[Federal Register Volume 87, Number 145 (Friday, July 29, 2022)]
[Proposed Rules]
[Pages 45727-45730]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-16244]
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DEPARTMENT OF THE TREASURY
Alcohol and Tobacco Tax and Trade Bureau
27 CFR Part 5
[Docket No. TTB-2022-0007; Notice No. 213]
RIN 1513-AC88
Proposed Addition of American Single Malt Whisky to the Standards
of Identity for Distilled Spirits
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 (TTB) proposes to
amend the regulations that set forth the standards of identity for
distilled spirits to include ``American single malt whisky'' as a type
of whisky that is a distinctive product of the United States. This
proposal follows petitions and comments submitted by several distillers
and the American Single Malt Whisky Commission. TTB invites comments on
this proposed amendment to its regulations.
DATES: Comments must be received on or before September 27, 2022.
ADDRESSES: You may electronically submit comments to TTB on this
proposal, and view copies of this document, its supporting materials,
and any comments TTB receives on it within Docket No. TTB-2022-0007 as
posted at https://www.regulations.gov. A direct link to that docket is
available on the TTB website at https://www.ttb.gov/distilled-spirits/notices-of-proposed-rulemaking under Notice No. 213. Alternatively, you
may submit comments via postal mail to the Director, Regulations and
Ruling Division, Alcohol and Tobacco Tax and Trade Bureau, 1310 G
Street NW, Box 12, Washington, DC 20005. Please see the Public
Participation section of this document for further information on the
comments requested regarding this proposal and on the submission,
confidentiality, and public disclosure of comments.
FOR FURTHER INFORMATION CONTACT: Christopher M. Thiemann, Regulations
and Rulings Division, Alcohol and Tobacco Tax and Trade Bureau, 1310 G
Street NW, Box 12, Washington, DC 20005; telephone 202-453-2265.
SUPPLEMENTARY INFORMATION:
Background on the Labeling of Distilled Spirits
TTB Authority
The Alcohol and Tobacco Tax and Trade Bureau (TTB) administers
regulations regarding the labeling of distilled spirits that include
setting forth ``standards of identity.'' The authority to establish
these standards is based on section 105(e) of the Federal Alcohol
Administration Act (FAA Act), codified in the United States Code at 27
U.S.C. 205(e). That section authorizes the Secretary of the Treasury
(the Secretary) to prescribe regulations relating to the ``packaging,
marking, branding, and labeling and size and fill'' of alcohol beverage
containers ``as will prohibit deception of the consumer with respect to
such products'' and ``as will provide consumers with adequate
information as to the identity and quality of the products * * *.''
Section 105(e) of the FAA Act also generally requires bottlers and
importers of alcohol beverages to obtain certificates of label approval
(COLAs) prior to bottling or importing alcohol beverages for sale in
interstate commerce.
TTB administers these FAA Act provisions pursuant to section
1111(d)
[[Page 45728]]
of the Homeland Security Act of 2002, as codified at 6 U.S.C. 531(d).
In addition, the Secretary has delegated certain administrative and
enforcement authorities to TTB through Treasury Department Order 120-
01.
Part 5 of title 27 of the Code of Federal Regulations (27 CFR part
5) sets forth the regulations implementing those provisions of section
105(e) of the FAA Act as they pertain to distilled spirits.
Classes and Types of Spirits
Subpart I of part 5 of the TTB regulations (27 CFR part 5)
establishes standards of identity for distilled spirits products and
categorizes these products according to various classes and types. As
used in Sec. 5.141, the term ``class'' refers to a general category of
spirits. Currently, there are 12 different classes of distilled spirits
set out in Sec. Sec. 5.142-5.156, such as whisky, rum, gin, and
brandy. As used in Sec. 5.141, the term ``type'' refers to a
subcategory within a class of spirits. For example, ``Cognac'' and
``fruit brandy'' are types of brandy, and ``Cacha[ccedil]a'' is a type
of rum.
The TTB labeling regulations at 27 CFR 5.63(a)(2) require that the
class and type of distilled spirits appear on the product's label.
These regulations provide that the class and type must be stated in
conformity with Part 5, Subpart I of the TTB regulations.
Classification of Malt Whisky
Section 5.143(a) sets forth the standard of identity for whisky as
follows:
(a) The class whisky. ``Whisky'' or ``whiskey'' is distilled
spirits that is an alcoholic distillate from a fermented mash of any
grain distilled at less than 95 percent alcohol by volume (190[deg]
proof) having the taste, aroma, and characteristics generally
attributed to whisky, stored in oak barrels (except that corn whisky
need not be so stored), and bottled at not less than 40 percent
alcohol by volume (80[deg] proof), and also includes mixtures of
such distillates for which no specific standards of identity are
prescribed.
In Sec. 5.143, paragraphs (c)(1) through (18) categorize the
specific types of whisky, such as Bourbon whisky, spirit whisky, and
Scotch whisky. Currently, ``malt whisky'' is found in paragraph (c)(2)
and is described as whisky produced at not more than 160[deg] proof
from a fermented mash of not less than 51 percent malted barley and
stored at not more than 125[deg] proof in charred new oak barrels. Such
whisky stored in charred new oak barrels for a period of 2 years or
more may optionally be further designated as ``straight.'' See 27 CFR
5.143(c)(5). Paragraph (c)(7) sets forth the standard for whisky
distilled from malt mash, which is whisky produced in the United States
at not exceeding 160[deg] proof from a fermented mash of not less than
51 percent malted barley and stored in used oak barrels. As a result,
the labeling regulations provide standards for identifying whisky as
``malt whisky'' and ``whisky distilled from malt mash'' but do not
further specify standards for ``single malt whisky.''
Section 5.154(a)(3) provides that geographical names that are not
names for distinctive types of distilled spirits, and that have not
become generic, may not be used unless the product is produced in the
particular place or region indicated in the name. Accordingly, a
product designated as ``American whisky'' (or ``American single malt
whisky'') must have been produced in the United States.
American Single Malt Whisky Petitions and Comments
Petitions
In October 2017, TTB received three petitions with similar content
from XO Alambic, R[eacute]my Cointreau, and Westland Distillery. Each
of these petitioners noted that they were filing the petition on behalf
of, or with, the American Single Malt Whiskey Commission (ASMWC), an
association of at least seventy-five producers of whisky in the United
States.
In their petitions, the distillers requested the establishment of a
standard of identity to define the ``American single malt whisky''
category for producers and consumers alike. They noted that the
American whisky category has been growing over the past decade and
continues to expand, and that recognition of American single malt
whisky is at an all-time high, with U.S. distillers winning
international competitions with products in these categories. They
stated that establishment of a standard of identity would benefit
consumers, as it would provide a definition for the product, establish
trust in the category, clarify label declarations, and equip consumers
with the necessary information to make informed decisions so they can
have confidence in the products they are choosing to buy in a similar
way that Scotch whisky standards provide such information to American
consumer. They also believe establishment of a standard of identity
would strengthen the U.S. economy by increasing tax revenue related to
the sale of American Single Malt Whiskey, and by creating jobs related
to producing, distributing, and selling such a product and the
ingredients used in this product.
With some slight, non-substantive variations, these petitions
requested that TTB add a standard of identity as follows:
American Single Malt Whisky is whisky that is mashed, matured
and distilled at a single United States distillery, is so distilled
to a proof not exceeding 160[deg] proof from a fermented mash of
100% malted barley, is stored in oak containers not exceeding a
capacity of 700 liters, and is bottled at not less than 80[deg]
proof.
The petitioners conveyed that they believe the proposed language is
complementary to the long-standing regulatory definitions for whiskies
such as bourbon, but is distinctive enough to add value to the new
designation while not inhibiting innovation among producers of American
Single Malt Whisky.
TTB's Rulemaking on Modernizing Its Labeling Regulations
On November 26, 2018, TTB published in the Federal Register a
Notice of Proposed Rulemaking (Notice No. 176, 83 FR 60562) proposing
to amend its regulations governing the labeling and advertising of
wine, distilled spirits, and malt beverages to reorganize and recodify
these regulations. TTB undertook this action in order to simplify and
clarify its regulatory standards, incorporate guidance documents and
current policy into the regulations, and reduce the regulatory burden
on industry members where possible. In Notice No. 176, TTB sought
comments from the public on the regulatory proposals and TTB received
over 1,100 comments.
TTB did not include a standard of identity for American single malt
whisky in the regulatory amendments proposed in Notice No. 176.
Regardless, TTB received over 200 comments in support of a new standard
for American single malt whisky, including one from the ASMWC, which
was mirrored in a number of other comments, urging TTB to add such a
standard. The ASMWC's comment in response to Notice No. 176 proposed a
standard slightly modified from the original petitioned-for standard.
This new proposal would require that the distillation, mashing, and
maturation of American Single Malt Whisky take place in the United
States, but would require only that the distillation take place at a
single United States distillery. The ASMWC stated in their comment that
it has the support of more than 130 producers of single malt whisky.
They restated their view that the proposed language is complementary to
existing definitions
[[Page 45729]]
for bourbon whisky and whisky, but distinctive enough to add value to
the new designation while not inhibiting innovation among producers of
American Single Malt Whisky.
On February 9, 2022, TTB published T.D. TTB-176, which finalized
the updates to the regulations proposed in Notice No. 176 with regard
to distilled spirits and malt beverages. TTB did not finalize a
standard for American single malt whisky in that final rule because TTB
had not yet published such a standard in a notice of proposed
rulemaking.
TTB Regulatory Proposal
After reviewing the petitions and comments, the regulations on the
standards of identity in 27 CFR part 5, and TTB's database of approved
Certificates of Label Approval (COLAs) (as discussed below), TTB has
determined that amending the standards of identity regulations at Sec.
5.143 to provide for a new standard of identity for American Single
Malt Whisky merits consideration and public comment, as invited in this
notice of proposed rulemaking.
Therefore, this document proposes to amend the standard of identity
in Sec. 5.143(c) by adding American Single Malt Whisky as a type of
whisky in paragraph (15), generally incorporating the proposal in the
comments to Notice No. 176. Of note, TTB is proposing that American
Single Malt Whisky could be stored in any oak barrel (used, uncharred
new, or charred new) not exceeding 700 liters, as the petitioners
requested.
Effect on Currently Approved Labels
If finalized, this amendment to the TTB regulations would revoke by
operation of regulation any COLA that uses the term ``American single
malt whisky'' as a designation for a distilled spirits product that
does not meet the proposed standard of identity. TTB has searched its
COLA database and does not believe that this rulemaking will affect any
existing labels. To minimize the adverse effect on industry members who
hold COLAs for labels that conflict with the proposed ``American single
malt whisky'' designation and that would therefore be revoked by
operation of regulation, however, TTB could allow for a time-limited
use up of such labels by delaying the effective date of the rule
establishing this designation. Additionally, TTB specifically seeks
comments on the impact on current producers, including whether this
rulemaking would affect any existing labels. TTB notes that distillers
currently using the designations ``malt whisky,'' ``American malt
whisky,'' ``whisky distilled from malt mash,'' or ``American whisky
distilled from malt mash'' on their labels may continue to do so.
Public Participation
Comments Invited
TTB invites comments from interested members of the public on this
proposed rule, including on whether the proposed amendment would have
an adverse impact on owners of U.S. trademarks and current producers of
malt whisky. In addition, TTB specifically seeks comments on the
following questions:
Noting that other whisky standards do not incorporate size
restrictions for barrels, is a 700-liter limit for oak barrels for
aging American single malt whisky necessary or appropriate?
What impact, if any, would this new standard of identity
have on current producers of malt whisky?
If TTB adopts this proposed amendment, and if any
previously approved labels are impacted, for how long should TTB allow
the use of previously approved labels for American single malt whisky
that do not meet the new standard of identity before they are revoked
by operation of regulation?
Is it appropriate that the new standard of identity allows
the use of used, uncharred new, and charred new oak barrels?
Should TTB amend its regulations to allow for the
designation ``straight'' to be used with American Single Malt Whisky?
Should the use of coloring, flavoring, or blending
materials be allowed in the production of American single malt whisky?
If so, what coloring, flavoring, or blending materials are
``customarily employed'' in the production of American single malt
whisky, in accordance with 27 CFR 5.155? Please provide any available
evidence of their use.
Should TTB amend its regulations to allow for mixtures of
American single malt whisky to be labeled as ``blended American single
malt whisky,'' similar to how TTB regulations allow for blended Scotch
whisky and blended Canadian whisky to be labeled, respectively,
``blended Scotch whisky'' and ``blended Canadian whisky''?
On February 9, 2022, the Department of the Treasury
released a report, ``Competition in the Markets for Beer, Wine, and
Spirits,'' which was produced in response to Executive Order 14036,
``Promoting Competition in the American Economy'' (86 FR 36987, July 9,
2021). Would the addition of a standard of identity for American Single
Malt Whisky affect competition in the alcohol beverage market?
Submitting Comments
You may submit comments on this proposal as an individual or on
behalf of a business or other organization via the Regulations.gov
website or via postal mail, as described in the ADDRESSES section of
this document. Your comment must reference Notice No. 213 and must be
submitted or postmarked by the closing date shown in the DATES section
of this document. You may upload or include attachments with your
comment. You also may submit a comment requesting a public hearing on
this proposal. The TTB Administrator reserves the right to determine
whether to hold a public hearing. If TTB schedules a public hearing, it
will publish a notice of the date, time, and place for the hearing in
the Federal Register.
Confidentiality and Disclosure of Comments
All submitted comments and attachments are part of the rulemaking
record and are subject to public disclosure. Do not enclose any
material in your comments that you consider confidential or that is
inappropriate for disclosure.
TTB will post, and you may view, copies of this document, its
supporting materials, and any comments TTB receives about this proposal
within the related Regulations.gov docket. In general, TTB will post
comments as submitted, and it will not redact any identifying or
contact information from the body of a comment or attachment.
Please contact TTB's Regulations and Rulings division by email
using the web form available at https://www.ttb.gov/contact-rrd, or by
telephone at 202-453-2265, if you have any questions regarding how to
comment on this proposal or to request copies of this document, its
supporting materials, or the comments received in response.
Regulatory Analysis and Notices
Regulatory Flexibility Act
Pursuant to the requirements of the Regulatory Flexibility Act (5
U.S.C. 601 et seq.), TTB certifies that this proposed rule, if adopted,
would not have a significant economic impact on a substantial number of
small entities. The proposed rule only adds a new standard of identity
for whisky at 27 CFR 5.143, which allows for the designation of a new
class and type designation on labels, and it imposes no new reporting,
recordkeeping, or other
[[Page 45730]]
administrative requirements. TTB searched the COLAs Online database and
did not find any labels that we believe would be affected, but we are
taking public comment on the issue of affected labels to get more
information about the potential economic effects of the rulemaking.
Therefore, no regulatory flexibility analysis is required.
Executive Order 12866
It has been determined that this proposed rule is not a significant
regulatory action as defined by Executive Order 12866 of September 30,
1993. Therefore, no regulatory assessment is required.
Drafting Information
Christopher M. Thiemann of the Regulations and Rulings Division
drafted this notice of proposed rulemaking.
List of Subjects in 27 CFR Part 5
Advertising, Alcohol and alcoholic beverages, Consumer protection,
Customs duties and inspection, Imports, Labeling, Liquors, Packaging
and containers, and Reporting and recordkeeping requirements.
Proposed Regulatory Amendment
For the reasons discussed in the preamble, TTB proposes to amend
title 27, chapter I, part 5, Code of Federal Regulations, 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 and 207.
Subpart C--Standards of Identity for Distilled Spirits
0
2. Section 5.143 is amended by:
0
a. Adding a sentence at the end of paragraph (b); and
0
b. In Table 1 to paragraph (c), adding paragraph (15).
The additions read as follows:
Sec. 5.143 Whisky.
* * * * *
(b) * * * ``American single malt whisky'' must be distilled
entirely at one U.S. distillery, and must be mashed, distilled, and
aged in the United States.
(c) * * *
Table 1 to Paragraph (c)--Types of Whisky and Production, Storage, and Processing Standards
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Allowable coloring,
Type Source Distillation proof Storage Neutral spirits flavoring, blending
permitted materials permitted
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* * * * * * *
(15) American single malt whisky.. Fermented mash of 100 160[deg] or less..... Oak barrels not No..................... Yes.
percent malted exceeding 700
barley. liters.
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* * * * *
Signed: July 20, 2022.
Mary G. Ryan,
Administrator.
Approved: July 20, 2022.
Thomas C. West, Jr.,
Deputy Assistant Secretary (Tax Policy).
[FR Doc. 2022-16244 Filed 7-28-22; 8:45 am]
BILLING CODE 4810-31-P