On Monday, September 29 2014, the Alcohol and Tobacco Tax and Trade Bureau (TTB) issued Industry Circular 2014-2, which expands the list of Allowable Revisions to Approved Alcohol Beverage Labels.
Industry Circular 2014-2 permits the following changes to already-approved malt beverage, wine and distilled spirits labels without the need for a new certificate of label approval (COLA):
- Deletion or revision of sponsorship themed graphics, logos, artwork, events, etc. and/or sponsorship information
- Addition, deletion or revision of awards, ratings or recognitions (i.e., “rated as the best 2012 wine by x association”)
- Deletion of organic claims (Note: The deletion of a single organic claim is not permitted. All organic claims must be removed from the label or a new COLA is required to delete individual references.)
- Revision of an approved sulfite/sulphite statement according to the formats prescribed in the Industry Circular (“Contains Sulfites/Sulphites,” “Contains (a) Sulfiting//Sulphiting Agent(s),” “Contains [name of specific sulfating/sulphating agent],” “Contains Naturally Occurring and Added Sulfites/Sulphites” or “Contains Naturally Occurring Sulfites/Sulphites”)
- Addition, deletion or revision of information regarding the number of bottles made, produced, distilled or brewed in a batch
- Addition of instructional statements vis-à-vis how to best consume and/or serve the product specified in the Industry Circular (“Refrigerate After Opening,” “Do Not Store In Direct Sunlight,” “Best If Frozen For ___ to ___ Hours,” “Shake Well,” “Pour Over Ice,” “Best When Chilled,” “Best Served Chilled,” “Serve Chilled,” “Serve at Room Temperature”)
Tied-house laws and related trade practice restrictions rank among the most baffling legal issues faced by a newcomer to the spirits industry. While issues like distribution contracts, labeling requirements, trademarks and taxes all have parallels in other businesses, tied-house laws have few analogs outside the drinks industry.
This article, originally published in the Fall 2014 issue of Artisan Spirit, aims to provide a very general overview of these laws so a newcomer can at least spot potential issues.
The Internal Revenue Service (IRS) recently issued final regulations (the Repair Regulations) that determine when taxpayers may deduct costs to acquire, produce or maintain tangible property, including all equipment and buildings. The Repair Regulations apply to all taxpayers, including brewers of all sizes. Taxpayers must follow these new rules in 2014, which generally will require them to change their method of accounting with the IRS.
This article was originally published in the July/August 2014 issue of The New Brewer.
Wine, Beer & Spirits Law 19th Annual National Conference
The Mayflower Renaissance Hotel
September 18-19, 2014
Click here to register.
View the conference brochure.
Marc E. Sorini, Partner, Program Co-chair
Arthur J. DeCelle, Counsel
Please join McDermott partner and program co-chair, Marc Sorini, at the Wine, Beer & Spirits Law 19th Annual National Conference on September 18-19, 2014. This year’s program will bring direct access to experts in the alcohol beverage industry, including speakers from the Alcohol and Tobacco Tax and Trade Bureau, Beam Suntory, BLDS, the California Department of Alcohol Beverage Control, Diago North America, Dogfish Head Craft Brewery, E&J Gallo Winery, the Federal Trade Commission, Ippolito Christon & Co., New Belgium Brewing Company, New Jersey Office of the Attorney General, Department of Law and Public, Safety, Division of Alcoholic Beverage Control, Precision Economics, Virginia Department of Alcoholic Beverage Control, Washington State Liquor Control Board, and the Wine Institute, as well as speakers from many of the nation’s leading law firms.
Of particular note, Marc Sorini will make a presentation titled, Federal Excise Tax Strategies and Tactics. McDermott counsel Art DeCelle will be moderating a panel of representatives from the industry’s leading national trade associations to discuss “The Future of Federal Regulation of Alcohol.”
To view the full conference brochure, click here. For more information and to register, please visit: http://cle.com/WashingtonDC.
Hard cider has shown phenomenal growth in the past several years. With rising consumer demand, more and more craft brewers are entering this rapidly expanding market. Although hard cider is typically distributed and marketed like a beer product, the federal government and most states actually tax and regulate cider as a type of wine. Brewers contemplating the production of cider accordingly must carefully consider the legal issues surrounding cider production and distribution that distinguish cider from beer. This article outlines some of the most important (though certainly not all) of these issues.
This article was originally published in the May/June 2014 issue of The New Brewer.
The craft distilling movement is growing rapidly. Indeed, the torrid pace of new distillery openings and the boundless enthusiasm of new entrants seem strangely reminiscent of craft brewing (then “microbrewing”) in the late 1980s and early 1990s. Craft distillers even have a simmering product integrity issue (the use of purchased neutral spirits) that splits the new industry like contract brewing divided craft brewers 20 years ago. There are, no doubt, significant differences, but craft distilling today seems poised for a period of growth like the one craft brewers have been (mostly) enjoying for the past 25 years. Not surprisingly, then, a growing number of craft brewers have followed the path of Anchor Brewing (or should I say Anchor Distilling) and expanded their offerings to include distilled spirits. But as brewers quickly discover, there are numerous legal, regulatory, and tax differences between these related, but distinct, businesses. While a full exploration of those differences could fill a rather thick book, this article briefly highlights the most important.
This article was originally published in the March/April 2014 issue of The New Brewer.
On Tuesday, July 1, 2014, the Alcohol and Tobacco Tax and Trade Bureau (TTB) released new Frequently Asked Questions (FAQs) concerning sugar claims made on labels and in advertising. The FAQs articulate, for the first time, a clear TTB policy on the subject and apply to all malt beverages (e.g., beer), wines and distilled spirits subject to TTB’s Federal Alcohol Administration Act jurisdiction.
The FAQs are notable in three primary respects:
- TTB will permit truthful and non-misleading sugar claims, provided that they are adequately supported by testing.
- TTB will consider a sugar claim the same as a carbohydrate claim and, thus, labels and advertisements making such claims must include a statement of average analysis in accordance with TTB Rulings 2004-1 and 2013-2.
- TTB will permit products containing less than 0.5 grams of sugar per serving to make the claims “zero sugar,” “no sugar” or “sugar free.”
The new policy does not apply to certain terms applied to wines and related to sugar content (e.g., “late harvest”) that were subject to prior rulings on such terms.
Warehouses aren’t exciting or sexy. In fact, they are usually boring to look at and think about. But a surprising amount of specialized alcohol beverage law surrounds the use of warehouses for the storage of distilled spirits.
This article, originally published in the Spring 2014 issue of Artisan Spirit, will briefly explore some of the basics.
Facebook and similar types of social media have become increasingly popular as a promotional tool for craft brewers. Ease of setup, simplified maintenance, the lure of almost immediate exposure to the general public and the ability to reach targeted audiences all make social media extremely attractive. Craft brewers use social media to introduce new products, generate interest or attendance at an event or solicit feedback on proposed new beers, among many other uses. Brewers should bear in mind, however, that social media is not without regulation.
This article was originally published in the January/February 2014 issue of The New Brewer.
Mastering distribution is as important to a successful distiller as mastering distilling, packaging or advertising. In a heavily-regulated industry, this requires knowledge of the applicable laws and regulations.
This article, originally published in the Winter 2013 issue of Artisan Spirit, explores, albeit at a very general level, how to manage one important category of those laws; so-called “franchise” laws.