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
TTB COLAs and Formulas
Subscribe to TTB COLAs and Formulas's Posts

Five Tips for Making Boozy Ice Cream That’s Legal

When you think of the relationship between alcohol and food, the classics come to mind: tiramisu, coq au vin and beer cheese. While there is a long culinary tradition of using alcohol in food, the newest trend is to utilize alcohol in innovative ways in the culinary world. Recently, a popular food/alcohol combo has been in the freezer aisle where alcohol has lent its flavor to ice cream and freezer pops. Fans consider this a win-win…it cools us down in the summer and acts as a little adult refreshment at the same time. As the tasty treats gain popularity, more and more states are approving the manufacture and sale of such items.  Recently, New York Governor Andrew Cuomo signed legislation that allows ice cream to be mixed with liquor. He stated this would, “help New York’s dairy farmers, liquor and craft beverage producers, dairy processors and manufacturers, food retailers, and restaurants meet the increasing consumer demand for these new and innovative...

Continue Reading

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...

Continue Reading

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)...

Continue Reading

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....

Continue Reading

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...

Continue Reading

TTB Relaxes Consignment Sale Restrictions in Wake of Coronavirus Cancellations

On Friday, March 13, 2019, in the wake of growing concerns and related mass cancellations of large events all across the United States, the federal Alcohol and Tobacco Tax and Trade Bureau (TTB) announced that it is relaxing federal restrictions on alcoholic beverage returns that might otherwise violate prohibitions associated with consignment sales. As a refresher, the Federal Alcohol Administration (FAA) Act 27 C.F.R., Part 11, Subpart D, and more specifically 27 C.F.R. § 11.31, provides that “it is unlawful to sell, offer to sell, or contract to sell products with the privilege of return for any reason, other than those considered to be ‘ordinary and usual commercial reasons’ arising after the product has been sold.” Sections 11.32 through 11.39 provide those circumstances that are considered “ordinary and usual commercial reasons” under the FAA, including: Defective products Discrepancies between the products ordered and delivered Products that may no...

Continue Reading

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...

Continue Reading

TTB Label Approval System Survives First Amendment Challenge from DC Brewery

I. Factual Background During the 34-day government shutdown occurring between December 2018 and January 2019, producers and importers of beer, wine and distilled spirits needing label approval to bring new products to market were forced to wait until the shutdown was resolved, when TTB could begin again to process COLA applications. The difficulties presented by this situation included the prospect of needing to destroy valuable, perishable inventory. Unable to obtain a COLA due to the shutdown, Atlas Brew Works (Atlas) filed suit in January in the US District Court for the District of Columbia, challenging the constitutionality of the COLA system. Atlas alleged that the requirement to obtain label approval violates the First Amendment, since, in the event of a government shutdown, the COLA requirement amounted to a prior restraint on protected speech. As the court explained in its opinion, Atlas’s argument boiled down to the claim that “a law that prohibits...

Continue Reading

TTB Publishes New Nonbeverage Product Formula Form

On August 12, 2019, the Alcohol and Tobacco Tax and Trade Bureau (TTB) published its updated Formula and Process for Nonbeverage Product, TTB Form 5154.1. The Nonbeverage Product approval process is critical to obtain “drawback” (a refund) on most of the alcohol excise tax on distilled spirits used to make such products deemed “unfit for beverage purposes.” The Nonbeverage Formula Form accordingly is important to producers of flavorings and extracts, soft drink concentrates and other non-beverage products made using potable alcohol. Nonbeverage drawback claimants, using the Formula Form, must show that taxpaid distilled spirits were used in the manufacture of a product unfit for beverage use. Today, most formulas are submitted online, although TTB’s National Laboratory in Maryland can still accept paper submissions. Notable features of the new form include: Previously, the Nonbeverage Formula Form requested information specifically if the finished product...

Continue Reading

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.

Continue Reading

STAY CONNECTED

TOPICS

ARCHIVES