The U.S. Alcohol and Tobacco Tax and Trade Bureau (TTB) this week published a final rule that will implement Phase 2 of its rulemaking on modernization of the labeling and advertising regulations for distilled spirits and malt beverages.
Per TTB, these updated regulations will improve the clarity and usability of the regulations, liberalize certain requirements, and assist industry members in submitting compliant label and formula applications, which will help in improving turnaround times. The changes in this final rule will not require industry members to make changes to labels or advertisements, but will instead provide additional flexibility in the labeling and advertising of distilled spirits and malt beverages.
The Phase 2 final rule finalizes, among other things, the following liberalizing changes to the distilled spirits and malt beverage labeling regulations that were proposed in Notice No. 176 (which was proposed in 2018):
- allowing greater flexibility in the placement of mandatory information on labels by eliminating the requirement that certain mandatory information appear on the “brand label”;
- specifically authorizing certain relabeling activities;
- allowing addition of labels on malt beverages identifying the wholesaler, retailer, or consumer; and
- providing additional flexibility in allowing the labeling of kegs with “keg collars” and “tap covers” that are not firmly affixed to the keg under certain circumstances to facilitate the reuse of kegs by different brewers.
Additionally, this final rule includes clarifying changes, such as:
- adding a definition of “grain” to the distilled spirits regulations that includes all cereal grains, as well as the seeds of the pseudocereals amaranth, buckwheat, and quinoa;
- incorporating certain rulings and industry circulars for ease of use;
- clarifying current policy by removing some outdated restrictions on the use of “disparaging” statements or depictions of the American flag if the labeling representations are truthful and non-misleading;
- allowing the use of designations in accordance with trade understanding, rather than statements of composition, in the labeling of malt beverages that are flavored or fermented with ingredients that TTB has determined are generally recognized as traditional ingredients in the production of a fermented beverage designated as “beer,” “ale,” “porter,” “stout,” “lager,” or “malt liquor”, in accordance with TTB Ruling 2015-1;
- creating a class for distilled spirits “specialty products”; and
- specifically permitting certain descriptive terms (such as “amber”, “red”, “dry”, and “cream”) with the designation on malt beverage labels, to reflect existing policy.
In 2018, TTB proposed labeling and advertising amendments in Notice No. 176, Modernization of the Labeling and Advertising Regulations for Wine, Distilled Spirits, and Malt Beverages. On April 2, 2020, TTB implemented Phase 1 of the rulemaking, publishing a final rule, T.D. TTB-158, which adopted certain proposals from Notice No. 176. On February 9, 2022, TTB published the Phase 2 final rule, which amends the labeling and advertising regulations for distilled spirits and malt beverages. The final rule is effective 30 days from the date of publication in the Federal Register, March 11, 2022.
TTB is currently working on Phase 3 of the rulemaking, which will reorganize the wine labeling regulations, address the remaining labeling issues related to wine, and reorganize and finalize the regulations related to the advertising of wine, distilled spirits, and malt beverages.
This final rule reorganizes parts 5 (distilled spirits) and 7 (malt beverages) of the regulations, as proposed in the NPRM. We plan to publish a revised part 4 (wine) in the future.
TTB will continue to consider some remaining issues raised by comments that are not addressed in this document and plan to address those issues in subsequent rulemaking documents.
TTB is currently reviewing its distilled spirits and malt beverage public guidance and will update those guidance documents consistent with this final rule. TTB will be superseding guidance materials that are fully incorporated into the regulations by this final rule.