ALCOHOL LAW ADVISOR
ALCOHOL LAW ADVISOR
Regulatory and Distribution Law Updates for the Alcohol Industry
ALCOHOL LAW ADVISOR
Regulatory and Distribution Law Updates for the Alcohol Industry
Food Safety and FDA
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Non-Alcoholic Beer Regulation 101

As part of the general move to better-for-you beverages, non-alcoholic (NA) options have been and will likely continue to be on the rise. However, how NA is treated, or not treated, as “beer” has significant impact on its potential route to market. The below summarizes the overall treatment of NA beer under US federal law, as well as examples of restrictions on direct-to-consumer (DTC) shipments imposed by certain states. FEDERAL TREATMENT OF NA BEER Tax Treatment: The Alcohol and Tobacco Tax and Trade Bureau’s (TTB) regulations define “beer” as a fermented beverage containing 0.5% or more alcohol by volume (ABV) and brewed or produced from malt, wholly or in part, or from any substitute for malt. (See: 27 C.F.R. § 25.11.) The regulations refer to a malt beverage containing less than 0.5% ABV as a “cereal beverage.” (See: 25.11.) Because NA beer contains less than 0.5% ABV, TTB will not treat it as a “beer” under the Internal Revenue Code (IRC), and...

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Detailed Summary of Federal Requirements for Production of Hand Sanitizing Products

To meet the growing need for hand sanitizing products, various federal agencies including the Alcohol Tobacco Tax and Trade Bureau (TTB), Federal Drug Administration (FDA), Health and Human Services (HHS) and Congress have been rapidly updating and providing guidance for alcohol manufacturers interested in producing or supplying alcohol for the production of these important products. The below neatly summarizes the key issues surrounding the production of alcohol for use in or production of hand sanitizers for distilled spirts plants (DSPs). Tax Treatment: Denatured and undenatured alcohol may be withdrawn from the bonded premises after December 31, 2019 and before January 1, 2021 free of tax for use in or contained in hand sanitizer made in accordance with FDA guidance. Formula requirements: No prior formula approval is required for DSPs or industrial alcohol users if: the hand sanitizer is produced in accordance with World Health Organization (WHO)...

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Importing and Exporting Beer

Importing and exporting beer or other alcohol beverages involves multiple levels of government regulation and taxation. Some regulations, taxes, and reporting requirements mirror your existing compliance obligations as a brewery. Other obligations are unique and include government agencies that are not involved in regulating domestic producers, such as US Customs and Border Protection (CBP) and the Commerce Department. The nations you target for selling or importing can have layers of regulations just as daunting as they are in the United States. Multinational trade agreements, treaties and laws at the national, state, provincial or municipal levels may apply to your activities and govern critical topics, including: Excise and other taxes Product classification and tariffs National support for domestic producers and exports Impediments to trade In addition to government regulation, entering new import or export agreements with businesses requires diligence....

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TTB and FDA Relax Restrictions on the Production of Hand Sanitizers by Alcohol Manufacturers

With the increasing pace of the spread of the Coronavirus (COVID-19) and the related emergent need to increase the available supply for hand sanitizer products across the United States, the Alcohol and Tobacco Tax and Trade Bureau (TTB), followed by the Federal Drug Administration (FDA), have relaxed requirements for certain alcohol producers to produce these products without first amending their existing permits or obtaining prior formula approval. On March 18, 2020, TTB came forward advising industry members that it has found it necessary and desirable to waive provisions of the internal revenue law to provide certain exemptions and authorizations for distilled spirits permittees to produce ethanol-based hand sanitizers to address the demand for such products during this time of national emergency. More specifically, TTB’s guidance provides: The exemptions are in effect through June 30, 2020. Alcohol fuel plants (AFPs) and beverage distilled spirits plants...

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Florida Federal District Court Rules GRAS Regulation Preempts Florida Statute Criminalizing Ingredient

In an important ruling dismissing a proposed class action, the US District Court for the Southern District of Florida ruled that the US Food and Drug Administration’s (FDA’s) generally recognized as safe (GRAS) regulation preempts a Florida statute that criminalized adding grains of paradise to liquor. More specifically, the Court in Marrache v. Bacardi USA, Inc., 2020 US Dist. LEXIS 13668 (January 28, 2020), ruled that the Florida statute was preempted because it conflicts with the Federal Food, Drug and Cosmetic Act (FFDCA) and the FDA’s regulations (21 C.F.R. § 182.10) which establish that grains of paradise are GRAS. 2020 US LEXIS 13668, at *4. The case started when Florida resident Uri Marrache purchased a bottle of Bombay Sapphire gin at a Winn-Dixie store in Florida. After consuming the gin, Marrache filed suit under Florida’s Deceptive and Unfair Trade Practices Act, claiming that Bacardi (the producer of Bombay Sapphire) and Winn-Dixie had engaged in...

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EPA Approves Use of 10 Pesticide Products on Hemp

Yesterday, the Environmental Protection Agency (EPA) announced its approval of 10 new pesticides for use on hemp products. EPA’s approval of nine biopesticides and one conventional pesticide provides greater certainty to hemp farmers in time for the 2020 planting season. The hemp industry awaits further guidance from other federal regulatory agencies. In December 2018, Congress passed the Agriculture Improvement Act of 2018 (2018 Farm Bill), which explicitly removed hemp from the definition of marijuana in the Controlled Substances Act. The 2018 Farm Bill directed the US Department of Agriculture (USDA) to establish a regulatory framework for hemp production in the United States. USDA recently released its interim final rule including proposed rules and regulations regarding USDA’s approval of hemp production plans submitted by States and Indian Tribes, and the establishment of a Federal Plan for hemp growers in States without a USDA-approved plan. Comments...

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What to Know About FDA’s Recent Statements on CBD

Last week FDA issued a public release on CBD titled, “What You Need to Know (And What We’re Working to Find Out) About Products Containing Cannabis or Cannabis derived Compounds, Including CBD.” The FDA document does not break much new ground, though it emphasizes again FDA’s concern with the safety of CBD, some of which comes from FDA’s review of the CBD-based epilepsy drug Epidiolex. FDA does not believe it has enough information about certain aspects of CBD, such as what happens if someone takes CBD daily for sustained periods. In addition, FDA specifically identifies as a potential harm the use of CBD with alcohol because of the increased risk of sedation and drowsiness, which can lead to injuries. FDA, in addition to issuing this document, sent 15 warning letters to companies marketing CBD products that FDA views as unapproved drugs primarily because of the drug like claims made for such products. FDA appears to be on a path toward considering a...

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USDA Publishes Long-Awaited Interim Regulations Governing the Production of Legalized Hemp

Yesterday, the United Stated Department of Agriculture (USDA) released its interim final rule setting forth the proposed rules and regulations regarding the production of hemp under the provisions of the Agricultural Improvement Act of 2018, or the “2018 Farm Bill.” As mandated by the 2018 Farm Bill, the proposed regulations outline provisions for both the approval by the USDA of State or Indian Tribe proposed plans as well as the development of its own federal plan for the production of hemp in the absence of an applicable approved State or Tribal program. While the draft rule is still subject to further comment, it provides the first official guidance from the USDA regarding the lawful production of hemp under the 2018 Farm Bill. In general, each of the approved State, Indian Tribe or Federal Plans include requirements for documenting and reporting, such as: Land descriptions, including geospatial location identifiers and total crop acreage Sampling and...

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Court Dismisses Challenge to TTB’s Rejection of Health Claims on Vodka

In August, the US District Court for the District of Columbia issued its final decision in Bellion Spirits, LLC v. United States, Civ. No. 17-2538 (JEB). The Bellion case was brought by spirits company Bellion Spirits after the Alcohol and Tobacco Tax and Trade Bureau (TTB) refused to approve a series of health claims advanced by Bellion in connection with its vodka products. According to Bellion, the infusion of its vodka with a compound called NTX will mitigate the damage alcohol inflicts on human DNA. In 2016, Bellion petitioned TTB to approve eight specific claims related to the NTX-infused vodka. After consulting with the federal Food & Drug Administration (FDA), in 2017 TTB rejected all eight claims. Bellion then brought suit, arguing that TTB’s actions with respect to two of its claims were illegal and unconstitutional. Bellion’s complaint advanced four counts alleging that: TTB impermissibly delegated authority to FDA by consulting with FDA during...

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Cannabis and Hemp Update

Cannabis legalization receives widespread popular support. According to opinion polls, more than two-thirds of Americans support full legalization—a steep rise in support considering that as recently as 2005, almost two-thirds of Americans opposed legalization. The country appears on the path to full cannabis legalization, but until that time, citizens and companies should be aware of the legal risks involved in entering the cannabis space. Access the full article. Originally published in The New Brewer, July/August 2019.

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