On Wednesday, June 22, 2016, TTB issued a proposed rule in the Federal Register in regard to proposed changes to wine labeling for certificate of  label exemptions. Docket No. TTB–2016–0005; Notice No. 160.  The proposed rule states that any standard grape wine containing 7% or  more alcohol by volume that is covered by a certificate of exemption from label approval may not be  labeled with a grape variety designation, a type designation of varietal significance, a vintage date, or an appellation of origin unless the wine is labeled in compliance with the respective TTB wine labeling regulations found in 27 CFR Part 4 (i.e., for the corresponding label information to which the proposed rule pertains).  The proposed rule calls to amend 27 CFR Part 24 in regard to labeling and recordkeeping as well as calls to include a reference to the new Part 24 in Part 4. Interested parties may submit comments on or before Augsut 22, 2016 (comments can be submitted online through the Federal Register).

Per the proposed rule, several industry members as well as delegates in various states contacted TTB in regard to the accuracy of label information on certain wine labels that are covered by the certificate of exemption from label approval. The proposed rule specifically mentions that the wine labels contain American Viticultural Area (AVA) names but do not appear to meet the Part 4 labeling requirements in regard to using an AVA name.

In the context of AVAs, 27 CFR 4.25(e)(3)(iv) requires that a wine label meet the following in order for the wine to be labeled with an AVA:

1. The AVA name must have been approved under 27 CFR part 9;
2. not less than 85 percent of the wine must be derived from grapes grown within the boundaries of the viticultural area; and
3. the wine must have been fully finished within the State, or one of the States, within which the labeled viticultural area is located (except for cellar treatments permitted by 27 CFR 4.22(c) or blending which does not result in an alteration of class and type under 27 CFR 4.22(b)).

A wine using the AVA name Napa Valley must be fully finished in California—in addition to complying with other requirements—in order to legally qualify to use the Napa Valley AVA on the label. Specifically, the proposed rule speaks to wine labeled with the AVA Napa Valley but also includes language that the wine is produced outside of California. (I.e., “Produced and Bottled by: ABC Winery, Anytown, Illinois” would not meet TTB wine labeling regulations in 27 CFR Part 4 in regard to AVAs because the wine was not fully finished in California and the label would thus not qualify for a COLA. These types of wines can currently apply for a Certificate of Label Exemption through the TTB if the will only be sold in the state of the permittee who submits the label application and will not be sold in interstate commerce.)

Letters sent to TTB in regard to these labels indicate that the Exemptions do not comply with AVA provisions in 27 CFR Part 4 and has the potential to mislead consumers when they are labeled with AVAs but not fully finished within the AVA. Industry members have also asked TTB to clarify whether or not 27 CFR Part 24 requires industry members to maintain records verifying label information for wines covered by the Exemption. (TTB takes the position that there are no provisions in Part 24 that require wine proprietors to comply with Part 4 wine labeling regulations when a wine label is covered by an exemption.)

Therefore, TTB proposes to amend  § 24.257 to require that a standard grape wine that contains 7% or more alcohol by volume and is covered by a certificate of exemption from label approval may not be labeled with a varietal (grape type) designation, a type designation of varietal significance, a vintage date, or an appellation of origin unless the wine complies with the relevant part 4 provisions for that label information. Wines that are not standard grape wine containing 7% or more alcohol by volume and that are covered by an exemption are exempt from Part 4 labeling regulations. TTB also proposes to make changes to recordkeeping requirements in Part 24.

How can Hops & Vine Consultants help your food and beverage company?

Hops & Vine Consultants can help your food or beverage company with labeling and advertising compliance issues before bringing your product to market, often saving companies from the costs associated with re-labeling or warning letters (for FDA-regulated food and beverages), among other expenses. We regularly correspond with federal agencies, such as FDA and TTB, and are well acquainted with label, labeling, and advertising issues that impact the alcohol beverage and food industries. For more information about our consultancy, our services, and how we can assist your company, please contact us at [email protected].