TTB Publishes Updated Guidelines for Formula Approvals for Domestic Producers and Importers

By on October 12, 2018

On September 18, 2018, the Alcohol and Tobacco Tax and Trade Bureau (TTB) issued TTB Industry Guidance 2018-10, a webpage consisting of questions and answers related to formulas. According to TTB, this new guidance “essentially replaces” Industry Circular 2007-4, which provided the framework for pre-COLA product evaluations. TTB has removed Industry Circular 2007-4 from its website.

The release of Industry Guidance 2018-10 comes with troubling implications. TTB has essentially revoked an Industry Circular signed by TTB Administrator John Manfreda and replaced it with a series Frequently Asked Questions (FAQs) with no clear authorship or authority. Furthermore, they have deleted Industry Circular 2007-4, preventing industry members from reviewing how these FAQs differ or alter the previous method for determining when formulas are required. Indeed, TTB seems to be significantly expanding the types of products that require formula approval. TTB notes in the new FAQs that “there may be circumstances when we will require a formula . . . even though the product does not generally require a formula.” See Industry Guidance 2018-10, FAB4.

TTB has recently required formulas for products, such as particular varieties of mezcal and spirits aged in previously used cooperage, where formulas were not previously required. It appears where no regulatory restrictions on aging (e.g., length of time or type of barrel) exists for a particular type/class of distilled spirits, TTB will more than likely request a formula approval prior to reviewing a Certificate of Label Approval (COLA) application. Some products may not require a formula if the label text only specifies the type of barrel used for aging, i.e., “Aged in used bourbon barrels.” But if the label mentions any attribute the aging provides to the liquid (e.g., “notes of sweet corn” or “hints of charred wood”) then TTB will likely require a formula.

Although TTB previously made strides in increasing speeds in which COLAs and formulas were reviewed, these new requirements will increase the compliance workload and approval timelines for TTB as well as alcohol beverage industry members. In addition to the challenges created by increasing the number of products requiring formulas, more questions are likely to arise under the anonymous FAQs, which replaced the longstanding protocols in Industry Circular 2007-4.

T. Marshall Fawley III
T. Marshall Fawley III focuses his practice on regulatory issues in the alcohol beverage industry as well as complex civil litigation. He counsels clients in matters relating to the sale and distribution of alcohol beverages, on both the state and federal level. His experience spans e-discovery, data privacy issues relative to antitrust litigation, Foreign Corrupt Practices Act investigations and white-collar criminal defense. Marshall has completed extensive training on the proper utilization of litigation technology and is recognized as a Relativity Review Specialist by kCura, the developers of Relativity. Read Marshall Fawley's full bio.

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