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
FAA Act
Subscribe to FAA Act's Posts

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

Five Issues That Impact Craft Brewers

In an article published by The New Brewer, Marc Sorini discusses five issues most likely to have a meaningful impact on craft brewers in the coming years, including: The Craft Beverage Modernization and Tax Reform Act’s (CBMTRA) new tiered excise tax rate structure, its extending benefits to foreign producers, and its authorization for brewers to transfer beer in bond between breweries of different ownership. The Sixth Circuit’s published opinion in Byrd v. Tennessee Wine and Spirits Retailers Association, affirming a decision finding that the “durational-residency” requirements imposed by Tennessee law for alcohol beverage retail licensees are unconstitutional under the “dormant” Commerce Clause. The TTB’s creation of a new unit within its Trade Investigations Division to focus on trade practice enforcement. The opinion in Mission Beverage Co. v. Pabst Brewing Co. from the California Court of Appeals, which found that “an existing distributor’s receipt of...

Continue Reading

TTB in a Deregulatory Mood

Changes in Administration and other political shifts can have subtle and, occasionally, not-so-subtle influences in the Alcohol and Tobacco Tax and Trade Bureau (TTB) policies and priorities. In the article, “TTB in a Deregulatory Mood” published by Artisan Spirit, Marc Sorini explores how the Trump Administration’s desire to reduce regulatory burdens on business has already influenced TTB’s regulatory priorities. Particularly, in the most recent “Unified Agenda,” a bi-annual compilation of federal regulatory initiatives, TTB placed a priority on deregulatory projects, several of which would alter the regulatory environment for the industry. Marc discusses how the change in administration appears to have an effect on TTB’s rulemaking efforts. Access the full article. Originally published in Artisan Spirit, Spring 2018.

Continue Reading

FDA Releases Draft Guidance on Public Warnings and Notifications of Recalls

The Food and Drug Administration (FDA) recently issued a draft guidance on the agency’s voluntary recall process and announced the agency’s intention to notify the public faster when a product is recalled. The guidance aims to assist and provide recommendations to industry and FDA staff regarding the use, content and circumstances for issuance of public warnings and public notifications for firm‑initiated or FDA‑requested recalls. In addition, the guidance discusses what information to include in a public warning, as well as the parties responsible for issuing it. Notably, the draft guidance does not specifically address recalls of alcohol beverage products regulated by the Federal Alcohol Administration (FAA) Act or the primary role of the Alcohol and Tobacco Tax and Trade Bureau (TTB) in seeking and monitoring recalls of such beverages. Comments on the draft guidance are due by March 20, 2018. The draft guidance, “Public Warning and Notification of Recalls...

Continue Reading

The Intersection of Spirits and Marijuana

In the past three years, TTB has approved an increasing number of certificate of label approvals (“COLA”) for hemp-flavored vodka, from Mill Six’s hemp, white tea and ginger flavored vodka to Olde Imperial Mystic’s hemp infused vodka. Distillers have designed labels with green smoke-like images and psychedelic sixties-style lettering to hint at their cultural connection to marijuana. As more states have legalized recreational cannabis, distillers have been thinking more ambitiously about combining their distilling business with one or more aspects of the emerging marijuana business. Read the full article. Originally published in Artisan Spirit: Winter 2017.

Continue Reading

TTB Issues Guidance on Application of Consignment Sales Regulations to Freshness Dating and Returns from Retailers

On September 29, 2017, the federal Alcohol and Tobacco Tax and Trade Bureau (TTB) issued Ruling 2017-2, which updates and supersedes older agency guidance on allowable returns of beer and malt beverage products that contain "pull dates" or other indicators of product freshness. The Federal Alcohol Administration (FAA) Act includes a general prohibition on "consignment sales," 27 USC 205(d). Congress believed that all transactions should be "bona fide" sales. Id. The intent was to prevent a wide range of unscrupulous practices that might occur if manufacturers and wholesalers furnishing alcohol beverages to retailers on consignment or with the right of return. The FAA Act prohibition on consignment sales does not apply to "transactions involving solely the bona fide return of merchandise for ordinary and usual commercial reasons arising after the merchandise has been sold." Id. TTB regulations provide an extensive list of reasons that a manufacturer or...

Continue Reading

Category Management Practices

Today’s off-premises retail landscape is dominated by large chains that rely on practices generally known as category management to maximize the profitability of their stores. Some of the activities falling under the category management umbrella require close interaction between the retailer and the producers, importers, or distributors supplying them product. As a result of this interaction, the federal Alcohol & Tobacco Tax & Trade Bureau (TTB) last year issued a ruling indicating that industry members’ participation in category management activities could result in a violation of the tied-house provision of the Federal Alcohol Administration (FAA) Act and the TTB’s corresponding tied-house regulations. Continue Reading Originally published in The New Brewer, September/October 2017.

Continue Reading

The Ban on Consignment Sales

Most brewers are at least somewhat familiar with federal and state laws regulating the interrelationships between members of the different industry tiers. The most well-known are the “tied house” laws, which prohibit or severely restrict brewers or beer wholesalers from owning retail establishments (and vice versa), and substantially limit the ability of brewers or beer wholesalers to provide money, free goods, or other “things of value” to retailers. Until recently, the laws prohibiting consignment sales in the alcohol beverage industry received little attention. But in the past 18 months, the settlement of two federal investigations involving the beer industry’s biggest players has focused new attention on the subject. This article will explain consignment sale laws in an effort to prevent brewers from inadvertently violating them. Read the full article. Originally published in The New Brewer, May/June 2017.

Continue Reading

Avoiding Misleading Labeling

Current conventional wisdom in the craft beer business holds that being local helps sell more beer. This has led many brewers to emphasize their local roots on their labels and in their marketing efforts. In some ways, the trend has a “back to the future” feel, as labels and marketing materials once again feature place names that often became the brand names for many of the first generation of craft brewers in the 1980s. But the emphasis on place can come with a price: the prospect of legal hurdles, including lawsuits, over allegations that a brand name, label, or advertisement misrepresents the beer’s place of production. Legally this subject usually goes by the name “geographic misdescription,” itself a subset of false advertising law. How can brewers minimize their chances of becoming the target of a lawsuit or government investigation alleging that a beer’s labeling or marketing deceived consumers? Read the full article, originally published in the...

Continue Reading

Labeling and Advertising Gluten-Free Beer

In the past decade, millions of Americans have converted to gluten-free diets. Originally a practice dictated solely by the medical needs of those who suffer from celiac disease, gluten-free has entered the mainstream. This article will explore the evolving and somewhat uncertain status of labeling and advertising beer as “gluten-free.” Read the full article, originally published in the July/August 2015 issue of The New Brewer.

Continue Reading

STAY CONNECTED

TOPICS

ARCHIVES