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
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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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TTB Publishes NPRMs to Repeal Standards of Fill for Wine and Distilled Spirits

On Monday, July 1, 2019, the Alcohol and Tobacco Tax and Trade Bureau (TTB) published two eagerly anticipated notices of proposed rulemaking (NPRMs) to largely repeal the standards of fill for wine and distilled spirits containers. The highlights: In the preamble to both NPRMs, TTB advances a number of significant policy beliefs on the topic of standards of fill, including: Standards of fill are no longer needed to help protect the revenue and enforce the excise tax. Standards of fill are not critical to protecting consumers, because consumers can rely on mandatory net content statements on labels. The lack of any standards of fill for malt beverages has not created any revenue or consumer deception problems. For spirits, TTB proposes to eliminate all standards except for a minimum of 50 milliliters and a maximum of 3.785 liters (one gallon). The maximum reflects the Federal Alcohol Administration Act’s statutory maximum for distilled spirit containers. For...

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TTB Spring 2019 Updates to Semi-Annual Regulatory Agenda

The spring edition of the federal government’s semi-annual Unified Agenda of Federal Regulatory and Deregulatory Actions (Regulatory Agenda) has been published. Like other federal agencies, the Alcohol and Tobacco Tax and Trade Bureau (TTB) uses the Regulatory Agenda to report on its current rulemaking projects. The Regulatory Agenda provides glimpses into TTB’s policy focus and aspirations. But, readers should recognize that TTB rulemaking moves very slowly, and the Agency often does not meet the aspirational dates published in the Regulatory Agenda.  The updated Regulatory Agenda lists the following projects of interest: Wines, Distilled Spirits and Malt Beverages In terms of importance, the list must begin with TTB Notice 176—the Notice of Proposed Rulemaking (NPRM) to “modernize” the labeling and advertising regulations applicable to all three commodities. Comments on Notice 176 are due on or before June 26, 2019. Three separate entries continue to...

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TTB Updates to the Semi-Annual Regulatory Agenda

Last week in its regular newsletter, Alcohol and Tobacco Tax and Trade Bureau (TTB) announced updates to the Fall edition of the semi-annual Unified Agenda of Federal Regulatory and Deregulatory Actions (Regulatory Agenda). Like other federal agencies, TTB uses the Regulatory Agenda to report on its current rulemaking projects. In the updated agenda, a few new items have been added, and many expected publication dates of Notices of Proposed Rulemaking (NPRMs), Advanced Notices of Proposed Rulemaking (ANPRMs) and Final Rules have changed. As always, readers should recognize that TTB rulemaking moves very slowly, and the Agency often does not meet the aspirational dates published in the Regulatory Agenda. The updated Regulatory Agenda lists the following projects of interest: Wines, Distilled Spirits and Malt Beverages The reform of TTB’s labeling and advertising regulations for all three commodities, on the Regulatory Agenda for years, now indicates that TTB...

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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.

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Proposed Regulation in Texas on Name and Address Labeling for Malt Beverages

Last week, the Texas Alcoholic Beverage Commission (“TABC”) circulated a draft amendment of Texas’ name and address labeling regulation for “malt beverages” (beer).  A copy of the proposed amended regulation (with a redline of the changes) is can be found here. Consistent with TTB regulations on name and address labeling for malt beverages, the current regulation requires only the name and address of the importer, with foreign producer information optional.  The revised regulation, in contrast, requires: On labels of containers of imported malt beverages, the name and principal place of business of the foreign manufacturer, bottler or shipper must be stated The proposed regulation accordingly marks a significant Texas departure from federal labeling rules.  First, it requires foreign producer information on the label.  Second, it requires the label to show the name and principal place of business address of the foreign producer.  This could require...

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