of Fill for Distilled Spirits
The standards of fill for distilled spirits are contained in
subpart E of part 5 of the TTB regulations (27 CFR part 5). The term
``standard of fill'' is used in the TTB regulations and in this
document to refer to the authorized amount of liquid in the container,
rather than the size or capacity of the container itself. For better
readability, however, this document sometimes uses the terms ``size''
or ``container size'' and ``standards of fill'' interchangeably.
Within subpart E, paragraph (a)(1) of Sec. 5.47a (27 CFR
5.47a(a)(1)) specifies the following metric standards of fill for
containers other than those described in paragraph (a)(2) of that
section:
1.75 liters;
1 liter;
750 milliliters;
500 milliliters (authorized only until June 30, 1989);
375 milliliters;
200 milliliters;
100 milliliters; and
50 milliliters.
In the case of distilled spirits in metal containers that have the
general shape and design of a can, that have a closure which is an
integral part of the container, and that cannot be readily reclosed
after opening, paragraph (a)(2) of Sec. 5.47a authorizes the use of
the following metric standards of fill:
355 milliliters;
200 milliliters;
100 milliliters; and
50 milliliters.
In addition to the metric standards specified above, Sec. 5.47a
contains provisions regarding tolerances (discrepancies between actual
and stated fill), unreasonable shortages in fill, and distilled spirits
bottled or imported before January 1, 1980, and marketed or released
from customs custody on or after that date (the date on which the U.S.
volumetric standards were replaced by the Sec. 5.47a metric standards,
as discussed in more detail below).
Current Standards of Fill for Wine
The standards of fill for wine are contained in subpart H of part 4
of the TTB regulations (27 CFR part 4). In a separate notice of
proposed rulemaking published elsewhere in this issue of the Federal
Register, TTB is also proposing to eliminate most of the standards of
fill for wine.
Malt Beverages
Unlike wine and distilled spirits, there are no standards of fill
prescribed for malt beverages under the FAA Act. However, in the case
of malt beverages, Sec. 7.22(a)(4) of the TTB regulations (27 CFR
7.22(a)(4)) requires the display of net contents on the brand label as
mandatory label information.
History of Standards of Fill for Distilled Spirits
Following the repeal of Prohibition, the standards of fill for
distilled spirits were established in 1934 within Regulations 13,
issued pursuant to the internal revenue laws. Similar standards were
established in 1936 within Regulations 5, issued pursuant to the FAA
Act. The standards of fill in Regulations 5 were as follows:
For domestically manufactured, domestically bottled, or
imported distilled spirits--
[cir] 1 gallon,
[cir] \1/2\ gallon,
[cir] 1 quart,
[cir] \4/5\ quart,
[cir] 1 pint,
[cir] \1/2\ pint,
[cir] \1/8\ pint, and
[cir] \1/10\ pint;
For domestically manufactured, domestically bottled, or
imported brandy--\1/16\ pint; and
For Scotch and Irish whisky and Scotch and Irish type
whisky, and for brandy and rum--\4/5\ pint.
Over the years, a number of changes were made to these standards.
The most
[[Page 31266]]
significant change took place in 1976 when TTB's predecessor agency,
the Bureau of Alcohol, Tobacco and Firearms (ATF), adopted metric
standards of fill for distilled spirits containers. These metric
standards were adopted in T.D. ATF-25 (41 FR 10217, March 10, 1976 and
41 FR 11022, March 16, 1976).
ATF provided a phase-in period for the new metric sizes that lasted
until January 1, 1980, at which time metric sizes became mandatory. The
original metric standards of fill specified for distilled spirits
containers were as follows:
1.75 liters;
1 liter;
750 milliliters;
500 milliliters;
200 milliliters; and
50 milliliters.
Later amendments to the metric standards for distilled spirits
containers included:
T.D. ATF-146 (48 FR 43319, September 23, 1983), which
added 100 milliliters and 375 milliliters to the list of authorized
sizes;
T.D. ATF-228 (51 FR 16167, May 1, 1986), which began a
phase-out of the 500-milliliter size; and
T.D. ATF-326 (57 FR 31126, July 14, 1992), which
authorized the 355-milliliter can and removed the 375-milliliter and
larger sizes for cans.
As noted above, TTB also regulates the standards of fill for
distilled spirits under section 5301(a) of the IRC, in order to protect
the revenue. Historically, standardized sizes made it easier to conduct
inventories of cased goods at distilleries and warehouses, thus
facilitating tax assessment. Within the TTB regulations promulgated
under the IRC to govern the establishment and operation of distilled
spirits plants, Sec. 19.511 (27 CFR 19.511) provides that liquor
bottles for domestic use shall conform to the standards of fill
provided in subpart E of 27 CFR part 5.
Prior Notices Seeking Comments on Changes to Standards
In addition to the rulemakings cited above that adopted or amended
standards of fill for wine and distilled spirits, ATF twice solicited
comments on whether the standards of fill should be retained, revised,
or eliminated.
In 1987, ATF published an advance notice of proposed rulemaking
(ANPRM), Notice No. 633 (52 FR 23685, June 24, 1987), which solicited
comments on whether the standards of fill requirements for distilled
spirits and wine should be retained either in general or as metric
standards. The Washington State Liquor Control Board (WSLCB) had
petitioned ATF to amend the regulations to allow for the importation of
distilled spirits not bottled in authorized metric standards of fill if
the bottles were labeled with certain additional information.
In its petition, the WSLCB stated that many foreign manufacturers
bottle their spirits in standards of fill that are not authorized in
the United States (for example, 740 milliliters and 800 milliliters).
Consequently, while these products could be shipped to other countries,
they could not be imported into the United States. The WSLCB argued
that the existing standards of fill stifled price competition on
imported distilled spirits, resulting in an artificial price increase
for U.S. consumers. Although the petition requested an amendment of the
standards of fill requirements for distilled spirits only, the ANPRM
requested comments on retaining or eliminating the standards of fill
for distilled spirits and wine. On February 6, 1990, ATF published
Notice No. 696 (55 FR 3980) and stated that it found no basis to
eliminate the existing standards of fill for wine and distilled
spirits.
In 1993, ATF published another ANPRM, Notice No. 773 (58 FR 35908,
July 2, 1993), in response to three petitions requesting the
reinstatement or addition of four sizes to the standards of fill for
distilled spirits. The petitioners requested that the regulations be
amended to include four sizes used in other countries: A 296-milliliter
can, a 500-milliliter bottle, a 680-milliliter bottle, and a 946-
milliliter bottle. The petitioners also made many of the same arguments
for retaining the existing standards that were noted in Notice No. 696.
Although these petitions only involved an amendment to the existing
standards for distilled spirits, ATF believed it was also appropriate
to address the larger issue of retaining or eliminating the standards
of fill requirements for distilled spirits and wine. A common theme in
the three petitions was that the current standards of fill were
hindering international trade between the United States and countries
with different standard container sizes. As a result, ATF sought
comment in Notice No. 773 on whether the existing standards of fill
should be revised, retained, or eliminated. ATF did not undertake
further rulemaking on this issue.
Petitions and Inquiries Regarding Changes to Standards
As noted above, in a separate notice of proposed rulemaking
published elsewhere in this issue of the Federal Register, TTB is
proposing to eliminate most of the standards of fill for wine. The
agency is taking that deregulatory action in response to a number of
petitions from domestic and foreign wine producers requesting
additional authorized sizes. TTB believes that the reasons cited by
wine industry members for revisions to the standards of fill
regulations also apply to the distilled spirits industry. As evidence
of this, we note that TTB has received the following petitions and
inquiry regarding changes to the standards of fill requirements for
distilled spirits:
1. In 2012, the Japan Sake and Shochu Makers Association and the
Nippon Distillers Association petitioned TTB to revise Sec.
5.47a(a)(1) to include 720-milliters, 900-milliliters, and 1.80 liters
sizes for shochu, a type of distilled spirit commonly produced in
Japan. The two trade associations state that shochu is bottled in these
sizes and it would be prohibitively expensive for their members to
produce special sizes for the U.S. market. They argue that U.S.
consumers will not be misled by the addition of new standards of fill,
noting that various sizes of different but similar fill are available
for other consumer goods in the United States, citing the example of an
over-the-counter medicine that is available in containers of either
240-milliliters or 260-milliters. Finally, the petitioners contend that
not permitting these standards of fill is a technical barrier to trade
and, as such, a violation of Article 2 of the Agreement on Technical
Barriers to Trade, which is one of the World Trade Organization (WTO)
agreements.
2. The National Tax Agency of Japan, part of Japan's Ministry of
Finance, wrote to TTB in 2013 expressing support for the 2012 petition
submitted by the Japan Sake and Shochu Makers Association and the
Nippon Distillers Association. They noted that Japan does not have
regulatory limitations on distilled spirits standards of fill, and
opined that relaxing our regulations would benefit U.S. consumers.
3. In 2015, TTB received a petition from the Japan Sake and Shochu
Makers Association, the Nippon Distillers Association, and the Japan
Spirits and Liqueurs Makers Association. The three trade associations
requested that TTB add the following distilled spirits container sizes
to Sec. 5.47a(a)(1): 700-milliters, 720-milliters, 900-milliliters,
and 1.80 liters. Noting that Japanese shochu and whiskey are bottled in
these sizes, the petitioners stated that allowing their importation
into the United States will benefit American consumers. They also
maintained that the United States is obliged under the WTO agreement on
technical barriers to
[[Page 31267]]
trade to not enforce rules such as the current standards of fill that
constitute unnecessary obstacles to international trade.
4. In 2017, an American company requested that TTB consider
revising the distilled spirits standards of fill to include a 2-
milliliter size. It stated it has a concept for a 2-millililter sample
size that could be given to consumers for free along with a mini
brochure describing the product. According to the company, this
packaging would allow the consumer to sample a product before purchase,
and would be a good way for companies to promote products.
TTB Proposal
In view of the points made in the petitions and inquiries discussed
above, TTB believes that it is appropriate to revisit the standards of
fill issue. TTB is proposing to eliminate the existing standards of
fill for distilled spirits, except that the regulations would maintain
a minimum standard of 50 milliliters and a maximum standard of 3.785
liters. The minimum container size is needed to insure sufficient space
on the container for required labeling. The maximum container size is
needed to maintain the distinction between bottled and bulk products.
TTB also welcomes comments on merely adding some or all of the
standards of fill requested in the petitions, or adding some or all of
those standards and also adopting an expedited approach for adding new
sizes in the future. TTB is considering eliminating the standards of
fill for the following reasons:
1. Elimination of the existing standards of fill would address the
petitions on this issue, would eliminate the need for industry members
to petition for additional authorizations if marketplace conditions
favor different standards in the future, and would eliminate
restrictions on competition and the movement of goods in domestic and
international commerce.
2. It would address concerns that the current standards of fill
unnecessarily limit manufacturing options and consumer purchasing
options, particularly where consumers may seek smaller containers to
target a specific amount of consumption.
3. TTB believes that the proposed labeling requirements regarding
net contents (see 27 CFR 5.32(b)(3) and 5.38) and those regarding the
design and fill of containers (see 27 CFR 5.46) provide consumers with
adequate information about container contents.
4. Limiting standards of fill is no longer necessary to ensure
accurate calculation of tax liabilities or to protect the revenue. TTB
verifies tax liability on the basis of a producer's production and
removal records, and allowing additional standards of fill would not
undermine TTB's efforts in this regard. ATF and TTB previously took the
position that limiting the number of bottle sizes protected the revenue
by facilitating accurate tax computations. This position was
successfully litigated in Goldstein v. Miller, 488 F.Supp. 156 (D. Md.
1980), aff'd without opinion 649 F.2d 863 (4th Cir. 1981), cert. denied
as Goldstein v. Regan, 454 U.S. 828 (1981). The litigation arose
shortly after the enactment of the all-in-bond system of tax payment
for distilled spirits under the Distilled Spirits Tax Revision Act of
1979, Title VIII of Public Law 96-39, 96th Cong., 1st Sess. Under this
system, the tax was calculated at the time of the removal of the
bottled distilled spirits from the distilled spirits plant rather than
at the early bulk stages before bottling. Due to the implementation of
the system, ATF was especially concerned about standards of fill at
that time. The all-in-bond system has now been in place for over 30
years. Audit experience since implementation of the all-in-bond system
and since the Goldstein litigation leads TTB to conclude that the
limitations on standards of fill are no longer necessary for revenue
protection purposes.
5. TTB's current experience with malt beverages, for which there is
no standard of fill requirement, shows no disproportionate level of
revenue compliance or consumer deception issues related to bottle
sizes.
In addition, we are proposing to amend the labeling regulations for
distilled spirits and malt beverages to specifically state that
distilled spirits may be labeled with the equivalent standard U.S.
measure in addition to the mandatory metric measure, and to
specifically state that malt beverages may be labeled with the
equivalent metric measure in addition to the mandatory standard U.S.
measure. This revision will formalize TTB's current policy and align
the distilled spirits and malt beverage labeling regulations with the
wine labeling regulations, which currently allow wine to be labeled
with the equivalent U.S. measure in addition to the mandatory metric
measure.
Discussion of the Proposed Changes
The specific regulatory amendments proposed in this document are as
follows:
In Sec. 5.32, which concerns mandatory label information
for distilled spirits, paragraph (a)(4) regarding net content
information on ``containers for which no standard of fill is
prescribed'' is removed because it would no longer be needed once all
but a minimum and maximum standard of fill are eliminated. In addition,
paragraph (b)(3) of Sec. 5.32, which currently requires that net
content information on ``containers conforming to the standards of
fill'' appear on the brand label or back label, is amended to remove
the reference to the standards of fill and to refer to Sec. 5.38,
which provides detailed requirements concerning the statement of net
contents on distilled spirits labels.
In Sec. 5.38, entitled ``Net contents,'' the current
texts of paragraphs (a) and (b) are removed because they distinguish
between the requirements for labeling bottles that conform to the
standards of fill requirements and those that do not, which would no
longer be needed. (Containers that did not conform to the standards of
fill requirements were those bottled before January 1, 1980, under a
different regulatory requirement.) Proposed new paragraph (a) provides
that the net contents of distilled spirits must be stated in metric
measure, but may also be stated in the equivalent standard U.S.
measure. Proposed paragraph (a) also provides a cross reference to the
regulations in Sec. 5.47, which address tolerances and the treatment
of unreasonable shortages. Paragraphs (c) and (d) are redesignated as
(b) and (c) respectively.
In Sec. 5.45, which concerns the applicability of
Sec. Sec. 5.46 through 5.47a (standard liquor bottle requirements, the
standards of fill for containers bottled before January 1, 1980, and
the standards of fill for containers bottled after December 31, 1979),
paragraph (a) is revised to change the reference ``Sec. 5.47a'' to
``Sec. 5.47'' and paragraph (b) is removed. These revisions are
necessary due to the removal of the current Sec. 5.47, the standards
of fill for distilled spirits bottled before January 1, 1980, discussed
below. In addition, with the removal of paragraph (b), Sec. 5.45 will
not contain any information collection requirement, and, as such, TTB
is removing the parenthetical reference at the end of the section to
the information collection approved under Office of Management and
Budget control number 1513-0064.
Section 5.47, standards of fill for distilled spirits
bottled before January 1, 1980, is removed. Since TTB is removing most
standards of fill for distilled spirits bottled on or after December
21, 1979, there is no reason to retain separate standards for distilled
spirits bottled before that date.
Section 5.47a is renumbered as Sec. 5.47, and paragraph
(a) is revised to set forth only maximum and minimum
[[Page 31268]]
metric standards and to specifically allow the optional addition of the
equivalent standard U.S. measurement. The maximum metric standard
(3.785 liters) corresponds to one wine gallon (see the definition of
``in bulk'' in 27 CFR 5.11). The minimum metric standard (50
milliliters) reflects what is prescribed in present Sec. 5.47a. We
believe the revised paragraph (a) text should apply to all types of
containers, including cans, and therefore the revised text does not
maintain the distinction between cans and other containers that is in
present Sec. 5.47a(a)(2). In addition, paragraph (d) is removed to
correspond to the removal of Sec. 5.47 discussed above. We have
retained the term ``standards of fill'' in the regulatory text to cover
the maximum and minimum standards, as well as related factors, such as
design, tolerance, and headspace, which have been traditionally
associated with the term.
In Sec. 7.27, which concerns net contents, the
introductory text of paragraph (a) is revised to specifically provide
for the inclusion of an equivalent metric measure in addition to the
specified U.S. measure.
Finally, references to ``Sec. 5.47a'' are removed and
replaced with ``Sec. 5.47'' in Sec. Sec. 26.40(c), 26.206(c), 26.312,
and 27.202.
Alternatives to the Proposal
TTB is also considering maintaining the standards of fill but
liberalizing the existing regulatory scheme. It simply could add some
or all of the petitioned-for standards of 700, 720, and 900
milliliters, and 1.8 liters, to Sec. 5.47a(a). It also could institute
an expedited process for considering future petitions to add additional
standards of fill and help ensure Sec. 5.47a is non-discriminatory and
does not create unnecessary obstacles to competition, trade, or
investment. For example, TTB could amend its regulations in Sec. 5.47a
to provide for administrative approvals of standards of fill. Under
such an expedited system, the Administrator could authorize new
standards of fill in response to a petition if the petition shows good
cause for approval (such as commercial viability), barring the
Administrator determining that the proposed standard would cause
confusion. Administratively approved standards of fill would then be
published on the TTB website so that other industry members are aware
of the additional authorized sizes.
Public Participation
Comments Sought
TTB requests comments on the proposals to eliminate the standards
of fill for distilled spirits (with the exception of a minimum 50-
milliliter standard and a maximum 3.785-liter standard), and to
specifically provide for the optional addition of U.S. equivalents for
distilled spirits and metric equivalents for malt beverages. TTB also
requests comments on alternative approaches, such as maintaining the
standards of fill but adding some or all of the petitioned-for
standards (e.g., 700, 720 and 900 milliliters and 1.8 liters) to Sec.
5.47a--including comments on the alternative of developing an expedited
process for adding new standards of fill in the future and the criteria
for approval of specific standards under an expedited process. TTB also
requests comments on whether the proposal to allow the net contents
statement on either the brand label or back label on a distilled
spirits container is sufficient to inform the consumer about the net
contents once standards of fill are eliminated, or whether TTB should
require that the net contents be stated on the brand label. Currently,
for distilled spirits bottled in containers conforming to the standards
of fill, the net contents may be placed on either the brand label or a
back label. Additionally, TTB understands that some state regulations
on standards of fill for distilled spirits may incorporate TTB
regulations by reference. TTB requests comments from state regulators
on whether this proposal will present a regulatory issue at the state
level. TTB invites any other suggestions or alternatives related to the
issue of standards of fill, including headspace requirements, for
distilled spirits. Given the absence of standards of fill for malt
beverages, TTB would be particularly interested in comments that
address the merits of continuing to apply different rules to wine and
spirits.
Any person submitting comments may present such data, views, or
arguments that he or she believes necessary. Comments that provide the
factual basis supporting the views or suggestions presented will be
particularly helpful in developing a reasoned regulatory decision on
this matter.
Submitting Comments
You may submit comments on this proposed rule by one of the
following three methods:
Federal e-Rulemaking Portal: You may send comments via the
online comment form posted with this proposed rule within Docket No.
TTB-2019-0005 on ``Regulations.gov,'' the Federal e-rulemaking portal,
at https://www.regulations.gov. A direct link to that docket is
available under Notice No. 183 on the TTB website at https://www.ttb.gov/spirits/spirits-rulemaking.shtml. Supplemental files may be
attached to comments submitted via Regulations.gov. For complete
instructions on how to use Regulations.gov, click on the site's
``Help'' tab.
U.S. Mail: You may send comments via postal mail to the
Director, Regulations and Rulings Division, Alcohol and Tobacco Tax and
Trade Bureau, 1310 G Street NW, Box 12, Washington, DC 20005.
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 400E, Washington, DC 20005.
Please submit your comments by the closing date shown above in this
proposed rule. Your comments must reference Notice No. 183 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 does not acknowledge receipt of comments, and considers
all comments as originals.
In your comment, please clearly state if you are commenting for
yourself or on behalf of an association, business, or other entity. If
you are commenting on behalf of an entity, your comment must include
the entity's name as well as your name and position title. In your
comment via Regulations.gov, please enter the entity's name in the
``Organization'' blank of the online comment form. If you comment via
postal mail or hand delivery/courier, 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 inappropriate for
public disclosure.
Public Disclosure
TTB will post, and you may view, copies of this proposed rule and
any online or mailed comments received
[[Page 31269]]
about this proposal within Docket No. TTB-2019-0005 on the Federal e-
rulemaking portal. A direct link to that docket is available on the TTB
website at https://ttb.gov/spirits/spirits-rulemaking.shtml under
Notice No. 183. You may also reach the relevant docket through the
Regulations.gov search page at https://www.regulations.gov. For
information on how to use Regulations.gov, click on the site's ``Help''
tab.
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 may view copies of this proposed rule and any electronic or
mailed comments TTB receives 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 Regulations.gov administrator at the above address or by
telephone at 202-453-2135 to schedule an appointment or to request
copies of comments or other materials.
Regulatory Analysis and Notices
TTB certifies that this proposed regulation, if adopted, will not
have a significant economic impact on a substantial number of small
entities.
Analysis of Impacts
The impacts of this proposed rule have been examined in accordance
with Executive Order 12866, Executive Order 13563, the Regulatory
Flexibility Act (5 U.S.C. 601-612), and the Unfunded Mandates Reform
Act of 1995 (Pub. L. 104-4).
Executive Orders 13771, 13563, and 12866 direct agencies to assess
costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits, including potential economic, environmental, public
health and safety effects, distributive impacts, and equity. Executive
Order 13563 emphasizes the importance of quantifying both costs and
benefits, reducing costs, harmonizing rules, and promoting flexibility.
The Executive Order 13771 designation for any final rule resulting from
the proposed regulation will be informed by comments received. The
preliminary Executive Order 13771 designation for this proposed rule is
deregulatory.
The proposed regulation has been designated by the Office of
Information and Regulatory Affairs (OIRA) as significant under
Executive Order 12866.
The Regulatory Flexibility Act requires agencies to analyze
regulatory options that would minimize any significant impact of a rule
on small entities. The proposal, if adopted, would reduce the
regulatory burden on distilled spirits producers and importers by
providing greater flexibility in the choice of product container sizes.
Moreover, the proposed amendments would not impose, or otherwise cause,
a significant increase in reporting, recordkeeping, or other compliance
burdens on a substantial number of small entities.
The Unfunded Mandates Reform Act of 1995 requires agencies to
prepare a written assessment of costs and benefits before proposing a
rule with mandates that ``may result in the expenditure by State,
local, and tribal governments, in the aggregate, or by the private
sector, of $100,000,000 or more (adjusted annually for inflation) in
any one year.'' This proposed rule would impose no new mandates.
Purpose of the Rule
Several regulatory requirements are intended to decrease the risk
that consumers will misjudge the quantities of distilled spirits in
containers available for sale and to protect the revenue. These
include:
A requirement that quantities of spirits conform to values
on a list of standard quantities, with each of the standard quantities
separated by at least 50 milliliters (27 CFR 5.47a(a)(1)); and
Provisions stating tolerances (discrepancies between
actual and stated fill), unreasonable shortages in fill, headspace, and
distilled spirits bottled or imported before January 1, 1980, and
marketed or released from customs custody on or after that date (the
date the U.S. volumetric standards were replaced by the metric
standards).
The standard quantities are called ``standards of fill.'' Although
originally these standard quantities were implemented to facilitate, at
least in part, accurate tax collection (but are no longer needed for
purposes of administering Federal taxes), these requirements may
decrease the risk of consumer confusion, but, under some circumstances,
the limitation also may impose additional costs without a corresponding
benefit.
This proposed rule would eliminate the requirement that quantities
correspond to standards of fill, allowing spirits to be sold in any
quantity between a minimum standard of 50 milliliters and a maximum
standard of 3.785 liters. The proposed rule would also amend the
labeling regulations for distilled spirits and malt beverages to state
expressly that distilled spirits may be labeled with the equivalent
standard U.S. measure in addition to the mandatory metric measure, and
specifically to state that malt beverages may be labeled with the
equivalent metric measure in addition to the mandatory standard U.S.
measure. The changes to the standards of fill are expected to increase
competition and economic efficiency by allowing manufacturers to
produce at lower costs and introduce products that would otherwise be
prohibitively costly or explicitly forbidden.
Background
Businesses are categorized by type using the North American
Industry Classification System (NAICS). Establishments primarily
engaged in distilling are classified under NAICS code 312140.
Establishments primarily engaged in the wholesale distribution of
distilled spirits and wine are classified under NAICS code 424820.
Establishments primarily engaged in retailing alcoholic beverages,
including wine, are classified under NAICS code 445310.
Total establishments, employees, and payroll for each category are
reported by the Census Bureau in the County Business Patterns (CBP)
data series. The most recent year for which CBP data were available at
the time of this analysis was 2016. Total receipts for establishments
in each category are reported by the Census Bureau in the Statistics of
U.S. Businesses (SUSB) data series. The most recent year for which SUSB
receipt data were available at the time of this analysis was 2012.
Table 1 reports total establishments, employees, payroll, and receipts
for each category.
[[Page 31270]]
Table 1--Industry Information
----------------------------------------------------------------------------------------------------------------
Payroll Receipts
Industry NAICS code Establishments Employees ($millions) ($millions)
----------------------------------------------------------------------------------------------------------------
Distilleries..................... 312140 716 11,038 $652 $9,139
Wholesalers specializing in wine 424820 2,599 87,026 6,462 76,170
and distilled spirits...........
Retailers specializing in wine 445310 33,958 167,286 3,795 43,085
and other alcoholic beverages...
----------------------------------------------------------------------------------------------------------------
Sources: Establishment counts, employee counts, and payroll are from 2016 County Business Patterns data
published by the Census Bureau. Receipts are from 2012 Statistics of U.S. Businesses data published by the
Census Bureau.
Costs
This proposed deregulation would, if implemented, impose no new
mandates. However, the rule could create some costs for both consumers
and producers. We are unable to quantify the costs, but welcome public
comment with relevant information.
Under the current standards of fill, consumers can misjudge a
quantity only by mistaking one standard quantity for another. The
difference between the smallest standard, 50 milliliters, and the next
standard, 100 milliliters, is 50 milliliters, or 100 percent of the
smaller standard. The absolute differences between adjacent standards
are typically larger for larger quantities, and, for quantities below
1.75 liters, never fall below 33 percent of the smaller standard. Large
differences between standards decrease the risk that one quantity on
the list of standards will be mistaken for another.
The rule would create costs for consumers if eliminating the
standards of fill increased confusion about the quantities available
for sale. However, other regulations would mitigate confusion about
quantities available for sale. See, e.g., 27 CFR 5.32, 5.38, 5.46(a),
5.46(b), 5.47a(b), and 5.47a(c).
Under current regulations, net contents labeling rules require that
the label or marking on the bottle itself accurately and legibly state
the quantity of the volume of contents in containers. The limitation on
headspace reduces the risk of consumer confusion by assuring the
quantity contained corresponds closely to the volume of the container.
Headspace is limited to 8 percent of capacity after closure for
containers with net contents of 200 milliliters or more. Rules on
tolerances limit discrepancies in fill amounts to measuring errors
occurring under good commercial practice, to differences in bottle
capacities, and to discrepancies due to variation in atmospheric
conditions. Provisions related to unreasonable shortages state that
such shortages shall not be compensated by overages in other bottles of
the same shipment.
Standards of fill may also have created secondary benefits that
would be foregone with their elimination. For example, standard sizes
may facilitate price comparison by consumers. When the net contents of
bottles are equal, the relative prices of the bottles correspond to the
relative prices per unit of spirits they contain. When container sizes
differ, the relative prices of bottles may differ from the relative
prices per unit, so the elimination of standards of fill could make the
comparison of prices per unit more difficult. Price per unit labeling
by retailers would decrease this potential impact of eliminating
standards of fill on the ease of comparison. Although price per unit
labeling by retailers is common, it is mandatory in just nine states,
and, where it is mandatory, alcohol is typically excluded.\1\ If a
proliferation in container sizes occurs under this proposal to largely
deregulate standards of fill, in the absence of unit price labeling at
retail establishments, consumers may not make the most cost-effective
purchasing choices, which would reduce economic efficiency.
---------------------------------------------------------------------------
\1\ See National Institute of Standards and Technology, ``Unit
pricing guide: A best practice approach to unit pricing.'' NIST
Special Publication 1181 (2015), available at http://dx.doi.org/10.6028/NIST.SP.1181; National Institute of Standards and
Technology, ``U.S. Retail Pricing Laws and Regulations by State,''
Sept. 17, 2018, available at https://www.nist.gov/pml/weights-and-measures/us-retail-pricing-laws-and-regulations-state.
---------------------------------------------------------------------------
The introduction of products that do not correspond to the
standards of fill could also create some costs for distilled spirits
manufacturers, wholesalers, and retailers. Potential costs include
those related to the renovation of production facilities to accommodate
new container sizes, the distribution of containers that do not conform
to current standards, and the reconfiguration of retail spaces.
Many of the potential costs may be fixed costs--one-time initial
adjustments--which may be more onerous for smaller producers who have
lower production volumes across which to spread the fixed costs.
However, new products would only be introduced if the expected profits
from introducing them were positive. Therefore the expected value to
consumers of the new products would generally exceed the expected cost
of their production, including any costs created by deviation from the
standards of fill, so that the benefits of introduction would be at
least as large as the costs.
Benefits
This proposed deregulation could, if implemented, create a range of
benefits. These include increasing economic efficiency by allowing
producers to harness economies of scale, increasing the variety of
products available to consumers, and increasing the competitiveness of
the market for distilled spirits. These efficiency gains could lead to
an increase in consumer surplus. We are unable to quantify the
benefits, but we welcome public comment with relevant information.
In some other countries, distilled spirits are bottled in standard
quantities that do not match the standards of fill in the United
States. Reconfiguring those spirits production facilities to produce
bottles specifically for the United States creates a fixed cost for
each new size produced. If the cost of reconfiguration is sufficiently
high, no bottles may be produced for the United States, despite
positive demand for those products at prices that correspond to
production at scale.
This proposal to eliminate all but the minimum and maximum
standards of fill would allow more manufacturers producing primarily
for foreign markets to sell their distilled spirits in the United
States. The entry of those firms would increase competition in the
spirits market. More competitive markets allocate resources more
efficiently by matching prices more closely to costs, so an increase in
the competitiveness of the spirits market would generate economic
benefits.
The introduction of those products would also increase consumer
choice by providing consumers with options they may prefer to those
currently available. Distilled spirits made primarily for foreign
markets may not be the only new products introduced. Spirits makers
currently producing for the
[[Page 31271]]
United States could also choose to introduce products that deviate from
the current standards of fill. Bottles that deviate from the current
standards may allow consumers to more closely match the quantities they
purchase to the quantities they desire to consume. Furthermore, some
limited evidence suggests that consumers value novelty in wine bottle
sizes, and novel bottle sizes may be of value to producers in
differentiating their brands.\2\ Possibly, consumer willingness to pay
premiums for novel bottle sizes in wine production may also apply to
spirits, although we do not find any studies directly analyzing this
notion for bottled spirits.
---------------------------------------------------------------------------
\2\ See Henrich Brunke, Franziska Thiemann & Rolf Mueller, ``Odd
Prices for Odd Bottles at VDP Auctions,'' paper presented at
Enometrics XVI conference of the Vineyard Data Quantification
Society in Namur, Belgium (2009); J. Fran[ccedil]ois Outreville,
``Does the Bottle Size Matter? An Investigation into Differences
between Posted and Market Price,'' American Association of Wine
Economists Working Paper Number 86 (2011).
---------------------------------------------------------------------------
Deviation of containers from current standards of fill may also
enhance productive efficiency among U.S. producers through economies of
scale. For example, under current rules, a U.S. spirits producer who
both sells domestically and exports to the European Union (EU) must use
different containers conforming to the standards of fill of each
respective market. The standard bottle size of distilled spirits is 750
milliliters in the U.S. and 700 milliliters in the EU. The proposed
rule would allow domestic producers to use a single 700 milliliter
bottle size to serve both markets, if they so choose.
Alternatives
The requirement that net contents conform to standards of fill
reduces the risk of consumer confusion about quantity at the cost of
restrictions on producers that decrease market efficiency. Consumer
information about net contents is also a concern for other types of
beverages, and the regulatory approaches taken for those beverages
suggest some alternatives to the proposed deregulation.
(1) Add new standards of fill. One alternative would be to add new
standards of fill to the current list. For example, standards of 720
milliliters, 900 milliliters, and 1800 milliliters could be added to
accommodate a foreign petition seeking access to the U.S. market
without incurring the fixed costs of changing its current bottle sizes.
One problem with that approach is that the proposed 720 milliliter
standard would be only 30 milliliters below the current standard of 750
milliliters, a difference of just 4 percent of the current standard.
Similarly, the 900 milliliter proposed standard is close to the 1000
milliliter current standard, and the 1800 milliliter proposed standard
would be virtually indistinguishable visually from the 1750 milliliter
current standard. Standards separated by such small amounts might
contribute to consumer confusion.
However, the piecemeal addition of new standards as circumstances
change involves costs that would be avoided by eliminating the
standards of fill entirely. The addition of new standards through
rulemaking would continue to involve the burden on industry of
petitioning for new standards and awaiting the outcomes and the burden
on the government of responding to the petitions and promulgating new
rules.
Standards of fill are not the only tool available for reducing the
risk of consumer confusion about quantities available for sale. The
appearance of net contents on the label is another tool, and more
prominent net contents labeling may achieve the same reduction in the
risk of confusion without incurring the costs associated with the
standards of fill. Currently, distilled spirits must generally conform
to standards of fill, and net contents can appear on the brand label or
back label affixed to the container (spirits bottled before 1980 must
show net contents on the front of the container), or be blown or etched
onto the front, back, or side of the bottle itself. Malt beverages need
not conform to standards of fill, but net contents must generally
appear on the brand label (27 CFR 7.22). Similarly, beverages like
carbonated soft drinks need not conform to standards of fill, but net
quantity of contents must appear on the principal display panel (21 CFR
101.7).
(2) Eliminate standards of fill but require net contents on brand
label for all containers. An alternative to the proposed rule would be
to eliminate the standards of fill but require that net contents appear
on the front label, analogous to the requirements for soft drinks. The
front label is more visible to consumers and would decrease the risk of
confusion about net contents relative to the appearance of net contents
on some other label. Relative to the proposed rule, this alternative
would create new costs associated with changing labeling for spirits
producers who do not currently state net contents on the front label.
(3) Eliminate standards of fill but require net contents on the
brand label only for non-standard container sizes. A third alternative
is to eliminate the requirement that net contents conform to a standard
of fill, but require that net contents be stated on a label affixed to
the front of the bottle only when the net contents do not conform to a
currently existing U.S. standard of fill (otherwise, the net contents
label may be affixed to either the front or back of the bottle, as
usual). This alternative would avoid creating new costs for production
that continues to conform to current standards of fill, but it could
create some potential costs for spirits sold in non-standard bottle
sizes, including domestic producers selling to foreign markets. Such
potential costs would not be incurred under the proposed rule. However,
in two cases, sales of spirits in new bottle sizes may avoid additional
labeling costs under this alternative. First, when the producer's
current practice already states net contents on the front label for its
distilled spirits products, this alternative requirement would be
business-as-usual and incurs no additional costs if applied to new
bottle sizes. The second case applies to a foreign producer who uses
non-standard size bottles and initiates new exports to the United
States as a result of the issuance of this alternative. The producer
would already be required to design and apply new conforming labels to
their bottled spirits destined for the U.S. market, so an obligation to
place net contents labels on the front of the bottle would not impose
an additional burden.
(4) Eliminate the standards of fill but enlarge the minimum type
size of the net contents statements for all containers. Another
alternative to the proposed rule would be to eliminate the standards of
fill but require the net contents appear in a larger than currently
mandated minimum type size on either the front or back label for all
containers. By making the net contents statements more visible to
consumers, the likelihood of potential confusion should be reduced.
Larger net contents statements may also help the aging population to
read them more easily. Current standards require the net contents
statement be made in type size of at least 2 millimeters for containers
larger than 200 milliliters, or at least 1 millimeter for containers of
200 milliliters or less (27 CFR 5.33(b)(6)). This requirement would
likely impose new costs on all producers except those who may already
state net contents in larger than minimum type sizes that would conform
to new minimum type size standards.
(5) Eliminate the standards of fill but enlarge the minimum type
size of the net contents statements only for non-standard container
sizes. A variation of the preceding alternative would be to eliminate
the standards of fill but
[[Page 31272]]
require the net contents to appear in a larger than currently mandated
minimum type size on either the front or back label only for containers
not conforming to a current standard of fill size. The distinction in
type size requirements of the net contents statements between new
container sizes (larger minimum type) and the current standard
container sizes (smaller minimum type) would help draw special
attention to the net contents of the former, and reduce consumer
confusion about the new container sizes. This requirement would impose
costs only on producers using non-standard container sizes.
(6) Eliminate the standards of fill but enlarge the minimum type
size of the net contents statements initially only for non-standard
container sizes, then for all containers. This alternative would
eliminate the standards of fill but require the net contents to appear
in a larger than currently mandated minimum type size on either the
front or back label initially only for containers not conforming to a
current standard of fill size, then phase-in the same larger minimum
type size for all containers. This variant would have the advantage of
drawing consumers' particular attention to the net contents of the new
container sizes for an initial three year period, before requiring all
containers to print net contents in the larger minimum type size. The
net contents statements for the new bottle sizes would ``stand out''
during the three year period because few of the standard sized bottles
would use the larger type size. This temporary distinction would help
consumers to understand the contents of the new bottle sizes appearing
in the market, and reduce the chances of confusion. Larger net contents
statements may also help the aging population to read them more easily.
This requirement would initially impose costs associated with modifying
the labels only on producers using non-standard container sizes, then
impose costs on all producers after three years.
Alternatives (2) through (6) intend to increase the likelihood that
consumers would see and understand the net contents of spirits at a
glance in a retail space potentially stocked with many different (and
sometimes similarly) sized containers. We have no reason to question
whether the net contents statements under current labeling rules
adequately inform consumers. However, if the proposed deregulation
results in a larger number of container sizes (sometimes similarly
sized), then consumers may need to rely more upon net contents
information on the labels, so improving their visibility may help to
constrain potential confusion.
A requirement that net contents appear on the brand label, or that
net contents be written in larger print type size would constitute a
new mandate on producers. Changing labels would involve administrative
costs as well as the costs of redesigning labels and replacing printing
equipment like engraving plates or cylinders. The proposed
degregulation avoids those costs by avoiding changes to the labeling
requirements.
Alternatives (3) and (5) apply only to non-standard container
sizes, and therefore impose no new mandates on producers complying with
current standards of fill. Distilled spirits producers electing to use
alternative container sizes may face costs associated with changing
their labels. However, producers would only be expected to undertake
those changes if doing so maximized profits. Therefore changes to
labeling would only be expected if making them were less costly than
conforming to the standards of fill. Furthermore, making such changes
would only maximize profits if the expected value to consumers exceeded
the cost of production, including the cost of any labeling changes.
As mentioned previously, a related matter is the ease of price
comparison by consumers. Under current standards of fill rules, it is
relatively simple to understand price differences per volume unit of
spirits because one may readily compare a range of spirits in the same
standard size containers. If the proposed deregulation results in more
container sizes that do not match a current U.S. standard, then unit
price comparison would become more difficult. When consumers are not
well-informed about relative unit pricing, they are less likely to make
cost-effective purchasing decisions, resulting in reduced economic
efficiency and potential welfare losses.
We welcome comment on these and other alternatives, including
information that will aid us in quantifying their costs and benefits.
Paperwork Reduction Act
The collection of information in this rule has been previously
approved by the Office of Management and Budget (OMB) under the title
``Labeling and Advertising Requirements Under the Federal Alcohol
Administration Act,'' and assigned control number 1513-0087. This
proposed regulation would not result in a substantive or material
change in the previously approved collection action, since the nature
of the mandatory information that must appear on labels affixed to the
container remains unchanged.
Drafting Information
Jennifer Berry of the Regulations and Rulings Division drafted this
document, along with other Department of the Treasury personnel.
List of Subjects
27 CFR Part 5
Advertising, Consumer protection, Customs duties and inspection,
Imports, Labeling, Liquors, Packaging and containers.
27 CFR Part 7
Administrative practice and procedure, Advertising, Customs duties
and inspection, Imports, Labeling, Malt beverages, Reporting and
recordkeeping requirements, Trade practices.
27 CFR Part 26
Alcohol and alcoholic beverages, Caribbean basin initiative,
Claims, Customs duties and inspection, Electronic funds transfers,
Excise taxes, Packaging and containers, Puerto Rico, Reporting and
recordkeeping requirements, Surety bonds, Virgin Islands, Warehouses.
27 CFR Part 27
Alcohol and alcoholic beverages, Beer, Cosmetics, Customs duties
and inspection, Electronic funds transfers, Excise taxes, Imports,
Labeling, Liquors, Packaging and containers, Reporting and
recordkeeping requirements, Wine.
Amendment to the Regulations
For the reasons discussed in the preamble, TTB proposes to amend 27
CFR parts 5, 7, 26, and 27 as follows:
PART 5--LABELING AND ADVERTISING OF DISTILLED SPIRITS
0
1. The authority citation for part 5 continues to read as follows:
Authority: 26 U.S.C. 5301, 7805, 27 U.S.C. 205.
0
2. In Sec. 5.32, paragraph (a)(4) is removed and reserved and
paragraph (b)(3) is revised to read as follows:
Sec. 5.32 Mandatory label information.
* * * * *
(b) * * *
(3) Net contents in accordance with Sec. 5.38.
* * * * *
0
3. Section 5.38 is amended by:
0
a. Revising paragraph (a);
0
b. Removing paragraph (b); and
[[Page 31273]]
0
c. Redesignating paragraphs (c) and (d) as paragraphs (b) and (c),
respectively.
The revision reads as follows:
Sec. 5.38 Net Contents.
(a) Standards of fill. The net contents of distilled spirits shall
be stated in metric measure. The equivalent standard U.S. measure may
also be stated on the container in addition to the metric measure. See
Sec. 5.47 of this part for tolerances and for regulations pertaining
to unreasonable shortages.
* * * * *
0
4. Section 5.45 is amended by:
0
a. Revising paragraph (a);
0
b. Removing and reserving paragraph (b); and
0
c. Removing the parenthetical phrase at the end of the section
containing the reference OMB control number 1513-0064.
The revision reads as follows:
Sec. 5.45 Application.
(a) No person engaged in business as a distiller, rectifier,
importer, wholesaler, or warehouseman and bottler, directly or
indirectly, or through an affiliate, shall sell or ship or deliver for
sale or shipment, or otherwise introduce in interstate or foreign
commerce, or receive therein or remove from customs custody any
distilled spirits in bottles unless such distilled spirits are bottled
and packed in conformity with Sec. Sec. 5.46 and 5.47.
* * * * *
Sec. 5.47 [Removed]
0
5. Section 5.47 is removed.
Sec. 5.47a [Redesignated as Sec. 5.47]
0
6. Section 5.47a is redesignated as Sec. 5.47.
0
7. In newly redesignated Sec. 5.47, the section heading and paragraph
(a) is revised and paragraph (d) is removed.
The revisions read as follows:
Sec. 5.47 Standards of fill.
(a) Authorized standards of fill. Subject to the tolerances allowed
under paragraph (b) of this section and the headspace prescribed in
Sec. 5.46(b), distilled spirits containers, other than bulk, may not
contain more than 3.785 liters or less than 50 milliliters.
* * * * *
PART 7--LABELING AND ADVERTISING OF MALT BEVERAGES
0
8. The authority citation for part 7 continues to read as follows:
Authority: 27 U.S.C. 205.
0
9. In Sec. 7.27, paragraph (a) introductory text is revised to read as
follows:
Sec. 7.27 Net contents.
(a) Net contents shall be stated in standard U.S. measure as
follows, and the equivalent metric measure may also be stated:
* * * * *
PART 26--LIQUORS AND ARTICLES FROM PUERTO RICO AND THE VIRGIN
ISLANDS
0
10. The authority citation for part 26 continues to read as follows:
Authority: 19 U.S.C. 81c; 26 U.S.C. 5001, 5007, 5008, 5010,
5041, 5051, 5061, 5111-5114, 5121, 5122-5124, 5131-5132, 5207, 5232,
5271, 5275, 5301, 5314, 5555, 6001, 6109, 6301, 6302, 6804, 7101,
7102, 7651, 7652, 7805; 27 U.S.C. 203, 205; 31 U.S.C. 9301, 9303,
9304, 9306.
Sec. 26.40 [Amended]
0
11. In Sec. 26.40, paragraph (c) is amended by removing the phrase
``Sec. 5.47a,'' and adding, in its place, the phrase ``Sec. 5.47''.
Sec. 26.206 [Amended]
0
12. In Sec. 26.206, paragraph (c) is amended by removing the phrase
``Sec. 5.47a,'' and adding, in its place, the phrase ``Sec. 5.47''.
Sec. 26.312 [Amended]
0
13. In Sec. 26.312, the first sentence is amended by removing the
phrase ``or Sec. 5.47a''.
PART 27--IMPORTATION OF DISTILLED SPIRITS, WINES, AND BEER
0
14. The authority citation for part 27 continues to read as follows:
Authority: 5 U.S.C. 552(a), 19 U.S.C. 81c, 1202; 26 U.S.C.
5001, 5007, 5008, 5010, 5041, 5051, 5054, 5061, 5121, 5122-5124,
5201, 5205, 5207, 5232, 5273, 5301, 5313, 5382, 5555, 6109, 6302,
7805.
Sec. 27.202 [Amended]
0
15. In Sec. 27.202, the first sentence is amended by removing the
phrase ``Sec. 5.47a'' and adding, in its place, the phrase ``Sec.
5.47''.
Signed: June 18, 2019.
Mary G. Ryan,
Acting Administrator.
Approved: June 20, 2019.
Timothy E. Skud,
Deputy Assistant Secretary Tax, Trade, and Tariff Policy.
[FR Doc. 2019-13767 Filed 6-28-19; 8:45 am]
BILLING CODE 4810-31-P