Federal Register, Volume 90 Issue 11 (Friday, January 17, 2025)

[Federal Register Volume 90, Number 11 (Friday, January 17, 2025)]
[Proposed Rules]
[Pages 5763-5778]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2025-00955]

[[Page 5763]]

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DEPARTMENT OF THE TREASURY

Alcohol and Tobacco Tax and Trade Bureau

27 CFR Parts 4, 5, and 7

[Docket No. TTB-2025-0003; Notice No. 238]
RIN 1513-AC94

Major Food Allergen Labeling for Wines, Distilled Spirits, and
Malt Beverages

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
require a labeling disclosure of all major food allergens used in the
production of alcohol beverages subject to TTB's regulatory authority
under the Federal Alcohol Administration Act. Under the proposed
regulations, unless an exception applies, labels must declare milk,
eggs, fish, Crustacean shellfish, tree nuts, wheat, peanuts, soybeans,
and sesame, as well as ingredients that contain protein derived from
these foods, if used in the production of the alcohol beverage. TTB
proposes a compliance date of 5 years from the date that a final rule
resulting from this proposal is published in the Federal Register.

DATES: Comments must be received on or before April 17, 2025.

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-2025-0003 as
posted at https://www.regulations.gov. A direct link to that docket is
available on the TTB website at https://www.ttb.gov/laws-and-regulations/all-rulemaking under Notice No. 238. 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: Curt Eilers, Regulations and Rulings
Division, Alcohol and Tobacco Tax and Trade Bureau, 1310 G Street NW,
Box 12, Washington, DC 20005; telephone 202-453-1039, ext. 041.

SUPPLEMENTARY INFORMATION: In accordance with 5 U.S.C. 553(b)(4), a
summary of this rule may be found at https://www.regulations.gov/TTB-2025-0003.

I. Background

On December 16, 2003, the Center for Science in the Public Interest
(CSPI) and others petitioned the Alcohol and Tobacco Tax and Trade
Bureau (TTB), requesting changes to the alcohol beverage labeling
regulations to, among other things, require information about
allergens. The following year, Congress enacted the Food Allergen
Labeling and Consumer Protection Act of 2004 (FALCPA), which amended
the Federal Food, Drug, and Cosmetic Act (FD&C Act) by defining what
constitutes a ``major food allergen'' (21 U.S.C. 321(qq)) and requiring
the presence of each major food allergen to be declared on the product
label using the name of the food source from which the major food
allergen is derived.
On July 26, 2006, TTB published an interim rule, T.D. TTB-53 (71 FR
42260), entitled ``Major Food Allergen Labeling for Wines, Distilled
Spirits and Malt Beverages,'' which addressed the voluntary labeling of
major food allergens used in the production of alcohol beverages. On
that same date, TTB published a proposed rule, Notice No. 62 (71 FR
42329), seeking comments on mandatory allergen labeling for alcohol
beverages. TTB did not finalize the proposed rule, and mandatory
labeling of major food allergens on alcohol beverage labels has not
been adopted.
In 2021, TTB received a letter, dated February 24, 2021, from
several consumer groups and public health advocates, including CSPI,
Alcohol Justice, the American Institute for Cancer Research, Breast
Cancer Prevention Partners, the Consumer Federation of America, the
National Consumers League, and the U.S. Alcohol Policy Alliance. The
letter urged the Secretary of the Treasury to adopt regulations to
mandate a standardized label that would include additional information
about calories, standard drinks, and advice on moderate drinking from
the U.S. Department of Agriculture and U.S. Department of Health and
Human Service's Dietary Guidelines for Americans. The letter also urged
the identification of any major food allergens present in the product
and an ingredient declaration that lists each ingredient by its common
or usual name.
On February 9, 2022, the Department of the Treasury, in
consultation with the Department of Justice and the Federal Trade
Commission, released a report entitled ``Competition in the Markets for
Beer, Wine, and Spirits'' (Competition Report). The Competition Report
was requested by Executive Order 14036, ``Promoting Competition in the
American Economy''. One of the Competition Report's findings was that
``[r]egulatory proposals that could serve public health and foster
competition by providing information to consumers, such as mandatory
allergen, nutrition, and ingredient labeling proposals, have not been
implemented.'' \1\ The Competition Report contains several
recommendations, including that ``TTB should revive or initiate
rulemaking proposing ingredient labeling and mandatory information on
alcohol content, nutritional content, and appropriate serving sizes.''
\2\
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\1\ See page 3 of the report, available at https://home.treasury.gov/system/files/136/Competition-Report.pdf.
\2\ Id. at page 61.
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Consistent with the Competition Report's recommendations, and
considering the February 2021 letter referenced above, TTB decided to
revisit the issue of mandatory allergen labeling for alcohol beverages.
In addition, TTB had received several comments in favor of reopening
this issue during the public comment period for proposals to modernize
alcohol beverage labeling in 2018. See Notice No. 176, 83 FR 60562,
November 26, 2018. Because it has been almost 20 years since TTB
solicited comments on allergen labeling, TTB published Notice No. 232,
which announced two virtual listening sessions, on February 28 and 29,
2024, and the opening of a docket to receive public input on labeling
of wine, distilled spirits, and malt beverages with per-serving alcohol
and nutritional information, major food allergens, and/or ingredients.
TTB is now publishing for public comment a new proposal that would
require allergen labeling for wines, distilled spirits, and malt
beverages. TTB is addressing the Competition Report's recommendations
and Notice No. 232 comments from the listening sessions on mandatory
alcohol facts and ingredient labeling in separate rulemaking projects.

II. TTB's Authority To Regulate Alcohol Beverage Labeling

A. TTB's Statutory Authority Under the FAA Act

TTB is responsible for the administration of the Federal Alcohol
Administration Act, 27 U.S.C. 201 et seq. (FAA Act), which sets forth

[[Page 5764]]

standards for the regulation of the labeling of wine (containing at
least 7 percent alcohol by volume), distilled spirits, and malt
beverages that will be sold or otherwise introduced in interstate or
foreign commerce. (This document generally refers to these products as
``alcohol beverages.'') Section 105(e) of the FAA Act (27 U.S.C.
205(e)) gives the Secretary authority to issue labeling regulations to
prevent deception of the consumer, to provide the consumer with
``adequate information'' as to the identity, quality, and alcohol
content of the product, and to prohibit false or misleading statements.
Additionally, the FAA Act gives the Secretary the authority to
prohibit, irrespective of falsity, labeling statements relating to age,
manufacturing processes, analyses, guarantees, and scientific or
irrelevant matters which are likely to mislead the consumer. In the
case of malt beverages, the labeling provisions of the FAA Act apply
only if the laws or regulations of the State into which the malt
beverages are to be shipped impose similar requirements.
The FAA Act generally requires bottlers and importers to obtain a
certificate of label approval (COLA) from TTB prior to bottling wine,
distilled spirits, or malt beverages for introduction into interstate
commerce, or removing alcohol beverages from customs custody, in
bottles, for sale or any other commercial purpose. The law provides
that COLAs are to be issued in such manner and form as the Secretary
shall prescribe by regulations.
TTB administers the FAA Act provisions pursuant to section 1111(d)
of the Homeland Security Act of 2002, 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.
Current TTB regulations do not require the disclosure of
ingredients or major food allergens on alcohol beverage labels.
However, as explained in the next section, labels must disclose the
presence of FD&C Yellow No. 5, cochineal extract or carmine, sulfites,
and aspartame for health-related reasons. A health warning statement
applicable to all alcohol beverages containing 0.5 percent or more
alcohol by volume is also required by the Alcoholic Beverage Labeling
Act of 1988, codified at 27 U.S.C. 213-219 and 219a and implemented in
the TTB regulations at 27 CFR part 16.

B. Current Ingredient Disclosures on Alcohol Beverage Labels

TTB's predecessor agency, the Bureau of Alcohol, Tobacco, and
Firearms (ATF), proposed on several occasions to adopt mandatory
ingredient disclosure requirements for alcohol beverages. In each case,
ATF ultimately decided not to adopt full ingredient labeling
requirements. (See Notice No. 41, 70 FR 22274, April 29, 2005, for a
more complete history of those ingredient labeling regulatory
initiatives.)
In 1980, ATF published regulations that required ingredient
labeling for alcohol beverages, with a delayed effective date. See T.D.
ATF-66 (45 FR 40538, June 13, 1980). ATF subsequently rescinded those
regulations before they went into effect. See T.D. ATF-94 (46 FR 55093,
November 6, 1981). CSPI and others challenged this action in court. ATF
subsequently undertook a new round of rulemaking, and issued another
final rule, T.D. ATF-150 (48 FR 45549, October 6, 1983), which
rescinded ingredient labeling but mandated the disclosure of one
ingredient, FD&C Yellow No. 5, on alcohol beverage labels. In the
preamble to T.D. ATF-150, ATF stated that there was ``no clear evidence
in the record that any other ingredient besides FD&C Yellow No. 5 poses
any special health problem. The Department will look at the necessity
of mandatory labeling of other ingredients on a case-by-case basis
through its own rulemaking initiative, or on the basis of petitions for
rulemaking. . . .'' Ultimately, the D.C. Circuit Court of Appeals
upheld ATF's actions in rescinding mandatory ingredient labeling in
favor of a policy that would require the agency to consider the
necessity of mandatory labeling of specific ingredients on a case-by-
case basis. See Center for Science in the Public Interest v. Department
of the Treasury, 797 F.2d 995, 1004 (D.C. Cir. 1986).
Consistent with that case-by-case review policy, ATF subsequently
undertook rulemaking that resulted in the issuance of regulations
requiring the disclosure on labels of sulfites in alcohol beverages
(T.D. ATF-236, 51 FR 34706, September 30, 1986) because it was
determined that the presence of undeclared sulfites in alcohol
beverages posed a recognized health problem to sulfite-sensitive
individuals. See 27 CFR 4.32, 5.63, and 7.63.
In 1987, ATF entered a Memorandum of Understanding (MOU) with the
U.S. Food and Drug Administration (FDA) which continues in effect. See
Notice No. 648 (52 FR 45502, November 30, 1987). The MOU states that
ATF would initiate rulemaking proceedings to promulgate labeling
regulations for alcohol beverages when FDA determined that the presence
of an ingredient in food products, including alcohol beverages, posed a
recognized public health problem and that the ingredient must be
identified on a food product label.
Pursuant to the policies set forth in the MOU, and based on FDA
determinations as reflected in its regulations, ATF, and later TTB,
subsequently engaged in rulemaking that resulted in regulations
requiring a declaration on labels when aspartame is used in the
production of malt beverages (T.D. ATF-347, 58 FR 44131, August 19,
1993) and distilled spirits (T.D. TTB-176, 87 FR 7526, February 9,
2022). The following statement must appear in capital letters, separate
and apart from all other information: ``PHENYLKETONURICS: CONTAINS
PHENYLALANINE.'' \3\ On April 16, 2012, TTB amended its regulations to
require alcohol beverage labels to disclose the presence of cochineal
extract and carmine so consumers who are allergic to these color
additives would be able to identify and thus avoid alcohol beverage
products that contain them. See T.D. TTB-103 (77 FR 22485, April 16,
2012). See also 27 CFR 4.32, 5.63, and 7.63.
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\3\ The evidence FDA considered showed a need to alert certain
individuals with specific medical conditions to the presence of
phenylalanine in products containing aspartame. This statement is
directed towards individuals with Phenylketonuria (PKU), an
inherited disorder of the metabolism of phenylalanine, who need to
carefully restrict their phenylalanine intake.
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C. Enactment of FALCPA

In 2004, Congress enacted the Food Allergen Labeling and Consumer
Protection Act of 2004 (FALCPA). FALCPA amended the Federal Food, Drug
and Cosmetic Act (FD&C Act) to require food labels to declare the
presence of each major food allergen using the name of the food source
from which the major food allergen is derived. For example, instead of
merely listing ``semolina,'' the label must also list ``wheat,'' and
instead of merely listing ``sodium casein,'' the label must also list
``milk.'' The 2004 FALCPA amendments defined ``major food allergens''
as milk, egg, fish, Crustacean shellfish, tree nuts, wheat, peanuts,
and soybeans, as well as most ingredients \4\

[[Page 5765]]

containing proteins derived from these foods.
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\4\ As explained further in this document, FALCPA provides
exemptions for any highly refined oil derived from a major food
allergen and any ingredient derived from such a highly refined oil,
and for food ingredients that are exempt from major food allergen
labeling requirements pursuant to a petition for exemption approved
by FDA under 21 U.S.C. 343(w)(6) or pursuant to a notice submitted
to FDA under 21 U.S.C. 343(w)(7), provided that the food ingredient
meets the terms or conditions, if any, specified for that exemption.
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The FALCPA amendments provide two ways for a manufacturer to
disclose major food allergens on the label:
The label can show the name of the food source from which
the major food allergen is derived within parentheses in the ingredient
list, for example, ``Ingredients: Water, wheat, whey (milk), albumen
(eggs), and peanuts.''
The label can list the name of the food source from which
the allergen is derived in a ``Contains'' statement after, or adjacent
to, an ingredient list, for example: ``Ingredients: Water, sugar, whey,
and albumen. Contains Milk and egg.''
The label can also declare the allergen in the ingredient list as
well as in a ``Contains'' statement but when this occurs, the
``Contains'' statement must be complete, which means that the
``Contains'' statement must include all the major food allergens in the
product. The allergen labeling requirements in FALCPA apply to any
packaged FDA-regulated food, as that term is defined in section 201(f)
of the FD&C Act, other than raw agricultural commodities. However, the
FAA Act assigns TTB jurisdiction to regulate the labeling of wine,
distilled spirits, and malt beverages. See Brown-Forman Distillers
Corp. v. Mathews, 435 F. Supp. 5 (W.D. Ky. 1976) and 1987 MOU with FDA.
In its report on FALCPA, the House of Representatives Committee on
Energy and Commerce recognized that FALCPA does not apply to alcohol
beverages regulated by TTB under the FAA Act and called for TTB to work
with FDA to promulgate appropriate allergen labeling regulations,
consistent with the 1987 MOU with FDA. The committee report
accompanying FALCPA stated:

The Committee expects, consistent with the November 30, 1987
Memorandum of Understanding, that the Alcohol and Tobacco Tax and
Trade Bureau (TTB) of the Department of Treasury will pursuant to
the Federal Alcohol Administration Act determine how, as
appropriate, to apply allergen labeling of beverage alcohol products
and the labeling requirements for those products. The Committee
expects that the TTB and the FDA will work together in promulgation
of allergen regulations, with respect to those products.

H.R. Rep. No. 608, 108th Cong., 2d Sess., at 3 (2004) (hereafter
``House committee report''). Congress thus recognized TTB's
longstanding policy of consulting with FDA in determining what
ingredients in alcohol beverages should be disclosed on labels and
indicated that TTB should issue appropriate allergen regulations for
alcohol beverage products, pursuant to the policies expressed in the
MOU with FDA and the authority of the FAA Act.
Consistent with the expectations expressed in the House committee
report, TTB consulted with FDA prior to issuing this proposed rule.
However, TTB's legal authority to issue regulations on allergen
labeling of alcohol beverages is based on the FAA Act, and thus differs
in some respects from the requirements of FALCPA. Accordingly, this
proposed rule reflects TTB's interpretation of its authority under the
FAA Act, as informed by the language in the House committee report.
The proposed regulations do not necessarily represent the views of
FDA regarding allergen labeling or the requirements of FALCPA. One of
the key differences between the food labeling regulations implemented
by FDA and the alcohol beverage labeling regulations implemented by TTB
is that the TTB regulations currently do not require the disclosure of
all ingredients on labels. As explained later in this document, this is
especially important because there are many allergens other than the
major food allergens identified in FALCPA.

III. Rulemaking History

A. 2005 Advance Notice of Proposed Rulemaking

Consistent with the FALCPA House committee report, on April 29,
2005, TTB published in the Federal Register (70 FR 22274) Notice No.
41, an advance notice of proposed rulemaking (ANPRM) entitled
``Labeling and Advertising of Wines, Distilled Spirits and Malt
Beverages; Request for Public Comment.'' Notice No. 41 sought public
comment on a wide range of alcohol beverage labeling and advertising
issues to help TTB determine what regulatory changes in alcohol
beverage labeling and advertising requirements, if any, TTB should
propose in future rulemaking documents. These included calorie and
carbohydrate claims, ``Serving Facts'' or ``Alcohol Facts'' statements,
ingredient labeling, and allergen labeling. TTB invited comments on
specific issues related to allergen labeling, including:
Whether TTB regulations should require allergen labeling
to be part of or adjacent to a list of ingredients, similar to the
FALCPA requirements;
Whether an allergen must be labeled in an allergen
statement even when the allergen name already appears in the product
name;
How processing or fining agents should be labeled;
Whether TTB should consider threshold levels in allergen
labeling;
What costs industry might incur from new labeling
requirements; and
How consumers might benefit from allergen labeling.
TTB also invited submission of any other relevant information about
allergen labeling.
TTB received over 19,000 comments in response to the ANPRM,
approximately 50 of which specifically addressed the subject of
allergen labeling. Of those, the vast majority favored mandatory
labeling of the major food allergens. Industry members, including major
trade associations, as well as consumer and public health advocates
commented in support of major food allergen labeling. Although
commenters took different positions on some of the specific issues TTB
sought comment on in the ANPRM, only a few comments questioned the
usefulness of requiring allergen information on alcohol beverage
labels.

B. 2006 Interim Rule on Voluntary Allergen Labeling

While TTB is not reproposing its 2006 interim regulations which
established standards for voluntary labeling of major allergens, there
are similarities in this proposal, such as the procedures for obtaining
an exemption, that warrant a brief summary of the 2006 regulations.
Under the interim regulations, producers, bottlers, and importers of
wines, distilled spirits, and malt beverages may voluntarily declare on
their labels the presence of milk, eggs, fish, Crustacean shellfish,
tree nuts, wheat, peanuts, and soybeans, as well as ingredients that
contain protein derived from these foods. However, if industry members
choose to disclose allergens, the interim regulations set forth
mandatory rules on how to undertake those disclosures--unless one of
three exceptions applies.
Two of these exceptions from major food allergen labeling are based
on FALCPA's definition of the term ``major food allergen,'' which
excludes both highly refined oil and food ingredients exempt from
allergen labeling under the FDA procedures at 21 U.S.C. 343(w)(6) and
(7). The third is an exemption through a TTB petition process created
by the interim regulations. All three are described in the following
paragraphs.
The original FALCPA definition of ``major food allergen'' excluded
any highly refined oil derived from one of the eight foods or food
groups listed in

[[Page 5766]]

that definition and any ingredient derived from such highly refined
oil.\5\ TTB included this as an exception from the definition of a
major food allergen in the interim regulations.
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\5\ On April 23, 2021, the President signed the Food Allergy
Safety, Treatment, Education, and Research (FASTER) Act into law,
declaring sesame as the ninth major food allergen. Accordingly,
there are now nine major food allergens described in 21 U.S.C.
321(qq).
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The second FALCPA exclusion from the definition of ``major food
allergen'' arises from two processes FALCPA added to the FD&C Act at 21
U.S.C. 343(w)(6) and (7), by which any person may obtain an exemption
from the allergen labeling requirements imposed by the statute.
Subsection (w)(6) allows any person to petition the Secretary of Health
and Human Services to exempt a food ingredient from the allergen
labeling requirements. Under its delegated authority, FDA performs the
function of the Secretary in this area. In this situation, the burden
is on the petitioner to provide scientific evidence (including the
analytical method used to produce the evidence) that demonstrates that
the food ingredient, as derived by the method specified in the
petition, does not cause an allergic response that poses a risk to
human health. FDA must approve or deny any such petition within 180
days of receipt, or the petition will be deemed denied, unless an
extension is mutually agreed upon by FDA and the petitioner.
Subsection (w)(7) allows any person to file a notification
containing scientific evidence demonstrating that a food ingredient
``does not contain allergenic protein.'' The scientific evidence must
include the analytical method used to produce the evidence that the
food ingredient, as derived by the method specified in the
notification, does not contain allergenic protein. Alternatively, the
notification may contain a determination from FDA under a premarket
approval or notification program provided for in section 409 of the
FD&C Act (21 U.S.C. 348) that the food ingredient does not cause an
allergic response that poses a risk to human health. FDA has 90 days to
object to a notification. Absent an objection, the food ingredient may
be introduced or delivered for introduction into interstate commerce as
a food ingredient that is not a major food allergen.
Many ingredients and food additives used in the production of foods
regulated by FDA are also used in the production of alcohol beverages
regulated by TTB. Accordingly, the interim regulations included in the
definition of the term ``major food allergen'' an exception for uses of
food ingredients that are exempt pursuant to 21 U.S.C. 343(w)(6) or (7)
discussed above. Alcohol beverage industry members also must establish
that the proposed use of the ingredient is consistent with any
conditions of use in the FD&C Act exemption for the ingredient.
As noted above, the interim regulations' third exception from
allergen labeling is through a TTB petition process. TTB recognized
that major food allergens are used in alcohol beverage production in
ways that may differ from the way they are used in the production of
foods regulated by FDA. For this reason, the interim regulations refer
to an exception for a product covered by a petition for exemption
approved by TTB. See 27 CFR 4.32a-b, 5.82-5.83, and 7.82-7.83. A
petition may pertain to the use of a major food allergen in the
production of one specific alcohol beverage product or it may pertain
to a class of products using a particular process involving a major
food allergen.
The TTB petition process is like that of the petition and
notification processes provided for at 21 U.S.C. 343(w)(6) and (7),
except that the TTB petition procedure focuses on finished products
instead of ingredients. The TTB petition process may be used:
When it is asserted that the product or class of products,
as derived by the method specified in the petition, does not cause an
allergic response that poses a risk to human health; or
When it is asserted that the product or class of products,
as derived by the method specified in the petition, does not contain
allergenic protein, even though a major food allergen was used in
production.
The interim TTB regulations provide for only a petition procedure,
rather than both the petition procedure and the notification procedure
provided for in the FALCPA amendments to the FD&C Act. In addition, the
interim regulations provide that if TTB does not approve or deny the
petition for exemption within 180 days of receipt, the petition is
deemed denied, unless an extension of time is mutually agreed upon by
TTB and the petitioner. TTB's petition procedure is therefore like the
petition procedure in 21 U.S.C. 343(w)(6) in that both procedures place
the burden on the petitioner to provide evidence in support of the
exemption and give the agency 180 days to respond.
The regulations also provide that a determination under this
section constitutes a final agency action and that even though a
petition is deemed denied because no action was taken within the 180-
day period, the petitioner may resubmit the petition at any time. A
resubmitted petition will be treated as a new petition.

C. 2006 Proposed Rule on Mandatory Allergen Labeling

As noted above, on the same date that TTB published interim
regulations on the voluntary labeling of major food allergens, the
agency also published Notice No. 62 (71 FR 42329 July 26, 2006),
proposing to adopt mandatory alcohol beverage labeling requirements
when one or more major food allergens, or ingredients derived from such
allergens, are used in the production of the alcohol beverage. The
proposed regulations were almost identical to those in the interim
rule, except where necessary to note that major food allergen labeling
would be mandatory. The proposed regulations set forth the same
procedures for petitioning for an exemption from allergen labeling.
TTB received 51 comments in response to Notice No. 62. While most
commenters were generally supportive of mandatory allergen labeling,
concerns were raised about various implementation issues, including the
absence of thresholds for the testing of finished alcohol beverages to
determine if the products contained major food allergens; whether
distillation should be recognized as a process that removed allergenic
proteins; and the treatment of fining agents or processing aids, such
as eggs, used in the production of alcohol beverages and then filtered
out so that only trace amounts of the major food allergen remained in
the finished product. While TTB did not finalize the 2006 proposed rule
on mandatory allergen labeling, the interim regulations providing for
voluntary allergen labeling remain in effect.

IV. Reasons for Issuing a New Notice on Mandatory Allergen Labeling

A. Comments in Response to Notice No. 176

On November 26, 2018, TTB published in the Federal Register Notice
No. 176 (83 FR 60562), ``Modernization of the Labeling and Advertising
Regulations for Wine, Distilled Spirits, and Malt Beverages,'' which
sought comments on the modernization of the labeling regulations, but
specifically stated that it would not address issues such as ingredient
or allergen labeling. Nonetheless, TTB received several comments
critical of that omission. Some of these comments specifically
addressed mandatory allergen labeling.

[[Page 5767]]

On February 22, 2019, CSPI, the Consumer Federation of America, and
the National Consumers League commented on Notice No. 176 in a letter
directed to the Secretary of the Treasury. The comment stated that
while the consumer organizations supported the modernization of the
labeling regulations, Notice No. 176 ``falls dramatically short of what
is needed to truly `modernize' alcohol labeling by failing to require
uniform disclosure of key information--alcohol content, serving size,
calories, ingredients, and allergen information--that consumers need to
make informed choices.''
The comment stated that ``TTB has similarly failed to follow
through on protections for consumers with food allergies. Disclosure of
allergen information can have life-and-death consequences for some
consumers, a harsh reality that led to passage of [FALCPA], which
requires allergen labeling for FDA-regulated foods and beverages.'' The
comment questioned why TTB had issued only an interim rule on voluntary
allergen labeling, given that in its rulemaking, TTB noted that the
major trade associations had expressed support for mandatory labeling
of major food allergens. The comment suggested that the voluntary
disclosure allowed by the interim rule ``creates a patchwork system
that leaves consumers guessing. It may actually undermine public health
to the extent that consumers with allergies may assume that an
alcoholic beverage is safe to drink if its label has no allergen
content declaration, when in fact the manufacturer simply has not
bothered to label allergens that may be present.''
The Brewers Association also urged TTB to adopt mandatory allergen
labeling, stating that ``the allergen disclosures required by FALCPA
should be included in the mandatory information on malt beverage
labels.'' The comment also stated that if TTB did not address allergen
labeling in this rulemaking, the issue warranted a separate rulemaking
in the future. On the other hand, the Distilled Spirits Council of the
United States (DISCUS) stated that it supported the proposal to
maintain the existing rule on voluntary allergen labeling and suggested
that ``TTB should continue to point to FDA as the lead federal agency
with regard to allergens.''

B. Letter From Public Health Advocates (2021 CSPI Letter)

On February 24, 2021, a letter was submitted on behalf of CSPI, the
Consumer Federation of America, the National Consumers League, Alcohol
Justice, the American Institute for Cancer Research, Breast Cancer
Prevention Partners, and the U.S. Alcohol Policy Alliance, urging the
Secretary to adopt regulations to mandate alcohol content statements
and a standardized Serving Facts label on all wine, distilled spirits,
and malt beverage products regulated under the FAA Act. The letter also
urged the adoption of regulations mandating an ingredient declaration
that lists each ingredient by its common or usual name and identifies
any major food allergens present in the product.

C. Treasury Report on Competition in the Markets for Beer, Wine, and
Spirits

As noted above, on February 9, 2022, the Department of the
Treasury, in consultation with the Department of Justice and the
Federal Trade Commission, released a report on competition in the
markets for alcohol beverages. One of the Competition Report's findings
was that ``[r]egulatory proposals that could serve public health and
foster competition by providing information to consumers, such as
mandatory allergen, nutrition, and ingredient labeling proposals, have
not been implemented.'' \6\ The Competition Report made some labeling
recommendations, including a recommendation that TTB ``should revive or
initiate rulemaking proposing ingredient labeling and mandatory
information on alcohol content, nutritional content, and appropriate
serving sizes.'' \7\
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\6\ See page 3 of the Competition Report, available at https://home.treasury.gov/system/files/136/Competition-Report.pdf.
\7\ Id. at page 61.
---------------------------------------------------------------------------

D. 2024 Virtual Public Listening Sessions

In light of the Competition Report, TTB announced in the Spring
2022 Unified Agenda of Federal Regulatory and Deregulatory Actions that
it would publish an NPRM on possible changes to its regulations related
to allergen labeling for alcohol beverages. Executive Order 14094,
``Modernizing Regulatory Review,'' was subsequently published on April
6, 2023, directing agencies, to the extent practicable and consistent
with applicable laws, to provide opportunities for public participation
designed to promote equitable and meaningful participation by a range
of interested or affected parties to inform regulatory actions.
On January 31, 2024, TTB issued Notice No. 232, which announced two
virtual listening sessions and the opening of a public docket to
receive written comments on the labeling of alcohol beverages with per-
serving alcohol and nutritional information, major food allergens, and/
or ingredients. Consistent with Executive Order 14094, TTB sought input
from a wide range of stakeholders, including those who may not usually
comment on its proposals, to inform rulemaking, particularly given the
broad implications of these issues. TTB also posed specific questions.
Those related to major food allergens included whether consumers
believe that they are adequately informed by information currently
provided on alcohol beverage labels and whether listing major food
allergens would be important information for consumers in making
purchasing or consumption decisions. TTB also asked whether requiring
additional information about major food allergens, alcohol or
nutritional information, and ingredients on labels would be expected to
increase the cost of products, and whether there are alternative ways
of providing the information, for example by allowing information to be
provided through a website using a quick response code (QR code) or
website address on the label.
The listening sessions, held on February 28 and 29, 2024, engaged
consumers, public health stakeholders, and industry members
representing businesses of different sizes. Approximately 700
registrants attended the two virtual sessions, including 47 different
speakers. In addition to the oral comments received during the
listening sessions, TTB received 5,159 written comments in response to
Notice No. 232.
The vast majority of the comments TTB received on allergens either
favored mandatory labeling of major food allergens or did not express
opposition to it. This included consumer and public health stakeholders
as well as industry members and trade associations representing the
alcohol beverage industry. However, some small sized producers opposed
any new regulatory requirements. For example, Carriage House Vineyards
and Travelers Cellar commented that ``The proposed changes regarding
nutritional information, major food allergens and ingredients would
significantly and negatively impact our small farm winery. . . . In our
years of operation, consumers have shown no interest, nor have to this
point inquired on any of the items that the proposal is looking to
add.''
Consumers and public health stakeholders stated that major food
allergen disclosures are necessary due to the implications for
individuals with

[[Page 5768]]

such allergies. TTB received substantially identical comments from
4,724 individuals supporting allergen disclosures, as well as other
disclosures for alcohol content, serving size, nutritional information,
and ingredients, which stated that ``For the 33 million Americans with
food allergies, knowing what is in a product from ingredient and
allergen labeling can be a matter of life or death.'' Other individual
commenters stressed the uncertainty they face without mandatory
allergen disclosures. For example, one individual commented that
``Without this information on alcoholic beverages, consuming them is
like playing a lottery--I never know if a product may contain an
ingredient I need to avoid until it's too late.'' The Centers for
Disease Control and Prevention commented that ``Accurate labeling for
major food allergens is crucial information to ensure safety for the
consumer.'' AllergyStrong commented that ``The majority of people are
not aware alcohol falls outside [FALCPA]--mistakenly believing that any
consumable product is accurately labeled for allergens.'' CSPI stated
that ``TTB should follow the lead of FDA and other countries and
require ingredient and allergen labeling.''
Some commenters expressed a preference that mandatory allergen
labeling for alcohol beverages be consistent with FDA requirements. The
Asthma and Allergy Foundation of America stated that ``To the extent
possible, labeling information should be displayed on alcoholic
beverages similar to labeling on FDA-regulated foods. Consumers with
food allergies are accustomed to FDA labeling, and would be able to
easily transition to a similar model for checking the safety of
alcoholic beverages . . .'' The Brewers Association commented that
``TTB should strive to make [major allergen] disclosures as consistent
as possible with FDA disclosure rules under the FALCPA and its
implementing regulations and guidance documents, while taking into
account the different underlying labeling rules that apply to malt and
other alcohol beverages versus most foods.''
Other commenters discussed the effect of distillation on allergenic
ingredients used in the production of alcohol beverages, suggesting
that any mandatory allergen disclosures should be based on the product
post-distillation rather than the raw materials prior to distillation.
DISCUS stated that ``Scientifically-based major food allergen labeling
. . . that properly identifies products containing allergenic protein
capable of causing an adverse reaction--can provide beneficial
information to consumers with allergies,'' but also noted that
distillation removes the proteins that cause allergic reactions and
thus, ``any new allergen labeling regulations need to be focused on the
post distillation final product.'' The Scotch Whisky Association
commented that ``The distillation process completely transforms the raw
materials used to produce a distilled spirit, so they are undetectable
in the final product. Therefore, distillers should only list the
elements and ingredients that have been added to the final product.
Otherwise, consumers could be misled into thinking that they would be
affected by the properties of the raw material used in the distillation
process.''
Many of the comments TTB received from industry members and their
trade associations advocated for the use of QR codes to satisfy new
labeling requirements generally. However, among those who spoke about
major food allergens specifically, some commenters otherwise in favor
of QR codes still supported allergen declarations on the product's
label. The American Distilled Spirits Alliance (ADSA) commented that
``while certain important information to consumers, including alcohol
content and allergen information, may efficiently and effectively be
included on a physical product label, more detailed information and
information that is subject to periodic modification or update over
time may be better communicated through a QR code. . . .'' Similarly,
the National Association of Beverage Importers commented that ``The
presence of a major allergen is also such an important piece of
information'' that it ``must be available to all consumers and appear
on a label on the bottle or container.''
Comments from industry also noted concerns about costs associated
with new labeling requirements generally, including costs to conduct
laboratory testing. While commenters did not specifically refer to
costs of laboratory analysis related to mandatory labeling of major
food allergens, ADSA commented that ``further discussion must be had
around testing, requirements for good manufacturing practices and other
safety protocols.''

E. International Developments

TTB participates in the Codex Alimentarius Commission by working
with the FDA and the U.S. Codex Office at the U.S. Department of
Agriculture. The Commission, which was established by the Food and
Agriculture Organization and the World Health Organization, publishes
the Codex Alimentarius, or ``Food Code,'' a collection of standards
designed to protect the health of consumers and ensure fair practices
in food trade. In recent years, the Codex Committee on Food Labelling
has been discussing food allergen standards, allergen labeling
provisions, and a possible framework for evaluating exemptions for food
allergens. TTB is actively monitoring these developments and other
Codex Alimentarius work related to alcohol labeling.

V. Proposed Regulatory Changes

For the reasons stated above, TTB is proposing rules for the
mandatory labeling of major food allergens used in the production of
alcohol beverages. Consistent with the FALCPA House committee report
and TTB's statutory mandate under the FAA Act to promulgate regulations
ensuring that consumers receive adequate information about the identity
and quality of alcohol beverages, TTB believes that alcohol beverage
labels should provide consumers with sufficient information about the
use of major food allergens in the production of alcohol beverages so
that consumers with food allergies may make an informed decision as to
whether consumption of a particular beverage may pose a risk of an
allergic reaction.
Existing regulations in 27 CFR 4.32, 5.63, and 7.63 list the
mandatory information that must appear on labels of wine, distilled
spirits, and malt beverages, respectively. TTB proposes to amend these
sections to include mandatory allergen labeling requirements, with a
cross-reference to the proposed new regulations that provide more
detail about the mandatory allergen labeling requirements.

A. Labeling of Major Food Allergens and other Mandatory Disclosures

1. Wording of the Labeling Statement and Other Mandatory
Disclosures
TTB is proposing that the mandatory food allergen statement consist
of the words ``Contains Major Food Allergen(s)'' followed by a colon
and the name of the food source(s) from which each major food allergen
is derived, for example, ``Contains Major Food Allergen: milk'' or
``Contains Major Food Allergens: wheat and milk.'' This wording differs
from the current voluntary allergen statement and is intended to make
clear that the statement only relates to the nine major

[[Page 5769]]

food allergens \8\ and does not include other, non-major food
allergens, or other ingredients that may cause adverse reactions in
some individuals.\9\ TTB specifically seeks comments below on this
wording and other related issues as described in this section.
---------------------------------------------------------------------------

\8\ As noted previously, the FASTER Act of 2021 revised 21
U.S.C. 321(gg) such that there are now nine major food allergens:
milk, eggs, fish, Crustacean shellfish, tree nuts, wheat, peanuts,
soybeans, and sesame.
\9\ In a draft guidance published in April 2022, FDA notes the
distinction between food allergies and other food intolerances, as
well as the existence of more than 160 known food allergens,
including the 9 currently identified major food allergens. See
Evaluating the Public Health Importance of Food Allergens Other Than
the Major Food Allergens Listed in the Federal Food, Drug, and
Cosmetic Act: Guidance for FDA Staff and Stakeholders (Draft),
available at https://www.fda.gov/regulatory-information/search-fda-guidance-documents/draft-guidance-fda-staff-and-stakeholders-evaluating-public-health-importance-food-allergens-other.
---------------------------------------------------------------------------

TTB recognizes that changes in the wording or format of allergen
disclosures may be warranted if TTB also requires ingredient
disclosures. For example, if TTB requires both, aligning such labeling
with food labeling may be warranted. Unlike foods labeled under FDA
regulations, alcohol beverages subject to TTB's labeling rules do not
currently require the listing of ingredients on labels. TTB is
conducting a separate rulemaking on this issue and is not proposing to
adopt mandatory ingredient labeling in this document. For food
products, FDA allows major food allergens to be listed within the
ingredient statement by their common or usual name, or in a separate
``contains'' statement. See 21 U.S.C. 343(w)(1). If TTB adopts
mandatory ingredient labeling, allowing a major food allergen
disclosure within such a statement, or allowing the statement to simply
say ``contains'' instead of ``Contains Major Food Allergen(s),'' may be
warranted. TTB seeks comment on these wording and format issues and the
issues discussed below.
Under current TTB regulations, certain ingredients that are not
``major food allergens'' but nevertheless pose a recognized public
health problem must be disclosed on labels. Currently this includes
FD&C Yellow No. 5, cochineal extract or carmine, sulfites, and
aspartame.\10\ See 27 CFR 4.32, 5.63, and 7.63. If an alcohol beverage
contains any of the first four of these ingredients, the label must
include a statement to that effect. While examples of such statements
are provided, such as ``FD&C Yellow No. 5'' or ``contains carmine,''
the specific wording of the disclosure is left to the industry member.
In the case of aspartame, the following statement, in capital letters,
must appear, separate and apart from all other information:
``PHENYLKETONURICS: CONTAINS PHENYLALANINE.'' Sometimes industry
members combine such disclosures, along with voluntary disclosures of
other ingredients, for example, ``contains: cochineal extract and
sulfites,'' or ``contains: sulfites and vanilla beans.''
---------------------------------------------------------------------------

\10\ In the case of sulfites, the disclosure is required if the
product contains ``10 or more parts per million of sulfur dioxide or
other sulfiting agent(s) measured as total sulfur dioxide.''
---------------------------------------------------------------------------

In this notice of proposed rulemaking, TTB is currently only
proposing to change its regulations to require the mandatory major food
allergen statement ``Contains Major Food Allergen(s): . . .'', which
would be separate from and not affect other required disclosures.\11\
However, TTB solicits comments on the wording of the proposed mandatory
major food allergen statement and the possible inclusion of other
mandatory ingredient disclosures. Specifically, TTB solicits comments
on the following:
---------------------------------------------------------------------------

\11\ For example, ``Contains Major Food Allergen: milk'' or
``Contains Major Food Allergens: egg and milk''.
---------------------------------------------------------------------------

1. Should TTB adopt the proposed wording of the major food allergen
statement (``Contains major food allergen(s)'' followed by a colon and
the name of the food source from which each major food allergen is
derived)? Alternately, should TTB require or allow alternative formats,
including the following:
``Contains'' followed by a colon and the name of the food
source from which each major food allergen is derived; or
A heading such as ``Major Food Allergen Information''
followed by ``Contains:'' or other language and the name of the food
source from which each major food allergen is derived.
2. Should TTB allow the inclusion of major food allergens within a
voluntary ingredient statement on labels as an alternative to a
separate major food allergen statement?
3. If mandatory ingredient labeling is ultimately adopted, should
TTB allow the inclusion of major food allergens in the list of
ingredients as an alternative to a separate major food allergen
statement? If mandatory ingredient labeling is ultimately adopted,
should TTB use the ``Contains'' statement for major food allergens,
consistent with FDA's approach? Should TTB limit the use of the
``Contains'' statement only for major food allergens?
4. Should other ingredients that are required to be disclosed under
current TTB regulations (FD&C Yellow No. 5, cochineal extract or
carmine, sulfites, and aspartame) be required to be listed in one
statement on the label? If so, should the other ingredients be included
in a ``Contains'' statement that includes the major food allergens?
(For example, ``Contains egg and sulfites''). Or should the major food
allergens be identified as such, and the other ingredients listed
separately (for example, ``Contains Major Food Allergen: egg. Contains
sulfites'')? Should another statement be used for ingredients that are
required to be disclosed under current TTB regulations (FD&C Yellow No.
5, cochineal extract or carmine, sulfites, and aspartame) to
differentiate from the ``Contains'' statement for major food allergens?
5. Would requiring all mandatory disclosures to be in one place on
the label, including the proposed major food allergen statement, make
it easier for consumers to find this information? Would such a
requirement impose additional costs or regulatory burdens on industry
members as compared to allowing the mandatory disclosures to appear
separately?
6. Should TTB mandate specific placement, type size, and
presentation requirements for major allergen labeling statements in
addition to the requirements already applicable to all mandatory
information on alcohol beverage labels? For example, should the
required allergen disclosure statement be set off by a box? Or, to the
extent practicable, should TTB mandate formatting consistent with FDA
requirements for major allergen labeling?
2. Definition of Major Food Allergen
The definition of the term ``major food allergen'' is consistent
with the statutory definition in the FD&C Act, as amended by FALCPA and
the FASTER Act. TTB is proposing the same definition used by FALCPA,
the FASTER Act, and FDA for consistency in labeling disclosures of
major food allergens across products regulated by TTB and FDA. Thus,
the proposed regulations define the term ``major food allergen'' as any
of the following: ``Milk, egg, fish (for example, bass, flounder, or
cod), Crustacean shellfish (for example, crab, lobster, or shrimp),
tree nuts (for example, almonds, pecans, or walnuts), wheat, peanuts,
soybeans, and sesame.'' The term as defined also includes any food
ingredient that contains protein derived from one of these nine foods
or food groups, subject to certain exceptions explained below in
Section V.B.
It should be noted that, consistent with guidance provided by FDA
to the food industry, the proposed regulations allow the terms
``soybean,'' ``soy,'' and ``soya'' as synonyms for the term

[[Page 5770]]

``soybeans,'' as used in the statute.\12\ Furthermore, consistent with
FDA guidance, the singular term ``peanut'' may be substituted for the
plural term ``peanuts,'' and singular terms (for example, almond,
pecan, or walnut) may be used in place of plural terms to describe the
different types of tree nuts. FALCPA provides that in the case of tree
nuts, the label must list the common name of the specific type of nut
(for example, almonds, pecans, or walnuts), and in the case of
Crustacean shellfish, the label must list the name of the species of
shellfish (for example, crab, lobster, or shrimp). 21 U.S.C. 343(w)(2).
The proposed regulations are consistent with the FALCPA amendments with
respect to the labeling of tree nuts and Crustacean shellfish.
---------------------------------------------------------------------------

\12\ See Questions and Answers Regarding Food Allergens,
Including the Food Allergen Labeling Requirements of the Federal
Food, Drug, and Cosmetic Act (Edition 5): Guidance for Industry
(last revised, November 2022), page 9, available at https://www.fda.gov/media/117410/download.
---------------------------------------------------------------------------

3. Labeling of Fish Species
In the case of fish, the FALCPA amendments also provide that the
name of the species of fish (for example, bass, flounder, or cod) must
appear on the label. Id. However, for the reasons outlined below, the
proposed regulations set forth in this document would not require
labeling of the specific fish species. The proposed regulations would
instead require simply listing ``fish'' when any type of finfish
protein is used in the production of an alcohol beverage.
Isinglass and fish gelatin are often used to clarify wines and
beers. Isinglass is a substance obtained from the swim bladders of
sturgeon and other fish. Fish gelatin is obtained from the skin of a
fish. Fish gelatin is often made from cod skins but can be made from
any species of fish.
It is TTB's understanding that vintners and brewers, when
purchasing isinglass or fish gelatin from a manufacturer for fining
purposes, often do not know, and have no way of easily finding out,
which species of fish was used to make the product. Moreover, it may be
difficult for industry members to determine by chemical analysis which
fish species was the source of the isinglass or fish gelatin.
TTB recognizes that the FALCPA amendments require the labeling of
the species of fish used as an ingredient in a food product. However,
it is TTB's responsibility to implement allergen labeling regulations
that are appropriate for alcohol beverages, as noted in the FALCPA
House committee report. It is likely that declarations of the use of
fish in the production of alcohol beverages will generally involve the
use of isinglass or fish gelatin as a processing aid, rather than the
use of fish or foods derived from fish as an ingredient or a flavor for
an alcohol beverage, where the specific fish species may be more easily
identified. Because of the particular difficulty faced by producers in
determining the specific species of fish used in producing the
isinglass or fish gelatin, and because at least some consumers may be
allergic to more than one species of fish, requiring labeling with the
name of the specific species of fish may impose a difficult fact-
finding burden on the alcohol beverage industry without offering
consumers significant additional information to help them avoid the
risk of an allergic reaction.
Accordingly, TTB solicits comments on whether labeling alcohol
beverages produced using finfish protein merely as containing ``fish,''
rather than with the name of the fish species, provides adequate
information to consumers. TTB also seeks comments on whether there are
alternative approaches to this issue that would provide consumers with
adequate information regarding the use of finfish protein in the
production of alcohol beverages.
4. Processing and Fining Agents
Pursuant to the FD&C Act and its implementing regulations,
incidental additives, including processing aids, are generally not
subject to ingredient labeling requirements. FDA regulations exempt
from the ingredient labeling requirements incidental additives that are
present in a food at insignificant levels and do not have any technical
or functional effect in that food. See 21 CFR 101.100(a)(3). However,
FALCPA amended the FD&C Act to require that, notwithstanding any other
provision of law, a flavoring, coloring, or incidental additive that
is, or that bears or contains, a major food allergen must conform to
FALCPA's labeling requirements. See 21 U.S.C. 343(w)(4).
The TTB regulations on wine treatment, found at 27 CFR 24.246,
authorize the use of certain materials that are approved as being
consistent with good commercial practice in the production, cellar
treatment, or finishing of wine and, where applicable, in the treatment
of juice, subject to certain conditions. Some of these materials are
processing aids derived from major food allergens. For example, albumen
(egg white) is approved as a fining agent for wine, isinglass (a
gelatin prepared from the swim bladders of fish) is approved to clarify
wine, and casein (derived from milk) is approved to clarify wine.
TTB is proposing to require the disclosure of fining or processing
agents that are or contain major food allergens, with the option of
including the added parenthetical ``(processing aid)'' and is
soliciting comments on this proposal. For example, if egg whites are
used as a processing aid for wine, the industry member has the option
of disclosing this on the label as follows: ``Contains Major Food
Allergen: egg (processing aid).'' This is an option that industry
members may choose to use, but they also may choose to list these
agents without the parenthetical. TTB is not proposing parenthetical
statements for other incidental additives besides processing aids. TTB
seeks comments on whether this proposal, which is generally consistent
with FALCPA, will provide adequate information to consumers.
TTB recognizes that some countries may handle this issue through
exemptions for particular processing aids and that there are ongoing
discussions about exemptions at the international level. TTB will
monitor future developments to determine if they provide a
scientifically supported basis for a more categorical exemption in this
area, and we will continue to consult with FDA on this issue.
5. Threshold Levels
The FALCPA amendments, which took effect for foods labeled on or
after January 1, 2006, require allergen labeling for packaged foods
regulated by FDA without the establishment of any threshold levels for
labeling. The FDA stated that a ``threshold is a value below which it
is unlikely that a food allergic individual would experience an adverse
effect'' and notes that ``[a]t this time, the FDA has not established a
threshold level for any allergens.'' \13\
---------------------------------------------------------------------------

\13\ See https://www.fda.gov/food/food-labeling-nutrition/food-allergies.
---------------------------------------------------------------------------

Consistent with TTB's longstanding policy of consulting with FDA in
determining what ingredients in alcohol beverages should be disclosed
on labels, TTB defers to FDA on this issue, and FDA has not established
any thresholds for major food allergens. Accordingly, TTB is not
proposing to set thresholds for the disclosure of major food allergens.
Instead, the proposed rule provides that all major food allergens and
proteins derived from the major food allergens used in production must
be declared on the beverage label, unless the product or class of
products is covered by an approved petition for exemption, or otherwise
falls under an applicable exception, as discussed below. TTB believes
that this position will ensure that consumers have

[[Page 5771]]

adequate information about the potential presence of major food
allergens used in the production of alcohol beverages. If FDA
establishes thresholds in the future, TTB will reconsider its policy on
this issue.
6. Allergen Advisory Labeling
TTB's proposal does not specifically address allergen advisory
labeling, such as statements that a product may contain a major food
allergen, e.g., ``May Contain (major food allergen).'' TTB is concerned
that allergen advisory labeling could be used as substitute for
adherence to current good manufacturing practices and could be
misleading. TTB is soliciting comments on the use of allergen advisory
labeling.

B. Exceptions From Allergen Labeling Requirements

1. Exceptions Found in Current Regulations
TTB is not proposing to amend the standards set forth in the
current regulations providing exceptions from major food allergen
labeling for ingredients derived from highly refined oil (consistent
with the definition of ``major food allergen'' in the FD&C Act) and for
food ingredients that are exempt pursuant to the FDA notice and
petition processes in 21 U.S.C. 343(w)(6) or (7). Furthermore, TTB is
not proposing to amend the current standards in the regulations that
allow an exception for a product or class of products covered by a
petition for exemption that is approved by TTB. A petition may pertain
to the use of a major food allergen in the production of one specific
alcohol beverage product or it may pertain to a class of products using
a particular process involving a major food allergen. Consistent with
the 1987 MOU with FDA, TTB intends to confer with FDA, as appropriate
and as FDA resources permit, on petitions submitted under the proposed
rule.
2. Distillation
In previous rulemaking, commenters asked whether spirits distilled
from a fermented mash containing a major food allergen (such as wheat)
must be labeled as containing that major food allergen. Industry
members have suggested that the distillation process removes all
protein, including allergenic protein. TTB is therefore proposing in 27
CFR 5.75(b)(2) that major food allergens, or ingredients containing
major food allergens, need not be declared on a label when such
allergens or ingredients have been subject to distillation in such a
manner that no protein, allergenic or otherwise, remains in the
distilled product or distilled ingredient. As explained below, this is
consistent with the position FDA has taken regarding the removal of
proteins using the distillation process within the context of major
food allergen labeling and gluten-free labeling of distilled foods.\14\
TTB is soliciting comments on this proposal.
---------------------------------------------------------------------------

\14\ TTB's current position on gluten-free labeling of distilled
foods is consistent with FDA's. See https://www.ttb.gov/rulings/r2020-2.
---------------------------------------------------------------------------

In June 2015, FDA published Food Allergen Labeling Exemption
Petitions and Notifications: Guidance for Industry.\15\ In that
guidance, FDA provided general advice for when a petition or
notification should be submitted under FALCPA, and specifically
addressed the distillation process. In particular, the guidance stated
that ``An ingredient derived from a major food allergen that does not
contain protein is not subject to the labeling requirements described
in section 403(w)(1) of the FD&C Act.'' FDA recognized that ``there are
some technologies (e.g., distillation) that may be able to produce
protein-free ingredients because of the nature of the process and
fundamental biochemical properties of proteins, peptides, and amino
acids.''
---------------------------------------------------------------------------

\15\ Available at https://www.fda.gov/regulatory-information/search-fda-guidance-documents/guidance-industry-food-allergen-labeling-exemption-petitions-and-notifications.
---------------------------------------------------------------------------

On August 13, 2020, FDA addressed the distillation issue in more
detail in its final rule to establish compliance requirements for
fermented and hydrolyzed foods, or foods that contain fermented or
hydrolyzed ingredients, bearing a ``gluten-free'' claim. See ``Food
Labeling: Gluten-Free Labeling of Fermented or Hydrolyzed Foods'' (85
FR 49240). The preamble to the FDA final rule explained that ``[i]f
good manufacturing practices are followed, the process of distillation
must remove all protein (and thus gluten), regardless if the product
has been distilled from gluten-containing grains.'' 85 FR 49248. FDA
noted that ``the process of distillation heats a liquid, which
vaporizes components with lower boiling points and separates them from
components with higher boiling points. The remaining compounds, whose
boiling points are too high to undergo vaporization, are left behind.''
Id. FDA concluded that ``[i]f distillation is done properly, the
process removes gluten because gluten does not vaporize.'' Id. For this
reason, FDA determined that ``a distilled product's labeling may bear a
`gluten-free' claim and should be safe for people with celiac disease
to consume.'' Id. The final rule provides that when a scientifically
valid method for verifying that a distilled product is gluten-free is
not available, FDA will evaluate compliance ``by verifying the absence
of protein in the distilled component using scientifically valid
analytical methods that can reliably detect the presence or absence of
protein or protein fragments in the food.'' 21 CFR 101.91(c)(5). The
preamble to the FDA final rule noted that the ``[t]ransfer of gluten
into the distillate would only be expected to occur under poor
manufacturing practices in which the initial material is splashing into
the distillate due to poor design of the still. Protein testing can be
done to confirm that protein (and thus gluten) is absent in the
distilled product.'' 85 FR 49248. FDA also noted that ``any ingredients
(such as flavors) added to the distilled product would need to be
`gluten-free' under Sec. 101.91(a)(3) for the finished product
labeling to bear a gluten-free claim.'' Id.
Consistent with the FDA's findings in its guidance on major food
allergens and its final rule on the labeling of distilled food products
with ``gluten-free'' claims, TTB is proposing to amend the distilled
spirits regulations in proposed 27 CFR 5.75(b)(2) to specifically
provide that the mandatory labeling requirements do not apply to major
food allergens used in the production of a distilled spirits product if
they have been completely distilled in such a manner that no protein
remains in the distilled spirits. As needed, TTB will evaluate
compliance by verifying the absence of protein in the distilled
component using scientifically valid analytical methods that can
reliably detect the presence or absence of protein or protein fragments
in the finished product. If ingredients containing protein are added to
the distilled spirits product after distillation, and no major food
allergens are listed on the label, industry members must be prepared to
substantiate, upon request, the absence of protein in the distillate,
the absence of any major food allergens in the added ingredients, and
the precautions taken to prevent cross-contact. TTB is soliciting
comments on whether this method of verifying compliance is adequate to
protect consumers and whether there are better alternatives.

C. Effective Date and Compliance With the Proposed Regulations

TTB is proposing a compliance date of 5 years from the date that a
final rule resulting from this proposal is published in the Federal
Register to minimize the costs and burdens associated with the proposed
new labeling information. TTB solicits comments on whether the proposed

[[Page 5772]]

compliance date would suffice to limit the impact on small businesses
and to reduce overall costs of compliance while ensuring that consumers
are adequately informed. TTB also seeks comments on whether the use of
a single compliance date for any new regulations on allergen,
ingredient, or ``Alcohol Facts'' labeling would provide consumers with
adequate information in a coherent and timely manner while also
reducing costs and other regulatory burdens on industry. See Section
VI, Cost Analysis, below, for additional information on coordinated
labeling changes. Similarly, TTB intends to clarify that industry
members will not be required to submit new COLA applications when the
only change being made to a label is the inclusion of a statement of
major food allergens. Therefore, this proposal would not require the
submission of a new application for label approval simply to add
allergen labeling statements in accordance with the new requirements.

VI. Cost Analysis

Executive Order 12866, as amended, requires TTB to design
regulations in the most cost-effective manner that will achieve the
regulatory objective. Accordingly, TTB seeks to tailor its regulations
to impose the least burden on individuals, businesses of differing
sizes, and other entities, consistent with the regulatory objective.

A. TTB's Estimate of Costs Associated With Alcohol Facts Proposed Rule

In Notice No. 237, Alcohol Facts Statements in the Labeling of
Wines, Distilled Spirits, and Malt Beverages, also published in this
issue of the Federal Register, TTB proposed an amendment to the
labeling regulations that would require an ``Alcohol Facts'' statement
on each wine, distilled spirits, and malt beverage label subject to the
FAA Act. TTB will not repeat the substance of that analysis here, but
below is a summary of the findings of that analysis.
To estimate the costs associated with the Alcohol Facts proposal,
TTB utilized the 2014 FDA Labeling Cost Model,\16\ adding its own data
inputs, making various assumptions about the alcohol beverage industry,
and adjusting costs to reflect inflation through January 2023. While
FDA provided TTB with access to its model, FDA is not responsible for
the assumptions made by TTB about the alcohol beverage market; nor is
FDA responsible for the estimates set out in this analysis.
---------------------------------------------------------------------------

\16\ FDA has periodically contracted with RTI International to
provide a model to estimate the costs of various product labeling
changes required by regulation. The most recent version is the
``2014 FDA Labeling Cost Model, Final Report, August 2015,''
available at https://downloads.regulations.gov/FDA-2016-N-2527-2681/content.pdf.
---------------------------------------------------------------------------

To determine the number of alcohol beverage Universal Product Codes
(UPCs) \17\ in the marketplace, TTB contracted with NielsenIQ \18\ to
obtain a one-time report, which consists of data for the period from
September 9, 2021, through September 10, 2022,\19\ for the following
markets: Total U.S. all outlets combined,\20\ liquor, and convenience
stores.\21\
---------------------------------------------------------------------------

\17\ Each individual product may have several UPCs associated
with different sizes or types of packaging.
\18\ Based in part on data reported by NielsenIQ through its
MarketTrack Service for the Alcohol Beverage Category for the period
from September 9, 2021 through September 10, 2022, for the Total US
all outlets combined, liquor, and convenience stores market.
Copyright (copyright) 2022 Nielsen Consumer LLC.
\19\ TTB emphasizes that the analyses, calculations and
conclusions in this document may have been informed in part by the
NielsenIQ RMS data through NielsenIQ's Retail Measurement Service
(RMS) for the beverage alcohol product categories for the reported
time period for Total US expanded all outlets combined, liquor, and
convenience stores. However, any such analyses, calculations and
conclusions are those of TTB and do not reflect the views of
NielsenIQ. NielsenIQ is not responsible for, had no role in, and was
not involved in analyzing and preparing the results reported herein,
or in developing, reviewing or confirming the research approaches
used in connection with this document.
\20\ NielsenIQ's xAOC market includes retailers in its Food,
Drug, Mass, Walmart, Club, Dollar, and Military channels. Nielsen
defines those channels as follows:
--Food is inclusive of all grocery stores with greater than $2MM
in annual ACV, including smaller chains and independents, and large
players such as Whole Foods.
--Drug is inclusive of all chains and independents with greater
than $1MM in annual ACV.
--Select Mass includes Target, K-Mart, and ShopKo.
--Walmart includes Walmart Division 1 + Supercenter's +
Neighborhood Markets.
--Select Club is inclusive of Sam's Club and BJ's. Costco does
not participate in market measurement with any data provider.
--Select Dollar is inclusive of Dollar General, Family Dollar,
and Fred's Dollar.
--Military is inclusive of military commissary stores.
\21\ Nielsen states that its Convenience channel includes
``major chains as census cooperators, and is projected to represent
all chains and independents.''
---------------------------------------------------------------------------

Based on the available data, TTB estimated the one-time total
labeling costs associated with the proposed rule on Alcohol Facts under
a 2-year compliance period to have a present discounted value (PDV)
\22\ of approximately $323.4 million (or approximately $161.7 million
per year). If the compliance date is extended to 3 years, the total PDV
would be approximately $258.5 million (or $86.5 million per year); for
42 months, the total PDV would be approximately $204.3 million (or
$58.4 million per year). Finally, if the compliance period is extended
to 5 years, the total PDV would be approximately $201.2 million (or
$40.2 million per year).\23\
---------------------------------------------------------------------------

\22\ The present discounted value of monetary values was
calculated using a 2 percent discount rate in accordance with OMB
Circular A-4 Chapter 12, available at https://www.whitehouse.gov/wp-content/uploads/2023/11/CircularA-4.pdf.
\23\ All costs in this proposal are provided in 2023 dollars.
---------------------------------------------------------------------------

B. Costs Associated With Allergen Proposed Rule if Coordinated With
Alcohol Facts Proposal

TTB is seeking comments on whether the compliance date for this
proposed rule should be coordinated with the compliance dates of other
labeling changes that have been proposed by TTB, including Notice No.
237, Alcohol Facts Statements in the Labeling of Wines, Distilled
Spirits, and Malt Beverages, which proposed the inclusion of Alcohol
Facts statements on alcohol beverage labels, as well as any proposals
that may be aired as a result of the ANPRM on ingredient labeling. See
Notice No. 237.
Promulgating the requirements for the final label changes together
would allow bottlers and importers to undertake all the label revisions
necessary to implement these changes in one label change. For example,
it is TTB's preliminary conclusion that for industry members that would
be required to make label changes under any new requirements resulting
from the Alcohol Facts and the Allergen rulemakings, it would be more
efficient and less costly to make changes to the label to accommodate
both requirements at the same time. If the rules were instead
promulgated and took effect at different points in time, TTB assumes
that the multiple distinct label changes would result in greater costs.
TTB invites comments on this preliminary conclusion.
TTB estimates that the cost savings of a coordinated regulatory
compliance date for the proposed labeling change rules would be
significant. For the purposes of this economic analysis, TTB is
considering major label changes to subsume minor label changes. For
example, a UPC subject both to the Alcohol Facts NPRM that will affect
virtually all UPCs (e.g., the addition of an Alcohol Facts statement),
and the proposed Allergen rule would count only under the final Alcohol
Facts rule because the major label change required by the proposed
Alcohol Facts rule would subsume the minor label changes

[[Page 5773]]

required by the proposed Allergen rule. The marginal additional cost of
the Allergen rule above the cost of the proposed Alcohol Facts rule is,
therefore, negligible if the two rules have the same compliance date.
This cost savings arises because alcohol beverage bottlers and
importers would generally have to make a major label change to comply
with the Alcohol Facts rule, and industry members that were
additionally affected by any new allergen disclosure requirements
arising out of this rulemaking would be able to undertake just one
label change to comply with the requirements of the two rules.

VII. Public Participation

A. Comments Sought

TTB requests comments from the public and all interested parties on
the regulatory proposals contained in this document. TTB seeks comments
on the proposed rule as well as other approaches also discussed in this
document. TTB has posed specific questions on various issues throughout
this preamble and also seeks comments in response to those questions.
In developing the final rule, TTB will carefully evaluate the proposed
regulations considering all comments and suggested alternative
approaches and will adopt the most appropriate approach. Where TTB has
specifically solicited comments on alternatives to proposed amendments,
it may consider adopting such alternatives in lieu of the proposed
amendments based on its review of the comments.
TTB also seeks comments on the impact that the proposed changes
will have on consumers and on industry members and any suggestions as
to how to minimize any costs or regulatory burdens associated with the
proposed regulations, including the following issues:
1. Are there alternative ways of providing a major food allergen
disclosure, for example, by allowing information to be provided through
a website using a quick response code (QR code) or website address on
the label? Will such an alternative method still provide adequate
information to the consumer?
2. Does the proposed compliance date suffice to reduce overall
costs of compliance, and specifically the costs to small businesses,
while ensuring that consumers are protected?
3. Is there a shorter compliance period that would provide more
benefits to consumers while still limiting costs and potential impacts
on small businesses? Specifically, would a 2-, 3-, or 3.5-year
compliance period suffice?
4. If a final rule is issued, will industry members begin
implementation of the labeling changes in advance of the compliance
date? If yes, how might consumers benefit from early compliance by
industry?
5. Are there any ongoing costs of compliance with the proposed rule
that TTB has not addressed in this document?
6. How many small businesses would be impacted by the proposed
rule, and what would be the economic impact of the proposal on these
small businesses? How, if at all, does the length of the compliance
period affect the impact on small businesses? Please explain in detail
and provide specific cost data.
We welcome comments on all other issues presented in this document.

B. 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. 238 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.

C. 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 comments
on this proposal or to request copies of this document, its supporting
materials, or the comments received in response.

VIII. Regulatory Analysis and Notices

The impacts of this proposed rule have been examined in accordance
with Executive Order 12866, as supplemented by Executive Order 13563
and amended by Executive Order 14094, and the Regulatory Flexibility
Act (5 U.S.C. 601-612).

A. Purpose of the Rule

The overall purpose of this proposed rule is to provide consumers
who are allergic to one or more major food allergens with more
information about the identity and quality of alcohol beverage
products. Since the effective date of the Food Allergen Labeling and
Consumer Protection Act of 2004 (FALCPA), major food allergen labeling
has been required for foods subject to the labeling regulations of the
FDA (subject to certain exceptions), and the Department of Agriculture
has similarly adopted regulations for foods subject to its labeling
regulations. Alcohol beverages subject to the labeling regulations of
the FAA Act are the only type of packaged beverage category without any
requirement for major food allergen labeling.
Accordingly, TTB proposes to require the disclosure of major food
allergens used in the production of alcohol beverages subject to the
FAA Act.\24\ TTB believes this proposal would provide consumers who are
allergic to one or more of the nine major food allergens with the
information they need to avoid exposure and the health risks posed by
these ingredients.
---------------------------------------------------------------------------

\24\ Further information on the specifics of TTB's proposal and
its authority to implement the proposal are in Section II.
---------------------------------------------------------------------------

B. Benefits

According to the FDA, food allergies and other food
hypersensitivities affect millions of Americans.\25\ A food allergy is
an immune response to certain proteins in food, which may cause mild
symptoms, but may also result in a severe, life-threatening allergic
reaction called anaphylaxis. Because food allergies currently cannot be
cured, early recognition of which foods cause individuals to have an
allergic reaction, and learning how to avoid such foods, are important
ways to prevent serious health risks.
---------------------------------------------------------------------------

\25\ See https://www.fda.gov/food/food-labeling-nutrition/food-allergies.
---------------------------------------------------------------------------

TTB does not possess data that would enable it to quantify the
monetary benefits of the proposed rule. However, TTB believes that a
labeling statement

[[Page 5774]]

with information about the presence of major food allergens in the
production of an alcohol beverage will provide significant benefits.
Consumers with these food allergies will be able to make an informed
decision as to whether consumption of a particular alcohol beverage may
pose a risk of an allergic reaction. This proposal will also promote
consistency in major food allergen disclosure across all types of food
product labels, removing ambiguity about whether a product contains a
major food allergen or not. TTB invites comments on its conclusion that
consumers would benefit from having this information available on
product labels.

C. Costs of Compliance

As set forth in Section VI of this preamble, based on its use of
the FDA Labeling Cost Model and assuming a 5-year coordinated
compliance period with the Alcohol Facts rule, TTB estimates that the
marginal additional cost of the Allergen rule above the cost of the
proposed Alcohol Facts rule is negligible. This is because industry
members would generally have to make a major label change to comply
with the Alcohol Facts rule, and industry members that were
additionally affected by any new allergen labeling requirements from
this rulemaking would be able to undertake just one label change to
comply with the requirements of the two rules.
TTB notes that this proposal does not require additional analytical
testing, as it generally requires labeling of major food allergens used
as an ingredient, and ingredients are expected to be known by the
producer.

D. Executive Orders 12866, 13563, and 14094

This proposed rule is a ``significant regulatory action'' for
purposes of Executive Order 12866, as supplemented by Executive Order
13563 and amended by Executive Order 14094, and has been reviewed by
the Office of Management and Budget.

E. Regulatory Flexibility Act

Pursuant to the requirements of the Regulatory Flexibility Act (5
U.S.C. 601-612), TTB has analyzed the potential economic effects of
this action on small entities. In lieu of the initial regulatory
flexibility analysis required to accompany proposed rules under 5
U.S.C. 603, section 605 allows the head of an agency to certify that a
rule will not, if promulgated, have a significant economic impact on a
substantial number of small entities.
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 will not impose, or otherwise cause, a significant
increase in reporting, recordkeeping, or other compliance burdens on a
substantial number of small entities. The proposed rule is not expected
to have significant secondary or incidental effects on a substantial
number of small entities. Accordingly, a regulatory flexibility
analysis is not required. Pursuant to 26 U.S.C. 7805(f), TTB will
submit the proposed regulations to the Chief Counsel for Advocacy of
the Small Business Administration (SBA) for comment on the impact of
the proposed regulations on small businesses.
The following analysis provides the factual basis for TTB's
certification under section 605.
In FY 2022, TTB collected $8.3 billion in taxes from the alcohol
industry.\26\ With regard to the total number of authorized producers
of alcohol beverages, there are 17,649 wineries and bonded wine
cellars; 14,185 brewers; and 4,494 distillers.\27\ However, the number
of authorized producers and importers who obtain certificates of label
approval (COLAs) in any given year, and who therefore could be affected
by this proposed rule, is much lower. For example, in FY 2022, TTB
received 192,954 label applications and 26,922 formula applications for
alcohol beverages.\28\ Internal data from TTB's COLAs Online system
shows that, on average, fewer than 12,000 permittees or brewers applied
for label approval in each of Fiscal Years 2020-2022. The data also
shows that most of these COLA applications come from the same set of
permittees and brewers every year. During the 3-year period of Fiscal
Years 2020-2022, fewer than 18,000 unique permittees or brewers applied
for label approval.
---------------------------------------------------------------------------

\26\ Alcohol and Tobacco Tax and Trade Bureau Annual Report
Fiscal Year 2022 (FY 2022 TTB Annual Report), available at https://www.ttb.gov/images/pdfs/ttbar2022.pdf, page 5.
\27\ Id. at page 10.
\28\ Id. at page 16. It should be noted that the number of label
applications does not necessarily correlate to the number of brands
and UPCs in the marketplace for several reasons. TTB cannot
determine whether approved labels appear in the marketplace, or how
long those labels may remain in use. For example, there may be malt
beverage labels authorized for a particular sporting event that are
no longer found in the marketplace a few months after the event has
taken place. On the other hand, some labels may be revised to
reflect different net contents or alcohol content statements without
submission of a new label to TTB. Industry members may decide not to
use labels for which they have obtained approval. Thus, TTB does not
use the number of COLA applications as an estimate of how many
brands or UPCs are in the marketplace at any given time.
---------------------------------------------------------------------------

The value of the U.S. import trade in alcohol beverages in 2021
totaled $23.9 billion.\29\ According to data published on the website
of the Distilled Spirits Council of the United States,\30\ the total
economic contribution of the alcohol beverage industry to the U.S.
economy in 2019 included 2,514,000 ``direct'' jobs and 5,630,000
``total'' jobs; $67.9 billion in direct wages and $160.3 billion in
total wages; and $242.6 billion in direct economic activity and $572.3
billion in total economic activity.
---------------------------------------------------------------------------

\29\ Id. at page 30.
\30\ Economic Contributions of Alcohol Beverage Industry 2019,
Distilled Spirits Council of the United States, available at https://www.distilledspirits.org/wp-content/uploads/2021/10/Economic-Contributions-2019.pdf. See Annual Economic Briefing (February 9,
2023), Distilled Spirits Council of the United States, available at
https://www.distilledspirits.org/wp-content/uploads/2023/02/FINAL-2022-AEB-Slide-Deck-2.9.23-941am.pdf.
---------------------------------------------------------------------------

TTB recognizes that most producers, bottlers, and importers of
alcohol beverages are small entities. The SBA sets out size standards
based on the North American Industry Classification System (NAICS),
under which an entity can be considered small for the purposes of
Regulatory Flexibility Act analysis.\31\ Breweries are considered small
if they have fewer than 1,250 employees; wineries are considered small
if they have fewer than 1,000 employees; and distilleries are
considered small if they have fewer than 1,100 employees.\32\
---------------------------------------------------------------------------

\31\ See Size Standards, U.S. Small Business Administration,
available at http://www.sba.gov/content/small-business-size-standards.
\32\ 13 CFR 121.201.
---------------------------------------------------------------------------

The U.S. Census Bureau's Statistics of U.S. Businesses (SUSB) data
include information on employment among establishments within NAICS
codes. The most recent data are from 2019.\33\ The SUSB data did not
include employment at the 1,000, 1,100, or 1,250 employee threshold;
however, it does include the number of firms within each NAICS code
that have at least 500 employees. Based on those numbers, approximately
99% of the firms in these three NAICS codes are small entities. The
percentage may be greater, depending on how many firms have at least
500 employees and fewer than 1,000 employees (for wineries), 1,100
employees (for distilleries), or 1,250 employees (for breweries). There
is no NAICS code for importers of alcohol beverages.
---------------------------------------------------------------------------

\33\ 2019 SUSB Annual Data Tables by Establishment Industry,
U.S. Census Bureau, available at https://www.census.gov/data/tables/2019/econ/susb/2019-susb-annual.html.

[[Page 5775]]

Table 1--Number of Firms With at Least 500 Employees
----------------------------------------------------------------------------------------------------------------
Small-entity size standards for potentially affected industries and number of firms with at
least 500 employees
------------------------------------------------------------------------------------------------- Total
Number of firms with employment
Industry (NAICS code) Small-entity size Total number at least 500
standard of firms employees
----------------------------------------------------------------------------------------------------------------
Breweries (NAICS 312120).......... Fewer than 1,250 4,217 23 (approximately 0.5 84,503
employees. percent).
Wineries (NAICS 312130)........... Fewer than 1,000 3,944 19 (approximately 59,587
employees. 0.48 percent).
Distilleries (NAICS 312140)....... Fewer than 1,100 1,004 10 (approximately 1%) 16,828
employees.
----------------------------------------------------------------------------------------------------------------

Data on revenues by firm size and industry are also available in
the SUSB, but are published less frequently. The most recent data
available is from 2017.\34\ Based on this data, with the revenues
adjusted for inflation, 2,609 of the total number of firms (3,214)
listed as breweries under NAICS Code 312120 have fewer than 20
employees.\35\ This category accounts for $3,314,362,000 of the total
inflation-adjusted receipts of $36,032,713,000, or roughly 9.2 percent
of the total receipts. With regard to wineries, 2,975 of the 3,576
firms under NAICS Code 31230 have fewer than 20 employees. This
category accounts for $2,907,606,000 of the total inflation-adjusted
receipts of $24,891,833,000, or roughly 12 percent of the total
receipts. With regard to distilleries, 659 of the 760 firms under NAICS
Code 31240 have fewer than 20 employees. This category accounts for
$1,060,898,000 of the total inflation-adjusted receipts of
$14,590,615,000 or roughly 7 percent of the total receipts.
---------------------------------------------------------------------------

\34\ This data is only available from Economic Census years
(years ending in 2 and 7). See 2017 SUSB Annual Data Tables by
Establishment Industry, U.S. Census Bureau, available at https://www.census.gov/data/tables/2017/econ/susb/2017-susb-annual.html.
\35\ A recent study estimates that 28.3% of brewing facilities
are brewpubs, with 66.7% of brewing facilities categorized as
``micro'' breweries. The study explains that brewpubs and small
micro-brewers ``produce beer for a limited market--sometimes only
for their own restaurant or retail establishment.'' See Beer Serves
America--A Study of the U.S. Beer Industry's Economic Contribution
in 2022,'' prepared for the Beer Institute and National Beer
Wholesalers Association, which is available at https://beerservesamerica.org/wp-content/uploads/2023/05/2022-Beer-Serves-America-Report.pdf.
---------------------------------------------------------------------------

As noted above, not all alcohol beverage producers would be
impacted by the requirements of this proposed rule. Some alcohol
beverages, while subject to permitting and excise tax requirements, are
not required to be labeled under the FAA Act. These include wines with
less than 7 percent alcohol by volume and beer produced without both
malted barley and hops. Additionally, most alcohol beverages do not
contain major food allergens. Some examples of alcohol beverages that
use ingredients in the production process that contain major food
allergens are malt beverages that contain wheat, and wines and malt
beverages that use eggs or fish as processing aids. Some specialty
products that are currently labeled as containing ``natural flavors''
may also have to include new labels disclosing the use of major food
allergens.
While most businesses subject to the proposed rule are small
businesses, the changes proposed in this document will not have a
significant impact on those small entities. The production, bottling,
importation, and distribution of alcohol beverages is an industry
subject to extensive Federal, State, and local regulation. The labeling
and advertising regulations under the FAA Act have been in place since
1936. TTB believes that adding a disclosure requirement for major food
allergens, the presence of which industry members already track in the
usual course of business, will not have a significant impact on the
regulated industry.
TTB cannot estimate the exact cost per small entity because we do
not know how many product brands (covered by different UPCs) on average
are owned by small entities as defined by the SBA. However, as
discussed in Section VI, above, TTB estimates that the marginal
additional cost of the Allergen rule above the cost of the proposed
Alcohol Facts rule is negligible. This is because industry members
would generally have to make a major label change to comply with the
Alcohol Facts rule, and industry members that were additionally
affected by any new allergen labeling requirements from this rulemaking
would be able to undertake just one label change to comply with the
requirements of the two rules.
This proposal differs from the proposed rule on mandatory allergen
statements in 2006 in that allergen labeling requirements will not
apply to distilled spirits products where no protein from major food
allergens remains in the product after distillation. See Section V,
above, and Notice No. 62, 71 FR 42329, July 26, 2006. This will reduce
the number of products subject to major allergen disclosure, and thus
the compliance burden for small distillers. Additionally, TTB is
proposing to reduce the costs associated with the label redesign by not
requiring industry members to submit new applications for label
approval when the only change is the inclusion, deletion, or revision
of a major food allergen statement.
TTB considered other options to reduce the regulatory burden and
cost for small businesses, but ultimately is not proposing them. One
option considered was to exempt small businesses from the requirements
of the proposed rule. The primary purpose of this proposed rule is to
provide information to consumers who are allergic to one or more of the
nine major food allergens. This purpose would be weakened by a
permanent exemption for small businesses. Consumers would not be able
to rely on alcohol beverage labels to disclose the presence of major
food allergens if the requirements did not apply to all such products.
Moreover, TTB questions whether a permanent exemption from mandatory
labeling requirements would be consistent with the mandate, in the FAA
Act, to ensure that labels provide consumers with adequate information
about the identity and quality of alcohol beverage products. TTB notes
that there is no specific statutory authority for exempting small
businesses from the requirements of the FAA Act as there is under the
FD&C Act for nutritional labeling regulated by the FDA. Further, the
small business exemption under FDA regulations pertains only to
nutrition labeling information, and not to any other mandatory
information, including allergens. TTB also considered the option of
proposing an extended compliance period only for small businesses.
However, this would not be administrable for TTB without imposing
additional requirements on these businesses. When reviewing
applications for label approval, TTB employees do not have access to
the number of people employed by each company, and thus it would not be
practical to base compliance status on the SBA standards for small
businesses. Additionally, reporting such information to TTB with each
label

[[Page 5776]]

application would impose a new burden on all industry members that
would be subject to this proposed rule. Instead, TTB is proposing a
compliance period of 5 years for all industry members, and is expecting
that many industry members, particularly large businesses, will start
declaring major food allergens after publication of a final rule, in
advance of the compliance date.
As previously noted, the label redesign, printing, and
administrative costs associated with making a labeling change are on a
per-UPC basis. Under the FDA Labeling Cost Model, the longer the
compliance period, the more likely it is that affected industry members
can coordinate new labeling requirements with scheduled labeling
changes, so cost estimates fall significantly as the time allowed for
the new labeling requirements increases. In other words, the longer the
period industry is given to comply with the new labeling requirements,
the lower the costs. According to the FDA Labeling Cost Model, with a
compliance period of 5 years, 100 percent of the labeling changes
resulting from a regulatory change can be coordinated with a regularly
scheduled labeling change, thus significantly reducing the estimated
costs and burdens for small businesses that would be subject to the
proposed rule.
TTB specifically solicits comments on the number of small
producers, bottlers, and importers of alcohol beverages that may be
affected by this proposed rule and the impact of this rule on those
small businesses. TTB welcomes data on all these issues.

F. Paperwork Reduction Act

Three of the regulatory sections addressed in this notice of
proposed rulemaking contain collections of information that have been
previously reviewed and approved by the Office of Management and Budget
(OMB) in accordance with the Paperwork Reduction Act of 1995 (44 U.S.C.
3507). Those regulatory sections are 27 CFR 4.32, 5.63, and 7.63, and
they contain existing information collections assigned OMB control
numbers 1513-0084 and 1513-0087. OMB No. 1513-0084 concerns the
labeling of sulfites in alcohol beverages, and OMB No. 1513-0087
concerns alcohol beverage labeling requirements under the FAA Act.
This proposed rule includes a new collection of information
involving the mandatory declaration of major food allergens on the
labels of alcohol beverages. This collection of information has been
submitted to the Office of Management and Budget (OMB) for review and
approval under the Paperwork Reduction Act of 1995 pending receipt and
evaluation of public comments. An agency may not conduct or sponsor,
and a person is not required to respond to, a collection of information
unless it displays a valid control number assigned by OMB.
The regulatory sections in this proposed rule that contain the new
information collection requirement for a declaration of major food
allergens are in proposed regulatory sections Sec. Sec. 4.32 and 4.32a
for wine labels, Sec. Sec. 5.63 and 5.75 for distilled spirits labels,
and Sec. Sec. 7.63 and 7.75 for malt beverage labels. This new
collection of information will be mandatory, and the likely respondents
are for-profit businesses, including corporations, partnerships, and
small businesses. Specifically, the new information collection would
require alcohol beverage bottlers and importers to disclose the
presence of any of the nine major food allergens (milk, eggs, fish,
Crustacean shellfish, tree nuts, wheat, peanuts, soybeans, and sesame),
as well as ingredients that contain protein derived from these foods,
if used in the production of the alcohol beverage, unless an exception
applies. The disclosure would state ``Contains major food allergen(s)''
followed by a colon and the name of the food source from which each
major food allergen is derived.
As discussed in Section VI, Cost Analysis, above, the FDA Labeling
Cost Model projects a ``mean'' internal recordkeeping burden of 1 hour
per UPC for labeling changes that are coordinated, and 2 hours per UPC
for labeling changes that are not coordinated. As noted above, TTB is
proposing a 5-year compliance date, which means that 100 percent of the
labeling changes will be ``coordinated.'' TTB believes that a
significant proportion of the alcohol beverage industry already
collects and maintains information regarding the presence of major food
allergens in their products in the usual course of business.
Furthermore, TTB does not propose to require industry members to submit
new COLA applications for the sole purpose of adding, deleting, or
revising major food allergen statements. Thus, the proposed rule would
not increase recordkeeping requirements regarding certificates of label
approval, which are covered by OMB Control Number 1513-0020.
Accordingly, TTB is estimating an annual burden of 1 hour per
respondent for the new major food allergen disclosures proposed under
the FAA Act labeling regulations. TTB estimates its annual burden as
follows:
Number of Respondents: 10,000.
Number of Responses: 30,000.
Average per-Response Burden: 1 hour per respondent.
Total Annual Burden: 10,000 hours.
TTB has submitted the major allergen disclosure statement
information collection requirements and the revised collection
requirements under the FAA Act to OMB for review. Please send any
comments on these new and revised collection requirements to OMB at
Office of Management and Budget, Attention: Desk Officer for the
Department of the Treasury, Office of Information and Regulatory
Affairs, Washington, DC 20503, or by email to
[email protected]. Please also send a copy of any such
comments to TTB by any of the comment submission methods described in
the ADDRESSES section of this document. Comments should be submitted no
later than April 17, 2025.
TTB specifically requests comments concerning:
The accuracy of the estimated burden associated with the
proposed collections of information (see below);
Whether a unified compliance date for labeling changes
that may arise from this rulemaking, along with separate rulemakings on
ingredient labeling and ``Alcohol Facts'' labeling, would result in
lowering the combined burden hours for the three rulemakings;
Whether the proposed labeling requirements are necessary
to provide consumers with adequate information as to the identity and
quality of alcohol beverages, including whether the information will
have practical utility;
How to enhance the quality, utility, and clarity of the
information to be collected;
How to minimize the burden of complying with the
collections of information; and;
Estimates of capital and start-up costs and costs of
operation, maintenance, and purchase of services to maintain records
and substantiate label claims.

List of Subjects

27 CFR Part 4

Advertising, Alcohol and alcoholic beverages, Customs duties and
inspection, Imports, Labeling, Packaging and containers, Reporting and
recordkeeping requirements, Surety bonds, Trade practices, Treaties,
Wine.

27 CFR Part 5

Advertising, Alcohol and alcoholic beverages, Customs duties and
inspection, Distilled spirits, Food additives, Grains, Imports,
International

[[Page 5777]]

agreements, Labeling, Liquors, Packaging and containers, Reporting and
recordkeeping requirements, Trade practices.

27 CFR Part 7

Advertising, Alcohol and alcoholic beverages, Beer, Customs duties
and inspection, Food additives, Imports, Labeling, Malt Beverages,
Packaging and containers, Reporting and recordkeeping requirements,
Trade practices.

Amendments to the Regulations

For the reasons discussed in the preamble, TTB proposes to amend 27
CFR parts 4, 5, and 7 as set forth below:

PART 4--LABELING AND ADVERTISING OF WINE

0
1. The authority citation for 27 CFR part 4 continues to read as
follows:

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

0
2. Amend Sec. 4.32 by adding paragraph (f) to read as follows:

Sec. 4.32 Mandatory label information.

* * * * *
(f) Declaration of major food allergens. If any major food allergen
as defined in Sec. 4.32a is used in the production of a wine, the
label must include a statement as required by that section.
* * * * *
0
3. Amend Sec. 4.32a by revising the section heading and paragraphs
(a)(1)(i), (b), and (c) to read as follows:

Sec. 4.32a Mandatory labeling of major food allergens.

PART 5--LABELING AND ADVERTISING OF DISTILLED SPIRITS

0
4. The authority citation for 27 CFR part 5 continues to read as
follows:

Authority: 26 U.S.C. 5301, 7805, 27 U.S.C. 205 and 207.

0
5. Amend Sec. 5.63 by redesignating paragraphs (c)(5) through (8) as
paragraphs (c)(6) through (9) and adding a new paragraph (c)(5).
The addition reads as follows:

Sec. 5.63 Mandatory label information.

* * * * *
(c) * * *
(5) Major food allergens. If any major food allergen as defined in
Sec. 5.75 is used in the production of a distilled spirits product,
the label must include a statement as required by that section.
* * * * *

Subpart F--[Amended]

0
6. Amend subpart F by removing the undesignated center heading ``Food
Allergen Labeling'' preceding Sec. 5.82.

Sec. Sec. 5.82 and 5.83 [Redesignated as Sec. Sec. 5.75 and 5.76]

0
7. Redesignate Sec. Sec. 5.82 and 5.83 as Sec. Sec. 5.75 and 5.76,
respectively, in subpart F.
0
8. Amend newly redesignated Sec. 5.75 by revising the section heading
and paragraphs (a)(1)(i) and (b) and adding paragraph (c) to read as
follows:

Sec. 5.75 Mandatory labeling of major food allergens.

(a) * * *
(1) * * *
(i) Milk, egg, fish (for example, bass, flounder, or cod),
Crustacean shellfish (for example, crab, lobster, or shrimp), tree nuts
(for example, almonds, pecans, or walnuts), wheat, peanuts, soybeans,
and sesame; or
* * * * *
(b) Labeling requirements. (1) Except as provided in paragraph
(b)(2) of this section, all major food allergens (defined in paragraph
(a)(1) of this section) used in the production of a distilled spirits
product, including major food allergens used as incidental additives,
such as processing aids, must be declared on a label affixed to the
container, except when covered by a petition for exemption approved by
the appropriate TTB officer as described in Sec. 5.76. The declaration
must consist of the words ``Contains Major Food Allergen(s)'' followed
by a colon and the name of the food source from which each major food
allergen is derived (for example, ``Contains Major Food Allergen:
milk'' or ``Contains Major Food Allergens: wheat and milk''), except
that the declaration of processing aids (such as clarifying agents) may
optionally include the parenthetical explanation (``processing aid'')
immediately following the name of the major food allergen (for example,
``Contains Major Food Allergen: egg (processing aid).''
(2) The labeling requirements of this section do not apply to major
food allergens used in the production of a distilled spirits product if
they have been completely distilled in such a manner that no protein
remains in the distilled spirits. TTB will evaluate compliance by
verifying the absence of protein in the distilled component using
scientifically valid analytical methods that can reliably detect the
presence or absence of protein or protein fragments in the finished
product. If ingredients containing protein are added to the distilled
spirits product after distillation, and no major food allergens are
listed on the label, industry members must be prepared to substantiate,
upon request, the absence of protein in the distillate, the absence of
any major food allergens in the added ingredients, and the precautions
taken to prevent cross-contact.
(c) Cross reference. For labeling requirements applicable to
distilled spirits containing FD&C Yellow No. 5, cochineal extract or
carmine, sulfites, and aspartame, see Sec. 5.63(c)(6) through (9).

Sec. 5.76 [Amended]

0
9. Amend newly redesignated Sec. 5.76 in paragraph (a) introductory
text by removing ``5.82'' and adding in its place ``5.75'' and in
paragraph (a)(2) by removing ``5.82(a)(1)(i)'' and adding in its place
``5.75(a)(1)(i)''.

Sec. Sec. 5.82 and 5.83 [Reserved]

0
10. Add reserved Sec. Sec. 5.82 and 5.83.

PART 7--LABELING AND ADVERTISING OF MALT BEVERAGES

0
11. The authority citation for 27 CFR part 7 continues to read as
follows:

[[Page 5778]]

Authority: 27 U.S.C. 205 and 207.

Subpart E--Mandatory Label Information

0
12. Amend Sec. 7.63 by adding paragraph (b)(5) to read as follows

Sec. 7.63 Mandatory label information.

* * * * *
(b) * * *
(5) Major food allergens. If any major food allergen as defined in
Sec. 7.75 is used in the production of a malt beverage, the label must
include a statement as required by that section.

Sec. Sec. 7.71 through 7.74 [Reserved]

0
13. Add reserved Sec. Sec. 7.71 through 7.74.

Subpart F--[Amended]

0
14. Amend subpart F by removing the undesignated center heading ``Food
Allergen Labeling'' preceding Sec. 7.82.

Sec. Sec. 7.82 and 7.83 [Redesignated as Sec. Sec. 7.75 and 7.76]

0
15. Redesignate Sec. Sec. 7.82 and 7.83 as Sec. Sec. 7.75 and 7.76,
respectively, in subpart F.
0
16. Amend newly redesignated Sec. 7.75 by revising the section heading
and paragraphs (a)(1)(i), (b), and (c) to read as follows:

Sec. 7.75 Mandatory labeling of major food allergens.

Sec. 7.76 [Amended]

0
17. Amend newly redesignated Sec. 7.76 in paragraph (a) introductory
text by removing ``7.82'' and adding in its place ``7.75'' and in
paragraph (a)(2) by removing ``7.82(a)(1)(i)'' and adding in its place
``7.75(a)(1)(i)''.

Sec. Sec. 7.82 and 7.83 [Reserved]

0
18. Add reserved Sec. Sec. 7.82 and 7.83.

Signed: January 10, 2025.
Mary G. Ryan,
Administrator.
Approved: January 10, 2025.
Aviva Aron-Dine,
Deputy Assistant Secretary (Tax Policy).
[FR Doc. 2025-00955 Filed 1-16-25; 8:45 am]
BILLING CODE 4810-31-P