[Federal Register Volume 90, Number 11 (Friday, January 17, 2025)]
[Proposed Rules]
[Pages 6654-6706]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2025-00957]
[[Page 6653]]
Vol. 90
Friday,
No. 11
January 17, 2025
Part VIII
Department of the Treasury
-----------------------------------------------------------------------
Alcohol and Tobacco Tax and Trade Bureau
-----------------------------------------------------------------------
27 CFR Parts 4, 5, 7, et al.
Alcohol Facts Statements in the Labeling of Wines, Distilled Spirits,
and Malt Beverages; Proposed Rule
Federal Register / Vol. 90 , No. 11 / Friday, January 17, 2025 /
Proposed Rules
[[Page 6654]]
-----------------------------------------------------------------------
DEPARTMENT OF THE TREASURY
Alcohol and Tobacco Tax and Trade Bureau
27 CFR Parts 4, 5, 7, 24, 25, and 27
[Docket No. TTB-2025-0002; Notice No. 237]
RIN 1513-AC93
Alcohol Facts Statements in the Labeling of Wines, Distilled
Spirits, and Malt Beverages
AGENCY: Alcohol and Tobacco Tax and Trade Bureau, Treasury.
ACTION: Notice of proposed rulemaking.
-----------------------------------------------------------------------
SUMMARY: The Alcohol and Tobacco Tax and Trade Bureau (TTB) proposes to
require disclosure of per-serving alcohol, calorie, and nutrient
content information in an ``Alcohol Facts'' statement on all alcohol
beverage labels subject to TTB's regulatory authority under the Federal
Alcohol Administration Act (FAA Act). This rulemaking responds to the
Department of the Treasury's February 2022 report on ``Competition in
the Markets for Beer, Wine, and Spirits,'' which recommended that TTB
revive or initiate rulemaking on alcohol content, nutritional content,
and appropriate serving sizes for alcohol beverage labels. Pursuant to
its authorities under both the FAA Act and the Internal Revenue Code of
1986, TTB is also proposing mandatory alcohol content statements for
certain types of malt beverages, beer, and wine that are not currently
required to be labeled with an alcohol content statement. 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-2025-0002 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. 237. 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: Curtis 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/docket/TTB-2025-0002.
I. Background
On July 31, 2007, TTB published Notice No. 73, a proposed rule
entitled ``Labeling and Advertising of Wines, Distilled Spirits and
Malt Beverages'' in the Federal Register (72 FR 41860). In that
document, TTB proposed to amend the TTB regulations to set forth
requirements for mandatory alcohol content labeling and for the
presentation of certain calorie and nutrient information in a mandatory
``Serving Facts'' panel. The proposed Serving Facts panel would also
have included information about the number of servings per container
and the serving size. TTB did not finalize the rulemaking; however, on
May 28, 2013, TTB published TTB Ruling 2013-2, Voluntary Nutrient
Content Statements in the Labeling and Advertising of Wines, Distilled
Spirits, and Malt Beverages. The ruling announced that alcohol beverage
labels could include Serving Facts statements on a voluntary basis
while the Bureau continued to consider the proposed rule. TTB withdrew
the Serving Facts rulemaking from the Unified Agenda of Federal
Regulatory and Deregulatory Actions in the fall of 2017.
In 2021, TTB received a letter, dated February 24, 2021, from
several consumer groups and public health advocates, urging TTB to
finalize the Serving Facts rulemaking. The letter was submitted on
behalf of the Center for Science in the Public Interest (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. This rulemaking
document will refer to the letter as the ``2021 CSPI letter.''
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\
---------------------------------------------------------------------------
\1\ See page 3 of the report, available at https://home.treasury.gov/system/files/136/Competition-Report.pdf.
\2\ Id. at page 61.
---------------------------------------------------------------------------
Consistent with the Competition Report's recommendations, and
considering the February 2021 letter referenced above, TTB decided to
revisit the issue of mandatory nutritional information and expanded
alcohol content information for alcohol beverages. Because it has been
almost 20 years since TTB solicited comments on this issue, 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 received over 5,000 written
comments in response to Notice No. 232 and heard from 47 speakers
during the listening sessions.
TTB is now publishing for public comment a new proposal that would
require ``Alcohol Facts'' labeling for wines, distilled spirits, and
malt beverages that provides alcohol and nutritional information, per
serving, for these products on labels. TTB is addressing the
Competition Report's recommendations and Notice No. 232 comments from
the listening sessions on mandatory allergen and ingredient labeling in
separate rulemaking projects.
II. TTB's Authority To Regulate Alcohol Beverage Labeling
As set forth below, TTB has broad authority to regulate the
labeling of alcohol beverages under Chapter 51 of the Internal Revenue
Code of 1986 (IRC) and under the labeling provisions of the Federal
Alcohol Administration Act (FAA Act), 27 U.S.C. 205(e). TTB administers
these IRC and 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,
[[Page 6655]]
the Secretary of the Treasury (the Secretary) has delegated certain
administrative and enforcement authorities to TTB through Treasury
Order 120-01.
A. TTB's Authority Under the IRC
Chapter 51 of the IRC (26 U.S.C. 5001 et seq.) imposes taxes on
distilled spirits, wines, and beer, and provides the Secretary
authority to regulate the marking and labeling of containers of these
alcohol beverages, to protect the revenue associated with those taxes.
The tax rates differ depending on the classification of the product,
and the marking and labeling requirements support the proper
determination of tax liability based on the identity of the product.
Thus, this authority is based, in part, on the Secretary's
responsibility to classify, and collect taxes on, alcohol beverages
under the IRC.
For example, 26 U.S.C. 5301 authorizes the Secretary to regulate
the branding and marking of distilled spirits containers whenever in
his or her judgment such action is necessary to protect the revenue.
Other provisions authorize the Secretary to regulate the marking,
branding, and labeling of wine and beer. See 26 U.S.C. 5368 and 5412.
Section 5555 requires every person liable for any tax imposed by
Chapter 51 of the IRC to comply with such rules and regulations as the
Secretary may prescribe. Finally, 26 U.S.C. 7805(a) provides the
Secretary with the authority to prescribe all needful rules and
regulations for the enforcement of the IRC.
B. TTB's Authority Under the FAA Act
Section 105(e) of the FAA Act, 27 U.S.C. 205(e), sets forth
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'' or ``alcohol beverage products.''
This section gives the Secretary the 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 authorizes the Secretary to
prohibit, irrespective of falsity, labeling statements relating to age,
manufacturing processes, analyses, guarantees, and scientific or
irrelevant matters that 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.
C. Legislative History of the FAA Act
The legislative history of the FAA Act provides some insight
concerning the general purpose of the FAA Act's labeling provisions. In
hearings before the House Committee on Ways and Means in 1935, Joseph
Choate from the Federal Alcohol Control Administration noted that the
purpose of the bill was ``to provide such regulations, not laid down in
statute, so as to be inflexible, but laid down under the guidance of
Congress, under general principles, by a body which could change them
as changes were found necessary.'' Mr. Choate also noted that those
regulations were intended to ensure that
the purchaser should get what he thought he was getting . . . . They
should not be confined, as the pure-food regulations have been
confined, to prohibitions of falsity, but they should also provide
for the information of the consumer, that he should be told what was
in the bottle, and all the important factors which were of interest
to him about what was in the bottle. [Emphasis added.]
See Hearings on H.R. 8539 Before the H. Comm. on Ways and Means, 74th
Cong., 1st Sess. 10 (1935) (statement of Joseph H. Choate, Jr., Federal
Alcohol Control Administration).
D. Calorie and Nutrient Labeling
The FAA Act expressly conveys broad discretion to the agency and
leaves it with the flexibility to prescribe such labeling regulations
``as will provide the consumer with adequate information'' as to, among
other things, the products' ``identity and quality'' and ``net
contents.'' 27 U.S.C. 205(e). In 1986, in the context of ingredient
labeling, the D.C. Circuit recognized that the obligation under the FAA
Act ``to ensure that disclosure is adequate squarely implicates
discretionary judgment on the part of the Secretary.'' Center for
Science in the Public Interest v. Department of the Treasury, 797 F.2d
995, 999 n.2 (D.C. Cir. 1986), citing Wawszkiewicz v. Department of the
Treasury, 670 F.2d 296, 300 (D.C. Cir. 1981) (footnote omitted)).
Accordingly, the D.C. Circuit upheld the actions of TTB's
predecessor, the Bureau of Alcohol, Tobacco and Firearms (ATF), in
issuing a final rule, T.D. ATF-150 (48 FR 45549, October 6, 1983),
which rescinded ingredient labeling regulations that had not yet taken
effect. The court held that there was no ``plain meaning of the phrase
`adequate information' which indicates Congress' intent as to whether
the FAA Act either requires or prohibits ingredient disclosure
regulations.'' Ctr. for Sci. in the Pub. Int., 797 F.2d at 999 n.2. The
court upheld ATF's conclusion that the FAA Act ``vests it with a zone
of discretion within which it can choose to require or not require
ingredient disclosure, as necessary to provide consumers with adequate
information.'' Id. It is TTB's view that rulemaking on calorie and
nutrient labeling similarly falls within the Secretary's discretion to
determine whether such information is necessary to provide consumers
with ``adequate information'' about the product.
E. Alcohol Content Labeling
The statutory requirements with respect to disclosure of alcohol
content on labels differ among the three alcohol beverage categories.
The FAA Act authorizes the Secretary to issue regulations that require
alcohol content statements on labels of distilled spirits products. 27
U.S.C. 205(e)(2). The FAA Act also authorizes the Secretary to require
alcohol content statements only for wines with an alcohol content of
over 14 percent alcohol by volume, leaving such statements optional for
wines with an alcohol content at or below 14 percent. Finally, the FAA
Act contains language that specifically prohibits placement of alcohol
content statements on malt beverage labels, unless required by State
law, but in 1995 the Supreme Court struck that ban on First Amendment
grounds in Rubin v. Coors Brewing Co., 514 U.S. 476 (1995).
F. Alcohol Beverages Subject to FDA Labeling Regulations
Alcohol beverages that fall under the definitions of distilled
spirits, wine, or malt beverages in the FAA Act are not subject to the
Nutrition Facts regulations promulgated by the U.S. Food and Drug
Administration (FDA) under 21 U.S.C. 343(q). In 1987, TTB's predecessor
agency, the Bureau of Alcohol, Tobacco, and Firearms (ATF), and the FDA
entered into a Memorandum of Understanding (MOU), which continues in
effect. See Notice
[[Page 6656]]
No. 648 (52 FR 45502, November 30, 1987). In the MOU, both agencies
recognized that ``ATF will be responsible for the promulgation and
enforcement of regulations with respect to the labeling of distilled
spirits, wine, and malt beverages pursuant to the FAA Act.'' The MOU
also stated that ``ATF and FDA will consult on a regular basis
concerning the propriety of promulgating regulations concerning the
labeling of other ingredients and substances for alcoholic beverages.''
Thus, alcohol beverages that are not distilled spirits, wines, or
malt beverages, as defined in the FAA Act, 27 U.S.C. 211, are subject
to the ingredient labeling, nutrition labeling, and allergen labeling
regulations administered by the FDA. However, these products remain
subject to the regulations enforced by TTB under the IRC.\3\ Therefore,
to the extent that this NPRM addresses the labeling regulations under
the FAA Act, which are found in 27 CFR parts 4, 5, and 7, it does not
apply to alcohol beverages subject to FDA labeling regulations.
However, to the extent that this NPRM proposes to amend the IRC
regulations regarding alcohol content statements for certain beers and
wines, those amendments would also affect alcohol beverages subject to
FDA labeling regulations.
---------------------------------------------------------------------------
\3\ Alcohol beverages intended for human consumption that
contain at least 0.5 percent alcohol by volume are also subject to
the health warning statement requirements of the Alcoholic Beverage
Labeling Act of 1988 (ABLA). See 27 U.S.C. 215. However, this
document does not propose changes to the regulations implementing
ABLA.
---------------------------------------------------------------------------
III. Background on ``Alcohol Facts'' Statements
A. 2003 Petition for Alcohol Facts Label and Ingredient Labeling
On December 16, 2003, CSPI, the National Consumers League, 67 other
organizations, and 8 individuals, including 4 deans of schools of
public health, filed a petition (the ``2003 petition'') requesting that
TTB amend the alcohol beverage labeling regulations.\4\ After receipt
of the 2003 petition, additional individuals wrote to TTB requesting
the addition of their names to the petition. The petition requested
that TTB require that labels of all TTB-regulated alcohol beverages
include the following information in a standardized format:
---------------------------------------------------------------------------
\4\ ATF previously considered the issue of requiring calorie and
nutrient information on alcohol beverage labels but did not
implement rules on this issue. On August 10, 1993, ATF published an
advance notice of proposed rulemaking (ANPRM) in the Federal
Register soliciting comments from the public on whether the
regulations should be amended to require nutrition labeling for
alcohol beverages. See Notice No. 776 (58 FR 42517). The ANPRM was
issued in response to a petition that cited, among other things, the
Nutrition Labeling and Education Act of 1990, which mandates
nutrition labeling for most FDA-regulated foods. For a detailed
description of the rulemaking history concerning nutrition labeling
on alcohol beverages, see TTB Notice No. 41, 70 FR 22274 (April 29,
2005).
---------------------------------------------------------------------------
The beverage's alcohol content expressed as a percentage
of alcohol by volume;
A standard serving size;
The amount of alcohol (in fluid ounces) contained within
each standard serving;
The number of calories per standard serving;
The ingredients (including additives);
The number of standard drinks per container; and
The current definitions of moderate drinking for men and
women published in the Dietary Guidelines for Americans, issued jointly
by the Department of Health and Human Services and the Department of
Agriculture.
The petitioners proposed that all alcohol beverage containers bear
this information on an ``Alcohol Facts'' panel. The petitioners
provided the following example for a 750 mL bottle of wine:
[GRAPHIC] [TIFF OMITTED] TP17JA25.095
The petition asked that the words ``Alcohol Facts'' be immediately
followed by a declaration of the number of standard drinks (servings)
per container. The petitioners asked, consistent with the then-current
version of the Dietary Guidelines for Americans, that a serving should
be defined as 12 fluid ounces of beer, 5 fluid ounces of wine, and 1.5
fluid ounces of 80-proof distilled spirits. The petitioners further
recommended that for alcohol beverages not fitting into one of those
standard categories (for example, a malt liquor containing eight
percent alcohol by volume), a serving should be defined as an amount of
fluid containing approximately 0.5 fluid ounces of ethyl alcohol. The
petitioners recommended that a consistent graphic symbol (for example,
a beer mug, wine glass, or shot glass) should appear first, followed by
the number of drinks in the container (for example, ``Contains 5
Servings''). The petition proposed requiring this information on labels
of all malt beverage, wine, and distilled spirits products under TTB
jurisdiction, and that the graphics and type size for the Alcohol Facts
label should follow the Nutrition Labeling and Education Act of 1990
standards set out in the FDA regulations at 21 CFR 101.9(d). Further,
the petitioners stated that ingredient information should appear on the
label immediately below, but segregated from, the Alcohol Facts panel,
and that ingredient statements should include information about
allergens.
According to the petitioners, current TTB regulatory requirements
forced consumers to guess about the number of calories in alcohol
beverages and their alcohol content. The petitioners summarized the
results of a September 2003 telephone study of 600 Americans, ages 18
and older, which they stated was nationally representative.
[[Page 6657]]
According to the study, 91 percent of respondents supported requiring
ingredient labeling on alcohol beverages; 94 percent supported
requiring alcohol content on alcohol beverage labels; 89 percent
supported requiring calorie content on alcohol beverage labels; and 84
percent supported requiring serving size information on alcohol
beverage labels.
B. 2004 Informal Request for Comments
Following the 2003 petition, an alcohol beverage industry member
contacted TTB about voluntarily labeling products with nutrient and
other information on a ``Serving Facts'' panel. Subsequently, TTB
received other requests from industry members to include similar
information on product labels.
In response to these requests, in 2004, TTB twice posted on its
website a request for comments on voluntary Serving Facts panels. In
response to the two postings, TTB received several comments reflecting
strong and varying opinions. A significant proportion of those who
commented felt that the issue should be addressed in public notice and
comment rulemaking rather than in a TTB ruling. Furthermore, many
commenters believed that certain elements of a Serving Facts panel
would tend to confuse or mislead consumers about alcohol beverage
products. In light of the issues that the commenters raised, TTB
decided to publish an advance notice of proposed rulemaking in 2005, as
discussed further below.
C. Statements of Average Analysis (TTB Ruling 2004-1)
On April 7, 2004, TTB published guidance to the industry on ways
that calorie and carbohydrate references could be provided in a non-
misleading way in the labeling and advertising of alcohol beverages.
Ruling 2004-1, Caloric and Carbohydrate Representations in the Labeling
and Advertising of Wine, Distilled Spirits, and Malt Beverages
clarified TTB's position with respect to statements about calorie and
carbohydrate content on labels and in advertisements of wines,
distilled spirits, and malt beverages and set forth TTB's policy on the
use of truthful and non-misleading nutrient statements in the labeling
and advertising of alcohol beverages.\5\
---------------------------------------------------------------------------
\5\ References to alcohol beverage products as being low in
calories or carbohydrates were considered misleading by TTB's
predecessor agency in 1955. See Revenue Ruling 55-404, 1955-1, C.B.
615. In the 1960s, after consultations with FDA, the Alcohol and
Tobacco Tax Division determined that products labeled as low calorie
or low carbohydrate could include statements of average analysis, as
well as truthful comparisons between a low-calorie product and that
of an equal volume of the brewer's regular beer. See ATF Ruling 76-
1. In subsequent rulings, ATF modified certain policies with respect
to malt beverage labeling statements and announced its intention to
engage in rulemaking on the use of the terms ``light'' and ``lite''
on malt beverage labels. See ATF Ruling 79-17, ATF Q.B. 1979-3, 3,
and ATF Ruling 80-3, ATF Q.B. 1980-2, 13.
---------------------------------------------------------------------------
TTB Ruling 2004-1 provided, in part, that calorie or carbohydrate
representations on product labels or in advertisements would be
considered misleading unless they include a ``statement of average
analysis'' that lists the number of calories and the number of grams of
carbohydrates, protein, and fat contained in the product based on a
single serving. In Frequently Asked Questions published on TTB's
website shortly after the ruling, TTB clarified that this policy did
not apply to advertisements where the only caloric or carbohydrate
representation appearing in the advertising materials is a brand name
incorporating the term ``light'' or ``lite.'' However, if the brand or
product name, or the advertising material in general, included any
additional caloric or carbohydrate representations such as ``low carb''
or ``low calorie,'' any specific calorie or carbohydrate claims, or
similar representations, the provisions of the ruling regarding a
statement of average analysis would apply.
For purposes of inclusion in the statement of average analysis, TTB
Ruling 2004-1 defined a single serving as 12 fluid ounces for malt
beverages, 5 fluid ounces for wine, and 1.5 fluid ounces for distilled
spirits, regardless of the alcohol content of the product. The ruling
allowed the statement of average analysis to be stated per container
size only if the container is equal to or less than a single serving
size. The ruling did not authorize the appearance of additional
information in the statement of average analysis.
D. 2005 Advance Notice of Proposed Rulemaking
On April 29, 2005, TTB published an advance notice of proposed
rulemaking, Notice No. 41, in the Federal Register (70 FR 22274),
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. Specifically, TTB sought
comments on the 2003 petition's request for Alcohol Facts panels and
ingredient labeling, the Serving Facts panel presented in TTB's
informal request for comments, and each panel's elements. Additionally,
TTB requested comments on allergen labeling and the labeling of calorie
and carbohydrate claims, such as ``light'' and ``low-carbohydrate.''
TTB received more than 19,000 comments in response to Notice No. 41
from consumers, consumer advocacy groups, government officials, alcohol
beverage industry members and associations, health organizations, and
other concerned individuals. This included over 18,500 consumers who
responded to Notice No. 41 indicating that they would like to see
additional information on alcohol beverage labels.
IV. 2007 Notice of Proposed Rulemaking
Following a review of the comments submitted in response to Notice
No. 41, TTB published Notice No. 73, a proposed rule entitled
``Labeling and Advertising of Wines, Distilled Spirits and Malt
Beverages'' in the Federal Register (72 FR 41860) on July 31, 2007. TTB
proposed to amend parts 4, 5, 7, and 24 of the TTB regulations to set
forth requirements for mandatory alcohol content labeling and for the
presentation of certain calorie and nutrient information in a mandatory
Serving Facts panel. The proposed Serving Facts panel would have
included information about the number of servings per container and the
serving size as well as the number of calories and the number of grams
of carbohydrate, fat, and protein per serving. It would also have
allowed the mandatory alcohol content statements to appear in the panel
as a percentage of alcohol by volume, with or without an additional
statement of the fluid ounces of alcohol per serving.
TTB received more than 700 comments on the various issues presented
in Notice No. 73. Commenters included consumers, consumer advocacy
groups, health professionals, health organizations, State and Federal
agencies, and industry members and associations. The comments on the
proposals outlined in Notice No. 73 expressed various points of view. A
number of comments opposed, or suggested modifications of, the various
elements proposed to appear in the Serving Facts panels. TTB received
several comments about the costs associated with the mandatory
proposals, particularly with regard to mandatory nutrient labeling
requirements. TTB also received several comments on regulatory
amendments that were not specifically proposed in
[[Page 6658]]
that document, such as using the title ``Alcohol Facts'' instead of the
title ``Serving Facts,'' and requiring a statement of fluid ounces of
alcohol per serving as part of the mandatory alcohol content statement.
TTB did not finalize the rulemaking and, following guidance in 2013
allowing voluntary depictions of Serving Facts information (discussed
below), withdrew it from the Unified Agenda of Federal Regulatory and
Deregulatory Actions in the fall of 2017.
V. TTB Public Guidance on Optional Serving Facts Statements
A. Optional Serving Facts Statements (TTB Ruling 2013-2)
On May 28, 2013, TTB issued Ruling 2013-2 to permit the use of
Serving Facts statements on labels and in advertisements. The ruling
provided that statements of average analysis that complied with the
requirements of TTB Ruling 2004-1 may continue to be used on labels and
in advertisements.
In TTB Ruling 2013-2, TTB further stated that it would allow the
use of optional Serving Facts statements on labels and in
advertisements on an interim basis pending the completion of
rulemaking. TTB explained that it was making this change to allow
industry members to provide truthful, accurate, and specific
information to consumers about the nutrient content of their products
on a per-serving basis. Although TTB already allowed nutrient content
information to appear on labels and in advertisements in the form of a
statement of average analysis, TTB was aware that some alcohol beverage
industry members were interested in voluntarily labeling their products
with this information in a Serving Facts statement such as the one
proposed in Notice No. 73. TTB reminded industry members that the
issuance of final regulations on Serving Facts statements might impact
their labels.
TTB also noted that the serving sizes recognized by TTB Ruling
2004-1 for wines, distilled spirits, and malt beverages may not always
be representative of how all products are typically consumed. For
example, a 355 mL (12 fl oz) can containing a distilled spirits
specialty product with 5 percent alcohol by volume would not generally
be consumed in 1.5 fl oz servings. Although the serving size found in a
nutrient content statement is not intended as a recommended serving
amount, TTB believed it was appropriate to consider alternative serving
sizes for products depending on their alcohol content. The serving size
chart provided in the ruling (reproduced below) applies to all
voluntary Serving Facts statements.
----------------------------------------------------------------------------------------------------------------
Alcohol percent by volume
Serving size --------------------------------------------------------------------------
Wine Distilled spirits Malt beverages
----------------------------------------------------------------------------------------------------------------
1.5 fl oz (44 ml), or 50 ml for 50 ml ....................... Above 24%.............. Above 24%.
containers of distilled spirits.
2.5 fl oz (74 ml).................... Above 16 to 24%........ Above 16 to 24%........ Above 16 to 24%.
5 fl oz (148 ml)..................... 7 to 16%............... Above 7 to 16%......... Above 7 to 16%.
12 fl oz (355 ml).................... ....................... Not more than 7%....... Not more than 7%.
----------------------------------------------------------------------------------------------------------------
TTB Ruling 2013-2 reiterated that statements or representations of
calorie or carbohydrate content that are made on labels or in
advertisements must be truthful, accurate, specific, and non-
misleading. TTB stated that such statements are misleading within the
meaning of the applicable regulations when not accompanied by a
statement of average analysis in accordance with Ruling 2004-1 or a
Serving Facts statement in accordance with TTB Ruling 2013-2. The other
elements of Ruling 2004-1 continued in force, and statements of average
analysis without an accompanying Serving Facts statement may continue
to be used.
TTB Ruling 2013-2 also permitted the listing of the number of U.S.
fluid ounces of pure ethyl alcohol per serving as part of a Serving
Facts statement, as long as the statement also includes the percentage
of alcohol by volume. Under this guidance, industry members may also
include a Serving Facts statement that provides no alcohol content
information, or alcohol content only as a percentage of alcohol by
volume. The ruling also noted that the distilled spirits regulations
authorize the inclusion of an optional statement of alcohol content in
degrees of proof if it appears in direct conjunction with the percent
of alcohol by volume statement. As noted above, industry members may
also continue to use a statement of average analysis, which does not
contain any alcohol content information. Finally, industry members who
do not make nutrient content claims on labels or in advertisements are
not required to include a Serving Facts statement or a statement of
average analysis.
Pursuant to TTB Ruling 2013-2, a Serving Facts statement appearing
on a label or advertisement must be stated per serving and specify the
serving size as part of the statement (unless the container is equal to
or less than a single serving size, in which case the Serving Fact
statement may be stated per container size). If a container holds more
than a single serving size, the Serving Facts statement may appear in a
dual-column format, which provides information both per serving and per
container.
The ruling provided that certain Serving Facts statements would not
require a new COLA application if the only label change was to provide
the voluntary Serving Facts statement, and provided examples of formats
for which that exception would apply. Additionally, the ruling did not
specify required fonts or type sizes, although it did provide the
following graphics to illustrate an acceptable panel display for a 750
mL bottle of wine containing 14 percent alcohol by volume, with and
without optional alcohol content information.
[[Page 6659]]
[GRAPHIC] [TIFF OMITTED] TP17JA25.096
The following Serving Facts statement is an example from TTB Ruling
2013-2 that illustrates an acceptable linear display for a 50 mL bottle
of distilled spirits containing 40 percent alcohol by volume and
includes all three optional alcohol content statements.
[GRAPHIC] [TIFF OMITTED] TP17JA25.097
The following graphic illustrates an acceptable Serving Facts
statement for a 23.5 fluid ounce malt beverage can containing 12
percent alcohol by volume and includes the optional alcohol content
statements.
[GRAPHIC] [TIFF OMITTED] TP17JA25.098
Finally, the ruling provided the following panel to illustrate an
acceptable dual-column display for a 24 fluid ounce malt beverage
containing 12 percent alcohol by volume and including the optional
percent-by-volume alcohol content declaration as well as the optional
declaration of alcohol in fluid ounces.
[[Page 6660]]
[GRAPHIC] [TIFF OMITTED] TP17JA25.099
B. Frequently Asked Questions on TTB's Website
In Frequently Asked Questions (FAQs) published on the TTB website
after publication of TTB Ruling 2013-2, TTB provided further guidance
on acceptable formats for Serving Facts statements. Subsequently, TTB
also issued FAQs that permitted the use of an optional ``Alcohol
Facts'' statement for industry members who wish to provide per-serving
alcohol content information without including any nutrient content
statements or claims. The FAQs state that this information should be
provided under the heading ``Alcohol Facts,'' to distinguish it from a
``Serving Facts'' statement, and must include the serving size (in
accordance with TTB Ruling 2013-2), the number of servings per
container, and the percentage of alcohol by volume together with a
numerical statement of the number of fluid ounces of pure ethyl alcohol
per serving (rounded to the nearest tenth). The FAQs note that industry
members who wish to make any type of nutrient content statement or
claim on the label or advertisement, along with optional per-serving
alcohol content information, should use a Serving Facts statement in
accordance with TTB Ruling 2013-2.
In 2014, TTB issued FAQs on the use of sugar content statements on
labels. The FAQs set forth TTB's policy that truthful, accurate, and
non-misleading numerical statements about the sugar content of a
product are permitted on alcohol beverage labels and in
advertisements.\6\ Sugar is a type of carbohydrate; accordingly, a
sugar content statement is not considered misleading if the label bears
either a statement of average analysis in accordance with TTB Ruling
2004-1, or a Serving Facts statement in accordance with TTB Ruling
2013-2, and the serving size on which the sugar content statement is
based is consistent with the applicable serving size under those
rulings. If a serving contains less than 0.5 g of sugar, the label may
include a claim such as ``Zero Sugar,'' ``No Sugar,'' or ``Sugar
Free.''
---------------------------------------------------------------------------
\6\ See FAQs SUG1-SUG5, available at www.ttb.faqs/alcohol.
---------------------------------------------------------------------------
C. Tolerances and Other Laboratory Procedures
1. TTB Procedure 2004-1
TTB Procedure 2004-1 set forth the methods that TTB used to test
the calorie, carbohydrate, protein, and fat content of wine, distilled
spirits, and malt beverages in order to verify labeling and advertising
claims. This procedure also addressed tolerance ranges with regard to
statements of calorie, carbohydrate, protein, and fat content. TTB
Procedure 2004-1 applied to statements of average analysis, as well as
Serving Facts statements. As described further below, this procedure
was superseded by TTB Procedure 2020-1, which updated the lab testing
methods as well as the tolerance for calorie statements.
2. 2020 Revisions of Tolerances
In 2020, TTB reviewed its calorie tolerance standards in response
to a request from industry members. The industry members suggested that
broader tolerances for calorie content would facilitate the increased
use of voluntary nutrient content statements in the labeling and
advertising of alcohol beverages, both by allowing for expanded
variations in calorie content between batches of a product and by
facilitating the use of databases and ``typical value'' charts in lieu
of laboratory analysis as a basis for nutrient content statements.
TTB decided to expand the tolerances for calories to achieve
greater consistency with FDA tolerances for calorie statements on food
package labels under FDA's jurisdiction and to facilitate industry
members' ability to provide truthful, accurate, and non-misleading
voluntary nutrient content information to consumers. However, TTB noted
that TTB tolerances and policies will still differ in some ways from
FDA labeling regulations, as well as FDA's menu labeling requirements,
due to differences in statutory and regulatory authorities.
Accordingly, TTB published TTB Ruling 2020-1 and TTB Procedure
2020-1 (which superseded TTB Procedure 2004-1 in its entirety). Under
the new guidance, a calorie statement on a label or in an advertisement
is acceptable as long as the calorie content, as determined by TTB
analysis, is within a reasonable range below the labeled or advertised
amount (within good manufacturing practice limitations) and not more
than 20 percent above the labeled or advertised amount. For example, a
labeling or advertising statement of 100 calories per serving will be
considered an acceptable understatement if TTB analysis of the product
shows a calorie content of not more than 120 calories per serving.
Industry members also asked if they may express calories to the
nearest 10-calorie increment for per-serving amounts above 50 calories
(and to the nearest 5-calorie increment for per-serving amounts up to
and including 50 calories) to be more consistent with FDA requirements.
In response to this request, TTB Ruling 2020-1 provides that calorie
statements on labels and in advertisements may, but are not required
to, be rounded to the nearest 10-calorie increment (for per-serving
amounts above 50 calories) or the nearest 5-calorie increment (for per-
serving amounts up to 50 calories), as long as the labeled or
advertised calorie content falls within the tolerances described in
this ruling. Thus, for example, regardless of whether the calories per
serving for a particular product are expressed as 98 calories or 100
calories, the labeled or advertised calorie statement must be within
the prescribed tolerance for the value that is expressed. TTB continued
to allow
[[Page 6661]]
amounts less than 5 calories to be expressed as zero.
The 2020 guidance did not change the tolerances for other
nutrients. Under TTB Procedure 2004-1, TTB already allowed a 20 percent
tolerance for understatements of carbohydrate and fat content, and a 20
percent tolerance for overstatements of protein content. Overstatements
of carbohydrate and fat content, and understatements of protein
content, are acceptable as long as the actual content, as determined by
TTB analysis, is within a reasonable range of the labeled or advertised
amount (within good manufacturing practice limitations). TTB Procedure
2020-1 maintained those tolerances. Similarly, the 2020 update did not
affect the regulatory tolerances for alcohol content statements,
expressed as a percentage of alcohol by volume, which are set forth in
the regulations at 27 CFR 4.36, 5.65, and 7.65.
TTB noted that the 2020 guidance would not require any changes to
approved labels but would instead allow greater flexibility for
industry members who choose to use voluntary nutrient content
statements on labels or in advertisements.
At the time TTB was asked to review its calorie tolerance standard
in 2020, industry members also asked TTB about the use of databases or
typical value charts (rather than laboratory analysis) as a basis for
nutrient content statements in the labeling and advertising of alcohol
beverages. Although industry members may conduct laboratory analyses to
determine nutrient content, they may also choose to rely on an
appropriate combination of analyses and other sources to accurately
label their products, including databases and typical value charts.
TTB's regulations do not require industry members to analyze each batch
of a product prior to making voluntary nutrient content statements.
Regardless of what approach industry members take, it is their
responsibility to ensure that the labeling and advertising statements
are reliable and accurate and fall within the tolerances set forth in
TTB guidance documents. TTB determines compliance with the tolerances
as described in Procedure 2020-1.
VI. Other Developments Since Issuance of the 2007 NPRM
A. Voluntary Use of Serving Facts Statements
Since the issuance of the Serving Facts guidance, the optional use
of such statements on labels has increased in the marketplace. For
example, in 2016, the Beer Institute announced the Brewers' Voluntary
Disclosure Initiative, a coordinated effort by the beer industry to
meet consumer demand for increased nutritional transparency. In August
2021,\7\ the Beer Institute released the results of an independent
survey showing that 95 percent of the beer volume sold by Anheuser-
Busch, Molson Coors Beverage Company, Constellation Brands Beer
Division, HEINEKEN USA, and FIFCO USA now voluntarily provides
nutritional information in the form of a Serving Facts statement. A
press release by the Beer Institute also stated that according to July
2021 polling conducted by Quadrant Strategies, 75 percent of Americans
aged 21 and older said they believe alcohol beverages should have
nutrition labels.\8\
---------------------------------------------------------------------------
\7\ Available at https://www.beerinstitute.org/policy-responsibility/policy/voluntary-disclosure/, accessed on November 4,
2024.
\8\ Available at https://www.beerinstitute.org/press-releases/new-report-shows-beer-leads-all-alcohol-categories-in-providing-nutritional-information-to-consumers/.
---------------------------------------------------------------------------
B. Dietary Guidelines for Americans, 2020-2025
Since 1990, the Secretaries of Agriculture and Health and Human
Services have been required by law to publish the Dietary Guidelines
for Americans every five years.\9\ The most recent version is the
Dietary Guidelines for Americans, 2020-2025, 9th Edition, published
December 2020.\10\ There have been some changes to the recommendations
in the guidelines since CSPI submitted its petition in 2003, but the
guidelines still provide general information relating to alcohol
beverage consumption.
---------------------------------------------------------------------------
\9\ See https://www.dietaryguidelines.gov/about-dietary-guidelines, accessed on November 4, 2024.
\10\ Available at https://www.DietaryGuidelines.gov/sites/default/files/2021-03/Dietary_Guidelines_for_Americans-2020-2025.pdf.
---------------------------------------------------------------------------
The Dietary Guidelines ``do[ ] not recommend that individuals who
do not drink alcohol start drinking for any reason'' and note that
there are some people who should not drink at all, such as those who
are pregnant or under the legal age for drinking.\11\ For individuals
who do drink, the guidelines state that ``drinking less is better for
health than drinking more.'' \12\ The guidelines point to evidence that
indicates higher average alcohol consumption is associated with an
increased risk of death from all causes compared with lower alcohol
consumption and state that ``[a]lcohol misuse or consuming alcohol in
excess of recommendations increases risk for several other conditions
such as liver disease, cardiovascular disease, injuries, and alcohol
use disorders.'' \13\
---------------------------------------------------------------------------
\11\ Id. at page 62.
\12\ Id. at page 49.
\13\ Id.
---------------------------------------------------------------------------
For purposes of evaluating amounts of alcohol that may be consumed,
the Dietary Guidelines define an ``alcoholic drink equivalent'' as
containing 14 grams (0.6 fl oz) of pure alcohol and consider the
following as one alcoholic drink equivalent: 12 fluid ounces of beer
(at 5 percent alcohol), 5 fluid ounces of wine (at 12 percent alcohol),
or 1.5 fluid ounces of distilled spirits (at 40 percent alcohol).
The Dietary Guidelines stated that adults of legal drinking age
could choose not to drink or to drink in moderation by limiting
consumption to two drinks or less per day for men and one drink or less
in a day for women. These amounts were not intended to be an average
over several days, but rather the amount consumed on any single day.
The Dietary Guidelines also advised that binge drinking, defined as
five or more drinks for the typical adult male or four or more drinks
for the typical adult female consumed in about two hours, should be
avoided.
The guidelines also note that, according to emerging evidence, even
drinking within the limits recommended above may increase overall risk
of death from various causes, including several types of cancer and
cardiovascular disease. The guidelines state that alcohol has been
found to increase the risk for cancer, and for some types of cancer,
even low levels of alcohol consumption (less than 1 drink in a day) can
increase the risk.
With regard to the calories that come from alcohol consumption, the
Dietary Guidelines state that alcohol beverages supply calories but few
nutrients, and calories from alcohol beverages should be counted for
the purpose of keeping total calorie intake at an appropriate level.
The guidelines note that alcohol beverages may contain calories from
both alcohol and other ingredients, such as soda, juice, and added
sugars, and it is important to consider ingredients and portion size.
The guidelines also state that approximately 60 percent of adults
report consuming alcohol beverages in the past month, and on days when
men and women consume alcohol, their consumption typically exceeds the
guidance for daily alcohol consumption. The guidelines state that,
among adults who drink, alcohol contributes on average approximately 9
percent of calories consumed. The guidelines stipulate that 85 percent
of an individual's total calories per day are
[[Page 6662]]
needed to meet food group recommendations healthfully with nutrient
rich foods, and that the remaining calories are available for other
uses (including added sugars, saturated fat, and alcohol). As such,
among adults who drink, calories from alcohol account for most of the
calories that remain after consuming recommended amounts of nutrient-
dense foods in each recommended food group. Accordingly, the Dietary
Guidelines recommend that ``[a]dults who choose to drink and are not
among the individuals listed above who should not drink, are encouraged
to limit daily intakes to align with the Dietary Guidelines--and to
consider calories from alcoholic beverages so as not to exceed daily
calorie limits.''
C. 2019 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.'' TTB
explained that the proposed rule would not address Serving Facts
statements, which would be addressed in separate rulemaking
proceedings. Although one trade association supported TTB's decision to
wait to address other complicated regulatory issues such as Serving
Facts until the labeling modernization rule was finalized, TTB also
received some comments critical of that decision. These commenters
suggested that that the labeling modernization rulemaking focused on
issues that were not of concern to consumers, while not addressing
issues in which consumers were interested, such as Serving Facts.
CSPI, the Consumer Federation of America, and the National
Consumers League commented on Notice No. 176 in a letter dated February
22, 2019, which was directed to the Secretary of the Treasury (the 2019
CSPI comment).\14\ This 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 the public had expressed
``an overwhelming interest in improved information on the labeling of
alcoholic beverages,'' and that TTB should fulfill its statutory
obligation under the FAA Act to ensure that labels and advertisements
provide the consumer with ``adequate information as to the identity and
quality of the products.''
---------------------------------------------------------------------------
\14\ Available at https://www.regulations.gov/comment/TTB-2018-0007-0074.
---------------------------------------------------------------------------
The 2019 CSPI comment referenced the 2003 petition (discussed in
Section III.A above) and suggested that the need for this information
was even greater today. The comment noted that this ``information is
now required on the vast majority of packaged foods and beverages'' and
that, as of May 2018, ``calorie and key nutrition information also must
be provided at chain restaurants, including for alcohol when it appears
on the menu.'' The comment stated that the ``need to protect the public
health from negative effects of consuming alcoholic beverages has never
been more pressing'' and noted that 70 percent of American adults are
now overweight or obese, and alcohol is a ``leading source of calories
in the American diet.'' [Citations omitted.]
The 2019 CSPI comment stated that the optional nutrient content
labeling allowed by TTB Ruling 2013-2 is ``inadequate'' because it
``fails to provide for uniform disclosures that will allow consumers to
make informed choices between products.'' The comment urged the
Secretary to instruct TTB to ``issue a new proposal providing a
mandatory, standardized declaration covering alcohol content by
percentage and amount, serving size, calories, ingredients, allergen
information, and other information relevant to consumers.'' The comment
suggested that the rule could be based on the prior regulatory dockets
and would ``provide much-needed closure to those considerable
efforts.'' The comment noted that ``[c]onsumers of alcoholic beverages
deserve the clear, consistent labeling that has long been available on
other beverages.''
In response to Notice No. 176, TTB also received some comments in
favor of expanding mandatory alcohol content requirements. For example,
the Wine Institute commented in favor of requiring a numerical alcohol
content statement for wines containing up to 14 percent alcohol by
volume in lieu of allowing such wines to be simply labeled as ``table
wine.'' The Brewers Association commented in favor of requiring alcohol
content statements on malt beverage labels, as long as the tolerance
for such statements was increased to one percentage point, and a three-
year implementation period is allowed.
D. Letter From Public Health Advocates (2021 CSPI Letter)
On February 24, 2021, a letter was submitted on behalf of 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, 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 stated that such labeling requirements fell under the
Secretary's authority to ensure that labels provide consumers with
adequate information on the identity, quality, and alcohol content of
alcohol beverages.
The 2021 CSPI letter noted that in response to the 2003 petition on
these issues, TTB had requested public comments, issued proposed
regulations, and published a ruling on voluntary nutrition and calorie
labeling. However, the 2021 CSPI letter stated that ``the draft
specifications were never finalized, and most alcoholic beverages still
are not labeled with critical information.'' Accordingly, the 2021 CSPI
letter urged Treasury and TTB to issue a final rule mandating a
standardized label that would include:
Information about the ``Drink Size'' and alcohol by
volume, as well as the number of ``drinks'' per container,
The calories and fluid ounces of alcohol per drink,
An ingredient declaration listing each ingredient by its
common or usual name and identifying any major food allergens present
in the product, and
The Dietary Guidelines for Americans' advice on moderate
drinking (to be updated based on any changes in the guidelines over
time).
The letter also stated that TTB should include in its rule specific
requirements for font, minimum size, and color contrast to ensure the
readability of the label. The letter included the following example of
a potential format for the standardized Serving Facts label:
[[Page 6663]]
[GRAPHIC] [TIFF OMITTED] TP17JA25.100
E. Treasury Report on Competition in the Markets for Beer, Wine, and
Spirits
On July 9, 2021, President Biden issued an Executive Order entitled
``Promoting Competition in the American Economy.'' See E.O. 14036 (86
FR 36987, July 14, 2021). Section 5(j) directed the Secretary, in
consultation with the Attorney General and the Chair of the Federal
Trade Commission (FTC), to submit a report ``assessing the current
market structure and conditions of competition [for beer, wine, and
spirits], including an assessment of any threats to competition and
barriers to new entrants. . . .'' 86 FR at 36994. Among other things,
the order provided that the report should address any ``unnecessary
trade practice regulations of matters such as bottle sizes, permitting,
or labeling'' that may unnecessarily inhibit competition by increasing
costs without serving any public health, informational, or tax purpose.
Id.
On July 28, 2021, the Department of the Treasury issued a Request
for Information (RFI) soliciting input from the public, consumer
groups, public interest groups, industry members, and other interested
parties regarding the current market structure and conditions of
competition in the American markets for beer, wine, and spirits,
including an assessment of any threats to competition and barriers to
new entrants. See Notice No. 204 (86 FR 40678, July 28, 2021).
Treasury received 827 public comments in response to this RFI.
While the RFI did not specifically solicit comments on calorie or
nutritional labeling, Treasury received over 100 comments stating that
consumers are ``ill-served'' by the lack of ingredient, calorie, or
nutritional labeling on alcohol beverages, and asking that the
regulations be amended to require this information on alcohol beverage
labels.
As noted above, on February 9, 2022, Treasury, in consultation with
the Department of Justice and the FTC, 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.'' \15\ 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.'' \16\
---------------------------------------------------------------------------
\15\ See page 3 of the Competition Report, available at https://home.treasury.gov/system/files/136/Competition-Report.pdf.
\16\ Id. at page 61.
---------------------------------------------------------------------------
F. 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 statements of alcohol and nutritional content. 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 comment 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 posed the following questions
in Notice No. 232:
1. Do consumers believe that they are adequately informed by the
information currently provided on alcohol beverage labels?
2. Is alcohol content per serving, and nutritional information
(such as calories, carbohydrates, protein, and fat) per serving
important for consumers in deciding whether to purchase or consume a
particular alcohol beverage? Would a full list of ingredients, and/or
major food allergens, be important information for consumers in making
their purchasing or consumption decisions? In what ways would this
information be useful, and in what ways could it be misleading? Is some
of this information more important than others?
3. What types of per-serving nutritional information, such as
calories, carbohydrates, protein, and fat, should be included?
4. Would requiring this information on labels be expected to
increase the cost of the products and, if so, by how much? To what
extent are businesses already following voluntary guidelines for this
information? Are there 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?
5. How would any new mandatory labeling requirements particularly
affect
[[Page 6664]]
small businesses and new businesses entering the marketplace?
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.
TTB has reviewed the comments that were submitted both orally and
in writing on alcohol and nutritional content information disclosures
and has used those comments to inform this proposed rule.
VII. New Proposed Rule
A. Reasons for Issuing a New Notice of Proposed Rulemaking
In this proposed rule, TTB is initiating new rulemaking on
mandatory alcohol content and nutrient information in alcohol beverage
labeling. More than 17 years have elapsed since the publication of
Notice No. 73 in the Federal Register, and TTB believes that the
comments received in response to that proposal may no longer fully and
accurately reflect the opinions of consumers, public health advocates,
industry members, trade associations, and other interested parties. TTB
also received thousands of comments in response to Notice No. 232 that
reflect new perspectives and provide updated information on the costs
and benefits of mandatory alcohol content and nutrient information
disclosure.
TTB thus believes it is appropriate to publish a new proposed rule
on these issues, which takes into account interim changes in labeling
policy, the comments on Notice No. 232, and the experience TTB and the
regulated alcohol-beverage community have gained with optional
statements of average analysis, Serving Facts statements, and Alcohol
Facts statements, and which solicits current comments on the proposed
regulatory changes. As was shown through comments on Notice No. 232,
some industry members have new perspectives that reflect their own
experience with voluntary labeling disclosures and the consumer
reaction to labels that include per-serving nutrient or alcohol content
information.
TTB received many comments about potential costs associated with
the mandatory proposals set forth in Notice No. 73, particularly the
nutrient labeling requirements. Many of those comments were echoed in
comments on Notice No. 232, with a large number of commenters
discussing the costs associated with testing product samples for
nutritional information. In light of those comments, TTB conducted a
more thorough cost analysis in this proposed rule (see Section IX, Cost
Analysis, below) that addresses concerns that were raised in the
comments on Notices No. 73 and 232. As described further below, TTB is
seeking comment on this analysis as it considers adopting the mandatory
labeling requirements proposed in this document as well as the length
of the implementation period.
Furthermore, in response to Notice No. 73, TTB received several
comments suggesting that TTB require alcohol content (as both a
percentage of alcohol by volume and as fluid ounces of alcohol per
serving) to appear in the mandatory labeling statement, and to use the
title ``Alcohol Facts'' instead of the title ``Serving Facts.'' TTB has
incorporated both of those suggestions into this proposed rule and is
soliciting comment on whether this information would assist in ensuring
that labels provide adequate information to consumers about the
identity, quality, and alcohol content of the product.
On a related issue, as explained in more detail below in Section
VII.B.4, TTB is proposing to require alcohol content labeling
statements for all malt beverages under its FAA Act authority, and for
all beers (whether regulated under the FAA Act or not) under its IRC
authority. TTB is also proposing to rely on its authority under the IRC
to propose mandatory numerical alcohol content statements for ``table
wines'' (wines containing at least 7 percent and not more than 14
percent alcohol by volume), instead of allowing wines the option of
being labeled as ``table wine'' without a numerical alcohol content
statement on the label. TTB believes that mandatory alcohol content
statements on labels for all beer and wines subject to tax under the
IRC will assist in ensuring appropriate Federal excise tax payment and
collection. TTB is seeking additional comments on these proposals in
this notice of proposed rulemaking.
B. Summary and Solicitation of Comments on Proposal
TTB proposes to amend its regulations to require an Alcohol Facts
statement on all alcohol beverage labels TTB regulates under the FAA
Act. As proposed, the mandatory Alcohol Facts statement would include
information about the alcohol content expressed both as a percentage of
alcohol by volume and in fluid ounces of pure ethyl alcohol per
serving, the number of calories, and the number, in grams, of
carbohydrates, fat, and protein, per serving. The serving sizes are
based on the amount of the beverage customarily consumed as a single
serving, as explained in Section VII.B.9 below. The proposed Alcohol
Facts statement may be presented in either a panel or a linear format.
1. Title of the Alcohol Beverage Information Statement
TTB is proposing ``Alcohol Facts'' as the title of the
informational statement, instead of ``Serving Facts,'' which was
proposed in 2007. While Notice No. 73 did not specifically solicit
comments on alternative titles, TTB received comments that supported
``Alcohol Facts'' or titles other than ``Serving Facts'' for the
information panel. Some commenters suggested that ``Serving Facts''
could confuse consumers because it is too similar to the ``Nutrition
Facts'' title of panels for food products under FDA's labeling
jurisdiction. Many commenters suggested alternative titles that they
believed would help differentiate alcohol beverage products from other
FDA-regulated products. Several commenters, including health
professionals and organizations, consumers, and consumer advocacy
groups, supported the title ``Alcohol Facts,'' as originally proposed
by the petitioners in 2003.\17\
---------------------------------------------------------------------------
\17\ TTB did not receive any comments on Notice 232 on what TTB
should title the information statement. While a few commenters
referred to the information statement as ``Serving Facts'' in their
comments, none provided commentary supporting or opposing any
particular title.
---------------------------------------------------------------------------
TTB finds merit in the argument that the title ``Alcohol Facts''
provides a better description of the information presented in the
statement. This is especially true since TTB is now proposing to
require alcohol content information as part of the information
statement.
Under its current policy, TTB guidance allows for optional
``Alcohol Facts'' statements that contain only alcohol content
information, while ``Serving Facts'' statements contain nutrient
information and may contain alcohol content information as an option.
In TTB's experience, relatively few industry members have chosen to
label their products with an ``Alcohol Facts'' statement; thus, TTB
does not believe the proposed change will cause consumer confusion.
Nonetheless, TTB is considering both ``Serving Facts'' and
``Alcohol Facts'' as options for the final rule, and thus seeks
comments on both titles, as well as any
[[Page 6665]]
alternative titles that may be more informative. TTB specifically seeks
comments on the following issues:
1. Which title, ``Serving Facts'' or ``Alcohol Facts,'' would be
more informative to consumers? Does the title ``Alcohol Facts'' better
describe the information provided in the proposed statement, which
includes per-serving alcohol content information?
2. Would the use of the title ``Alcohol Facts'' affect compliance
costs or regulatory burdens by requiring a title change for products
already voluntarily labeled with a ``Serving Facts'' statement?
3. Are consumers accustomed to finding nutrient content information
in a Serving Facts statement? Would changing the title to ``Alcohol
Facts'' cause confusion?
4. Alternatively, does the title ``Alcohol Facts'' make it easier
for consumers to readily distinguish alcohol beverages from other food
items?
2. Mandatory Calorie and Nutrient Information
In Notice No. 232, TTB asked consumers if nutritional information
(such as calories, carbohydrates, protein, and fat) per serving is
important in deciding whether to purchase or consume a particular
alcohol beverage, and what types of per-serving nutritional information
should be included. TTB received well over 100 individual comments
expressing a variety of viewpoints on nutritional labeling, and
thousands of substantially identical comments from consumers expressing
support for mandatory nutritional labeling, as well as other
disclosures for alcohol content, allergens, and ingredients.
Commenters in favor of mandating nutritional labeling stated that
this information is necessary for consumers to make informed purchasing
and consumption decisions. Several commenters, including CSPI, cited to
a March 2024 survey by Big Village, in which 78 percent of over 1,000
surveyed consumers stated that nutritional content was at least
somewhat important in helping decide whether to purchase a particular
alcoholic beverage.\18\ Most commenters in favor of mandatory
nutritional disclosures also discussed the health-related reasons why
nutrient labeling is important to consumers. These reasons included the
ability to monitor caloric intake and manage or prevent diet-related
conditions.
---------------------------------------------------------------------------
\18\ According to CPSI's comment, CPSI commissioned Big Village
to conduct the survey.
---------------------------------------------------------------------------
The comments opposed to mandatory nutritional labeling largely came
from industry members who identified themselves as small businesses.
These commenters cited their perception of a lack of interest in
nutritional information by their customers and their concern that the
cost of nutritional labeling, due to redesigning existing labels and
testing product samples, would place small businesses at a competitive
disadvantage.
Several commenters stated that, while consumers may find
nutritional information on the label to be useful, TTB should not
mandate that the information appear on the label, since the government
already provides nutritional information about alcohol beverages
through USDA's FoodData Central website. As an example, Bozzo Family
Vineyards stated that the nutritional information provided by USDA is
``representative of commercially available [alcohol beverages] and
should permit consumers, who are interested in such information for
purchase or consumption decisions, to make an informed choice of
whether to buy or consume.''
Some commenters stated that producers should only be required to
list calories, particularly for distilled spirits. The Distilled
Spirits Council of the United States (DISCUS) commented that most
distilled spirits do not contain any carbohydrates, fat, or proteins,
and TTB should allow producers to list only calories, as calories are
the only nutritional information pertinent to most distilled spirits
consumers. The American Craft Spirits Association commented that
nutrition labeling is inappropriate for distilled spirits products,
which are non-nutritive, and that requiring nutritional labeling for
distilled spirits products could mislead or confuse consumers by
implying that distilled spirits have nutritive value. The Mexican
Commission for the Wine and Liquor Industry expressed that nutritional
information is not appropriate on alcohol beverage labels for the same
reason.
After careful consideration of the diverging viewpoints provided by
the commenters to Notice No. 232, TTB is proposing to mandate
nutritional information on alcohol beverage labels. Comments revealed
significant consumer interest in nutritional information on labels.
While certain alcohol beverages are unlikely to contain certain
nutrients, such as fat or protein, even the absence of these components
provides information and may be of interest to consumers. Additionally,
the USDA database cited above contains information on only a limited
number of specific products, and other listings only represent general
information about certain types of alcohol beverages. For these
reasons, TTB is proposing nutritional requirements as described below
and welcomes both general comments and feedback on each specific
proposal.\19\ In line with the nutritional elements allowed in current
TTB guidance on voluntary label disclosures, TTB is proposing to
require per-serving calorie, carbohydrate, fat, and protein content to
be included on product labels.
---------------------------------------------------------------------------
\19\ TTB received many comments on the potential costs of
mandatory calorie and nutrient information disclosure and
suggestions for mitigating those costs. TTB addresses those
comments, including comments requesting the option to electronically
disclose Alcohol Facts information, in sections VII.A.3 and A.8 and
in the cost analysis in Section IX. TTB is also soliciting further
comments on the costs of this proposed rule, how those costs impact
businesses, and how TTB might mitigate those impacts, particularly
for small businesses.
---------------------------------------------------------------------------
TTB is also proposing to allow sugar content statements as an
optional element in the Alcohol Facts statement. Under current policy,
sugar content statements may appear on a label provided certain
conditions are met, but they are not permitted in statements of average
analysis or Serving Facts statements. TTB has received numerous
requests from industry members to allow sugar content statements to
appear in the optional Serving Facts statements for alcohol beverages
in a manner that is consistent with the FDA Nutrition Facts Label. In
addition, TTB received comments on Notice No. 232 from consumers and
public health organizations stating that sugar content should appear on
alcohol labels, including a joint comment from 27 public health groups
and public health officials stating that ``[s]ugar-sweetened beverages
contribute to weight gain, type 2 diabetes, and heart disease,[*] and
sugary ready-to-drink cocktails are increasing in popularity.[*] ''
[*Internal footnotes omitted.] Thus, based on industry interest and the
support expressed in comments on Notice No. 232, TTB proposes to allow
sugar content statements in the Alcohol Facts statement, which is the
same place consumers are viewing other nutrient information.
TTB is also seeking comments on whether other elements of the
Alcohol Facts statement should be optional rather than mandatory, and
whether additional elements should be added to the statement on a
mandatory or optional basis. TTB specifically seeks comments on whether
TTB should
[[Page 6666]]
harmonize its nutrient labeling requirements with regulations issued by
FDA, as updated in 2016. The following graphic shows the current format
for the FDA Nutrition Facts label.\20\
---------------------------------------------------------------------------
\20\ Available at https://www.fda.gov/food/food-labeling-nutrition/changes-nutrition-facts-label.
[GRAPHIC] [TIFF OMITTED] TP17JA25.101
TTB is not currently proposing to allow other micronutrients, such
as sodium, that appear on the FDA Nutrition Facts label as mandatory or
optional elements of the Alcohol Facts statement. Several individual
commenters to Notice No. 232, and thousands of substantially identical
comments from submitters identifying themselves as consumers of alcohol
beverages, stated that sodium should be a mandatory element of the
Alcohol Facts statement. A few commenters stated that alcohol beverages
should be labeled with all micronutrients required on food labels by
the FDA. However, other commenters stated most alcohol beverages do not
contain sufficient quantities of micronutrients to merit disclosure on
the label, and some, including the Brewers Association, commented that
requiring the disclosure of nutrients in line with FDA could confuse
consumers into viewing alcohol beverages like any other food component
when alcohol beverages are not, and should not, be positioned as
dietary staples.
At this time, TTB does not believe most alcohol beverages contain
sufficient quantities of sodium or other micronutrients to merit
inclusion in the Alcohol Facts statement. However, TTB seeks further
comments, and specifically comments with market data, on whether any
micronutrients, such as sodium, are present in alcohol beverages in
sufficient quantities that their disclosure would affect purchasing or
consumption decisions, and if yes, whether TTB should require, or
permit optional, inclusion of those nutrients on alcohol beverage
labels.
TTB also seeks comments on whether certain nutrients should be
listed only if present at specific levels. TTB is proposing to require
the listing of calorie, carbohydrate, fat, and protein content on
alcohol beverages, even if the product does not contain, or contains
only a de minimis amount of, these components. However, TTB
specifically seeks comments on whether fat and protein, which are not
typically found in certain alcohol beverages, should be listed only if
present at specific levels. If so, what levels should trigger these
requirements? TTB also seek comments on whether any other nutrients,
such as sodium, caffeine, or sugar, should be required to be listed if
present at a specific level, even if they do not otherwise have to be
disclosed.
In addition to the above, TTB is seeking comment on the following
issues related to mandatory calorie and nutrient statements:
1. Should TTB's proposed nutrient content labeling statement be
more consistent with the Nutrition Facts Label found on foods that are
under FDA's labeling jurisdiction? Alternatively, do the differences
between alcohol beverages and other foods make it unnecessary, or even
misleading, to adopt the type of nutrient labeling required on food
labels that are under FDA's labeling jurisdiction? For example, would
information on the percentage of the daily value of the listed
nutrients provided by alcohol beverages be useful information for
consumers? Alternatively, could such statements mislead consumers by
implying that they may rely on alcohol beverage consumption to satisfy
part of their daily nutrient requirements?
2. For greater consistency with the FDA Nutrition Facts Label,
should Alcohol Facts statements be allowed or required to include other
elements (such as sodium and cholesterol) or a further breakdown of fat
(to include saturated fat and trans-fat)?
3. Would the inclusion of elements not ordinarily expected to be
found in alcohol beverages (such as trans-fat and dietary fiber) be
useful or potentially misleading?
4. Should TTB allow numerical statements of the vitamin and mineral
content of alcohol beverages, assuming the product contains vitamins or
minerals, or could such a statement create an erroneous impression that
consumption of the alcohol beverage has nutritional value or other
health-related benefits?
5. How many industry members already provide nutrient content
information on labels, in advertisements (such as websites), or upon
request (for example, to consumers or restaurants)?
6. Do consumers want to see Alcohol Facts labeling on alcohol
beverage products? How might consumers benefit from such a label? Do
consumers have adequate information about the identity and quality of
alcohol beverages if alcohol beverage containers do not
[[Page 6667]]
include Alcohol Facts labeling? How do those benefits compare to the
costs and regulatory burdens associated with such revisions?
7. How, if at all, would the new mandatory labeling requirements
affect competition in the alcohol beverage market?
8. How would the new mandatory labeling requirements affect small
businesses and, in particular, new businesses entering into the alcohol
beverage marketplace?
9. How, if at all, would the new mandatory labeling requirements
affect international trade of alcohol beverages? Is there any
information that should, or should not, be included to align the
proposed labeling requirements with those of other countries?
3. Calculating Panel Elements and Tolerance Levels
As previously noted in this document, TTB expanded the tolerance
levels for calories in 2020, with the issuance of TTB Ruling 2020-1 and
TTB Procedure 2020-1. TTB Procedure 2020-1 states that the calorie,
carbohydrate, or fat content, as determined by TTB analysis, must be
within a reasonable range below the labeled or advertised amount
(within good manufacturing practice limitations), and the protein
content must be within a reasonable range above the labeled amount
(within good manufacturing practice limitations). TTB Ruling 2020-1
also permits industry members to rely on databases or ``typical value''
charts, rather than laboratory analysis, to determine nutrient content
values for the labeling and advertising of alcohol beverages provided
the values are within the ``reasonable range'' prescribed in Procedure
2020-1.
TTB is proposing to modify the tolerances set out in the 2020
guidance by eliminating references to ``reasonable ranges'' based on
``good manufacturing practice limitations.'' Instead, TTB is proposing
an objective standard, which allows a tolerance of 20 percent either
above or below the labeled amount for calories, carbohydrates, protein,
and fat. TTB believes that this change would promote compliance by
eliminating subjective standards. Importantly, the proposed revisions
would facilitate the use of ``typical values'' charts and other
methodologies to calculate the level of calories, carbohydrates, fat,
and protein in alcohol beverage products. Because of variations between
batches of the same alcohol beverage product, one purpose of the
tolerances is to facilitate reliance on databases, such as the U.S.
Department of Agriculture's FoodData Central, and other methodologies
to calculate calorie and nutrient levels, without having to change the
label for minor variations in those values.
In response to Notice No. 232, small businesses stated that broad
tolerances that allow for the use of tables and other means to
calculate calories and nutrient levels are important to reducing costs
and maintaining their businesses' competitiveness in the market. These
commenters were particularly concerned about any regulatory change that
would require them to either buy expensive equipment to conduct in-
house nutritional analysis testing or, more likely, send their products
to third-party laboratories for analysis because they would not be able
to afford the equipment to conduct in-house testing. Commenters stated
that small producers often create small batches of products, and, as
such, costs for testing cannot be easily absorbed over the sale of a
large number of units. Other commenters expressed concern about the
time third-party testing could add between the production of a product
and its release to the market.
TTB seeks comments on whether the proposed tolerances are broad
enough to facilitate reliance on databases for standard products, among
other methods for calculating calorie and nutrient content, but still
specific enough to provide accurate information to consumers.
Specifically, TTB seeks comments on whether it should instead propose
the same tolerances set forth in TTB Procedure 2020-1 or whether
another approach should be considered.
4. Mandatory Listing of Alcohol by Volume on All Alcohol Beverage
Products
Consistent with Notice No. 73, TTB is proposing to require an
alcohol content statement, expressed as a percentage of alcohol by
volume, on the labels of all alcohol beverage products. This would be a
new requirement for table wines (wines containing at least 7 percent
and no more than 14 percent alcohol by volume) and most malt beverages
and beers. TTB believes that uniform labeling of alcohol content on all
alcohol beverage products will assist taxpayers in complying with their
obligations under the IRC and will assist TTB in identifying alcohol
beverage products that pose compliance risks. TTB has authority under
the IRC to require alcohol content statements on all wines and beer,
pursuant to TTB's authority to classify, collect taxes on, and ensure
the appropriate labeling of, such products. As noted in the preamble to
Notice No. 73, TTB concluded that the alcohol content of a beverage is
one of the most important pieces of information about that product.
Both the FAA Act and the IRC provide the Secretary of the Treasury
with broad authority to regulate the labeling of alcohol beverages. The
FAA Act and IRC, and their implementing regulations regarding the
labeling of alcohol content, differ by commodity. For example, all
distilled spirits must be labeled with alcohol content statements under
the FAA Act, as well as under the implementing FAA Act and IRC
regulations. See 27 U.S.C. 205(e) and 27 CFR 5.63, 5.65, 19.516, and
19.517. However, the FAA Act requires alcohol content for wines only if
they contain more than 14 percent alcohol by volume. See 27 U.S.C.
205(e). Pursuant to TTB regulations, wines with an alcohol content of
at least 7 percent but no more than 14 percent alcohol by volume may be
labeled with the type designation ``table wine'' or ``light wine'' on
the brand label in lieu of a percent-by-volume alcohol content
declaration. Additionally, all wines may be labeled with a range of
alcohol content levels. See 27 CFR 4.36.
The FAA Act, as enacted in 1935, also originally prohibited the
placement of alcohol content statements on malt beverage labels, unless
required by State law. However, the Supreme Court found this provision
was unconstitutional in Rubin v. Coors Brewing Co., 514 U.S. 476
(1995). As TTB explained in Notice No. 73, this decision leaves TTB
with authority to either allow or require alcohol content statements on
malt beverage labels.
With the exception of certain flavored malt beverages that contain
alcohol derived from added nonbeverage flavors or other added
nonbeverage ingredients (other than hops extract) containing alcohol
(see 27 CFR 7.63(a)(3)), malt beverages are not currently required to
bear an alcohol content statement. However, many consumers have become
used to seeing optional alcohol content statements on many malt
beverage labels, which are permitted under TTB regulations at 27 CFR
7.65 and may be required under State law.
a. Proposal To Require Alcohol Content Statements for Malt Beverages
In Notice No. 176, TTB did not propose mandatory alcohol content
statements for malt beverages but did propose to increase the alcohol
content tolerance for malt beverages from 0.3 percent to 1 percent
above or below the labeled alcohol content. TTB made this proposal with
the understanding that some brewers, especially small brewers, avoid
putting optional alcohol content statements on malt beverage labels
[[Page 6668]]
because of the difficulty in maintaining precise alcohol content levels
from batch to batch.
In response to Notice No. 176, the Beer Institute opposed the
proposed increase of the alcohol content tolerance for malt beverages,
stating that the increase could confuse, mislead, and possibly endanger
consumers due to higher than labeled alcohol content. On the other
hand, the Brewers Association supported mandatory alcohol content
statements for malt beverages, if the tolerance was increased to one
percentage point above or below the labeled amount, and if a three-year
compliance period was provided to allow for label changes.\21\ Because
the issue of mandatory alcohol content statements for malt beverages
was outside of the scope of that proposed rule, TTB did not adopt an
increase in the tolerance for alcohol content statements in response to
Notice No. 176; instead, TTB stated that it was treating the comment in
favor of this amendment as a request for further rulemaking. TTB is now
proposing both to require alcohol content statements for all malt
beverages under the FAA Act and to increase the labeling tolerance to
one percentage point above or below the stated amount. TTB is also
proposing conforming amendments to the IRC labeling regulations, in
parts 25 and 27, to cover domestic and imported beer.
---------------------------------------------------------------------------
\21\ The Beer Institute and the Brewers Association made
substantially similar comments in response to Notice No. 232.
---------------------------------------------------------------------------
For beers that are not defined as ``malt beverages'' under the FAA
Act, TTB is proposing to mandate an alcohol content statement on the
label of the products under TTB's IRC authority. However, these beers
would not be subject to the proposed Alcohol Facts labeling
requirements, including the requirement for a statement of the number
of fluid ounces of pure ethyl alcohol per serving, because the Alcohol
Facts labeling requirements are being proposed under TTB's FAA Act
authority, which does not apply to these products. Instead, these
products are subject to FDA labeling requirements. TTB believes that
requiring an alcohol content statement on these products would
facilitate revenue protection by, among other things, making it readily
apparent that the products are subject to tax under the IRC. TTB seeks
comments on this issue.
TTB also seeks comment on the proposal to increase the labeling
tolerance to one percentage point above or below the stated amount for
all malt beverages and beers. In response to Notice No. 232, brewers
commented that the cost of the equipment needed to test for alcohol
content to a sufficient degree of certainty to meet the current
tolerance standards costs tens of thousands of dollars. Small brewers
reported that this cost was unaffordable, would push them out of the
market, and would discourage new entrants to market. Increasing the
tolerance to one percentage point above or below the stated alcohol
content would allow brewers to calculate the alcohol content through a
formula based on hydrometer readings, which commenters to Notice No.
232 stated would drastically lower the costs of compliance. TTB seeks
comment on whether increasing the tolerance for alcohol content to one
percent would lower the cost of compliance for a mandatory alcohol
content disclosure and thereby promote competition in the marketplace
if such disclosure is required. TTB also seeks comment on whether
consumers would receive adequate information about the alcohol content
of malt beverages if the tolerance is increased.
Non-alcoholic malt beverages that are the product of alcoholic
fermentation are subject to the labeling requirements of the FAA Act
but are not subject to the health warning requirements of the Alcoholic
Beverage Labeling Act of 1988 because their alcohol content is less
than 0.5 percent alcohol by volume.\22\ See 27 CFR 7.65(e), 16.10, and
16.21. The IRC regulations in 27 CFR 25.242 require marking such
products as a ``cereal beverage,'' ``malt beverage,'' or ``near beer,''
along with a statement that the product is ``Nontaxable under section
5051 I.R.C.'' on bottles, kegs, and barrels.
---------------------------------------------------------------------------
\22\ While this proposed rule would generally allow for a
tolerance of one percentage point above or below the labeled alcohol
content for malt beverages, for malt beverages containing less than
0.5 percent alcohol by volume, the actual alcohol content may be
less than, but may not exceed, the labeled alcohol content.
---------------------------------------------------------------------------
TTB is proposing to require an Alcohol Facts statement for non-
alcoholic malt beverages, but TTB does not see any reason to require a
specific statement of the percentage of alcohol by volume, as long as
the statement adequately informs the consumer that the product contains
less than 0.5 percent alcohol by volume. TTB is thus proposing to allow
the alcohol content statement for these products to be expressed either
as a percentage of alcohol by volume or with the terms ``non-
alcoholic'' or ``alcohol free,'' provided the product meets the current
definitions of those terms in 27 CFR 7.65(e)-(f). The term ``non-
alcoholic'' means the product contains less than one half of one
percent alcohol by volume, while the term ``alcohol free'' is reserved
for those products that contain no alcohol. Additionally, if the term
``non-alcoholic'' is used, the phrase ``contains less than 0.5 percent
(or .5%) alcohol by volume'' must appear immediately adjacent to it,
although it may be abbreviated as provided in proposed Sec.
7.212(e)(1). Similarly, for non-alcoholic malt beverages, there is no
need to specify the number of fluid ounces of alcohol per serving,
given that, by definition, a serving size would be 12 fl oz, so the
fluid ounces of alcohol per serving would be less than 0.06, which is
one-tenth of an alcoholic drink equivalent as defined by the Dietary
Guidelines.
TTB seeks comment on this issue, and specifically invites comments
on whether an Alcohol Facts statement should be required for non-
alcoholic malt beverages. TTB notes that other non-alcoholic products
are not subject to the FAA Act's labeling requirements. For example, a
non-alcoholic wine does not fall under the definition of a ``wine''
under the FAA Act because the minimum alcohol content for wine under
that definition is 7 percent alcohol by volume. See 27 U.S.C. 211.
Similarly, the definition of the term ``distilled spirits'' in 27 CFR
5.1 does not include products containing less than 0.5 percent alcohol
by volume.
b. Proposal To Require Alcohol Content Statements for Wine
The current wine regulations under the IRC require alcohol content
to be labeled on all containers, either as a percentage of alcohol by
volume or in accordance with 27 CFR part 4. Accordingly, wines with
less than 7 percent alcohol by volume must be labeled with a numerical
statement of alcohol content. However, because the IRC regulations
allow wines as defined under the FAA Act to be labeled with an alcohol
content statement in accordance with the regulations in part 4, they do
not require the listing of a percentage of alcohol by volume for wines
with an alcohol content of at least 7 percent and up to 14 percent,
which are instead entitled to the exemptions under part 4.\23\ As
previously noted, the regulations in section 4.36 do not require
numerical alcohol content statements for wines labeled with the
[[Page 6669]]
designation ``table wine'' on the brand label.
---------------------------------------------------------------------------
\23\ See 27 CFR 24.257(a)(3). The regulation incorporates the
rules under part 4, which results in a somewhat inconsistent effect.
The IRC regulations require wines under 7 percent alcohol by volume
(which are not ``wines'' under the FAA Act and thus fall under FDA's
labeling jurisdiction) to bear a percent-by-volume alcohol content
statement; however, they do not require the same statement on wines
with an alcohol content of 7 to 14 percent alcohol by volume.
---------------------------------------------------------------------------
As explained in Notice No. 73, TTB believes that the listing of
alcohol content should be consistent for wines regardless of whether
they contain more than 14 percent alcohol by volume. Accordingly, in
that document, TTB proposed amending Sec. 24.257(a)(3) to require
alcohol content expressed in terms of a percentage of alcohol by volume
on all wine labels. TTB stated that this amendment would serve an
important revenue purpose, as the alcohol content of a wine is a key
factor in determining its tax classification. See 26 U.S.C. 5041(b).
While there were many supportive comments on this issue in response
to Notice No. 73, some wine industry members and associations opposed
the proposed amendment, urging TTB to retain the provisions in the
regulations that permit the use of the designation ``table wine'' or
``light wine'' for wines with alcohol content levels of at least 7
percent and no more than 14 percent alcohol by volume. On the other
hand, as previously mentioned, the Wine Institute commented in response
to Notice No. 176 in favor of requiring numerical alcohol content
statements on the labels of all wines, including table wines. TTB
recognizes the views of some industry members may have changed since
Notice No. 73 was issued in 2007.
Thus, this proposed rule provides for mandatory alcohol content
statements under the IRC regulations for all wines and removes the
option for a ``table wine'' or ``light wine'' designation to be used in
lieu of a numerical statement of alcohol content. See proposed
Sec. Sec. 4.36(b), 24.257(a)(3), and 27.59(a)(3). ``Table wine,''
``light wine,'' and related terms may still be included as optional
information under the definitions in Sec. 4.21.
Wines subject to the FAA Act (i.e., wines containing at least 7
percent alcohol by volume) would also be subject to the proposed rules
in part 4 with regard to the formatting of alcohol content statements,
as well as the inclusion of a statement of fluid ounces of alcohol per
serving, under TTB's authority under the FAA Act to ensure consistency
in the presentation of information on labels. See 27 U.S.C. 205(e).
The proposed rule also removes the option to list the alcohol
content for wines in terms of ranges. Instead, TTB is proposing to
require the proposed mandatory alcohol content statements to be within
the tolerances set forth in current Sec. 4.36 for wines with at least
7 percent alcohol by volume and within a tolerance of plus or minus
0.75 percentage points for wines with less than 7 percent alcohol by
volume.
c. Comments Sought
TTB is soliciting comments on the proposed expansion of alcohol
content labeling for malt beverages and wines, including on the below
topics:
1. What are the potential benefits to consumers and industry
members from a requirement for alcohol content statements, expressed as
a percentage of alcohol by volume, on the labels of all alcohol
beverage products?
2. Will the proposed requirement for alcohol content labeling for
all beer and malt beverages result in additional costs and burdens for
brewers and importers, particularly small businesses? Will the increase
in alcohol content tolerances mitigate or reduce those costs and
burdens?
3. Will the proposed increase in alcohol content tolerances for
malt beverages mislead consumers? If so, does the same argument apply
to wines, which currently have a 1.5 percentage point tolerance for
wines up to 14 percent alcohol by volume, and a 1 percentage point
tolerance for wines with an alcohol content of over 14 percent alcohol
by volume?
4. Do the proposed labeling requirements for non-alcoholic malt
beverages adequately advise the consumer that the products contain less
than 0.5 percent alcohol by volume? Should non-alcoholic malt beverages
be exempted from calorie and nutrient labeling requirements?
5. What, if any, additional costs or burdens would requiring
numerical alcohol content statements for table wines impose on wineries
and importers, particularly small businesses?
6. Would an alternative that allowed table wines to indicate
alcohol content as a range (e.g., 7-14 percent alcohol by volume) place
less of a burden on small wineries and importers? Would this approach
provide sufficient information to consumers?
5. Placement of Alcohol Content Statements as Part of the Alcohol Facts
Statement
TTB is proposing to amend the FAA Act labeling regulations in parts
4, 5, and 7 to require that alcohol content statements that are already
required under the FAA Act, or that are proposed in this document to be
required under either the FAA Act (for malt beverages) or under the IRC
(for table wines), be placed on the label as part of the mandatory
Alcohol Facts statement. The alcohol content of an alcohol beverage is
one of the most important pieces of information about the product for
the consumer and thus should be highlighted and easy to locate on the
label. TTB believes that providing this information as part of the
panel facilitates consumers' evaluation of the alcohol content in
context with the nutritional information.
Over the past 17 years, TTB has amended the regulations to remove
the brand label concept for distilled spirits and malt beverages, which
had required certain information to appear together, such as the brand
name, class and type designation, and if applicable, the alcohol
content. For distilled spirits, the mandatory alcohol content statement
currently must appear in the same field of vision as the brand name and
the class/type designation. See 27 CFR 5.63(a) and 7.63(a), as amended
by T.D. TTB-158 and T.D. TTB-176. With regard to wine, it bears noting
that the World Wine Trade Group (WWTG) Agreement on Requirements for
Wine Labeling provides that wines may be imported bearing certain
common mandatory information (CMI), including alcohol content, on any
label on the wine container, and that this information may be placed
within a single field of vision, meaning any part of the surface of the
container, excluding its base and cap, that can be seen without having
to turn the container. Under this Agreement, as long as all of the CMI
elements are visible at the same time, they will meet the placement
requirements (if any) of each member country. Accordingly, in 2013, TTB
amended the wine labeling regulations to allow alcohol content to
appear on labels other than the brand label. See T.D. TTB-114 (78 FR
34565, June 10, 2013). The 2013 amendment provided greater flexibility
in wine labeling and conformed the TTB wine labeling regulations to the
WWTG agreement.
Nothing in this proposal prevents an alcohol content statement from
also appearing on the single field of vision label(s) with the other
elements of CMI, provided that it is also included on the Alcohol Facts
statement. Likewise, this proposal does not preclude the placement of
the Alcohol Facts statement (as prescribed in this document) together
with the other elements of CMI on the single field of vision label. TTB
encourages U.S. trading partners, including other WWTG members, and all
interested persons, to submit comments in response to this specific
issue in the proposal.
Specifically, TTB seeks comments on the following questions:
[[Page 6670]]
1. Would it be easier for consumers to locate alcohol content
information on a label if it is required to be included in the Alcohol
Facts statement and if so, why?
2. Alternatively, should TTB allow alcohol content labeling as an
optional element of the Alcohol Facts statement?
3. Does the placement of alcohol content information affect costs
of compliance and regulatory burdens? If so, how?
4. Does the proposal to require alcohol content information as part
of the Alcohol Facts statement affect competition or issues addressed
by international trade agreements or international standards?
6. Mandatory Statement of Alcohol in Fluid Ounces of Pure Alcohol per
Serving
TTB is proposing to require a statement of alcohol content in fluid
ounces of pure alcohol per serving as part of the mandatory Alcohol
Facts statement. TTB received numerous comments in response to Notice
Nos. 73 and 232 stating that per-serving alcohol content is critically
important information to consumers. Thousands of consumers commented on
Notice No. 232 that per-serving alcohol content is important to help
people understand how much alcohol they are consuming. The National
Center for Health Research, a non-profit think tank focused on health
issues, stated that alcohol beverage packaging should ``provide
information on the total amount of alcohol in the container (not just
alcohol by volume) so that consumers can make informed choices and
avoid excessive consumption.'' The American Public Health Association,
an advocacy organization for public health, commented that alcohol
beverage containers should provide the ``total amount of alcohol in the
container (not alcohol by volume)'' along with other information like
nutrients and ingredients because ``[m]ost heavy drinkers are not
alcohol dependent, and additional information . . . could influence
individual decisions about alcohol use.'' Commenters also indicated
that many governmental and health agencies provide consumption and
moderation advice to consumers that is based on the amount of pure
ethyl alcohol in each serving or drink, so information about the
quantity of pure ethyl alcohol per serving is needed to allow consumers
to follow this advice.
TTB believes that listing alcohol content in fluid ounces per
serving on the alcohol beverage container could help consumers
understand how much alcohol they are consuming and follow consumption
and moderation advice from government and public health organizations,
if they wish to do so. TTB further believes that requiring this
information on labels would further its mandate to ensure that labels
provide consumers with adequate information as to the alcohol content
of the product.
Accordingly, TTB proposes to amend the regulations to require the
listing of the number of U.S. fluid ounces of pure ethyl alcohol per
serving, expressed to the nearest tenth of a fluid ounce, on the
mandatory Alcohol Facts statement. In a panel, the information would be
required to be indented under the alcohol-by-volume statement.
For wines with an alcohol content of no more than 14 percent
alcohol by volume, TTB recognizes that the FAA Act does not require
numerical alcohol content statements on labels. As explained earlier,
however, TTB is proposing to amend the IRC regulations in parts 24 and
27 to require alcohol content statements on all wine labels. TTB
believes its authority under the FAA Act extends to ensuring
consistency in the format and presentation of all alcohol content
statements appearing on wines subject to part 4, even if such
statements are not required by the FAA Act. Accordingly, proposed Sec.
4.36 provides that where an alcohol statement, as a percentage of
alcohol by volume, appears on a wine label subject to the requirements
of part 4, it must conform to the requirements of Sec. 4.36 and must
appear in an Alcohol Facts statement in accordance with the
requirements of new subpart L of 27 CFR part 4.
This proposal includes all distilled spirits and includes malt
beverages with at least one half of one percent alcohol by volume.
However, as explained above in Section VII.B.4, for malt beverages with
less than one half of one percent alcohol by volume, TTB believes that
the designation ``non-alcoholic'' (along with the required statement
that such products contain less than 0.5 percent alcohol by volume) or
``alcohol-free'' (for products containing no alcohol) is sufficient,
and that there is no need to specify the percentage of alcohol by
volume as part of the Alcohol Facts statement. Similarly, TTB is not
proposing to require the disclosure of the number of fluid ounces of
alcohol per serving for such products.
The 2003 petition from CSPI and other consumer organizations
(discussed in Section III.A) proposed that, in addition to presenting
pure ethyl alcohol content in fluid ounces per serving, Alcohol Facts
labels should disclose the number of ``standard drinks'' per serving
and per container.\24\ CSPI proposed that a ``standard drink'' be
defined identically to the Dietary Guidelines for Americans ``alcoholic
drink equivalent'' as containing 14 grams, or .6 fluid ounces, of pure
ethyl alcohol. CSPI further proposed that labels should include a
statement that ``A standard drink contains .6 fl oz of pure alcohol''
and consumption advice provided by the Dietary Guidelines for
Americans. In response to Notice No. 232, TTB received a large number
of comments from consumers supporting CSPI's proposal to include
``standard drink'' information on alcohol beverage labels. The Centers
for Disease Control also provided a comment that cited a study that
found including the recommended alcohol guidelines as well as standard
drink sizes were more effective than only including percent of alcohol
by volume for improving estimates of alcohol consumption.\25\
---------------------------------------------------------------------------
\24\ In their comment to Notice No. 232, CSPI stated that they
are no longer calling for the pure alcohol content in fluid ounces
per serving because they believe this would serve the same purpose
as standard drink labeling and thus would be duplicative.
\25\ Edmunds, C.E.R., Gold, N., Burton, R. et al., The
effectiveness of alcohol label information for increasing knowledge
and awareness: a rapid evidence review, BMC Public Health 23, 1458
(2023), available at https://doi.org/10.1186/s12889-023-16327-x.
---------------------------------------------------------------------------
TTB did not propose to define a ``standard drink'' or to mandate
inclusion of the consumption advice provided by the Dietary Guidelines
for Americans in the 2007 proposed rule, Notice No. 73. The preamble to
Notice No. 73 presents, in detail, TTB's explanation for why it was not
including those elements, and TTB believes that the rationale set forth
in Notice No. 73 on these issues still applies.
Alcohol beverages are rarely packaged as products equaling a
``standard drink'' of exactly 0.6 fluid ounces of pure alcohol.
Products will therefore almost always contain less than one standard
drink or multiple standard drinks, potentially leading to consumer
confusion. TTB believes that consumers would also be confused about the
difference between the terms ``standard drink'' and ``serving size.''
Accordingly, TTB is not proposing to adopt CSPI's suggestions about use
of the term ``standard drink'' or mandating inclusion of the Dietary
Guidelines for Americans' advice on moderate drinking (which may be
updated based on any changes in the guidelines over time).
TTB is soliciting comments from all interested persons on these
issues.
[[Page 6671]]
Specifically, TTB solicits comments on the following:
1. Would including information about the fluid ounces of pure ethyl
alcohol per serving in the proposed Alcohol Facts statement improve the
ability of consumers to follow the consumption and moderation advice
provided by governmental and health agencies, if they so choose?
2. Would requiring information about the fluid ounces of pure ethyl
alcohol per serving in the proposed Alcohol Facts statement impose
additional costs or burdens for alcohol beverage manufacturers and
importers, particularly for small businesses?
3. Is there a better way of presenting the volume of alcohol
content per serving? Specifically, should the term ``standard drink''
be defined and used in place of or in addition to fluid ounces of pure
ethyl alcohol per serving?
4. TTB notes that the Dietary Guidelines for Americans, 2020-2025,
use the terms ``drink,'' and ``alcoholic drink equivalent,'' and seeks
comments on whether any of those terms should be used or defined for
use on labels.
5. Should the proposed mandatory Alcohol Facts statement include a
summary of the Dietary Guidelines' advice on moderate drinking (to be
updated based on any changes in the guidelines over time)?
TTB also specifically seeks comments on whether these proposals
would provide useful information to consumers or would instead be
confusing or misleading, and whether inclusion of these elements would
affect the costs of compliance and regulatory burdens.
7. Statements of Average Analysis and Serving Facts Statements
Under this proposed rule, the mandatory Alcohol Facts statement
would replace the current voluntary statements of average analysis and
Serving Facts statements on alcohol beverage labels. Thus, as of the
compliance date, those statements would no longer satisfy the proposed
mandatory Alcohol Facts labeling requirements.
8. Linear Display, Type Size, and Electronic Display of Alcohol Facts
Information
a. Linear Display
TTB proposes to allow the option of a linear display placed on the
container (including a keg), as long as it is set apart from other
information and is placed inside a box with the title ``Alcohol Facts''
in bold-faced type. TTB received comments in response to Notice No. 232
expressing concern about label space on certain containers, such as 50
mL bottles, and/or whether new information requirements would require a
back label, which would increase the cost of compliance. TTB believes
the linear display will allow information to fit on labels of most
containers without the need for a back label, while requiring the
linear display to be in a box will make it more noticeable to
consumers. TTB is also proposing to liberalize the format and size
requirements for the panel display, as compared to the Notice No. 73
proposal, to encourage industry members to use the panel format rather
than the linear format.
TTB believes that these changes would reduce the burden on industry
members and are consistent with TTB's mandate to issue regulations to
ensure that labels provide consumers with adequate information about
the identity, quality, and alcohol content of alcohol beverages.
Examples of Alcohol Facts panels in a linear display appear in the
proposed regulations at Sec. Sec. 4.112(h), 5.212(h) and 7.212(j).
b. Type Size
TTB is proposing that the minimum type size requirements for
Alcohol Facts statements mirror existing type size requirements for
mandatory information in the wine, distilled spirits, and malt beverage
regulations in parts 4, 5, and 7, respectively. See 27 CFR 4.38, 5.53,
and 7.53. TTB is also proposing to remove the existing maximum type
size requirement for alcohol content statements appearing in the
proposed mandatory Alcohol Facts statements for wine and malt beverages
subject to the FAA Act. Currently, the maximum type size for alcohol
content statements is 3 millimeters for all wine containers. See Sec.
4.38(b)(3). For malt beverages, the limit is 3 millimeters for
containers of 40 fluid ounces or less and 4 millimeters for containers
of more than 40 fluid ounces. See Sec. 7.53(b). TTB believes that the
maximum type size requirement may no longer serve a purpose, and that a
maximum type size requirement for any one element of an Alcohol Facts
statement is likely to either lead to differences in type sizes among
the elements or create a de facto limitation on the size of the overall
panel, which might be unnecessarily limiting to industry members in
designing their labels.
Regarding malt beverages, TTB is also seeking public comment on
whether to remove the maximum type size for optional alcohol content
statements. TTB received a comment requesting removal of this
limitation in the context of its label modernization rulemaking. See
T.D. TTB-176 (87 FR 7526, February 9, 2022). In response, TTB stated
that such a regulatory change should not be adopted without providing
more specific notice (and an opportunity to comment) to interested
parties. TTB is now seeking public comment on this issue.
c. Electronic Display of Alcohol Facts Information
TTB considered, but is not proposing, to allow the proposed Alcohol
Facts panel to be distributed by electronic means via a link, code, or
other marking on the physical label rather than requiring the full
panel to appear on the physical label itself. TTB believes that
allowing mandatory information to appear somewhere other than the
physical label would decrease consumer accessibility to information
that to informs decisions about purchasing and consuming alcohol
beverages. As detailed below, TTB seeks comment on this assumption.
TTB's current policy, articulated in Industry Circular 2022-2,
``Use of Social Media in the Advertising of Alcohol Beverages,'' allows
the use of links, including QR codes, on labels, and treats the linked
website as advertising material if such use falls within the FAA Act's
definition of an advertisement. Thus, industry members may currently
include QR codes that link to websites with additional information
about their products, including optional calorie and nutrient
information. However, TTB currently does not allow mandatory labeling
requirements to be satisfied solely by including the information on a
website with a link or code on the physical label; instead, the
mandatory information must appear on the label itself.
In Notice No. 232, TTB asked if there are alternative ways of
providing the Alcohol Facts information, for example, by allowing
information to be provided through a website that could be accessed by
consumers via a quick response code (QR code) or website address on the
label. In response to this request, individual commenters and public
health and consumer advocacy groups largely opposed the use of QR codes
for mandatory label information. On the other hand, the vast majority
of trade organizations representing industry members commented that
they support disclosure via QR code for at least some of the
information disclosures proposed in this rulemaking. However, there
were exceptions. The Beer Institute commented that nutritional and
alcohol
[[Page 6672]]
content information should appear on the physical label. TTB also
received comments from small producers and a few consumers supporting
the use of QR codes or websites to disclose nutritional information.
The comments supporting the use of disclosure via electronic means
cited three primary points. First, web-based disclosure is a cost-
efficient means to provide information to consumers that provides
producers with flexibility and reduces time to market. Second,
commenters cited to the broad implementation of digital labels in
Europe and the benefits electronic information disclosure could have
for international trade. Multiple commenters also touted the benefits
of electronic disclosure for tailoring product information to country-
specific regulations and providing information in a language
appropriate to the point of sale. Finally, several commenters stated
that web-based disclosure is consumer-friendly, particularly for
products sold in smaller containers. These commenters argued that QR
codes prevent labels from becoming cluttered, which can distract
consumers from the most relevant information, make labels difficult to
read, and contribute to consumer confusion.
These points were countered by comments from public health and
consumer advocacy organizations, academics, and consumers. These
commenters argued that disclosing the information electronically would
create an unreasonable burden on consumers both because many consumers
do not have access to a smart phone, or to the internet, as they shop
for alcoholic beverages and because consumers do not want to have to go
to a website to access the information.
CSPI commented that the barriers to information created by
electronic disclosure would disproportionately affect consumers who are
older or have lower incomes, and those living in rural areas and on
tribal lands. CSPI cited a 2023 survey conducted by the Pew Research
Center that found that 79 percent of adults with annual incomes less
than $30,000 owned smartphones compared to 90-98 percent of higher
income groups and found similar sized gaps by age, with only 76 percent
of adults aged 65 and older owning smartphones compared with 89-97
percent of adults in younger age groups.\26\ Data from the Federal
Communications Commission also shows a rural-urban gap for access to
high speed mobile 4G LTE and lower access to ``fixed terrestrial
services'' (i.e., satellite or wireless internet/broadband). The gap in
access to high speed fixed terrestrial services is even larger between
tribal lands and urban areas.\27\
---------------------------------------------------------------------------
\26\ Pew Research Center, Mobile Fact Sheet, available at
https://www.pewresearch.org/internet/fact-sheet/mobile. (accessed
May 9, 2024).
\27\ Federal Communications Commission, Fourteenth Broadband
Deployment Report, 2021, available at FCC-21-18A1.pdf.
---------------------------------------------------------------------------
Regarding consumer preferences on the location of information,
several commenters cited a survey that found 76 percent of consumers
would prefer to learn about alcohol and nutritional content of
alcoholic beverages by reading the information on the label of the
container, as opposed to scanning a QR code or visiting a website.\28\
And the Consumer Federation of America cited a review of consumer
behavior experiments by the European Union's Joint Research Centre that
found ``the spontaneous use of QR codes by consumers is very low.''
\29\
---------------------------------------------------------------------------
\28\ Big Village's CARAVAN U.S. Online Omnibus Survey,
administered March 15-20, 2024. The survey question asked: ``How
would you prefer to learn about the ingredients, alcohol content,
allergens, calories, and nutritional content of an alcoholic
beverage? [Select one answer] 1. Read this information on the label
of the container; 2. Scan a QR code on the label; 3. Visit a website
address provided on the label; 4. I do not want to learn this
information.''
\29\ Werle, C.O.C., et al, Literature review on means of food
information provision other than packaging labels, JRC Technical
Report, 2022, available at https://publications.jrc.ec.europa.eu/repository/bitstream/JRC128410/JRC128410_01.pdf.
---------------------------------------------------------------------------
TTB also received thousands of nearly identical comments from
consumers that oppose QR codes as an alternative to on-container
labeling. The commenters stated that ``[f]or nutrition and alcohol
content to be accessible to all, it is vital that it be mandated to
appear on each container.''
As previously stated, TTB currently requires all mandatory
information disclosures to appear on the physical label of an alcohol
beverage container. At this time, TTB has decided not to propose
allowing this information to be disclosed electronically via a link or
code on the physical label (e.g., a QR code) rather than on the
physical label itself. TTB is persuaded by the comments from public
health and consumer advocacy organizations and consumers that allowing
the disclosure of information via electronic means would create
barriers for consumer access, particularly for consumers in certain
demographics and those living in rural areas. However, TTB recognizes
that access to technology and cultural norms surrounding the provision
of information via electronic means are rapidly advancing and seeks
comment on whether any final rule should allow the proposed Alcohol
Facts information to be disclosed via electronic means.
TTB is soliciting comments from all interested persons on these
issues, including on the following specific topics:
1. Would consumers have trouble locating Alcohol Facts information
if that information is presented in a linear display?
2. Does the proposal to require the linear display to appear in a
box with the title ``Alcohol Facts'' in bold-face type allow consumers
to better locate the information? Alternatively, should industry
members be allowed the flexibility to include a linear display that is
not surrounded by a box?
3. Do consumers, industry members, or other interested parties have
comments on the type size and general formatting requirements proposed
for both linear displays and panels?
4. How would the proposed formatting requirements, including the
linear display option, affect the costs and other regulatory burdens?
What are the benefits of the proposed formatting requirements?
5. Should TTB remove the maximum type size limitation for mandatory
statements of alcohol content for wine and malt beverages that appear
in an Alcohol Facts statement? For malt beverages, should TTB remove
the maximum type size limitation for alcohol content statements that
may appear elsewhere on the label as well?
6. What alternatives exist to convey Alcohol Facts information to
consumers? How, if it all, would the alternatives affect competition in
the marketplace as compared to displaying the information as proposed
on the physical label? What are the costs and benefits of aligning
Alcohol Facts information to requirements of other countries?
7. If TTB adopts mandatory Alcohol Facts labeling for alcohol
beverages, should it include the option of satisfying the requirement
by making the information available electronically, for example by
including a QR code or website address on the label to allow consumers
to view mandatory Alcohol Facts statements on their mobile devices
instead of on the product label? Would this option provide consumers
with sufficient access to Alcohol Facts information at the retail store
so that they can make informed decisions, given issues such as the need
to use a smartphone, potential issues regarding the adequacy of
cellular or Wi-Fi coverage at some retail stores, and other potential
technological challenges? Would the provision of mandatory information
disclosures via electronic
[[Page 6673]]
means create disproportional barriers to access for particular
communities?
8. How would the option of disclosing the proposed Alcohol Facts
information via electronic means affect the costs and other regulatory
burdens? What are the benefits of disclosure via electronic means?
9. If TTB were to allow mandatory information to be disclosed
electronically, should TTB allow all of the proposed Alcohol Facts
information to be disclosed electronically or should some of the
information be required to appear on the physical label?
10. If TTB allowed multiple options to convey Alcohol Facts
information to consumers, could the lack of uniformity create consumer
confusion?
9. Serving Size Reference Amounts
Consistent with the serving sizes found in TTB Ruling 2013-2, TTB
proposes the following reference serving sizes in new Sec. Sec.
4.111(b), 5.211(b), and 7.211(b), for wines, distilled spirits, and
malt beverages, respectively:
----------------------------------------------------------------------------------------------------------------
Alcohol percent by volume
Serving size --------------------------------------------------------------------------
Wine Distilled spirits Malt beverages
----------------------------------------------------------------------------------------------------------------
1.5 fl oz (44 mL), or 50 mL for 50 mL ....................... Above 24%.............. Above 24%.
containers of distilled spirits.
2.5 fl oz (74 mL).................... Above 16 to 24%........ Above 16 to 24%........ Above 16 to 24%.
5 fl oz (148 mL)..................... 7 to 16%............... Above 7 to 16%......... Above 7 to 16%.
12 fl oz (355 mL).................... ....................... Not more than 7%....... Not more than 7%.
----------------------------------------------------------------------------------------------------------------
TTB recognizes that these serving size reference amounts do not
reflect the multiple servings that may be consumed on a single
occasion. Serving size reference amounts are not intended as
recommended consumption amounts but rather are intended to be used as a
reference amount for the consumer to determine alcohol, nutrient, and
calorie intake. TTB seeks comments on whether the proposed serving size
reference amounts should be adopted, and if not, what other serving
sizes should be used.
TTB specifically seeks comments on the following issues:
1. Are the proposed reference amounts a reasonably accurate
representation of the amount of the product customarily consumed as a
single serving? If not, what data or other information should TTB
consider that would give a better estimate of the amount customarily
consumed for a specific product category?
2. Are the proposed reference amounts more accurate than the
serving sizes set forth in TTB Ruling 2004-1 (1.5 fl oz for distilled
spirits, 5 fl oz for wines, and 12 fl oz for malt beverages, regardless
of the alcohol content)? Why or why not?
3. Should TTB allow greater flexibility in serving sizes?
4. Should the serving size reference amounts be exactly equal to an
alcoholic drink equivalent of 0.6 fluid ounces of alcohol, or would
this mislead consumers by not recognizing the way in which alcohol
beverages are typically consumed?
10. Dual-Column Alcohol Facts Panel Display
TTB proposes to allow for the optional presentation of Alcohol
Facts panels in a dual-column format. The first column would provide
the information for the standard reference serving size, while the
second column would provide information about the contents of the
entire container. TTB is proposing to allow the dual-column format on
alcohol beverages sold in containers holding at least 200 percent and
less than 500 percent of the serving size reference amount. See
proposed Sec. Sec. 4.112, 5.212, and 7.212 below. CSPI suggested that
TTB could model its regulations after FDA's policy, which requires dual
column nutrition labeling for products containing more than 2 and up to
3 servings per container. See 21 CFR 101.9(b)(12)(i). TTB, however, is
proposing to allow dual-column labeling on containers up to 5 servings
because TTB is aware of products in the marketplace that are sold in
larger containers for which there may be a valid reason to include a
dual-column label.
TTB is also proposing that alcohol beverages packaged and sold in
containers with a net content of less than 200 percent of a single
serving size reference amount must be labeled as containing a single
serving, and a single serving size is the net content of the container.
This means that, for example, a malt beverage sold in a can that
contains 150 percent of a single serving size reference amount would be
labeled with the entire net contents being considered as one serving.
TTB seeks comments on the following specific issues, and may
consider different rules for dual-column labeling and single-serving
containers based on the comments:
1. Does dual-column labeling create the impression that consumption
of multiple servings of an alcohol beverage at one time is expected or
recommended?
2. Should dual-column displays be limited to containers with three
or fewer servings, consistent with the FDA regulations? Or is a limit
of less than five servings better suited to the way in which alcohol
beverages may be bottled and labeled?
3. Should dual-column displays be allowed on any container,
regardless of the number of servings in that container, consistent with
TTB Ruling 2013-2?
4. The proposed rule would require containers with a net content of
more than 100 percent but less than 200 percent of a single serving
size reference amount to be labeled as containing a single serving. TTB
solicits comments on whether this is the best way to convey the alcohol
and nutrient content of these products to consumers.
11. Implementation Period
TTB is proposing a compliance date of 5 years from the date that a
final rule resulting from this document 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
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 received a number of comments in response to Notice No. 232
requesting a sufficiently long transition period between publication of
a final rule and implementation of the rule to allow businesses, and
particularly small businesses, ample time to exhaust existing label
stocks and to bring labels and websites into compliance with the new
regulations. One commenter emphasized that a longer implementation
period is needed to allow TTB time to educate regulated industry
members on new requirements, create resources for small businesses, and
publish clarifying guidance.
[[Page 6674]]
While most commenters did not suggest a specific time period, the
Brewers Association recommended an implementation period of at least 3
years and the American Distilled Spirits Alliance requested at least 5
years. The Brewers Association said, ``a quicker implementation
schedule would risk placing financial burdens on brewers and other
producers, particularly small ones.'' CSPI recommended that, to
minimize costs, TTB provide an implementation long enough that many
producers would make updates to their labels even absent the
regulation. CSPI cited to an FDA regulatory impact analysis for a food
labeling rule that found food and beverage products tend to be
voluntarily relabeled on a 2- to 5-year cycle.\30\
---------------------------------------------------------------------------
\30\ U.S. Food and Drug Administration, Regulatory Impact
Analysis for Final Rules On: ``Food Labeling: Revision of the
Nutrition and Supplement Facts Labels'' and ``Food Labeling: Serving
Sizes of Foods That Can Reasonably Be Consumed at One Eating
Occasion; Dual-Column Labeling; Updating, Modifying, and
Establishing Certain Reference Amounts Customarily Consumed; Serving
Size for Breath Mints; and Technical Amendments,'' 2016, available
at https://www.fda.gov/media/98712/download.
---------------------------------------------------------------------------
TTB believes that a 5-year period would provide both small and
large industry members with sufficient time to phase in the
requirements of the proposed mandatory Alcohol Facts labeling in a
cost-effective manner. As discussed later in this document, TTB
estimates that industry members change their labels at least once every
42 months; therefore, a 5-year compliance period would allow all
affected industry members to make the changes required by this proposal
at the same time as a regularly scheduled label change. See Section IX,
Cost Analysis, below, for additional information on the estimated costs
of this proposed rule, which are affected by the length of the
implementation period and estimates of the frequency of changes to
alcohol beverage labels.
Under this proposal, TTB will not require industry members to
submit new COLA applications when the only change being made to a label
is the inclusion, or alteration, of a required Alcohol Facts panel or
statement containing alcohol content information. Therefore, this
proposal would not require the submission of a new application for
label approval simply to cover revisions to the calorie, nutrient, and
alcohol content labeling of the product in accordance with the new
requirements.
Under current guidance, industry members have been allowed to label
their products voluntarily with either a statement of average analysis
or a Serving Facts statement. See TTB Rulings 2004-1 and 2013-2. TTB
has also allowed, via FAQs published on TTB's website, ``Alcohol
Facts'' panels that contain information about alcohol content, but not
nutrient content. All of these voluntary statements differ in several
respects from the mandatory Alcohol Facts statement proposed in this
document. During the implementation period, industry members may
continue to use approved COLAs that contain these statements, as long
as they comply with current guidance.
TTB further believes that consumers will begin to benefit from this
rulemaking well in advance of the 5-year implementation date because
TTB expects that many industry members will come into early compliance
with the rule. As previously discussed, 95 percent of the beer volume
sold by Anheuser-Busch, Molson Coors Beverage Company, Constellation
Brands Beer Division, HEINEKEN USA, and FIFCO USA already contains
nutritional information in the form of a voluntary Serving Facts
Statement, and the Distilled Spirits Council of the United States
(DISCUS) announced that all spirits products distributed in the United
States by DISCUS Director Members will include nutrition information by
June 2024.\31\ Given rising industry participation in voluntary
disclosure of nutrition information, TTB expects that if a final rule
on Alcohol Facts is issued, many industry members will move to include
Alcohol Facts statements on labels in advance of the 5-year
implementation period.
---------------------------------------------------------------------------
\31\ See September 28, 2022, statement by Distilled Spirits
Council of the United States, available at https://www.distilledspirits.org/news/distilled-spirits-council-director-members-to-provide-serving-facts-information-for-spirits-products-as-part-of-white-house-conference-on-hunger-nutrition-and-health/.
---------------------------------------------------------------------------
Accordingly, effective after a 5-year implementation period, TTB
proposes in amended Sec. Sec. 4.32, 5.63 and 7.63 to mandate an
Alcohol Facts labeling statement on all wines, distilled spirits, and
malt beverages that contains both alcohol and nutrient content
information, as described above. The implementation period does not
appear in the proposed regulatory text but will be incorporated in any
final rule resulting from this rulemaking.
TTB seeks comments on whether the length of the implementation
period is adequate. In particular, TTB seeks comments on the following
issues:
1. How frequently do bottlers and importers of alcohol beverages
typically change labels?
2. How long do industry members need to comply with the
requirements of the proposed rule?
3. Will 5 years provide enough time for small businesses to
coordinate labeling changes required by regulatory changes with
labeling changes that are planned in the ordinary course of business?
4. Is 5 years too long a compliance period? Should the compliance
period instead be 2 years, 3 years, or another length of time?
5. If a final rule is issued, will industry members begin
implementation of the labeling changes in advance of the compliance
date?
VIII. Summary of Proposed Regulatory Changes
Based on the above, TTB proposes to amend parts 4, 5, 7, 24, 25,
and 27 of the TTB regulations to set forth requirements for the
presentation of certain alcohol content, calorie, and nutrient
information in a mandatory Alcohol Facts statement. These proposed
changes involve the addition of a new subpart L in each of parts 4, 5,
and 7, as well as conforming changes elsewhere in parts 4, 5, and 7 of
the TTB regulations. TTB also proposes amendments to parts 24, 25, and
27 of the TTB regulations with respect to the labeling of beers and
wines under the IRC. The proposed regulatory amendments discussed in
more detail earlier in this document are summarized below for ease of
reading.
A. Mandatory Alcohol Facts Statement
TTB proposes a mandatory nutrient information statement on labels
that must include the following information: the title ``Alcohol
Facts''; the serving size; the number of servings per container;
alcohol content as a percentage of alcohol by volume, the number of
fluid ounces of pure ethyl alcohol per serving, the number of calories
per serving; and the number, in grams per serving, of carbohydrates,
fat, and protein.
1. Serving Size and Servings per Container
TTB proposes to define the term ``serving'' or ``serving size'' as
the amount of the alcohol beverage customarily consumed as a single
serving, expressed in both U.S. fluid ounces, and, in parentheses, in
milliliters, for wines, distilled spirits, and malt beverages. In new
Sec. Sec. 4.111(b), 5.211(b), and 7.211(b), TTB proposes the use of
serving size reference amounts, specific to each alcohol beverage
category, which in each case most closely approximate the amount of the
[[Page 6675]]
product that a consumer customarily drinks as a single serving. This
amount is specified as a reference amount, used only as a basis for the
consumer to determine alcohol, calorie, and nutrient intake and not as
a recommended consumption amount. These rules are intended to ensure as
much uniformity as possible in labeling serving sizes within a product
category. Consistent with the serving sizes in TTB Ruling 2013-2, TTB
proposes the following serving size reference amounts for each
category:
Wine: For wines with an alcohol content of at least 7
percent and not more than 16 percent alcohol by volume, the serving
size would be 5 fluid ounces (about 148 mL). For wines with an alcohol
content of more than 16 percent alcohol by volume and not more than 24
percent alcohol by volume, the serving size would be 2.5 fluid ounces
(about 74 mL).
Distilled spirits: For distilled spirits products
containing not more than 7 percent alcohol by volume, the serving size
would be 12 fluid ounces (about 355 mL). For products containing over 7
percent and not more than 16 percent alcohol by volume, the serving
size would be 5 fluid ounces (about 148 mL). For products containing
over 16 percent and not more than 24 percent alcohol by volume, the
serving size would be 2.5 fluid ounces (about 74 mL). For products
containing over 24 percent alcohol by volume, the serving size would be
1.5 fluid ounces (about 44 mL) or 50 mL if bottled in a 50 mL
container.
Malt beverages: For malt beverages containing not more
than 7 percent alcohol by volume, the serving size would be 12 fluid
ounces (about 355 mL). For products containing over 7 percent and not
more than 16 percent alcohol by volume, the serving size would be 5
fluid ounces (about 148 mL). For products containing over 16 percent
and not more than 24 percent alcohol by volume, the serving size would
be 2.5 fluid ounces (about 74 mL). For products containing over 24
percent alcohol by volume, the serving size would be 1.5 fluid ounces
(about 44 mL).
Since wines and distilled spirits are subject to metric standards
of fill under the TTB regulations, the serving sizes for these
categories would be set forth in both fluid ounces and milliliters. TTB
recognizes that consumers may use fluid ounces rather than milliliters
when pouring a glass of wine or a shot glass of distilled spirits. For
consistency purposes, TTB proposes to require serving sizes for malt
beverages also to be set forth in both fluid ounces and milliliters.
2. Percentage of Alcohol by Volume
In new Sec. Sec. 4.111(c), 5.211(c), and 7.211(c) for wines,
distilled spirits, and malt beverages, respectively, TTB proposes to
require alcohol content as a percentage of alcohol by volume to appear
as part of the Alcohol Facts statement. TTB is also proposing to amend
Sec. Sec. 4.32, 5.63, and 7.63 to provide that alcohol content must
appear as part of the mandatory Alcohol Facts statement, which may
appear on any label affixed to the container. New Sec. 5.211(c) also
provides that an Alcohol Facts statement for distilled spirits may also
bear an optional statement of alcohol content in degrees of proof. TTB
is also proposing to make conforming changes to the alcohol content
regulations in Sec. Sec. 4.36, 5.65, and 7.65. TTB is not proposing to
change any requirements related to additional statements of alcohol by
volume that may appear outside of an Alcohol Facts statement.
TTB proposes to amend Sec. Sec. 24.257(a)(3) and 27.59 to provide
that alcohol content, expressed as a percentage of alcohol by volume,
is required on labels for all wines subject to tax under the IRC.
Additionally, TTB proposes to amend Sec. Sec. 25.141(a), 25.142(a),
and 27.60 to require an alcohol content statement on labels of all beer
subject to tax under the IRC. TTB is also proposing to make conforming
amendments to Sec. Sec. 27.59 and 27.60 to require that imported wines
and beers must be labeled with the same basic information applicable to
domestic wines and beers under 27 CFR parts 24 and 25. Finally, the
proposed rule also reorganizes Sec. Sec. 27.59 and 27.60 for purposes
of clarity.
3. Alcohol Expressed in Fluid Ounces
In new Sec. Sec. 4.111(d), 5.211(d), and 7.211(d), TTB proposes to
require the display of the number of U.S. fluid ounces of pure ethyl
alcohol per serving on the mandatory Alcohol Facts statement.
4. Calories
In new Sec. Sec. 4.111(e), 5.211(e), and 7.211(e), TTB proposes
standards for expressing a statement of the calorie content per serving
for wines, distilled spirits, and malt beverages, respectively.
5. Carbohydrates
In new Sec. Sec. 4.111(f), 5.211(f), and 7.211(f), TTB proposes
standards for expressing carbohydrate content per serving for wines,
distilled spirits, and malt beverages, respectively. TTB also proposes
to allow an optional statement of sugar content to appear in the
Alcohol Facts statement.
6. Fat
In new Sec. Sec. 4.111(g), 5.211(g), and 7.211(g), TTB proposes
standards for expressing fat content per serving for wines, distilled
spirits, and malt beverages, respectively.
7. Protein
In new Sec. Sec. 4.111(h), 5.211(h), and 7.211(h), TTB proposes
standards for expressing protein content per serving for wines,
distilled spirits, and malt beverages, respectively.
B. Format and Placement of the Alcohol Facts Statement
New Sec. Sec. 4.112, 5.212, and 7.212 set forth proposed
formatting specifications for the Alcohol Facts Statement. TTB proposes
to permit listing Alcohol Facts information in a linear fashion for all
products. See these proposed sections for examples of linear displays.
In addition, new Sec. Sec. 4.113, 5.213, and 7.213 would permit the
Alcohol Facts statement to appear in either a vertical or horizontal
presentation.
C. Tolerance Levels
New Sec. Sec. 4.114, 5.214, and 7.214 set forth proposed tolerance
levels for all of the elements required to appear in the Alcohol Facts
statement.
IX. Cost Analysis
A. Summary
Executive Order 12866 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.
In Notice No. 73, TTB solicited comments on the expected economic
impact of the proposed rule on Serving Facts labeling, especially on
small businesses. TTB asked commenters to provide specific cost data
and asked the following question: 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?
No final rule was issued in response to Notice No. 73. TTB has
concluded that many of the larger issues raised by the comments in
response to Notice No. 73 about costs and effects on small businesses
are still valid concerns today. However, many of the comments, as well
as the data that TTB previously relied upon for analyzing cost issues,
are out-of-date.
TTB solicited new comments on the costs of requiring per-serving
alcohol
[[Page 6676]]
and nutritional information on alcohol beverage labels in Notice No.
232. TTB asked if requiring this information on labels would be
expected to increase the cost of products, and if so, by how much; to
what extent businesses are already following voluntary guidelines for
this information; and how any new mandatory labeling requirements would
particularly affect small business and new businesses entering the
marketplace.
TTB is now undertaking a new effort to estimate the costs of
complying with the current proposed rule. This cost estimate takes into
consideration the costs and concerns raised by commenters to Notice No.
73 along with the more recent comments and data received in response to
Notice No. 232. TTB invites comments on this estimate.
To estimate the costs associated with this proposal, TTB utilized
the 2014 FDA Labeling Cost Model,\32\ 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, TTB would like to emphasize that
FDA is not responsible for the assumptions that TTB used in applying
that model to the alcohol beverage market; nor is FDA responsible for
the estimates set out in this analysis.
---------------------------------------------------------------------------
\32\ 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.
---------------------------------------------------------------------------
As set forth in more detail below, based on the available data, TTB
estimates the one-time total labeling costs associated with this
proposed rule under a 2-year compliance period to have a present
discounted value (PDV) \33\ 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).\34\
---------------------------------------------------------------------------
\33\ Throughout this section, the present discounted value of
monetary values is 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.
\34\ All costs in this proposal are provided in 2023 dollars.
---------------------------------------------------------------------------
As detailed below, TTB also invites comments on whether analytical
testing of product samples should be included as a recurring cost after
the initial compliance period, and if so, whether industry members
would in fact send product samples to independent laboratories for
testing on an annual basis. Assuming that each industry member sends
two samples of each unique product formulation to be tested by an
independent laboratory each year, TTB estimates the recurring costs of
the proposed rule to be $64 million. However, as explained later in
this document, TTB believes that once initial testing of a product is
completed, industry members may choose not to (and are not required to)
send that same product formulation for testing every year. For some
products, initial testing may not even be necessary.
TTB seeks comments on all aspects of its cost estimates. Given that
the proposed changes would affect the labeling of virtually all alcohol
beverages that fall under the definition of a wine, malt beverage, or
distilled spirit under the FAA Act, and are for sale in interstate
commerce, TTB believes that a compliance period of 5 years would
minimize the regulatory burdens and economic costs associated with the
proposal, while still ensuring that consumers receive adequate
information about the alcohol beverages they are purchasing within a
reasonable period of time. TTB also believes that many industry
members, particularly large companies, are likely to start voluntary
compliance with any final rule in advance of the compliance date, given
that many industry members already include calorie and nutrient
statements on their labels.
Finally, as noted elsewhere in this document, TTB also plans to
seek comments in separate rulemaking projects on other labeling changes
that would affect the industry, including mandatory ingredient and
major food allergen labeling. TTB seeks comments on whether a single
compliance date should be established for any changes resulting from
these rulemaking projects.
B. Purpose of Proposed Amendments
As noted earlier in this document, the labeling provisions of the
FAA Act, codified at 27 U.S.C. 205(e), provide the Secretary of the
Treasury with authority to issue regulations to prevent deception of
the consumer, to provide the consumer with ``adequate information'' as
to the identity and quality of the product, to prohibit false or
misleading statements, and to provide information as to the alcohol
content of the product. Consistent with this authority, the proposed
rule is intended to provide consumers with more information about the
alcohol content, identity, and quality of alcohol beverages, including
per-serving information about alcohol content, calories, and nutrient
content. This information will in turn enable consumers to follow
advice about moderate alcohol consumption, if they so choose, and will
provide them with additional information about the calorie and nutrient
content of the alcohol beverages they purchase and consume.
Current regulations do not require the labeling of alcohol
beverages with calorie, carbohydrate, fat, and protein content, and
some alcohol beverages are not even required to be labeled with alcohol
content. Offering this basic information to consumers at the point of
purchase, on the labels, will provide them with information to make
more informed alcohol beverage choices. Providing this information in a
consistent format on alcohol beverage containers will also help
consumers understand the information and prevent inconsistent
presentations that might be confusing.
Furthermore, the proposal to utilize TTB's authority under the IRC
to issue regulations requiring alcohol content statements on all wines
and beer would serve an important revenue protection purpose. TTB
provided a more detailed discussion of the benefits associated with
mandatory alcohol content labeling in the preamble of Notice No. 73 (72
FR 41860), and TTB notes that the new requirement would primarily
affect malt beverage and table wine labels that do not already include
numerical statements of alcohol content.
C. Costs
In the comments to Notice Nos. 73 and 232, manufacturers,
importers, and bottlers were primarily concerned with the costs
associated with three main categories: (1) New labeling equipment
costs; (2) costs associated with label redesign, printing, and
administrative costs; and (3) laboratory analysis/testing costs. As
explained below, TTB does not believe that the proposed rule, if
adopted, would impose new labeling equipment costs. The second category
(label redesign, printing, and administrative costs) is estimated on a
per-UPC (Universal Product Code) basis and is dependent on the length
of the compliance period. The third category, laboratory analysis
costs, could impact both initial costs and recurring annual costs.
According to the FDA Labeling Cost Model, the initial laboratory
analysis costs are affected by the percentage of labeling changes that
[[Page 6677]]
cannot be coordinated with previously scheduled label changes. Separate
and apart from the costs set forth in the model, TTB is also providing
an estimate of laboratory analysis costs that may recur on an annual
basis after the end of the compliance period.
1. New Labeling Equipment Costs
In Notice No. 73, TTB proposed a mandatory ``Serving Facts'' panel,
with a linear display option for small containers. TTB solicited
comments on whether a linear display option should be allowed for all
containers irrespective of size. TTB also sought comments on whether
allowing the linear display on all containers would reduce costs
associated with compliance while providing consumers with adequate
information about the products.
TTB received many comments from industry members and associations
in favor of the linear display option. These commenters supported the
use of this option for all containers, regardless of size. Some
commenters assumed that a panel requirement would force industry
members to use a back label and noted that not all bottlers have the
necessary equipment to add a back label to their products. These
commenters suggested that compliance with a panel requirement could
mean that the bottler would have to purchase a new labeling machine,
which would impose a significant burden on small producers and
bottlers. The commenters indicated that if TTB were to permit a linear
display, rather than require a panel display, the need for additional
labeling equipment would be eliminated.
This proposed rule allows the mandatory Alcohol Facts information
to appear either in a panel or in a linear display, regardless of the
size of the container. Therefore, TTB has no reason to believe that the
proposed rule would require industry members to purchase new labeling
equipment to comply with its labeling requirements. TTB is inviting
comments on this conclusion.
2. Costs Associated With Label Redesign, Printing, and Administrative
Costs
To estimate the costs associated with label redesign, printing, and
administrative costs, TTB utilized the 2014 FDA Labeling Cost Model,
adding its own data inputs and in some cases making assumptions about
the alcohol beverage industry.
a. FDA Labeling Cost Model
The FDA Labeling Cost Model estimates labeling costs for a broad
range of FDA-regulated consumer products using current data. To utilize
the model, the user specifies:
the categories of products affected;
the nature of the labeling change;
the length of the compliance period; and
additional inputs as specified.
Based on the user specifications, additional collected data, and
FDA-provided data, the model generates an estimate of costs per UPC for
the labeling change, total costs per product type, and an aggregate
cost across all affected products. The model quantifies uncertainty or
variability with high and low estimates constructed in a way that
facilitates interpretation as bounds on 90 percent probability ranges.
Because it is anticipated that labeling regulations would affect
numerous products at the same time, the model estimates assume that
manufacturers are implementing changes simultaneously across multiple
products.\35\
---------------------------------------------------------------------------
\35\ As previously noted, if TTB implements other new labeling
requirements at the same time as the Alcohol Facts labeling
requirements, these changes could be coordinated with use of a
single compliance date.
---------------------------------------------------------------------------
i. Factors That Affect the Results of the FDA Labeling Cost Model
The following three factors affect the results of the FDA Labeling
Cost Model:
Whether the type of contemplated labeling change is
``minor,'' ``major,'' or ``extensive;''
Data on the number of UPCs and total units that would be
affected by the labeling change, including whether the products are
``branded'' or ``private label''; and
The length of time the regulated industry will have to
comply with the change.
aa. Types of labeling changes: The model allows for the three
different types of labeling changes. Section 2.3 (page 2-9) of the
model explains ``[t]he part of the label that is affected determines
the number of plates (colors) that must be changed and thus the
complexity of making a change.'' The three types of labeling changes
are:
Minor change--only one color is affected and the label
does not need to be redesigned. Examples of this type of change include
changing an ingredient list or adding a toll-free number.
Major change--requires multiple color changes and label
redesign. An example of a major change is adding a facts panel or
modifying the front of a package.
Extensive change--a major format change requiring a change
to the product packaging to accommodate labeling information. An
example of an extensive change is adding a peel-back label or otherwise
increasing the package surface area.
For purposes of this analysis, TTB is assuming that the proposed
rule will require a ``major change'' for all alcohol beverage
containers currently in the marketplace that are subject to the
labeling requirements of the FAA Act, i.e., that fall under the
definition of a wine, distilled spirit, or malt beverage under 27
U.S.C. 211 and that are sold or otherwise introduced into interstate
commerce.\36\ TTB invites comments on whether these assumptions are
valid.
---------------------------------------------------------------------------
\36\ Because TTB does not have data to quantify the number of
beer products reflected in the Nielsen data that would not fall
under the FAA Act's definition of a ``malt beverage,'' TTB is not
excluding any beer from this estimate. TTB is excluding wines under
7 percent by alcohol, to the extent such data is available.
---------------------------------------------------------------------------
Finally, TTB notes that many alcohol beverages are already labeled
with a ``Serving Facts'' statement or a statement of average analysis.
As discussed in section VI.A, this category includes a significant
number of malt beverage products.\37\ For those products already
labeled with a Serving Facts statement or statement of average
analysis, it is arguable that any changes required by the proposed rule
(changing the title of the statement, complying with the proposed
formatting rules, and in some cases changing the appropriate serving
size of the product) would be minor.\38\ However, as noted above, TTB
is assuming, for purposes of this analysis, that all covered labels
will be required to undergo a major change. Under the proposed rule,
many labels with Serving Facts statements would also have to be changed
to place the alcohol content statement (as a percentage of alcohol by
volume) and the statement of fluid ounces of pure ethyl alcohol per
serving in the new statement.\39\ TTB invites comments on this issue,
and welcomes any available
[[Page 6678]]
data on how many industry members are currently including calorie and
nutrient content statements on alcohol beverage labels.
---------------------------------------------------------------------------
\37\ See, e.g., statement by the Beer Institute that more than
95 percent of the beer volume sold by Anheuser-Busch, Molson Coors
Beverage Company, Constellation Brands Beer Division, HEINEKEN USA,
and FIFCO USA now voluntarily provides nutritional information.
Available at https://www.beerinstitute.org/press-releases/new-report-shows-beer-leads-all-alcohol-categories-in-providing-nutritional-information-to-consumers/.
\38\ As previously noted, there is a difference between the
serving sizes authorized for statements of average analysis under
TTB Ruling 2004-1 and the serving sizes authorized for Serving Facts
statements under TTB Ruling 2013-2. This proposed rule would adopt
the serving sizes set forth in TTB Ruling 2013-2.
\39\ TTB Ruling 2013-2 permits alcohol content as a percentage
of alcohol by volume, as well as alcohol content on a per-serving
basis, to appear as part of a Serving Facts statement. However, many
industry members choose to include the alcohol content, as a
percentage of alcohol by volume, elsewhere on the label rather than
including it as part of an optional Serving Facts statement.
---------------------------------------------------------------------------
bb. Data on the number of UPCs and total units that would be
affected by the labeling change: Based on the FDA Labeling Cost Model,
the administrative, redesign, and printing costs associated with making
a labeling change are on a per-UPC basis rather than a formulation
basis. Each individual product may have several UPCs associated with
different sizes or types of packaging. For example, a malt beverage
product with the same formulation may have several UPCs associated with
that one product because it is sold in a multitude of package
combinations (such as individual 12 fl oz and 24 fl oz bottles; or a 6-
pack and a 12-pack of 12 fl oz cans), each of which has a separate UPC.
To determine the number of alcohol beverage UPCs in the
marketplace, TTB contracted with NielsenIQ \40\ to obtain a report,
which consists of data for the period from September 9, 2021, through
September 10, 2022,\41\ for the following markets: Total U.S. all
outlets combined,\42\ liquor, and convenience stores.\43\ At TTB's
request, Nielsen reported the following data:
---------------------------------------------------------------------------
\40\ 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.
\41\ 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.
\42\ 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.
\43\ Nielsen states that its Convenience channel includes
``major chains as census cooperators, and is projected to represent
all chains and independents.''
---------------------------------------------------------------------------
Overall number of UPCs for beer, wine, and spirits;
Overall number of brand extensions for beer, wine, and
spirits;
Number of private labels for beer, wine, and spirits;
Number of units sold for beer, wine, and spirits for cans,
bottles, and other packaging;
Total dollars sold for beer, wine, and spirits;
Overall number of UPCs for wine with less than 7 percent
ABV; and
Overall number of UPCs for malt beverage/beer in the
flavored malt beverage category (broken down, as appropriate, by
subcategories such as hard seltzer).
TTB made some changes to the NielsenIQ categorization of wine,\44\
and beer/malt beverages \45\ based on whether the products fall within
the definitions of those terms set forth in the FAA Act, 27 U.S.C. 211.
---------------------------------------------------------------------------
\44\ While the Nielsen data separated out ``wine'' based on
whether the alcohol content was at least 7 percent, it separated out
``cider'' products based on whether the alcohol content was over 6
percent alcohol by volume or 6 percent and under. As previously
noted, the definition of wine under the FAA Act (but not the IRC)
covers only wine that contains at least 7 percent alcohol by volume.
Thus, TTB excluded wines with an alcohol content of under 7 percent
and excluded ciders with an alcohol content of 6 percent and under.
This meant that ciders were included if they contained over 6
percent alcohol by volume. TTB recognizes that this number is overly
inclusive, because it includes some wines with an alcohol content of
over 6 but under 7 percent alcohol by volume, even though those
wines are not subject to the labeling requirements of the FAA Act.
\45\ As previously noted, the FAA Act's definition of ``malt
beverages'' does not include beer made without both malted barley
and hops. Thus, for example, while Nielsen included ``cider''
products in ``Total Beer/FMB/Cider'' category, TTB moved the cider
products to the ``wine'' category instead, as cider products (i.e.,
products predominantly derived from the fermentation of apples)
would be classified as wines under TTB regulations implementing both
the IRC and the FAA Act. While it is possible that some of these
products are in fact beer or malt beverages, TTB regulations do not
provide for the labeling of malt beverages as ``cider.'' Similarly,
NielsenIQ also has a subcategory of beer entitled ``hard seltzer.''
While some of these products may not be malt beverages under the FAA
Act, some hard seltzer products are in fact made with both malted
barley and hops, and are thus classified as malt beverages within
the meaning of the FAA Act. Because TTB did not have a basis to
distinguish those hard seltzers that are ``malt beverages'' under
the FAA Act from those that are not, the entire hard seltzer
subcategory is included in the overall category of malt beverages.
TTB notes that this approach may overstate the number of malt
beverages (within the meaning of the FAA Act) in the marketplace.
---------------------------------------------------------------------------
Based on the data that Nielsen provided (including the changes to
the data noted above), TTB estimates that industry members would have
to modify labels for approximately 130,410 different alcohol beverage
product UPCs to comply with the proposed Alcohol Facts disclosure. In
Table 1, TTB has broken down this estimate into the total UPCs, brand
extensions,\46\ and total units for wines, distilled spirits, and malt
beverages/beer. TTB invites comments on whether these estimates are
valid.
---------------------------------------------------------------------------
\46\ For purposes of this analysis, TTB used the Nielsen ``brand
extensions'' as a proxy for formulas.
Table 1--Number of UPCs, Brand Extensions, and Total Units
----------------------------------------------------------------------------------------------------------------
Brand
UPCs extensions Total units
----------------------------------------------------------------------------------------------------------------
Wines........................................................ 64,509 20,963 1,690,698,919
Distilled Spirits............................................ 32,775 16,447 1,741,901,217
Malt Beverages/Beer.......................................... 33,126 22,364 5,823,640,369
--------------------------------------------------
Total.................................................... 130,410 59,774 9,256,240,505
----------------------------------------------------------------------------------------------------------------
[[Page 6679]]
cc. Private label products: Private-label alcohol beverages are
traditionally brands created for a company (often a retailer or
restaurant), which sell exclusively via one sales channel. At TTB's
request, NielsenIQ provided data on the number of private labels in the
marketplace, but noted that its methodology meant that individual UPCs
for private labels would be masked and displayed as a ``pseudo UPC.''
Nielsen's data reflected that private label UPCs made up less than one
percent of each category (wine, distilled spirits, and malt beverages).
However, based on Nielsen's explanation of its methodology, as well as
the publicly available data on the number of private labels in the
alcohol beverage market, TTB views the number of private labels
reported in the data as being underinclusive.\47\
---------------------------------------------------------------------------
\47\ See, e.g., Catherine Douglas Moran, ``Untapped: How grocers
are growing their private label alcohol assortment,'' Grocery Dive,
available at www.grocerydive.com/news/untapped-how-grocers-are-growing-their-private-label-alcohol-assortment/592081/; and Hannah
Wallace, ``Private Label Wines: A Peek Behind the Label,''
SevenFifty Daily, available at https://daily.sevenfifty.com/private-label-wines-a-peek-behind-the-label/.
---------------------------------------------------------------------------
The FDA Labeling Cost Model treats ``private labels'' differently
from branded labels and assumes that labeling changes for private
labels require additional time for coordination with regulatory
changes. TTB believes that the model's treatment of private labels
makes the private label category a useful proxy for the percentage of
UPCs that might require additional time for coordinating regulatory
labeling changes with regularly scheduled labeling changes, due to the
size of the company.
After reviewing the available data on private labels, as well as
the available data on the size of businesses in the wine, distilled
spirits, and malt beverage industries, TTB is estimating that 10
percent of the alcohol beverage products requiring labeling changes as
a result of this proposed rule may require additional time to
coordinate regulatory labeling changes with labeling changes made in
the ordinary course of business, in the same way that ``private label''
products require additional time under the FDA Labeling Cost Model. For
the sole purpose of estimating costs under different compliance
periods, TTB is treating those products as affecting the costs in a
manner that is functionally equivalent to the role that private labels
play in the FDA Labeling Cost Model.\48\ Accordingly, TTB estimates
that approximately 13,041 UPCs (10 percent of the total 130,410 UPCs)
fall into the private label category for the purposes of the model.
---------------------------------------------------------------------------
\48\ For example, TTB notes that under data from the North
American Industry Classification System (NAICS), as adjusted for
inflation, the category of brewers, wineries, and distillers that
have fewer than 20 employees account for just under 10 percent of
the annual revenues of those businesses. See Section XI.E.2. For
wineries, businesses with fewer than 20 employees account for 11.7
percent of the annual revenues; for brewers, the figure is 9.2
percent, and for distillers, the figure is 7.3 percent.
---------------------------------------------------------------------------
dd. Length of compliance period: The FDA Labeling Cost Model
assumes that the costs of a new labeling requirement fall significantly
as the time allowed for compliance increases because affected industry
members can better coordinate new labeling requirements with scheduled
labeling changes. Section 3 of the model explains that product
manufacturers ``often update their labeling information for marketing
purposes, because of a change in packaging, or for other reasons,'' and
that ``when manufacturers update labels for nonregulatory reasons, they
can often incorporate a change required by a regulation at minimal
additional costs.'' Thus, the model accounts for these nonregulatory
labeling changes when estimating the costs of regulatory labeling
changes to avoid overstating the costs of compliance.
The model further explains that ``[i]t is likely that a regulation
affecting labeling will cause affected firms to incur some level of
costs, regardless of how well coordinated the regulatory labeling
change is with nonregulatory labeling changes.'' See FDA Labeling Cost
Model Section 3.1. The model, therefore, assumes that a regulation
affecting labeling will cause affected entities to incur some costs
even when a regulatory labeling change is coordinated with
nonregulatory labeling changes, and it accounts for the incremental
costs associated with the regulation, ``such as staff time for
reviewing the regulatory requirements, determining options for
complying with the regulatory requirements, and coordinating the
required change with a scheduled change.'' Id.
The FDA Labeling Cost Model explains that most food manufacturers
that provided estimates to FDA indicated that some 20-50 percent of
products are relabeled in any given year, indicating a 2-5 year cycle
for relabeling all products. Furthermore, interview respondents for the
FDA Labeling Cost Model noted that private label products were less
likely to be relabeled in any given year. (See Section 3.2.1, page 3-
7).
TTB does not have specific data on the frequency of scheduled label
changes for the alcohol beverage industry but believes it would be
similar in many respects to the FDA-regulated food industry. Table 3-1
of the FDA Labeling Cost Model presents the FDA's assumptions about the
proportion of UPCs that could be changed together with a scheduled
label change, based on the length of the compliance period. The model
assumes that 100 percent of brand name products can coordinate a
regulatory label change with a regularly scheduled label change within
two years.\49\
---------------------------------------------------------------------------
\49\ This data point is limited to the products that TTB
selected from the FDA Labeling Cost Model to use as analogs for the
relevant alcohol products and does not necessarily apply to all food
and drink products.
---------------------------------------------------------------------------
Private label products, however, do not change their labels as
often. Accordingly, a longer compliance period is necessary to
coordinate a regulatory change with a regularly scheduled change for
all private label products. For private label products, the percentage
of changes that can be coordinated with a regularly scheduled change is
only 26 percent at 2 years (as compared to 100 percent for branded
products), and 57 percent at 3 years. A 42-month compliance period is
required to coordinate 100 percent of changes to private label products
with regularly scheduled label changes.\50\
---------------------------------------------------------------------------
\50\ TTB notes that even if the alcohol beverage industry
differs from the food industry with regard to the frequency with
which label changes are made for private labels, as discussed
previously, the private label category is a useful proxy for the
percentage of labels that may not be changed as frequently as other
labels are.
---------------------------------------------------------------------------
TTB applied the FDA's assumptions about the proportion of UPCs that
could be changed together with a scheduled label change, based on the
length of the compliance period, to the approximately 130,410 different
alcohol beverage product UPCs. Table 2 shows the number of coordinated
changes and uncoordinated changes to the alcohol beverage UPCs for a
compliance period of 2, 3, 3.5, and 5 years, broken down by wines,
distilled spirits, and malt beverages/beer. Because the FDA model
assumes that 100 percent of branded product label changes can be
coordinated within a 2-year compliance period, the number of
uncoordinated changes is solely driven by private labels. With a 3.5-
year compliance period or longer, the model assumes that all label
changes, whether branded or private label, can be coordinated with a
regularly-scheduled change, and that, therefore, there are no
uncoordinated changes.
[[Page 6680]]
Table 2--Number of Uncoordinated/Coordinated Changes by UPC
----------------------------------------------------------------------------------------------------------------
Distilled
Wines spirits Malt beverages
----------------------------------------------------------------------------------------------------------------
24 months:
Uncoordinated............................................... 4,774 2,425 2,451
Coordinated................................................. 59,735 30,350 30,675
36 months:
Uncoordinated............................................... 2,774 1,409 1,424
Coordinated................................................. 61,735 31,366 31,702
42 months:
Uncoordinated............................................... 0 0 0
Coordinated................................................. 64,509 32,775 33,126
60 months:
Uncoordinated............................................... 0 0 0
Coordinated................................................. 64,509 32,775 33,126
----------------------------------------------------------------------------------------------------------------
ii. Qualifications to TTB's Application of Model to Alcohol Beverages
As previously noted, the data available to TTB did not always match
up with the categories reflected in the FDA Labeling Cost Model.
Accordingly, TTB had to make some assumptions in applying the model to
its data. TTB invites comments on the validity of those assumptions and
welcomes data on any of these issues.
The FDA Labeling Cost Model does not include alcohol
beverage product categories. TTB, therefore, had to use proxy
categories for wine, spirits, and malt beverages. The categories in the
model reflect different packaging types, material costs, and inventory
costs that apply to that category. The variability in costs between
different food categories in the model is primarily driven by the print
labeling costs (material) and inventory-related costs (discarding of
labels or packages) for different packaging and label types.
Accordingly, TTB chose food categories as proxies for the three alcohol
beverage categories based on similar packaging types and labels.
Nielsen provided estimates of the ratio of packaging types (e.g., cans,
bottles) for each alcohol beverage commodity. TTB chose the model
category ``non-alcoholic wine'' as a proxy for all wine and spirits
because the costs for the ``non-alcoholic wine'' category are
associated with ``paper labels,'' such as those attached to glass
bottles, and the Nielsen data showed that the vast majority of wine and
spirits are packaged in bottles. The Nielsen data showed that
approximately 70 percent of malt beverages are packaged in aluminum
cans and the remaining 30 percent are primarily in glass bottles. TTB,
therefore, chose the food category of ``coffee- liquid,'' which
reflects costs associated with packaging in aluminum cans, as a proxy
for 70 percent of the malt beverages and used the ``non-alcoholic
wine'' category as a proxy for malt beverages in glass bottles.\51\
---------------------------------------------------------------------------
\51\ These costs may not be a perfect proxy for those that would
be incurred in the printing of alcohol beverage labels, but it was
the best proxy available to TTB.
---------------------------------------------------------------------------
TTB applied FDA Labeling Cost Model input costs for labor,
materials, analytical costs, marketing, inventory, and recordkeeping,
based on its conclusion that this model is a reasonable proxy given the
similarities in packaging foods and alcohol beverages.
The FDA Labeling Cost Model was developed based on 2014
wage rates and allows for adjustments for inflation. Accordingly, TTB
used Bureau of Labor Statistics data to apply an inflation adjustment
of 25.5 percent, based on the estimated aggregate Consumer Price Index
inflation rate between the start of 2014 and January 2023.\52\
---------------------------------------------------------------------------
\52\ Consumer Price Index (January 2023), U.S. Bureau of Labor
Statistics, available at https://www.bls.gov/cpi/.
---------------------------------------------------------------------------
TTB input data that is specific to alcohol beverages.
However, the data also reflects some working assumptions:
[cir] For the reasons explained earlier in this section, TTB
assumed that the share of labels where changes could not easily be
coordinated with regulatory changes was 10 percent. In the FDA Labeling
Cost Model, these calculations are based on the number of ``private
labels.'' However, for the alcohol beverage category, TTB estimated
that whether an alcohol beverage product is a ``private label'' product
or not, the 10 percent figure is a reasonable proxy for those
businesses that make regularly scheduled labeling changes on a less
frequent basis.\53\ TTB invites comments on this assumption. TTB also
notes that with a proposed 5-year compliance period, the exact
percentage of private label products, or private label equivalents, is
not as important, because the model estimates that 100 percent of
private label changes will be ``coordinated'' labeling changes as of 42
months.
---------------------------------------------------------------------------
\53\ See discussion in Section IX.C.2.a.i.cc.
---------------------------------------------------------------------------
[cir] For purposes of calculating the costs of analytical testing
(i.e., laboratory analysis), TTB used Nielsen-provided data on the
number of ``brand extensions'' as a proxy for the number of
formulations.
[cir] The data in question does not cover the entire market;
however, TTB has tentatively concluded that the data likely included
unique products that represent close to 100 percent of all the UPCs
that are available throughout the United States. TTB seeks comments on
the validity of this conclusion.
b. Costs of Proposed Labeling Changes
i. Cost per UPC
Using the model with the described data inputs and qualifications,
the mean labeling cost per UPC for coordinated labeling changes
(changes that can be coordinated with scheduled changes) is unaffected
by length of the compliance period. Regardless of whether the
compliance period is 2 years, 5 years, or somewhere in between, the
costs per UPC for a coordinated labeling change is $1,636.52 for wines,
distilled spirits, and malt beverages.
For changes that cannot be coordinated, the mean labeling cost per
UPC varies based on the compliance period, as is illustrated in Table
3. The cost per UPC for uncoordinated changes (changes that cannot be
coordinated with scheduled changes) is driven upward by both greater-
per-unit labor, material, and recordkeeping costs, and the presence of
inventory and analytical costs, which are not applicable to coordinated
labeling changes.
[[Page 6681]]
Table 3--Mean Cost per UPC for Uncoordinated Change \54\
----------------------------------------------------------------------------------------------------------------
Wines Distilled spirits Malt beverages
----------------------------------------------------------------------------------------------------------------
24 months.............................................. $11,856.67 $12,992.46 $19,352.27
36 months.............................................. 11,264.61 11,791.86 12,572.01
42 months.............................................. 10,427.36 10,427.36 9,445.05
60 months.............................................. 10,427.36 10,427.36 9,445.05
----------------------------------------------------------------------------------------------------------------
ii. Initial Cost of Compliance
---------------------------------------------------------------------------
\54\ It should be noted that under the model, there are no
uncoordinated labeling changes for compliance periods of at least 42
months. See Table 2.
---------------------------------------------------------------------------
Table 4 sets out the overall initial cost of compliance with the
proposed regulation based on four different compliance periods (2
years, 3 years, 42 months and 5 years), applying a 25.5 percent
inflation rate as of January 2023.\55\ TTB estimates the one-time total
relabeling costs associated with this proposed rule to be approximately
$333 million assuming a compliance date of 2 years (or approximately
$167 million per year). If the compliance date is extended to 3 years,
the total costs would be approximately $270 million (or $90 million per
year); for 3.5 years, the total costs would be approximately $214
million (or $61 million per year), and if the compliance date is
extended to 5 years, the total costs would be approximately $214
million (or $43 million per year).
---------------------------------------------------------------------------
\55\ The figures in Table 4 were calculated using the FDA
Labeling Cost Model, which only includes initial costs. The model
does not calculate any recurring costs that may accrue following the
initial compliance period.
Table 4--Total Cost Based on Labeling Compliance Period
----------------------------------------------------------------------------------------------------------------
Distilled
Wine (million) spirits Malt beverages Total Average annual
(million) (million) (million) cost (million)
----------------------------------------------------------------------------------------------------------------
24 months....................... $154 $81 $98 $333 $167
36 months....................... 132 68 70 270 90
42 months....................... 106 54 54 214 61
60 months....................... 106 54 54 214 43
----------------------------------------------------------------------------------------------------------------
Table 5 sets out the same overall estimated cost of compliance
based on the four different compliance periods but with a 2 percent
discount rate. TTB estimates the one-time total relabeling costs
associated with this proposed rule at a 2 percent discount rate to be
approximately $323.4 million assuming a compliance date of 2 years (or
approximately $161.7 million per year). If the compliance date is
extended to 3 years, the estimated total costs with a 2 percent
discount rate would be approximately $259.5 million (or $86.5 million
per year); for 3.5 years, the estimated total costs with a 2 percent
discount rate would be approximately $204.3 million (or $58.4 million
per year), and if the compliance date is extended to 5 years, the
estimated total costs with a 2 percent discount rate would be
approximately $201.2 million (or $40.2 million per year).
Table 5--Total Costs With 2 Percent Discount Rate
----------------------------------------------------------------------------------------------------------------
Undiscounted 2% Discount
Undiscounted 2% Discount average annual average annual
(million) rate (million) cost (million) cost (million)
----------------------------------------------------------------------------------------------------------------
24 months....................................... $333 $323.4 $167 $161.7
36 months....................................... 270 259.5 90 86.5
42 months....................................... 214 204.3 61 58.4
60 months....................................... 214 201.2 43 40.2
----------------------------------------------------------------------------------------------------------------
The overall cost of compliance goes down as the compliance period
gets longer due to the higher number of coordinated changes in the
longer compliance periods.\56\ Costs for shorter compliance periods are
far greater due to the greater number of uncoordinated changes, which
drive up per-unit labor and recordkeeping costs and create inventory
and analytical costs that do not apply to coordinated labeling changes.
---------------------------------------------------------------------------
\56\ The overall cost is the same for the 42-month and 60-month
compliance periods because the FDA Model assumes that at 42 months
all labeling changes will be coordinated.
---------------------------------------------------------------------------
As previously noted, TTB estimates that approximately 13,041 UPCs
(10 percent of the total 130,410 UPCs) fall into the category of
products for which the label is less likely to be modified on a regular
basis, thus making them roughly equivalent to FDA's private label
category. While the model assumes that 100 percent of brand labels will
be able to coordinate regulatory changes with regularly scheduled
labeling changes with a compliance period of at least 2 years, this is
not true of private labels until the compliance period reaches 42
months. Thus, the difference in the total labeling costs under the FDA
Labeling Cost Model between a 2-year, a 3-year, a 42-month, and a 5-
year compliance period is driven by assumptions about private labels.
c. Proposed Compliance Period
Based on its analysis of the cost data described in this section,
TTB proposes to adopt a 5-year implementation
[[Page 6682]]
period. TTB believes that the proposed compliance period will reduce
the costs and burdens associated with the proposed new labeling
requirements. According to the FDA Labeling Cost Model, 100 percent of
industry members will be able to coordinate their labeling changes as a
result of the proposed regulatory requirements with their scheduled
labeling changes within the proposed 5-year implementation period. This
will allow affected industry members to use up existing label stocks
and coordinate the redesign of their labels with an already planned
label redesign.\57\
---------------------------------------------------------------------------
\57\ While this proposal will allow all industry members five
years to implement required changes, TTB believes that many industry
members, particularly large companies, are likely to start voluntary
compliance with any final rule in advance of the compliance date
given that many industry members already include calorie and
nutrient statements on their labels.
---------------------------------------------------------------------------
TTB is further proposing to reduce the costs associated with new
labeling information by permitting linear displays and not requiring
industry members to submit new applications for label approval when the
only change being made to the label is the inclusion of a new Alcohol
Facts statement, or the replacement of an already approved Serving
Facts statement or statement of average analysis, with a new Alcohol
Facts statement.
TTB invites comments on this data, the proposed compliance period,
and any other options available to reduce regulatory burdens and
economic costs while still providing the consumer with adequate
information about the products in question.
3. Recurring Analytical Testing Costs
In response to Notice No. 73, many commenters raised the issue of
the cost of conducting analytical testing of their products. Comments
on Notice No. 232 demonstrate that the costs of conducting analytical
testing of products continue to be a concern for small producers. But
the comments also showed that in the time since Notice No. 73 was
published, many industry members have begun testing their products for
purposes of listing calorie and nutrient information on labels and
websites, or in some cases, so that restaurants may comply with the
menu labeling regulations administered by FDA.\58\ The Beer Institute
commented that, as of 2021, 95 percent of the malt beverages produced
by Anheuser-Busch, Molson Coors, Constellation Brands, HEINEKEN USA,
and FIFCO USA already include nutrient information,\59\ and DISCUS
commented that by June 2024, all DISCUS Director Members \60\ will
provide per-serving alcohol and nutritional information on the labels
of all spirits products they sell in the United States.
---------------------------------------------------------------------------
\58\ See FDA final rule, ``Food Labeling; Nutrition Labeling of
Standard Menu Items in Restaurants and Similar Retail Food
Establishments,'' which includes alcohol beverages, available at
https://www.federalregister.gov/documents/2014/12/01/2014-27833/food-labeling-nutrition-labeling-of-standard-menu-items-in-restaurants-and-similar-retail-food.
\59\ Beer Institute statement, supra note 8.
\60\ As of May 9, 2024, DISCUS Director Members included
Bacardi, Brown-Forman, Constellation Brands, and Remy Cointreau
among others. DISCUS lists the Director Members on its website at
https://www.distilledspirits.org/director-members/.
---------------------------------------------------------------------------
The FDA Labeling Cost Model estimates a cost of $1,060 per product
formulation for a laboratory analysis of non-alcoholic wines that
includes two samples, as well as the cost of preparing and submitting
samples to a laboratory.\61\ However, the model applies the cost for
laboratory analysis only with regard to changes that cannot be
coordinated with regularly scheduled labeling changes.
---------------------------------------------------------------------------
\61\ This estimated laboratory analysis cost includes the
adjustments for inflation discussed above.
---------------------------------------------------------------------------
TTB compared the FDA figures with quotations for calorie and
nutrient testing for alcohol beverages on the publicly available
websites of three randomly selected laboratories, and determined that
the estimates, per sample, ranged from a low of $160 to a high of $435.
Some testing laboratories charged different amounts depending on the
type of alcohol beverage.\62\
---------------------------------------------------------------------------
\62\ These estimates usually covered testing that would provide
results for alcohol content, calories, carbohydrates, and protein.
The laboratories generally advised that fat was not expected to be
found in alcohol beverages, and that analytical testing for fat
content would be an extra cost.
---------------------------------------------------------------------------
TTB also received comments in response to Notice No. 232 that
included data on testing costs. Commenters quoted testing costs ranging
from $170-$800 per product. The range in testing costs seemed to be
related to the number of nutrients the commenter assumed would need to
be included in the test. One commenter stated that the testing
necessary for all nutrients that appear in the FDA's Nutrition Facts
Label would cost $500, but that the test for calories, carbohydrates,
protein, and fat (the nutrients proposed for Alcohol Facts panels)
would cost only $170.
For purposes of this analysis, TTB is including an estimate of the
recurring costs of analytical testing for calorie and nutrient content
for alcohol beverages. Using an estimate of approximately 60,000 brand
extensions, or different formulations, per year, with a cost of $1,060
for testing two samples of each formulation, the ongoing annualized
cost of the proposed rule would be approximately $64 million. TTB
invites comments on whether industry members would in fact plan to
conduct analytical testing of their products if the proposed rule is
adopted, and if so, how frequently such testing would occur. In
particular, TTB seeks comments on whether the reasons outlined below
might result in a lower cost for, and frequency of, testing:
Differences between TTB's proposed rule and FDA's nutrient
labeling regulations. The FDA Nutrition Facts label includes many more
nutrients than the proposed TTB Alcohol Facts label, which may impact
the cost of testing.\63\
---------------------------------------------------------------------------
\63\ TTB notes that while the proposed rule would require
disclosure of the calorie content and three macronutrients
(carbohydrates, fat, and protein), FDA Nutrition Facts labels also
require the disclosure of sodium, fiber, and certain vitamins and
minerals.
---------------------------------------------------------------------------
The proposed rule allows industry members to rely on
databases rather than analytical testing. The proposed rule would not
require industry members to send each batch of a product to a
laboratory for analysis prior to labeling the product; nor would it
require any testing at all. Industry members may choose to rely on
analytical testing, published databases, mathematical calculations
based on alcohol content (for certain products), or an appropriate
blend of these methods to accurately label their products. The
frequency with which producers will conduct analytical testing on
products will vary from product to product. It is up to the bottler or
importer to accurately label the product; however, the proposed
regulations do not prescribe a particular methodology.
Proposed tolerances facilitate the use of typical values
charts and other methodologies to determine calorie and nutrient
content. As previously noted, in 2020, TTB issued public guidance to
broaden the tolerance levels for calorie statements on labels and in
advertisements. See TTB Ruling 2020-1 and TTB Procedure 2020-1. In this
proposed rule, TTB has included this expanded tolerance level for
calories, and is adopting an objective standard for the three nutrients
required to be disclosed, allowing a tolerance of 20 percent above or
below the labeled amount. TTB believes that these proposed changes will
facilitate the use of ``typical values'' charts and other methodologies
to calculate the calories, carbohydrates, fat, and protein content of
an alcohol beverage product. TTB is also proposing to expand the
alcohol content tolerance for malt beverage
[[Page 6683]]
labeling statements. This means bottlers would be less likely to have
to change labels due to minor variations in alcohol content among
different batches.
Availability of calculations based on alcohol content. For
many products, there will be no need to test at all. For example, a
company producing an 80-proof vodka will know from standard databases
what the calorie content of the product is. The product will not have
any carbohydrate, fat, or protein content. Furthermore, the tolerances
adopted by the proposed rule facilitate the use of non-analytical
methods to determine calories and carbohydrates for many alcohol
beverages after the alcohol content of the product is determined.
Industry members are already testing their products in the
absence of a regulatory requirement. TTB seeks comments on the extent
to which industry members are already conducting analytical testing in
the absence of regulations that mandate this type of disclosure on
labels.
TTB tentatively concludes it is likely that a significant number of
products will either not need to be tested on an annual basis or are
already being tested. TTB is nonetheless including these products in
the estimates, and believes it is reasonable to estimate costs based on
the assumption that, on average, each company will conduct one
analytical test per year, consisting of two samples, of each
formulation.\64\ If a 5-year compliance period is adopted, TTB has
estimated that the initial compliance costs of the proposed rule would
amount to approximately $201.2 million in 2023 dollars (or $40.2
million per year). If TTB assumes that industry members will continue
to send each product formulation for analytical testing each year, the
ongoing annualized cost of the proposed rule would be approximately $64
million.\65\
---------------------------------------------------------------------------
\64\ See FDA Labeling Cost Model, Section 3.1.2 ``Analytical
Testing.'' (``To conduct analytical testing, a manufacturer will
usually prepare a composite sample made up of several samples of the
product. Based on information provided by the manufacturers we
contacted, they usually test one composite sample but may test up to
three samples. Many manufacturers already have some idea of the
levels of the particular substance in their product from their
routine quality control checks. In particular, some manufacturers
told us they test products approximately every 2 years to verify
initial test results. However, even if the manufacturer has data on
a particular substance, if a regulation involves that substance, the
manufacturer would generally retest to confirm their data.'')
\65\ The FDA Model assumes that there are no analytical testing
costs for coordinated labeling changes; therefore, the initial
compliance cost of $201.2 million in 2023 dollars (or $40.2 million
per year) does not include analytical testing because the model
assumes there will be no need for analytical testing for coordinated
labeling changes. If, instead, the initial compliance cost included
the recurring cost of analytical testing, an additional $64 million
would be added to those implementation costs, which, if prorated
over 5 years, would amount to an additional $13 million per year
during the implementation period, for a total cost of $53.2 million
per year.
---------------------------------------------------------------------------
TTB invites comments from the public and the industry with regard
to this estimate. In particular, we are interested in receiving
comments on how many industry members, particularly small businesses,
would send their products for analytical testing on an annual basis as
a result of the proposed rule, as well as the number that would have no
need to do this because:
They already know the calorie and nutrient values of their
products;
They would conduct analytical testing even in the absence
of a regulatory requirement;
They feel comfortable relying upon databases for this
information, or
The nature of their product is such that the relevant
information can be accurately calculated based simply on the alcohol
content of the product.
X. Public Participation
A. Comments Sought
TTB requests comments from the public and all interested parties on
the regulatory proposals contained in this document. TTB requests
general comments from anyone interested in the regulatory proposals
outlined 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 it
seeks comments in response to those questions. In developing the final
rule, TTB will carefully evaluate the proposed regulations in light of
all comments and suggested alternative approaches, and it 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 is particularly interested in comments that address whether the
proposed revisions to the labeling regulations will provide the
consumer with adequate information about the identity, quality, and
alcohol content of the product. Where TTB proposes substantive changes,
TTB seeks comments on the proposals for further appropriate changes.
TTB also seeks comments on the impact that the proposed changes
will have 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. Does the proposed compliance date suffice to limit the negative
impact on small businesses and reduce overall costs of compliance while
ensuring that consumers receive adequate information about the
identity, quality, and alcohol content of the alcohol beverage products
they are purchasing and consuming?
2. Is there a shorter compliance period that would provide more
benefits to consumers while still limiting costs and potential negative
impacts on small businesses? Specifically, would a 2-, 3-, or 3.5-year
compliance period suffice?
3. 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.
4. Are the tolerances for nutrient labeling sufficiently broad to
facilitate reliance on typical value charts and databases but still
specific enough to provide accurate information to consumers? How, if
at all, would the use of typical value charts and databases reduce the
costs of the proposed rule, particularly for small businesses? Please
explain in detail and provide specific cost data.
We welcome comments on all other issues presented in this notice of
proposed rulemaking.
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. 237 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
[[Page 6684]]
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.
XI. Regulatory Analyses 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 the proposed rule is to provide consumers
with more information about the identity, quality, and alcohol content
of alcohol beverages. Since the effective date of the Nutrition
Labeling and Education Act of 1990, nutrition 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. This leaves alcohol beverages subject to the labeling
regulations of the FAA Act as the only type of packaged beverage
category without any requirement for calorie or nutrient labeling.
Current TTB policy is that claims about reduced calorie and
carbohydrate levels are misleading in the absence of a more complete
statement regarding the per-serving levels of calories, carbohydrates,
protein, and fat. These statements may be presented in the form of a
Serving Facts statement or a statement of average analysis, each of
which has different serving sizes. TTB is inviting comments on whether
the current lack of uniformity with regard to calorie and nutrient
labeling is confusing to consumers, and whether consumers would benefit
from readily accessible information in the form of an easily understood
labeling statement in a consistent format on alcohol beverage
containers.
Accordingly, TTB proposes to require the disclosure of alcohol
content expressed as a percentage of alcohol by volume on all alcohol
beverage labels and to require the disclosure of calories, certain
nutrients, and fluid ounces of pure ethyl alcohol per serving in an
Alcohol Facts statement on all alcohol beverage labels subject to the
FAA Act.\66\ TTB believes this proposal would provide consumers with
the information they need to follow advice from the U.S. Government,
public health organizations, and their own doctors about alcohol
consumption, if they so choose.
---------------------------------------------------------------------------
\66\ Further information on the specifics of TTB's proposal and
its authority to implement the proposal are in Section VII.
---------------------------------------------------------------------------
Additionally, TTB has determined that mandatory alcohol content
statements on labels for all beer and wines subject to tax under the
IRC will assist in protection of the revenue.
B. Benefits
TTB does not have data to quantify the monetary benefits of the
proposed rule, but as stated previously, the overall purpose of the
proposed rule is to provide consumers with more information about the
identity, quality, and alcohol content of alcohol beverages. This
information will in turn enable consumers to follow advice about
moderate alcohol consumption and will provide them with additional
information about the calorie and macronutrient content of alcohol
beverages. Currently, alcohol beverage products are the only beverage
products on the market that are not required to provide labeling
information concerning calorie, carbohydrate, fat, and protein content.
Additionally, most malt beverage products and some wines are not
required to disclose the alcohol content on their labels. TTB believes
offering this information to consumers on product labels at the point
of purchase will provide consumers with adequate information to make
more informed alcohol beverage choices.
The health risks associated with alcohol consumption and alcohol
abuse remain clear. According to Alcohol Facts and Statistics, a
publication of the National Institute on Alcohol Abuse and Alcoholism
(NIAAA), an estimated 178,000 people in the United States died from
alcohol-related causes from 2020-2021.\67\ The Centers for Disease
Control estimates that excessive alcohol consumption costs $249 billion
annually in the United States, approximately $807 per person annually,
or $2.05 per drink sold. These costs are based on lost workplace
productivity, healthcare expenses, law enforcement and criminal justice
expenses, and losses from motor vehicle crashes.\68\
---------------------------------------------------------------------------
\67\ See Alcohol Facts and Statistics, available at http://pubs.niaaa.nih.gov/publications/AlcoholFacts&Stats/AlcoholFacts&Stats.htm.
\68\ See Data on Excessive Alcohol Use, available at https://www.cdc.gov/alcohol/excessive-drinking-data/index.html.
---------------------------------------------------------------------------
The 2023 National Survey on Drug Use and Health, conducted annually
by the Substance Abuse and Mental Health Services Administration,
states that 28.1 million adults ages 18 and older had Alcohol Use
Disorder (AUD).\69\ According to NIAAA, ``[AUD] is a medical condition
that doctors diagnose when a patient's drinking causes distress or
harm'' and includes both alcohol abuse and alcohol dependence.\70\
Furthermore, ``NIAAA defines binge drinking as a pattern of drinking
that brings blood alcohol concentration (BAC) levels to 0.08g/dl. This
typically occurs after 4 drinks for women and 5 drinks for men--in
about 2 hours.'' \71\
---------------------------------------------------------------------------
\69\ Alcohol Facts and Statistics, supra note 67.
\70\ Treatment for Alcohol Problems: Finding and Getting Help,
available at https://www.niaaa.nih.gov/publications/brochures-and-fact-sheets/treatment-alcohol-problems-finding-and-getting-help.
\71\ NIAAA Spectrum: NIAAA Scientists Provide More Evidence that
Binge Drinking May Indicate Vulnerability to Alcohol Use Disorder,
available at https://www.niaaa.nih.gov/research/niaaa-research-highlights/niaaa-spectrum-niaaa-scientists-provide-more-evidence-binge-drinking-may-indicate-vulnerability.
---------------------------------------------------------------------------
The Scientific Report of the 2020 Dietary Guidelines Advisory
Committee states that ``[b]inge drinking itself has increased,
including among middle- and older-aged adults, as has mortality from
fully alcohol-attributable causes of death, including alcoholic liver
disease.'' \72\ The Scientific Report notes that excessive drinking
accounted for 1 in 10 deaths among working age adults, with each death
representing an average of 30 years of potential life lost. The report
states that approximately 20 percent of people who begin drinking will
develop AUD at some point during their lives. However, only a minority
of people who drink excessively or who binge drink have an alcohol use
disorder. As such, excessive drinking and alcohol-related problems are
prevalent, and are not restricted to those with an alcohol use
disorder. At all
[[Page 6685]]
levels, and particularly for high per occasion alcohol consumption and
resulting blood alcohol concentrations, alcohol is associated with an
increase in intentional injuries, such as suicide and homicide, and
unintentional injuries, such as motor vehicle accidents and
drownings.\73\
---------------------------------------------------------------------------
\72\ Chapter 11, Part D, Scientific Report of the 2020 Dietary
Guidelines Advisory Committee: Advisory Report to the Secretary of
Agriculture and the Secretary of Health and Human Services,
Department of Agriculture, Agricultural Research Service,
Washington, DC, available at https://www.dietaryguidelines.gov/2020-advisory-committee-report.
\73\ Id.
---------------------------------------------------------------------------
With regard to health effects, the Dietary Guidelines for Americans
note that ``among those who drink, higher average alcohol consumption
is associated with an increased risk of death from all causes compared
with lower average alcohol consumption.'' \74\ NIAAA and other
authorities state that alcohol is also associated with increased risk
of certain types of cancer (head and neck, esophageal, liver,
colorectal, and breast cancer in women).\75\ The Scientific Report
states that high average alcohol consumption and binge drinking are
associated with an increased risk of coronary heart disease, stroke,
congestive heart failure, atrial fibrillation, and hypertension.\76\
The report also identifies alcohol as a risk factor for several
gastrointestinal health outcomes, including chronic liver disease.
---------------------------------------------------------------------------
\74\ Dietary Guidelines for Americans, 2020-2025, 9th Edition,
published December 2020, available at https://www.DietaryGuidelines.gov/sites/default/files/2021-03/Dietary_Guidelines_for_Americans-2020-2025.pdf.
\75\ See NIAAA, Alcohol's Effects on Health, available at
https://www.niaaa.nih.gov/alcohols-effects-health/alcohols-effects-body.
\76\ Scientific Report of the 2020 Dietary Guidelines Advisory
Committee, supra note 72.
---------------------------------------------------------------------------
The Scientific Report also notes that alcohol is an important risk
factor or contributor to many social and mental health problems,
including depression, child abuse and neglect, fetal alcohol spectrum
disorder, domestic violence, and sexual assault.\77\ Additionally,
according to the Centers for Disease Control (CDC), nearly 4,000
alcohol-attributable deaths occur annually among persons under 21 years
of age, either due to underage drinking or to effects from others'
drinking.\78\ Finally, the Dietary Guidelines for Americans note that
alcohol beverages provide calories but few nutrients.\79\ The
guidelines state that among U.S. adults who drink, alcohol accounts for
approximately 9 percent of energy intake, making it more difficult to
meet dietary recommendations.\80\ For those who consume excessively,
the number of calories from alcohol may be considerably higher, and
binge drinking is associated with obesity.\81\
---------------------------------------------------------------------------
\77\ Id.
\78\ See Centers for Disease Control and Prevention, Facts About
U.S. Deaths from Excessive Alcohol Use, available at https://www.cdc.gov/alcohol/facts-stats/index.html.
\79\ Dietary Guidelines for Americans, supra note 74.
\80\ Id.
\81\ Scientific Report of the 2020 Dietary Guidelines Advisory
Committee, supra note 72.
---------------------------------------------------------------------------
Given these risks, it is clearly important that alcohol beverage
consumers can easily access information about the most important
factors associated with these products. Consumers cannot follow
governmental and medical advice about moderate consumption without
knowing, at a minimum, the alcohol content of the product. Labels that
provide basic information about the calories of the product, on a per-
serving basis, provide consumers with the knowledge needed to
understand how many discretionary calories may come from alcohol
consumption. Finally, information about carbohydrate, fat, and protein
content provides a basic overview of the macronutrients in an alcohol
beverage.
In response to Notice No. 232, the CDC commented that per-serving
alcohol and nutritional information would provide consumers with ``the
necessary information to manage their caloric intake and to make better
informed decisions about alcoholic beverages consumption.'' The CDC
said that ``[p]roviding nutrition labels that include carbohydrate,
fat, and protein per serving is especially crucial for certain groups
of people, such as people who have diabetes, who need to closely
monitor their carbohydrate intake.'' The CDC further stated that
calorie content was important to consumers because it ``could remind
consumers that alcoholic drinks contain calories, and potentially
influence their decisions to not purchase or consume as much alcohol to
meet existing goals or intentions (i.e., weight loss, diabetes
management).''
Thus, this proposed regulation could, if implemented, result in a
range of benefits stemming from providing additional information to
consumers. Being able to view the alcohol content and amount of alcohol
per serving in an easily understood labeling statement will help
consumers better understand the amount of alcohol they are consuming.
This information, along with the macronutrient disclosures in an
Alcohol Facts statement, will help consumers follow advice from the
U.S. Government, public health organizations, and their own doctors
regarding calorie and alcohol consumption levels. While TTB is unable
to quantify these potential benefits, we welcome public comments with
relevant information on this issue.
C. Costs of Compliance
As set forth in Section IX of this preamble, based on its use of
the FDA Labeling Cost Model, and assuming a 5-year compliance period,
TTB estimates initial implementation costs of approximately $201.2
million in 2023 dollars (or $40.2 million per year). Assuming that
laboratory analysis is conducted for two samples of each brand
extension per year (which may be an overestimate), and using the FDA
estimates for the cost of such a laboratory analysis, the recurring
annual costs would be approximately $64 million.
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.
[[Page 6686]]
1. Overview of the Alcohol Beverage Industry
In FY 2022, TTB collected $8.3 billion in taxes from the alcohol
industry.\82\ 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.\83\
---------------------------------------------------------------------------
\82\ 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.
\83\ Id. at page 10.
---------------------------------------------------------------------------
However, the number of authorized producers and importers who
obtain certificates of label approval (COLAs) in any given year is much
lower. In FY 2022, TTB received 192,954 label applications and 26,922
formula applications for alcohol beverages.\84\ Internal data from
TTB's COLAs Online system shows that fewer than 12,000 permittees or
brewers applied for label approval in each of Fiscal Years 2020-2022,
and that for that overall 3-year time period, fewer than 18,000
permittees or brewers applied for label approval.
---------------------------------------------------------------------------
\84\ 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 actually 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.\85\ According to data published on the website
of the Distilled Spirits Council of the United States,\86\ 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.
---------------------------------------------------------------------------
\85\ Id. at page 30.
\86\ 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.
---------------------------------------------------------------------------
2. Small Businesses in the Alcohol Beverage Industry
TTB recognizes that the vast majority of 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.\87\ 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.\88\
---------------------------------------------------------------------------
\87\ See Size Standards, U.S. Small Business Administration,
available at http://www.sba.gov/content/small-business-size-standards.
\88\ 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.\89\ 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 percent 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.
---------------------------------------------------------------------------
\89\ 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.
Table 6--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
-----------------------------------------------------------------------------------------------------------------
Number of firms with
Industry (NAICS code) Small-entity size Total number at least 500 Total
standard of firms employees employment
----------------------------------------------------------------------------------------------------------------
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.\90\ 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.\91\ 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.
---------------------------------------------------------------------------
\90\ 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.
\91\ A recent study estimates that 28.3 percent of brewing
facilities are brewpubs, with 66.7 percent 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.
---------------------------------------------------------------------------
3. Effect of the Proposed Rule
The vast majority of businesses subject to the proposed rule are
small businesses, but the changes proposed in this document will not
have a significant impact on those small
[[Page 6687]]
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. Adding more elements of
mandatory information to the label 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, TTB
estimates that the initial costs of complying with a final rule
resulting from this proposal would be roughly $1,636 per UPC.
Therefore, a small entity owning one to ten UPCs would incur a cost of
between roughly $1,636 to $16,636 over the proposed 5-year
implementation period.
In response to its 2007 proposed rule on mandatory Serving Facts
information, TTB received many comments from small businesses who were
concerned that the new labeling requirements would negatively affect
their market share, and who pointed out that larger competitors could
more easily absorb the costs associated with the new labeling
requirements. Many of the small businesses assumed that they would be
required to run laboratory analyses for every batch they produced.
These concerns were repeated in comments on Notice No. 232. Small
businesses commented that laboratory analysis would be costly, extend
the time to bring a product to market, and affect small producers'
ability to compete in the marketplace.
As described in the next section, TTB has tailored this proposal to
avoid many costs associated with labeling changes, including providing
for an extended compliance period, allowing smaller linear displays,
increasing tolerances to avoid the need for analytical testing in many
cases, and not requiring new COLA submissions.
4. Alternative Options Considered by TTB
TTB has considered several options to reduce the regulatory burdens
and economic costs imposed by the proposed rule on small businesses, as
described below:
a. Exemption for Small Businesses
TTB received over a dozen comments proposing a small business
exemption to any new labeling requirements, mostly from small producers
or their trade associations. Many commenters specifically proposed that
TTB provide an exemption similar to the small business exemptions to
FDA's nutrition labeling requirements provided for in section 403(q) of
the Federal Food, Drug, and Cosmetic Act. Not all commenters, however,
favored a small business exemption. The American Beverage Licensees and
the Beer Institute commented against exemptions for small producers.
TTB considered the comments requesting a small business exemption
from the requirements of the proposed rule; however, this proposal does
not include this option. One of the primary purposes of this proposed
rule is to provide additional information to consumers. This purpose
would be weakened by a permanent exemption for small businesses. There
is no reason to believe that consumers of alcohol beverages produced by
small producers are less interested in obtaining information about the
alcohol, calorie, and nutrient content of the beverages they consume.
Moreover, TTB questions whether a permanent exemption from mandatory
labeling requirements would be consistent with the FAA Act mandate to
ensure that labels provide consumers with adequate information about
the identity, quality, and alcohol content of the product. 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
Federal Food, Drug, and Cosmetic Act for nutritional labeling regulated
by the FDA.
b. Extended Compliance Period for Small Businesses
TTB considered the option of proposing an extended compliance
period only for small businesses. However, this would present
significant logistical difficulties for TTB and impose a new
information reporting burden on industry members. 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 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
assuming that many industry members, particularly large businesses who
are already likely to be using this information in their labeling and
marketing, will start using Alcohol Facts labels 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 of time 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 are subject to
the proposed rule. Five years is also the longest implementation date
recommended by a commenter to Notice No. 232.
c. Linear Display
In response to Notice No. 73, many small businesses objected to
TTB's proposal to require a Serving Facts panel with a linear format
option available only for small containers. Many commenters suggested
that small businesses would have no choice but to place the panel on a
back label, and noted that some small businesses lacked the equipment
necessary to place a back label on their container.
Taking into account the points made by those commenters, the
current proposed rule will allow the option of a linear display for all
products, regardless of the size of the container. TTB believes that
this will significantly reduce the costs of compliance with the new
regulations, while still providing consumers with a clear statement of
alcohol content and calorie and nutrient content. TTB believes that the
potential benefits of having a larger and more readily noticeable
display would not outweigh the costs of compliance with such a
requirement. The linear display will provide additional flexibility to
small businesses, while still ensuring that labels provide consumers
with the required information. Industry members may still opt to use
the panel display.
d. Electronic Disclosure
TTB considered, but is not proposing, the option to allow
disclosure of the proposed Alcohol Facts information via electronic
means. Several commenters to Notice No. 232 stated that this option
would reduce the burden of this
[[Page 6688]]
proposed rulemaking because small businesses would not need to change
label designs as frequently as they would if the Alcohol Facts
information appeared on the physical label. For the reasons previously
discussed in Section VII.B.8.c, TTB believes electronic disclosure
would create undue barriers to access the information by consumers so
is not proposing it in this rulemaking.
e. Broadened Tolerance Levels
As previously noted in Section VII.B.3, TTB is proposing broader
tolerance levels to facilitate the use of ``typical values'' charts,
formulas, and other methodologies to calculate the alcohol, calories,
carbohydrate, fat, and protein content of an alcohol beverage product
without the need to conduct laboratory analyses for each batch. In
response to Notice No. 232, many commenters expressed concern that
laboratory analysis would place undue burden on small businesses and
affect their competitiveness in the market. The commenters stated, and
TTB agrees, that the ability to use charts and methodologies that do
not require third-party testing should reduce costs and regulatory
burdens on small businesses.
f. Allowing Labeling Changes Without a New COLA
TTB is proposing to further reduce the costs associated with the
label redesign by not requiring industry members to submit new
applications for label approval when the only change being made to the
label is the inclusion of a new Alcohol Facts statement, or the
replacement of an already approved Serving Facts statement or statement
of average analysis with a new Alcohol Facts statement.
g. Solicitation of Comments
TTB solicits comments on all of the options discussed in this
section, on any costs, burdens, and benefits associated with the
proposed rule, and on any impact on small businesses. TTB welcomes data
on all of these issues.
F. Paperwork Reduction Act
Fourteen 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, 4.36, 4.38, 5.52,
5.63, 5.65, 7.52, 7.63, 7.65, 24.257, 25.141, 25.142, 27.59, and 27.60,
and they contain existing information collections assigned OMB control
numbers 1513-0086, 1513-0087, and 1513-0092. OMB No. 1513-0086 concerns
marks and labels on beer containers required under the authority of the
Internal Revenue Code (IRC), OMB No. 1513-0087 concerns alcohol
beverage labeling requirements under the Federal Alcohol Administration
Act (FAA Act), and 1513-0092 concerns marks and labels on wine
containers required under the authority of the IRC.
In this proposed rule, under its IRC authorities, TTB is revising
the information collections approved under OMB Nos. 1513-0086 and 1513-
0092 by requiring alcohol content statements on all domestic and
imported consumer containers of beer and wine. In addition, under its
FAA authority, TTB is revising the information collection currently
approved under OMB No. 1513-0087 to add a new information collection
that generally requires an Alcohol Facts statement to appear on alcohol
beverage labels for domestic and imported products subject to the
jurisdictional requirements of the FAA Act. 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 new
information collection requirements for an Alcohol Facts statement are
in proposed regulatory sections Sec. Sec. 4.111-4.114 for wine labels,
Sec. Sec. 5.211-5.214 for distilled spirits labels, and Sec. Sec.
7.211-7.214 for malt beverage labels. In addition, references to the
new requirements for an Alcohol Facts statement will appear in
Sec. Sec. 4.32, 4.36, 4.38, 5.52, 5.63, 5.65, 7.52, 7.63, and 7.65.
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 per-serving alcohol,
calorie, and nutrient content information in an Alcohol Facts statement
as the proposed regulations will require that statement on all domestic
and imported alcohol beverage labels subject to the FAA Act. The
Alcohol Facts statement would include information about the alcohol
content of the product expressed as a percentage of alcohol by volume
and in fluid ounces of pure ethyl alcohol per serving, as well as
information about the number of calories and the amount, in grams, of
carbohydrates, fat, and protein per serving. Bottlers and importers
could present the Alcohol Facts statement in either a panel or a linear
format.
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. TTB is proposing a 5-year compliance date, which means
that 100 percent of the labeling changes will be ``coordinated.''
Furthermore, TTB does not propose to require industry members to submit
new COLA applications for the sole purpose of adding, or revising, an
Alcohol Facts label statement. Thus, the proposed rule would not
increase recordkeeping requirements under the COLA requirement, which
is covered by OMB Control Number 1513-0020.
TTB believes that a significant proportion of the alcohol beverage
industry already collects and maintains information regarding the
nutrient content of their products, and that they do so in the usual
course of business. Furthermore, domestic producers of wines, distilled
spirits, and malt beverages are already required to determine and keep
records of the alcohol content of their products pursuant to existing
regulations under the IRC.
Accordingly, TTB is estimating an annual burden of one hour per
respondent for the new Alcohol Facts proposal under the FAA Act
labeling regulations. TTB estimates its annual burden as follows:
Number of Respondents: 13,000.
Number of Responses: 13,000 (1 response per respondent).
Average per-response Burden: 1 hour per respondent.
Total Annual Burden: 13,000 hours.
In addition, under its IRC authorities in 26 U.S.C. Chapter 51, TTB
is proposing to expand existing requirements for alcohol content
statements as a percentage of alcohol by volume to beers and wines that
were not subject to mandatory alcohol content labeling under the FAA
Act. TTB has determined that mandatory alcohol content statements on
labels for all beer and wines subject to tax under the IRC will assist
in protection of the revenue. TTB will account for these new IRC-based
information collection requirements under the existing information
collections approved under OMB No. 1513-0086 for beer labels and OMB
No. 1513-0092 for wine labels. The specific proposed regulatory
sections that include those expanded IRC-based alcohol content labeling
requirements are Sec. Sec. 24.257(a)(3), 25.141, 25.142, 27.59, and
27.60.
Currently, TTB considers the IRC-based labeling requirements for
beer and
[[Page 6689]]
wine, approved under OMB Nos. 1513-0086 and 1513-0092, respectively, to
require only the display of usual and customary label information,
which, under OMB regulations, imposes no additional burden on
respondents under the Paperwork Reduction Act. TTB believes that
responses to the expanded requirements to display alcohol content on
labels of beer and wine that were not previously subject to such a
requirement will not require more than 1 hour annually per respondent.
TTB believes that the great majority of beer and wine bottlers and
importers either already label their products with an alcohol content
statement or have ready access to such information for quality control
purposes (or under IRC regulations, for domestic products) even if they
do not display that information on their product labels. In addition,
given the proposed compliance period of 5 years, TTB believes that all
alcohol beverage bottlers and importers will be able to coordinate any
required labeling changes with their usual and customary scheduled
labeling changes.
For the revised IRC-based beer labeling information collection,
approved under OMB No. 1513-0086, TTB estimates the revised annual
burden for that collection as follows:
Number of Respondents: 10,000.
Number of Responses: 10,000 (1 per respondent).
Average per-response Burden: 1 hour.
Total Annual Burden: 10,000 hours.
For the revised IRC-based wine labeling information collection,
approved under OMB No. 1513-0092, TTB estimates the revised annual
burden for that collection as follows:
Number of Respondents: 14,300.
Number of Responses: 14,300 (1 per respondent).
Average per-response Burden: 1 hour.
Total Annual Burden: 14,300 hours.
TTB has submitted the new Alcohol Facts statement information
collection requirements and the revised collection requirements under
the FAA Act and the IRC to the 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 allergen labeling, would result in lowering the
combined burden hours for the three rulemakings;
Whether the proposed labeling requirements are necessary
in order to provide consumers with adequate information as to the
identity, quality, and alcohol content of alcohol beverage products,
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 claim.
XII. Severability
For the reasons described in Section II, TTB's Authority to
Regulate Alcohol Beverage Labeling, TTB believes that its authority to
implement all provisions of the proposed regulation is well-supported
in law and should be upheld in any legal challenge. TTB also believes
that its exercise of its authority reflects sound policy. However, in
the event that any portion of the proposed rule is declared invalid,
TTB intends that the labeling provisions proposed under TTB's FAA Act
authority be severable from those proposed under TTB's IRC authority.
For example, if a provision of the rule promulgated under TTB's FAA Act
authority is invalidated, the provisions of this rule promulgated under
TTB's IRC authority should remain valid. TTB intends these provisions
to be severable because TTB is of the view that the set of provisions
proposed under the FAA Act and the set of provisions proposed under the
IRC would each still function sensibly even if the other, as finalized,
was found unlawful.
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 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.
27 CFR Part 24
Administrative practice and procedure, Claims, Electronic funds
transfers, Excise taxes, Exports, Food additives, Fruit juices,
Labeling, Liquors, Packaging and containers, Reporting and
recordkeeping requirements, Research, Scientific equipment, Spices and
flavorings, Surety bonds, Vinegar, Warehouses, Wine.
27 CFR Part 25
Administrative practice and procedure, Beer, Claims, Electronic
funds transfers, Excise taxes, Exports, Labeling, Packaging and
containers, Reporting and recordkeeping requirements, Research, Surety
bonds.
27 CFR Part 27
Alcohol and alcoholic beverages, Beer, Cosmetics, Customs duties
and inspection, Electronic funds transfers, Excise taxes, Exports,
Freight, Imports, Labeling, Liquors, Packaging and containers,
Reporting and recordkeeping requirements, Surety bonds, Wine.
Amendments to the Regulations
For the reasons discussed in the preamble, TTB is proposing to
amend 27 CFR parts 4, 5, 7, 24, 25, and 27, as set forth below:
PART 4--LABELING AND ADVERTISING OF WINE
0
1. The authority citation for part 4 continues to read as follows:
Authority: 27 U.S.C. 205, unless otherwise noted.
0
2. In Sec. 4.32, revise paragraph (b)(3) and add paragraph (b)(4) to
read as follows:
Sec. 4.32 Mandatory label information.
* * * * *
(b) * * *
(3) Alcohol content, in accordance with Sec. 4.36 and subpart L of
this part.
[[Page 6690]]
(4) An Alcohol Facts statement, in accordance with subpart L of
this part.
* * * * *
0
3. Revise Sec. 4.36 to read as follows:
Sec. 4.36 Alcohol content.
(a) Wines containing more than 14 percent alcohol by volume. An
alcohol content statement, expressed in terms of a percentage of
alcohol by volume, is required under this section for any wine
containing more than 14 percent of alcohol by volume. Such a statement
must appear in an Alcohol Facts statement in accordance with the
requirements of subpart L of this part.
(b) Wines containing not more than 14 percent alcohol by volume.
Part 24 of this chapter (setting forth the requirements under the
Internal Revenue Code for domestic wines) and part 27 of this chapter
(setting forth the requirements under the Internal Revenue Code for
imported wines) require alcohol content statements, expressed in terms
of a percentage of alcohol by volume, for all wines, including wines
not exceeding 14 percent of alcohol by volume, if those wines are
subject to the tax imposed by 26 U.S.C. 5041. Where such a statement
appears on a wine label subject to the requirements of this part, it
must conform to the requirements of this section, and it must appear in
an Alcohol Facts statement in accordance with the requirements of
subpart L of this part.
(c) Additional alcohol content statements elsewhere on the label--
(1) General. Any additional statement of alcohol content must be
expressed in terms of a percentage of alcohol by volume, and may appear
on any label affixed to the container, in one of the following formats:
(i) ``Alcohol __ percent by volume'';
(ii) ``__ percent alcohol by volume''; or
(iii) ``Alcohol by volume: __ percent''.
(2) Formatting rules. Any of the words or symbols may be enclosed
in parentheses and authorized abbreviations may be used with or without
a period. The alcohol content statement does not have to appear with
quotation marks.
(3) Optional abbreviations. The statements listed in paragraph
(c)(1) of this section must appear as shown, except that the following
abbreviations may be used: Alcohol may be abbreviated as ``alc'';
percent may be represented by the percent symbol ``%''; alcohol and
volume may be separated by a slash ``/'' in lieu of the word ``by'';
and volume may be abbreviated as ``vol''.
(d) Tolerance levels for optional or mandatory alcohol content
statements. Except as otherwise provided in paragraph (e) of this
section, a tolerance of 1 percentage point in the case of wines
containing more than 14 percent of alcohol by volume, and of 1.5
percentage points in the case of wines containing not more than 14
percent alcohol by volume, will be permitted either above or below the
stated percentage.
(e) Exceptions to the tolerance provisions. Regardless of the
tolerances specified in paragraph (d) of this section, any optional or
mandatory alcohol content statement shall definitively and correctly
indicate the class, type, and taxable grade of the wine so labeled, and
nothing in this section shall be construed as authorizing the
appearance upon the labels of any wine of an alcohol content statement
that indicates that the alcohol content of the wine is within the
prescribed limitation on the alcohol content of any class, type, or
taxable grade of wine, when in fact it is not.
0
4. In Sec. 4.38, revise paragraph (b)(3) and add paragraph (i) to read
as follows:
Sec. 4.38 General requirements.
* * * * *
(b) * * *
(3) Alcohol content statements (other than those appearing in an
Alcohol Facts statement required by subpart L of this part) may not
appear in script, type, or printing larger or more conspicuous than 3
millimeters nor smaller than 1 millimeter on labels of containers
having a capacity of 5 liters or less and shall not be set off with a
border or otherwise accentuated.
* * * * *
(i) Alcohol Facts statements. See subpart L of this part for more
specific requirements that apply to Alcohol Facts statements.
0
5. Add subpart L to read as follows:
Subpart L--Alcohol Facts Statement
Sec.
4.111 Alcohol Facts statement.
4.112 Format for the Alcohol Facts statement.
4.113 Placement of the Alcohol Facts statement.
4.114 Tolerance levels.
Subpart L--Alcohol Facts statement
Sec. 4.111 Alcohol Facts statement.
(a) General. The Alcohol Facts statement required under Sec.
4.32(b)(4) must include the following information, and may not include
additional information, except as provided in this section:
(1) The single serving size, as defined in paragraph (b) of this
section;
(2) The number of servings per container;
(3) Alcohol content as a percentage of alcohol by volume;
(4) The number of fluid ounces of pure ethyl alcohol per serving;
(5) The number of calories per serving; and
(6) The number, in grams per serving, of carbohydrates, fat, and
protein.
(b) Single serving size and servings per container--(1) Definition.
The term ``single serving size'' or ``serving size'' means an amount of
the wine customarily consumed as a single serving, expressed in U.S.
fluid ounces and, in parentheses, in milliliters (mL) to the nearest
whole number. This amount is not a recommended amount, but rather is
only a reference amount to help consumers determine nutrient, alcohol,
and calorie intake. The single serving size reference amounts for wines
are:
Table 1 to Paragraph (b)(1)
------------------------------------------------------------------------
For products containing: a single serving size is:
------------------------------------------------------------------------
At least 7% and not more than 16% alc/vol. 5 fluid ounces (148 mL).
Over 16% and not more than 24% alc/vol.... 2.5 fluid ounces (74 mL).
------------------------------------------------------------------------
(2) Single-serving containers. Wines packaged and sold in
containers with a net content of less than 200 percent of a single
serving size reference amount described in this section must be labeled
as containing a single serving, and a single serving size is the net
content of the container.
(3) Multi-serving containers. Products packaged and sold in
containers with a net content of 200 percent or more of the applicable
single serving size reference amount described in this section will be
considered to be in multi-serving containers, and the number of
servings per container must be labeled to the nearest one-quarter
serving.
(c) Percentage of alcohol by volume. The Alcohol Facts statement
must express the alcohol content as a percentage of alcohol by volume
to the nearest tenth of a percent, subject to the tolerances set forth
in Sec. 4.36.
(d) Alcohol expressed in fluid ounces. The Alcohol Facts statement
must express the number of U.S. fluid ounces of pure ethyl alcohol per
serving to the nearest tenth of an ounce. The declaration of alcohol in
fluid ounces per serving is calculated from the
[[Page 6691]]
percent-by-volume alcohol content declaration. For example, 5 fl oz of
a beverage with 12 percent alcohol by volume would have 0.6 fl oz of
pure ethyl alcohol, while 5 fl oz of a beverage with 14 percent alcohol
by volume would have 0.7 fl oz of pure ethyl alcohol.
(e) Calories. Calorie statements may be expressed to the nearest
calorie, or may be rounded to the nearest 10-calorie increment (for
per-serving amounts above 50 calories) or the nearest 5-calorie
increment (for per-serving amounts up to 50 calories), subject to the
tolerances set forth in Sec. 4.114. An amount less than 5 calories may
be expressed as zero.
(f) Carbohydrate. (1) The Alcohol Facts statement must express the
number of grams of total carbohydrates in a serving to the nearest
gram, except that if a serving contains less than 1 gram, the statement
``less than 1 gram'' may be used as an alternative, and if the serving
contains less than 0.5 gram, the content may be expressed as zero.
(2) The Alcohol Facts statement may optionally express the number
of grams of total sugars in a serving to the nearest gram, except that
if a serving contains less than 1 gram, the statement ``less than 1
gram'' may be used as an alternative, and if the serving contains less
than 0.5 g of sugar, the content may be expressed as zero.
(g) Fat. The Alcohol Facts statement must express the number of
grams of total fat in a serving (with total fat defined as total lipid
fatty acids and expressed as triglycerides) to the nearest 0.5 (\1/2\)
gram increment below 5 grams and to the nearest gram increment at or
above 5 grams. If the serving contains less than 0.5 gram, the content
may be expressed as zero.
(h) Protein. The Alcohol Facts statement must express protein
content in grams per serving to the nearest gram, except that if a
serving contains less than 1 gram, the statement ``Contains less than 1
gram'' or ``less than 1 gram'' may be used as an alternative, and if
the serving contains less than 0.5 gram, the protein content may be
expressed as zero.
Sec. 4.112 Format for the Alcohol Facts statement.
The Alcohol Facts statement must be presented in either a panel or
a linear format, and the presentation must conform to the formatting
specifications in this section. For wine containers with a net content
of at least 200 percent and less than 500 percent of the applicable
single serving size reference amount described in Sec. 4.111, as an
option, the Alcohol Facts statement may be presented in a dual-column
panel format, which sets forth the required information per serving and
per container, as illustrated by paragraph (j) of this section.
(a) The panel or linear display must be set off within a box by use
of hairlines with all black or one color type, printed on a contrasting
background.
(b) All information within the box must appear in a single, easy-
to-read type style using both upper case and lower case letters. The
box must be separate and apart from any additional information and the
information must be readily legible to potential consumers under
ordinary conditions. The type or printing must be at least 1 millimeter
in height for containers of 187 mL or less and at least 2 millimeters
in height for containers of more than 187 mL.
(c) Bold face is required for the title ``Alcohol Facts'' and for
the heading ``Amount Per Serving'' and is optional for the headings
``Alcohol by volume,'' ``Calories,'' ``Carbohydrate,'' ``Sugar'' (if
used), ``Fat,'' and ``Protein.''
(d) The Alcohol Facts statement must appear in the panel or linear
format in the following order:
(1) Serving size;
(2) Servings per container;
(3) Percentage of alcohol by volume;
(4) U.S. fluid ounces of pure ethyl alcohol per serving. If a panel
format is used, the U.S. fluid ounces of pure ethyl alcohol per serving
must be indented directly under the percent-by-volume alcohol content
declaration (see the example in paragraph (g) of this section);
(5) Calories;
(6) Carbohydrate;
(7) Sugar (if used);
(7) Fat; and
(8) Protein.
(e) The following abbreviations or shortened expressions may be
used, with or without a period:
(1) For percentage of alcohol by volume, the percent symbol ``%'',
``Alcohol by volume'', ``Alc/vol'' or ``Alc by vol'';
(2) For U.S. fluid ounces, ``fl oz'';
(3) For grams, ``g'';
(4) For carbohydrate, ``Carb'';
(5) For serving, ``Serv.'';
(6) For milliliter, ``mL''; and
(7) For amount, ``Amt.''.
(f) The expression of decimal amounts less than 1 must include a
zero prior to the decimal point (for example, 0.5 fl oz).
(g) The following Alcohol Facts statement illustrates an acceptable
panel display for a 750 mL bottle of wine containing 14 percent alcohol
by volume.
Figure 1 to Paragraph (g)
[GRAPHIC] [TIFF OMITTED] TP17JA25.102
(h) The following Alcohol Facts statement illustrates an acceptable
linear display for a 750 mL bottle of wine containing 14 percent
alcohol by volume.
[[Page 6692]]
Figure 2 to Paragraph (h)
[GRAPHIC] [TIFF OMITTED] TP17JA25.103
(i) The following Alcohol Facts statement illustrates an acceptable
panel display for a 100 mL bottle of wine containing 17 percent alcohol
by volume. The container has a net content of less than 200 percent of
a single serving size reference amount and thus is labeled as
containing a single serving.
[[Page 6693]]
Figure 3 to Paragraph (i)
[GRAPHIC] [TIFF OMITTED] TP17JA25.104
(j) The following Alcohol Facts statement illustrates an acceptable
dual-column panel display for a 375 mL bottle of wine containing 14
percentalcohol by volume.
[[Page 6694]]
Figure 4 to Paragraph (j)
[GRAPHIC] [TIFF OMITTED] TP17JA25.105
Sec. 4.113 Placement of the Alcohol Facts statement.
The Alcohol Facts statement may be presented in either a horizontal
or vertical orientation.
Sec. 4.114 Tolerance levels.
(a) General. The following tolerance levels apply to labeling
statements of calorie, carbohydrate (including sugar), protein, fat,
and alcohol content for wines:
(1) Calorie content. A tolerance of 20 percent either above or
below the stated calorie content is permitted. For example, a label
showing 100 calories per serving is acceptable if the product has a
calorie content of between 80 and 120 calories per serving.
(2) Carbohydrate (including sugar) and protein content. A tolerance
of 20 percent either above or below the stated carbohydrate, sugar, and
protein content is permitted. For example, a label showing 7 grams of
carbohydrates per serving is acceptable if the product has a
carbohydrate content of between 5.6 and 8.4 grams per serving.
(3) Fat content. A tolerance of 20 percent either above or below
the stated fat content is permitted. For example, a label showing 7
grams of fat per serving is acceptable if the product has a fat content
of between 5.6 and 8.4 grams per serving.
(4) Alcohol content. The tolerances for alcohol content specified
in Sec. 4.36 apply. The declaration of alcohol in fluid ounces per
serving is calculated from the percent-by-volume alcohol content
declaration.
(b) Publication of analytical methods. TTB will maintain on its
website (https://www.ttb.gov) information regarding the methods it uses
to validate calorie, carbohydrate, protein, fat, and alcohol content
statements.
PART 5--LABELING AND ADVERTISING OF DISTILLED SPIRITS
0
6. The authority citation for part 5 continues to read as follows:
Authority: 26 U.S.C. 5301, 7805, 27 U.S.C. 205 and 207.
0
7. In Sec. 5.52, add paragraph (e) to read as follows:
Sec. 5.52 Legibility and other requirements for mandatory information
on labels.
* * * * *
(e) Alcohol Facts statements. See subpart L of this part for more
specific requirements that apply to Alcohol Facts statements.
0
8. In Sec. 5.63, revise paragraphs (a)(1) and (2), remove paragraph
(a)(3), revise paragraphs (b)(1) and (2), and add paragraphs (b)(3) and
(4) to read as follows:
Sec. 5.63 Mandatory label information.
(a) * * *
(1) Brand name, in accordance with Sec. 5.64; and
(2) Class, type, or other designation, in accordance with subpart I
of this part.
(b) * * *
(1) Name and address of the bottler or distiller, in accordance
with Sec. 5.66, or the importer, in accordance with Sec. 5.67 or
Sec. 5.68, as applicable;
(2) Net contents (which may be blown, embossed, or molded into the
container as part of the process of manufacturing the container), in
accordance with Sec. 5.70;
(3) Alcohol content, in accordance with Sec. 5.65 and subpart L of
this part; and
(4) An Alcohol Facts statement, in accordance with subpart L of
this part.
* * * * *
0
9. In Sec. 5.65, revise paragraph (a) and paragraph (b) introductory
text to read as follows:
Sec. 5.65 Alcohol content
(a) General. The alcohol content for distilled spirits must be
stated as a percentage of alcohol by volume and must appear in an
Alcohol Facts statement in accordance with the requirements of subpart
L of this part. Products that contain a significant amount of material,
such as solid fruit, that may absorb spirits after bottling must state
the alcohol content at the time of bottling as follows: ``Bottled at
__percent alcohol by volume.'' An additional statement of alcohol
content as a percentage of alcohol by volume may appear on any label
affixed to the container.
(b) How the alcohol content must be expressed. The following rules
apply to additional statements of alcohol content that appear on the
label, other than the required statement in an Alcohol Facts statement:
* * * * *
0
10. Add subpart L to read as follows:
Subpart L--Alcohol Facts Statement
Sec.
5.211 Alcohol Facts statement.
5.212 Format for the Alcohol Facts statement.
5.213 Placement of the Alcohol Facts statement.
5.214 Tolerance levels.
Subpart L--Alcohol Facts Statement
Sec. 5.211 Alcohol Facts statement.
(a) General. The Alcohol Facts statement required under Sec.
5.63(b)(4) must include the following information, and may not include
additional information, except as provided in this section:
(1) The single serving size, as defined in paragraph (b) of this
section;
(2) The number of servings per container;
[[Page 6695]]
(3) Alcohol content as a percentage of alcohol by volume;
(4) The number of fluid ounces of pure ethyl alcohol per serving;
(5) The number of calories per serving; and
(6) The number, in grams per serving, of carbohydrates, fat, and
protein.
(b) Single serving size and servings per container--(1) Definition.
The term ``single serving size'' or ``serving size'' means an amount of
the distilled spirits customarily consumed as a single serving,
expressed in U.S. fluid ounces and, in parentheses, in milliliters
(mL), to the nearest whole number. This amount is not a recommended
amount, but rather is only a reference amount to help consumers
determine nutrient, alcohol, and calorie intake. The single serving
size reference amounts for distilled spirits are:
Table 1 to Paragraph (b)(1)
------------------------------------------------------------------------
For products containing: a single serving size is:
------------------------------------------------------------------------
Not more than 7% alc/vol.................. 12 fluid ounces (355 mL).
Over 7% and not more than 16% alc/vol..... 5 fluid ounces (148 mL).
Over 16% and not more than 24% alc/vol.... 2.5 fluid ounces (74 mL).
Over 24% alc/vol.......................... 1.5 fluid ounces (44 mL) or
50 mL for a 50 mL
container.
------------------------------------------------------------------------
(2) Single-serving containers. Distilled spirits packaged and sold
in containers with a net content of less than 200 percent of a single
serving size reference amount described in this section must be labeled
as containing a single serving, and a single serving size is the net
content of the container.
(3) Multi-serving containers. Products packaged and sold in
containers with a net content of 200 percent or more of the applicable
single serving size reference amount described in this section will be
considered to be in multi-serving containers, and the number of
servings per container must be labeled to the nearest one-quarter
serving.
(c) Percentage of alcohol by volume. The Alcohol Facts statement
must express the alcohol content as a percentage of alcohol by volume
to the nearest tenth of a percent, subject to the tolerances set forth
in Sec. 5.65(c). Products that contain a significant amount of
material, such as solid fruit, that may absorb spirits after bottling
must state the alcohol content at the time of bottling as follows:
``Bottled at __percent alcohol by volume.'' An optional statement of
proof may also be included, as set forth in Sec. 5.212(d)(4), but only
if it is immediately adjacent to the percent-by-volume alcohol content
declaration.
(d) Alcohol expressed in fluid ounces. The Alcohol Facts statement
must express the number of U.S. fluid ounces of pure ethyl alcohol per
serving to the nearest tenth of an ounce. The declaration of alcohol in
fluid ounces per serving is calculated from the percent-by-volume
alcohol content declaration. For example, 5 fl oz of a beverage with 12
percent alcohol by volume would have 0.6 fl oz of pure ethyl alcohol,
while 5 fl oz of a beverage with 14 percent alcohol by volume would
have 0.7 fl oz of pure ethyl alcohol.
(e) Calories. Calorie statements may be expressed to the nearest
calorie, or may be rounded to the nearest 10-calorie increment (for
per-serving amounts above 50 calories) or the nearest 5-calorie
increment (for per-serving amounts up to 50 calories), subject to the
tolerances set forth in Sec. 5.214. An amount less than 5 calories may
be expressed as zero.
(f) Carbohydrate. (1) The Alcohol Facts statement must express the
number of grams of total carbohydrates in a serving to the nearest
gram, except that if a serving contains less than 1 gram, the statement
``less than 1 gram'' may be used as an alternative, and if the serving
contains less than 0.5 gram, the content may be expressed as zero.
(2) The Alcohol Facts statement may optionally express the number
of grams of total sugars in a serving to the nearest gram, except that
if a serving contains less than 1 gram, the statement ``less than 1
gram'' may be used as an alternative, and if the serving contains less
than 0.5 g of sugar, the content may be expressed as zero.
(g) Fat. The Alcohol Facts statement must express the number of
grams of total fat in a serving (with total fat defined as total lipid
fatty acids and expressed as triglycerides) to the nearest 0.5 (\1/2\)
gram increment below 5 grams and to the nearest gram increment at or
above 5 grams. If the serving contains less than 0.5 gram, the content
may be expressed as zero.
(h) Protein. The Alcohol Facts statement must express protein
content in grams per serving to the nearest gram, except that if a
serving contains less than 1 gram, the statement ``Contains less than 1
gram'' or ``less than 1 gram'' may be used as an alternative, and if
the serving contains less than 0.5 gram, the protein content may be
expressed as zero.
Sec. 5.212 Format for the Alcohol Facts statement.
The Alcohol Facts statement must be presented in either a panel or
a linear format, and the presentation must conform to the formatting
specifications in this section. For distilled spirits containers with a
net content of at least 200 percent and less than 500 percent of the
applicable single serving size reference amount described in Sec.
5.211, as an option, the Alcohol Facts statement may be presented in a
dual-column panel which sets forth the required information per serving
and per container, as illustrated by paragraph (i) of this section.
(a) The panel or linear display must be set off within a box by use
of hairlines with all black or one color type, printed on a contrasting
background.
(b) All information within the box must appear in a single, easy-
to-read type style using both upper case and lower case letters. The
type or printing must be at least 1 millimeter in height for containers
of 200 mL or less and at least 2 millimeters in height for containers
of more than 200 mL.
(c) Bold face is required for the title ``Alcohol Facts'' and for
the heading ``Amount Per Serving,'' and is optional for the headings
``Alcohol by volume,'' ``Calories,'' ``Carbohydrate,'' ``Sugar'' (if
used), ``Fat,'' and ``Protein.''
(d) The Alcohol Facts statement must appear in the panel or linear
format in the following order:
(1) Serving size;
(2) Servings per container;
(3) Percentage of alcohol by volume;
(4) Optional statement of alcohol content in degrees of proof,
which may only be presented in parentheses following the percentage of
alcohol by volume declaration in the Alcohol Facts statement when
displayed in a linear format. If a panel format is used, the statement
of proof must be indented directly under the percent-by-volume alcohol
content declaration (see the example in paragraph (g) of this section);
(5) U.S. fluid ounces of pure ethyl alcohol per serving. If a panel
format is used, the U.S. fluid ounces of pure ethyl alcohol per serving
must be indented directly under the percent-by-volume alcohol content
declaration, or under the optional proof statement if that is used (see
the example in paragraph (g) of this section);
(6) Calories;
(7) Carbohydrate;
(8) Sugar (if used);
(9) Fat; and
(10) Protein.
[[Page 6696]]
(e) The following abbreviations or shortened expressions may be
used, with or without a period:
(1) For percentage of alcohol by volume, the percent symbol ``%'',
``Alcohol by volume'', ``Alc/vol'' or ``Alc by vol'';
(2) For U.S. fluid ounces, ``fl oz'';
(3) For grams, ``g'';
(4) For carbohydrate, ``Carb'';
(5) For serving, ``Serv.'';
(6) For milliliter, ``mL''; and
(7) For amount, ``Amt.''.
(f) The expression of decimal amounts less than 1 must include a
zero prior to the decimal point (for example, 0.5 fl oz).
(g) The following Alcohol Facts statement illustrates an acceptable
panel display for a 750 mL bottle of distilled spirits containing 40
percent alcohol by volume, and includes the optional statement of
proof.
Figure 1 to Paragraph (g)
[GRAPHIC] [TIFF OMITTED] TP17JA25.106
(h) The following Alcohol Facts statement illustrates an acceptable
linear display for a 50 mL bottle of distilled spirits containing 40
percent alcohol by volume and includes the optional statement of proof.
[[Page 6697]]
Figure 2 to Paragraph (h)
[GRAPHIC] [TIFF OMITTED] TP17JA25.107
(i) The following Alcohol Facts statement illustrates an acceptable
dual-column panel display for a 100 mL bottle of distilled spirits
containing 40 percent alcohol by volume.
[[Page 6698]]
Figure 3 to Paragraph (i)
[GRAPHIC] [TIFF OMITTED] TP17JA25.108
Sec. 5.213 Placement of the Alcohol Facts statement.
The Alcohol Facts statement may be presented in either a horizontal
or vertical orientation.
Sec. 5.214 Tolerance levels.
(a) General. The following tolerance levels apply to labeling
statements of calorie, carbohydrate (including sugar), protein, fat,
and alcohol content for distilled spirits:
(1) Calorie content. A tolerance of 20 percent either above or
below the stated calorie content is permitted. For example, a label
showing 100 calories per serving is acceptable if the product has a
calorie content of between 80 and 120 calories per serving.
(2) Carbohydrate (including sugar) and protein content. A tolerance
of 20 percent either above or below the stated carbohydrate, sugar, and
protein content is permitted. For example, a label showing 7 grams of
carbohydrates per serving is acceptable if the product has a
carbohydrate content of between 5.6 and 8.4 grams per serving.
(3) Fat content. A tolerance of 20 percent either above or below
the stated fat content is permitted. For example, a label showing 7
grams of fat per serving is acceptable if the product has a fat content
of between 5.6 and 8.4 grams per serving.
(4) Alcohol content. The tolerances for alcohol content specified
in Sec. 5.65(c) apply. The declaration of alcohol in fluid ounces per
serving is calculated from the percent-by-volume alcohol content
declaration.
(b) Publication of analytical methods. TTB will maintain on its
website (https://www.ttb.gov) information regarding the methods it uses
to validate calorie, carbohydrate, protein, fat, and alcohol content
statements.
PART 7--LABELING AND ADVERTISING OF MALT BEVERAGES
0
11. The authority citation for part 7 continues to read as follows:
Authority: 27 U.S.C. 205 and 207.
0
12. In Sec. 7.52, add paragraph (e) to read as follows:
Sec. 7.52 Legibility and other requirements for mandatory information
on labels.
* * * * *
(e) Alcohol Facts statements. See subpart L of this part for more
specific requirements that apply to Alcohol Facts statements.
0
13. In Sec. 7.53, revise paragraph (b) to read as follows:
Sec. 7.53 Type size of mandatory information and alcohol content
statements.
* * * * *
(b) Maximum type size optional alcohol content statements. (1)
Containers of more than 40 fluid ounces. An alcohol content statement
(other than one required to appear in an Alcohol Facts statement under
subpart L of this part) may not appear in script, type, or printing
that is more than four millimeters in height on containers of malt
beverages of more than 40 fluid ounces.
(2) Containers of 40 fluid ounces or less. An alcohol content
statement (other than one required to appear in an Alcohol Facts
statement under subpart L of this part) may not appear in script, type,
or printing that is more than three millimeters in height on containers
of malt beverages of 40 fluid ounces or less.
0
14. In Sec. 7.63, revise paragraphs (a)(3) through (5) and add
paragraph (a)(6) to read as follows:
Sec. 7.63 Mandatory label information.
(a) * * *
(3) Alcohol content, in accordance with Sec. 7.65 and subpart L of
this part;
(4) Name and address of the bottler or importer (which may be
blown, embossed, or molded into the container as part of the process of
manufacturing the container), in accordance with Sec. 7.66, Sec.
7.67, or Sec. 7.68, as applicable;
(5) Net contents (which may be blown, embossed, or molded into the
container as part of the process of manufacturing the container), in
accordance with Sec. 7.70; and
(6) An Alcohol Facts statement, in accordance with subpart L of
this part.
* * * * *
0
15. Revise Sec. 7.65 to read as follows:
Sec. 7.65 Alcohol content
(a) Alcohol content in Alcohol Facts statement. An alcohol content
statement must appear in an Alcohol Facts statement in accordance with
the requirements of subpart L of this part, unless prohibited by State
law.
(b) Additional alcohol content statements elsewhere on the label.
The following rules apply to additional statements of alcohol content
that appear on the label, other than the required statement in an
Alcohol Facts statement.
(1) General. An additional statement of alcohol content must be
expressed as a percentage of alcohol by volume and may appear on any
label affixed to the container. Other truthful, accurate, and specific
factual representations of alcohol content, such as alcohol by weight,
may also be made, as long as they appear together with, and as part of,
a statement of alcohol content as a percentage of alcohol by volume.
(i) The alcohol content statement must be expressed in one of the
following formats:
(A) ``Alcohol __percent by volume'';
(B) ``__percent alcohol by volume''; or
[[Page 6699]]
(C) ``Alcohol by volume: __percent.''
(ii) Any of the words or symbols may be enclosed in parentheses and
authorized abbreviations may be used with or without a period. The
alcohol content statement does not have to appear with quotation marks.
(2) Optional abbreviations. The statements listed in paragraph
(b)(1) of this section must appear as shown, except that the following
abbreviations may be used: Alcohol may be abbreviated as ``alc'';
percent may be represented by the percent symbol ``%''; alcohol and
volume may be separated by a slash ``/'' in lieu of the word ``by'';
and volume may be abbreviated as ``vol''.
(3) Examples. The following are examples of alcohol content
statements that comply with the requirements of paragraph (b) of this
part:
(i) ``4.2% alc/vol'';
(ii) ``Alc. 4.0 percent by vol.'';
(iii) ``Alc 4% by vol''; and
(iv) ``5.9% Alcohol by Volume.''
(c) Tolerance levels. A tolerance of one percentage point is
permitted, either above or below the stated alcohol content, for malt
beverages containing 0.5 percent or more alcohol by volume. However,
any malt beverage that is labeled as containing 0.5 percent or more
alcohol by volume may not contain less than 0.5 percent alcohol by
volume, regardless of any tolerance. The tolerance provided by this
paragraph does not apply in determining compliance with the provisions
of Sec. 7.5 regarding the percentage of alcohol derived from added
nonbeverage flavors and other nonbeverage ingredients containing
alcohol. For malt beverages containing less than 0.5 percent alcohol by
volume, the actual alcohol content may be less than, but may not
exceed, the labeled alcohol content.
(d) Low alcohol and reduced alcohol. The terms ``low alcohol'' and
``reduced alcohol'' may be used only on malt beverages containing less
than 2.5 percent alcohol by volume.
(e) Non-alcoholic. The term ``non-alcoholic'' may be used on malt
beverages, provided the statement ``contains less than 0.5 percent (or
.5%) alcohol by volume'' appears immediately adjacent to it, in readily
legible printing and on a completely contrasting background.
(f) Alcohol free. A malt beverage may not be labeled with an
alcohol content of 0.0 percent alcohol by volume, unless it is also
labeled as ``alcohol free'' and contains no alcohol. The term ``alcohol
free'' may be used only on malt beverages containing no alcohol. No
tolerances are permitted for ``alcohol free'' malt beverages.
0
16. Add subpart L to read as follows:
Subpart L--Alcohol Facts Statement
Sec.
7.211 Alcohol Facts statement.
7.212 Format for the Alcohol Facts statement.
7.213 Placement of the Alcohol Facts statement.
7.214 Tolerance levels.
Subpart L--Alcohol Facts Statement
Sec. 7.211 Alcohol Facts statement.
(a) General. The Alcohol Facts statement required under Sec.
7.63(b)(6) must include the following information, and may not include
additional information, except as provided in this section:
(1) The single serving size, as defined in paragraph (b) of this
section;
(2) The number of servings per container;
(3) The alcohol content, under the conditions of paragraph (c) of
this section;
(4) The number of fluid ounces of pure ethyl alcohol per serving,
when required by paragraph (d) of this section;
(5) The number of calories per serving; and
(6) The number, in grams per serving, of carbohydrates, fat, and
protein.
(b) Single serving size and servings per container--(1) Definition.
The term ``single serving size'' or ``serving size'' means an amount of
the malt beverage customarily consumed as a single serving, expressed
in U.S. fluid ounces and, in parentheses, in milliliters (mL), to the
nearest whole number. This amount is not a recommended amount, but
rather is only a reference amount to help consumers determine nutrient,
alcohol, and calorie intake. The single serving size reference amounts
for malt beverages are:
Table 1 to Paragraph(b)(1)
------------------------------------------------------------------------
For products containing: a single serving size is:
------------------------------------------------------------------------
Not more than 7% alc/vol.................. 12 fluid ounces (355 mL).
Over 7% and not more than 16% alc/vol..... 5 fluid ounces (148 mL).
Over 16% and not more than 24% alc/vol.... 2.5 fluid ounces (74 mL).
Over 24% alc/vol.......................... 1.5 fluid ounces (44 mL).
------------------------------------------------------------------------
(2) Single-serving containers. Malt beverages packaged and sold in
containers with a net content of less than 200 percent of a single
serving size reference amount described in this section must be labeled
as containing a single serving, and a single serving size is the net
content of the container.
(3) Multi-serving containers. Products packaged and sold in
containers with a net content of 200 percent or more of the applicable
single serving size reference amount described in this section will be
considered to be in multi-serving containers, and the number of
servings per container must be labeled to the nearest one-quarter
serving.
(c) Alcohol content. For malt beverages with an alcohol content of
at least 0.5 percent alcohol by volume, the Alcohol Facts statement
must include the alcohol content as a percentage of alcohol by volume
rounded to the nearest tenth of a percent, subject to the tolerances
set forth in Sec. 7.65(c). For malt beverages containing less than 0.5
percent alcohol by volume, alcohol content may be expressed in the
Alcohol Facts statement either as a percentage of alcohol by volume, or
by use of the designation ``non-alcoholic'' or ``alcohol free'' in
accordance with the tolerances and other conditions set forth in Sec.
7.65(c), (e), and (f).
(d) Alcohol expressed in fluid ounces. For malt beverages with an
alcohol content of at least 0.5 percent alcohol by volume, the Alcohol
Facts statement must express the number of U.S. fluid ounces of pure
ethyl alcohol per serving to the nearest tenth of an ounce. The
declaration of alcohol in fluid ounces per serving is calculated from
the percent-by-volume alcohol content declaration. For example, 5 fl oz
of a beverage with 12 percent alcohol by volume would have 0.6 fl oz of
pure ethyl alcohol, while 5 fl oz of a beverage with 14 percent alcohol
by volume would have 0.7 fl oz of pure ethyl alcohol.
(e) Calories. Calorie statements may be expressed to the nearest
calorie, or may be rounded to the nearest 10-calorie increment (for
per-serving amounts above 50 calories) or the nearest 5-calorie
increment (for per-serving amounts up to 50 calories), subject to the
tolerances set forth in Sec. 7.214. An amount less than 5 calories may
be expressed as zero.
(f) Carbohydrate. (1) The Alcohol Facts statement must express the
number of grams of total carbohydrates in a serving to the nearest
gram, except that if a serving contains less than 1 gram, the statement
``less than 1 gram'' may be used as an alternative, and if the serving
contains less than 0.5 gram, the content may be expressed as zero.
[[Page 6700]]
(2) The Alcohol Facts statement may optionally express the number
of grams of total sugars in a serving to the nearest gram, except that
if a serving contains less than 1 gram, the statement ``less than 1
gram'' may be used as an alternative, and if the serving contains less
than 0.5 g of sugar, the content may be expressed as zero.
(g) Fat. The Alcohol Facts statement must express the number of
grams of total fat in a serving (with total fat defined as total lipid
fatty acids and expressed as triglycerides) to the nearest 0.5 (\1/2\)
gram increment below 5 grams and to the nearest gram increment at or
above 5 grams. If the serving contains less than 0.5 gram, the content
may be expressed as zero.
(h) Protein. The Alcohol Facts statement must express protein
content in grams per serving to the nearest gram, except that if a
serving contains less than 1 gram, the statement ``Contains less than 1
gram'' or ``less than 1 gram'' may be used as an alternative, and if
the serving contains less than 0.5 gram, the protein content may be
expressed as zero.
Sec. 7.212 Format for the Alcohol Facts statement.
The Alcohol Facts statement must be presented in either a panel or
a linear format, and the presentation must conform to the formatting
specifications in this section. For malt beverage containers with a net
content of at least 200 percent and less than 500 percent of the
applicable single serving size reference amount described in Sec.
7.211, as an option, the Alcohol Facts statement may be presented in a
dual-column panel which sets forth the required information per serving
and per container, as illustrated by paragraph (k) of this section.
(a) The panel or linear display must be set off within a box by use
of hairlines with all black or one color type, printed on a contrasting
background.
(b) All information within the box must appear in a single, easy-
to-read type style using both upper case and lower case letters. The
type or printing must be at least 1 millimeter in height for containers
of \1/2\ pint (8 U.S. fluid ounces or 237 mL) or less and no smaller
than 2 millimeters in height for containers of more than \1/2\ pint (8
U.S. fluid ounces or 237 mL).
(c) Bold face is required for the title ``Alcohol Facts'' and for
the heading ``Amount Per Serving'' and is optional for the headings
``Alcohol by volume,'' ``Calories,'' ``Carbohydrate,'' ``Sugar'' (if
used), ``Fat,'' and ``Protein.''
(d) The Alcohol Facts statement must appear in the panel or linear
format in the following order:
(1) Serving size;
(2) Servings per container;
(3) Percentage of alcohol by volume;
(4) U.S. fluid ounces of pure ethyl alcohol per serving. If a panel
format is used, the U.S. fluid ounces of pure ethyl alcohol per serving
must be indented directly under the percent-by-volume alcohol content
declaration (see the example in paragraph (g) of this section);
(5) Calories;
(6) Carbohydrate;
(7) Sugar (if used);
(8) Fat; and
(9) Protein.
(e) The following abbreviations or shortened expressions may be
used, with or without a period:
(1) For percentage of alcohol by volume, the percent symbol ``%'',
``Alcohol by volume'', ``Alc/vol'' or ``Alc by vol'';
(2) For U.S. fluid ounces, ``fl oz'';
(3) For grams, ``g'';
(4) For carbohydrate, ``Carb'';
(5) For serving, ``Serv.'';
(6) For milliliter, ``mL''; and
(7) For amount, ``Amt.''.
(f) The expression of decimal amounts less than 1 must include a
zero prior to the decimal point (for example, 0.5 fl oz).
(g) The following Alcohol Facts statement illustrates an acceptable
panel display for a 24 fluid ounce bottle of a malt beverage containing
5 percent alcohol by volume.
[[Page 6701]]
Figure 1 to Paragraph (g)
[GRAPHIC] [TIFF OMITTED] TP17JA25.109
(h) The following Alcohol Facts statement illustrates an acceptable
panel display for a 12 fluid ounce bottle of a non-alcoholic malt
beverage containing less than 0.5 percent alcohol by volume.
[[Page 6702]]
Figure 2 to Paragraph (h)
[GRAPHIC] [TIFF OMITTED] TP17JA25.110
(i) The following Alcohol Facts statement illustrates an acceptable
panel display for an 18 fluid ounce bottle of a malt beverage
containing 5 percent alcohol by volume. The container has a net content
of less than 200 percent of a single serving size reference amount and
thus is labeled as containing a single serving.
[[Page 6703]]
Figure 3 to Paragraph (i)
[GRAPHIC] [TIFF OMITTED] TP17JA25.111
(j) The following Alcohol Facts statement illustrates an acceptable
linear display for a 12 fluid ounce can of a malt beverage containing 4
percent alcohol by volume.
[[Page 6704]]
Figure 4 to Paragraph (j)
[GRAPHIC] [TIFF OMITTED] TP17JA25.112
(k) The following Alcohol Facts statement illustrates an acceptable
dual-column panel display for a 24 fluid ounce can of a malt beverage
containing 12 percent alcohol by volume.
[[Page 6705]]
Figure 5 to Paragraph (k)
[GRAPHIC] [TIFF OMITTED] TP17JA25.113
Sec. 7.213 Placement of the Alcohol Facts statement.
The Alcohol Facts statement may be presented in either a horizontal
or vertical orientation.
Sec. 7.214 Tolerance levels.
(a) General. The following tolerance levels apply to labeling
statements of calorie, carbohydrate (including sugar), protein, fat,
and alcohol content for malt beverages:
(1) Calorie content. A tolerance of 20 percent either above or
below the stated calorie content is permitted. For example, a label
showing 100 calories per serving is acceptable if the product has a
calorie content of between 80 and 120 calories per serving.
(2) Carbohydrate (including sugar) and protein content. A tolerance
of 20 percent either above or below the stated carbohydrate, sugar, and
protein content is permitted. For example, a label showing 7 grams of
carbohydrates per serving is acceptable if the product has a
carbohydrate content of between 5.6 and 8.4 grams per serving.
(3) Fat content. A tolerance of 20 percent either above or below
the stated fat content is permitted. For example, a label showing 7
grams of fat per serving is acceptable if the product has a fat content
of between 5.6 and 8.4 grams per serving.
(4) Alcohol content. The tolerances for alcohol content specified
in Sec. 7.65 apply. The declaration of alcohol in fluid ounces per
serving is calculated from the percent-by-volume alcohol content
declaration.
(b) Publication of analytical methods. TTB will maintain on its
website (https://www.ttb.gov) information regarding the methods it uses
to validate calorie, carbohydrate, protein, fat, and alcohol content
statements.
PART 24--WINE
0
17. The authority citation for part 24 continues to read as follows:
Authority: 5 U.S.C. 552(a); 26 U.S.C. 5001, 5008, 5041, 5042,
5044, 5061, 5062, 5121, 5122-5124, 5173, 5206, 5214, 5215, 5351,
5353, 5354, 5356, 5357, 5361, 5362, 5364-5373, 5381-5388, 5391,
5392, 5511, 5551, 5552, 5661, 5662, 5684, 6065, 6091, 6109, 6301,
6302, 6311, 6651, 6676, 7302, 7342, 7502, 7503, 7606, 7805, 7851; 31
U.S.C. 9301, 9303, 9304, 9306.
0
18. In Sec. 24.257, revise paragraph (a)(3) to read as follows:
Sec. 24.257 Labeling wine containers.
(a) * * *
(3) The alcohol content as a percentage of alcohol by volume. For
wines with 7 percent or more alcohol by volume, the tolerance levels
set forth in Sec. 4.36 of this chapter apply. For wines with less than
7 percent alcohol by volume stated on the label, an alcohol content
tolerance of plus or minus 0.75 percentage points is allowed; and
* * * * *
PART 25--BEER
0
19. The authority citation for part 25 continues to read as follows:
Authority: 19 U.S.C. 81c; 26 U.S.C. 5002, 5051-5054, 5056,
5061, 5121, 5122-5124, 5222, 5401-5403, 5411-5417, 5551, 5552, 5555,
5556, 5671, 5673, 5684, 6011, 6061, 6065, 6091, 6109, 6151, 6301,
6302, 6311, 6313, 6402, 6651, 6656, 6676, 6806, 7342, 7606, 7805; 31
U.S.C. 9301, 9303-9308.
0
20. In Sec. 25.141, amend paragraph (a) by adding two sentences prior
to the last sentence to read as follows:
Sec. 25.141 Barrels and kegs.
(a) * * * The barrel or keg must also show by label the alcohol
content expressed as a percentage of alcohol by volume, rounded to the
nearest tenth of a percentage point. A tolerance of one percentage
point is permitted, either above or below the stated percentage of
alcohol by volume, except that neither the labeled or actual alcohol
content may be less than 0.5 percent alcohol by volume, regardless of
any tolerance. * * *
* * * * *
0
21. In Sec. 25.142, amend paragraph (a) by adding two sentences prior
to the last sentence to read as follows:
Sec. 25.142 Bottles.
(a) * * * The bottle must also show by label the alcohol content
expressed as a percentage of alcohol by volume, rounded to the nearest
tenth of a percentage point. A tolerance of one percentage point is
permitted, either above or below the stated percentage of alcohol by
volume; except that neither the labeled or actual alcohol content may
be less than 0.5 percent alcohol by volume, regardless of any
tolerance. * * *
* * * * *
PART 27--IMPORTATION OF DISTILLED SPIRITS, WINES, AND BEER
0
22. The authority citation for part 27 continues to read as follows:
Authority: 5 U.S.C. 552(a), 19 U.S.C. 81c, 1202; 26 U.S.C. 5001,
5007, 5008, 5010, 5041, 5051, 5054, 5061, 5121, 5122-5124, 5201,
5205, 5207, 5232, 5273, 5301, 5313, 5382, 5555, 6038E, 6065, 6109,
6302, 7805.
0
23. In Sec. 27.59, remove paragraph (a), redesignate paragraph (b) as
paragraph (d), add new paragraphs (a) and (b), and add paragraph (c) to
read as follows:
Sec. 27.59 Wines.
(a) Label requirements. Each container of imported wine shall be
marked or labeled with the following information:
(1) The name and address of the importer;
[[Page 6706]]
(2) The brand name, if different from above;
(3) The alcohol content expressed as a percentage of alcohol by
volume. For wines with 7 percent or more alcohol by volume, the
tolerance levels set forth in Sec. 4.36 of this chapter apply. For
imported wines with less than 7 percent alcohol by volume, an alcohol
content tolerance of plus or minus 0.75 percentage points is allowed;
(4) The kind of wine, in accordance with the standards set forth in
Sec. 24.257 of this chapter; and
(5) The net contents of the container, unless the net content is
permanently marked on the container as provided in 27 CFR part 4.
(b) Federal Alcohol Administration Act requirements. All imported
wines containing not less than 7 percent and not more than 24 percent
of alcohol by volume are required to be packaged, marked, branded, and
labeled in conformity with the Federal Alcohol Administration Act (FAA
Act) and regulations promulgated thereunder (27 CFR part 4), prior to
their removal from customs custody. Containers of imported wine bottled
or packaged after tax payment and withdrawal from customs custody are
required to be covered by a certificate of label approval or a
certificate of exemption from label approval on TTB Form 5100.31 issued
pursuant to the FAA Act and regulations promulgated thereunder (27 CFR
part 4).
(c) Customs requirements. Imported containers of wine are required
also to be marked, branded and labeled in accordance with customs
regulations (19 CFR parts 11 and 12).
* * * * *
0
24. Revise Sec. 27.60 to read as follows:
Sec. 27.60 Beer.
(a) Label requirements. Each container of beer shall be marked or
labeled with the following information: the name and address of the
importer, the net contents of the container, the nature of the product
(such as beer, ale, porter, or stout), and the alcohol content,
expressed as a percentage of alcohol by volume.
(b) Federal Alcohol Administration Act requirements. All imported
malt beverages are required to be released from customs custody in
conformity with the Federal Alcohol Administration Act (FAA Act) and
regulations thereunder. The regulations under the FAA Act on the
labeling and advertising of malt beverages may be found in 27 CFR part
7.
(c) Customs requirements. Imported containers of beer are required
to be marked and labeled in accordance with customs regulations (19 CFR
parts 11 and 12).
Signed: January 10, 2025.
Mary G. Ryan,
Administrator.
Approved: January 10, 2025.
Aviva Aron-Dine,
Deputy Assistant Secretary (Tax Policy).
[FR Doc. 2025-00957 Filed 1-16-25; 8:45 am]
BILLING CODE 4810-31-P