[Federal Register Volume 70, Number 82 (Friday, April 29, 2005)]
[Proposed Rules]
[Pages 22274-22283]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 05-8574]


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DEPARTMENT OF THE TREASURY

Alcohol and Tobacco Tax and Trade Bureau

27 CFR Parts 4, 5, and 7

[Notice No. 41]
RIN 1513-AB07


Labeling and Advertising of Wines, Distilled Spirits and Malt 
Beverages; Request for Public Comment

AGENCY: Alcohol and Tobacco Tax and Trade Bureau, Treasury.

ACTION: Advance notice of proposed rulemaking.

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SUMMARY: The Alcohol and Tobacco Tax and Trade Bureau (TTB) requests 
public

[[Page 22275]]

comment on possible changes to the labeling and advertising 
requirements of alcohol beverage products regulated by TTB. The agency 
has long required certain labeling, such as brand name, class and type, 
alcohol content (in the case of wines containing more than 14 percent 
alcohol by volume and distilled spirits), net contents, and in recent 
years has published updated standards for the use of carbohydrate and 
calorie claims. Because of petitions to mandate additional information, 
including ingredient, allergen, alcohol, calorie, and carbohydrate 
content and requests by some to use labels with at least some of that 
additional information on a voluntary basis under existing rules, TTB 
believes it is now appropriate to consider revising the alcohol 
beverage labeling and advertising regulations, and seeks public comment 
on several issues to assist the agency in formulating specific 
regulatory proposals.

DATES: We must receive written comments on or before June 28, 2005.

ADDRESSES: You may send comments to any one of the following addresses:
     Chief, Regulations and Procedures Division, Alcohol and 
Tobacco Tax and Trade Bureau, Attn: Notice No. 41, P.O. Box 14412, 
Washington, DC 20044-4412.
     202-927-8525 (facsimile).
     nprm@ttb.gov (e-mail).
     http://www.ttb.gov/alcohol/rules/index.htm (an online 
comment form is posted with this notice on our Web site).
     http://www.regulations.gov (Federal e-rulemaking portal; 
follow instructions for submitting comments).
    You may view copies of this advance notice, the petitions, and any 
comments we receive on this notice by appointment at the TTB Library, 
1310 G Street, NW., Washington, DC 20220. To make an appointment, call 
202-927-2400. You may also access copies of the advance notice and 
comments online at http://www.ttb.gov/alcohol/rules/index.htm.
    See Section VI of this notice for specific instructions and 
requirements for submitting comments and for information on how to 
request a public hearing.

FOR FURTHER INFORMATION CONTACT: Lisa M. Gesser, Regulations and 
Procedures Division, Alcohol and Tobacco Tax and Trade Bureau, P.O. Box 
128, Morganza, MD 20660; (301) 290-1460.

SUPPLEMENTARY INFORMATION:

I. Introduction

    TTB is soliciting public comment on a wide range of alcohol 
beverage labeling and advertising issues to help the agency determine 
what regulatory changes in alcohol beverage labeling and advertising 
requirements, if any, TTB should propose in future rulemakings. Because 
of increased interest in including nutrition and ingredient information 
on alcohol beverage labels, TTB believes it is now appropriate to 
consider amending the alcohol beverage labeling and advertising 
regulations to provide more specific information to the consumer.
    Accordingly, TTB is soliciting public comments on appropriate ways 
to use alcohol beverage labels to inform the public about the identity 
and quality of the products. In addition to specific questions posed 
later in this advance notice, TTB invites responses to the following 
general questions:
    1. Should TTB seek to require mandatory nutrition labeling (that 
is, calories, fat, carbohydrates, and protein) for alcohol beverage 
products, or should nutrition information be permitted only on a 
voluntary basis?
    2. Should TTB seek to require mandatory ingredient labeling (that 
is, a list of all ingredients used to make the product, including 
processing aids) for alcohol beverage products, or should ingredient 
labeling be permitted only on a voluntary basis?
    3. What areas need further research and evaluation before TTB can 
reach decisions on whether and how changes can be made?
    4. Are there modifications TTB can make to current requirements 
regarding alcohol beverage labels to help consumers better understand 
and benefit from the information on the label?
    5. Should TTB harmonize its alcohol beverage labeling regulatory 
requirements with those of other major producing nations, such as the 
Member States of the European Union, Australia, and Canada, and with 
regulatory schemes of other Federal agencies, such as the Food and Drug 
Administration (FDA)? If so, how would that be best done?
    6. Are consumers likely to derive benefits from more specific 
information on alcohol beverage labels, and, if so, are those benefits 
sufficient to warrant the economic costs associated with such 
revisions?
    7. What should be the agency's priorities in deciding which changes 
to make on alcohol beverage labels, that is, which changes are most 
important and which are least important?
    8. Should any new labeling requirements apply equally to 
advertisements?

II. TTB's Authority To Prescribe Alcohol Beverage Labeling and 
Advertising Regulations

Federal Alcohol Administration Act

    Sections 105(e) and 105(f) of the Federal Alcohol Administration 
Act (FAA Act), codified in the United States Code at 27 U.S.C. 205(e) 
and 205(f), set forth standards for regulation of the labeling and 
advertising of distilled spirits, wine (at least 7 percent alcohol by 
volume), and malt beverages, generally referred to as alcohol beverage 
products throughout this document. These sections give the Secretary of 
the Treasury the authority to issue regulations to prevent deception of 
the consumer, to provide the consumer with ``adequate information'' as 
to the identity and quality of the product, and to prohibit false or 
misleading statements. Additionally, these FAA Act provisions give the 
Secretary the authority to prohibit, irrespective of falsity, 
statements relating to age, manufacturing processes, analyses, 
guarantees, and scientific or irrelevant matters which are likely to 
mislead the consumer. In the case of malt beverages, the labeling and 
advertising provisions of the FAA Act apply only if the laws of the 
State into which the malt beverages are to be shipped impose similar 
requirements. TTB is responsible for the administration of the FAA Act 
and the regulations promulgated under it.

TTB's Implementing Regulations

    Subject to certain jurisdictional limitations, the FAA Act requires 
that alcohol beverage labels and advertisements be in conformity with 
the regulations prescribed under it. The basic FAA Act implementing 
regulations, which appear as parts 4, 5, and 7 in title 27 of the Code 
of Federal Regulations (27 CFR parts 4, 5, and 7), specifically state 
what mandatory information must appear, and what is prohibited from 
appearing, on labels and in advertisements. Most of the mandatory 
labeling information requirements for alcohol beverages flow directly 
from the purpose stated in the statute, that is, to ``provide the 
consumer with adequate information as to the identity and quality of 
the products, the alcoholic content thereof * * * the net contents of 
the package, and the manufacturer or bottler or importer of the 
product.'' See 27 U.S.C. 205(e). The current specific requirements may 
be summarized as follows: brand name, product identity, the name and 
address of the bottler, packer, or importer, the net contents and 
alcohol content (see below) of the

[[Page 22276]]

product, and the presence of sulfites, FD&C Yellow No. 5, and in the 
case of malt beverages, aspartame. (The health warning statement is 
required pursuant to a different provision of the FAA Act, the 
Alcoholic Beverage Labeling Act of 1988, codified at 27 U.S.C. 213-219 
and 219a.)
    In the case of alcohol content, it should be noted that alcohol 
content statements are not mandatory for all alcohol beverages falling 
within TTB's jurisdiction. The FAA Act provides that in the case of 
wines, statements of alcohol content shall be required only for wines 
containing more than 14 percent of alcohol by volume. See 27 U.S.C. 
205(e). The implementing regulations provide that wines having an 
alcohol content of 14 percent alcohol by volume or less may bear on 
their labels either an alcohol content statement or the type 
designation ``table'' wine or ``light'' wine. See 27 CFR 4.36(a).
    In the case of malt beverages, the FAA Act as enacted specifically 
prohibited the placement of alcohol content statements on malt beverage 
labels, unless required by State law. This provision of the law was 
found to be unconstitutional by the Supreme Court in Rubin v. Coors 
Brewing Co., 514 U.S. 476 (1995). Accordingly, the regulations at 27 
CFR 7.71 now allow the placement of optional alcohol content statements 
on malt beverage labels, unless prohibited by State law. The 
regulations do not currently require an alcohol content statement on 
malt beverage labels; however, effective January 3, 2006, certain 
flavored malt beverages will be required to bear an alcohol content 
statement on the brand label (see TTB T.D.-21, 70 FR 194).
    The implementing regulations establish the ``identity'' of alcohol 
beverage products by defining certain classes and types for wines and 
distilled spirits. With regard to malt beverages, statements of class 
and type must conform to the designation of the product as known to the 
trade. The class and type regulations were promulgated shortly after 
the enactment of the FAA Act in 1935, and with relatively few 
exceptions, these standards have remained unchanged since then.
    The regulations also prohibit, irrespective of falsity, statements 
that directly, or by ambiguity, omission or inference, or by the 
addition of irrelevant, scientific or technical matter, tend to create 
a misleading impression. Additionally, the regulations prohibit the use 
of any health-related statements in the labeling and advertising of 
alcohol beverages, if such statements are untrue in any particular or 
tend to create a misleading impression. TTB evaluates such statements 
on a case-by-case basis, and may require a disclaimer or some other 
qualifying statement to dispel any misleading impression created by the 
health-related statement. Statements concerning calorie, carbohydrate, 
protein, and fat content are not considered health-related statements 
within the meaning of the TTB regulations.
    In order to prevent the sale or shipment of improperly labeled 
alcohol beverages in interstate or foreign commerce, the FAA Act 
requires industry members to obtain a certificate of label approval 
prior to the bottling of, or removal from customs custody in bottles 
of, distilled spirits, wines, or malt beverages. The regulations do not 
require a certificate of label approval for products exported in bond. 
If an industry member can establish that a domestic wine or distilled 
spirits product is not to be sold, offered for sale, shipped or 
delivered for shipment, or otherwise introduced, in interstate or 
foreign commerce, a certificate of exemption is issued.
    Industry members are not required to submit advertisements to TTB 
for review prior to use. However, TTB encourages industry members to 
voluntarily submit advertising materials for pre-clearance by the 
Bureau. In addition, TTB monitors advertisements that are already in 
the marketplace as part of its comprehensive compliance program to 
protect the consumer and encourage industry compliance (see Industry 
Circular 2004-6, dated November 19, 2004).
    TTB and its predecessor agencies have traditionally utilized 
rulings for expressing interpretations of these regulations. The 
questions now before the Bureau require public rulemaking to resolve 
because some of the changes on which we are soliciting comments go 
beyond the mere interpretation of existing regulations.

III. Alcohol Beverage Ingredient Labeling History

    In the case of ingredient disclosure, the Department of the 
Treasury has considered this issue on a number of occasions dating back 
to 1972 when the Center for Science in the Public Interest (CSPI), a 
consumer health organization, petitioned TTB's predecessor, the Bureau 
of Alcohol, Tobacco and Firearms (ATF), to require ingredient labeling. 
As a result of that petition, ATF published in the Federal Register 
Docket Nos. 74-17720, 75-3719, and 75-3720 (39 FR 27812, 40 FR 6354, 
and 40 FR 6349) proposing amendments to 27 CFR parts 4, 5, and 7 
regarding ingredient labeling of alcohol beverages. The agency held 
three public hearings over the course of six days and received in 
excess of 1,000 written comments on the matter. After considering all 
representations, on November 11, 1975, ATF published Notice No. 285 in 
the Federal Register (40 FR 52613) withdrawing the ingredient labeling 
proposals, stating five reasons: (1) The cost of ingredient labeling to 
the industry, and ultimately to the consumer, would be excessive in 
relation to the benefit received; (2) the content of alcohol beverages 
is extensively regulated; (3) the uniqueness of manufacturing processes 
of alcohol beverages is such that it makes labeling of their 
ingredients of little value, and in certain cases, even misleading 
because ingredients that are used to make the product are not 
necessarily present in the finished product; (4) ingredient labeling 
requirements would interfere with international trade negotiations; and 
(5) ingredient labeling is supported by only a small segment of the 
public.
    Subsequently, on February 2, 1979, ATF published Notice No. 834 in 
the Federal Register (44 FR 6740) proposing requirements for ingredient 
labeling of alcohol beverages. During the comment period, ATF received 
over 1,800 comments from consumers, special interest groups, industry 
members, doctors, government agencies and members of Congress. 
Thereafter, on June 13, 1980, ATF published in the Federal Register (45 
FR 40538) a final rule, T.D. ATF-66, which required ingredient 
disclosure on all alcohol beverages sold in the United States. The 
final rule included an exception to the requirement. Under the 
exception, an ingredient list would not have to appear on the label 
when the producer, bottler, or importer:
    (1) Elects to make an ingredient list available upon request;
    (2) Places a statement on the front label or on a separate strip 
label notifying the consumer of the availability of an ingredient list 
and provides the name and, somewhere on the label, a full mailing 
address in the United States where such an ingredient list can be 
obtained upon request; and
    (3) Does not place a statement on the label that could be 
misconstrued to be an ingredient list (for example, a partial 
ingredient list).
    ATF stated that this exception would give the industry maximum 
flexibility to provide ingredient information at a minimum cost. At the 
same time, it would provide consumers who have the need or desire to 
avoid various ingredients a means to do so, thus

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meeting the objective of Notice No. 834. Also, because of specific 
health concerns, T.D. ATF-66 mandated the label disclosure of FD&C 
Yellow No. 5 whenever it is used in a product. The new labeling 
regulations were to take effect on January 1, 1983.
    On February 17, 1981, President Reagan issued Executive Order 
12291, which was published in the Federal Register on February 19, 1981 
(46 FR 13193). Executive Order 12291 required each Federal agency to 
establish a management system that would improve the quality and lessen 
the burden of Federal regulation. Executive Order 12291 required 
agencies, within their legal authority, to establish regulatory goals, 
to set regulatory priorities, to review existing regulations, and to 
implement new regulations with the aim of maximizing the benefits to 
society while at the same time imposing the least burden to achieve 
those benefits.
    As a result of ATF's review of existing regulations called for by 
Executive Order 12291, ATF concluded that T.D. ATF-66 was not in accord 
with the President's mandate. Therefore, on May 4, 1981, ATF published 
Notice No. 372 in the Federal Register (46 FR 24962) proposing to 
rescind the ingredient labeling amendments before they became 
mandatory.
    ATF received a total of 8,068 comments containing 23,352 individual 
signatures. Of the comments received, 4,909 comments representing 
17,138 individuals supported the proposal to rescind the ingredient 
labeling regulations and 3,159 comments, representing 6,214 
individuals, opposed the rescission. In T.D. ATF-94, published in the 
Federal Register (46 FR 55093) on November 6, 1981, ATF rescinded the 
ingredient labeling regulations, concluding that the costs were 
disproportionate to the benefits that would be gained from the 
additional label information. ATF further concluded that ingredient 
labeling would not result in an appreciable benefit to consumers when 
compared to the existing label information requirements and standards 
of identity. ATF noted in this regard that under the FAA Act 
regulations, a standard of identity generally identifies the basic 
agricultural ingredient and sets forth standards for production and 
alcohol content.
    On February 8, 1983, CSPI and two individual consumers filed an 
action in the United States District Court for the District of Columbia 
contesting the rescission. See Center for Science in the Public 
Interest v. Department of the Treasury, 573 F. Supp. 1168 (D.D.C. 
1983), appeal dismissed, Center for Science in the Public Interest v. 
Regan, 727 F.2d 1161 (D.C. Cir. 1984). As a result of the suit, the 
district court held invalid and set aside Treasury's decision to 
rescind T.D. ATF-66 for failure to comply with the Administrative 
Procedure Act and for violating its statutory mandate under the FAA 
Act. In essence, the court found that ATF failed to adequately explain 
the reversal of the prior rule and placed undue weight on cost factors. 
The court then ordered ATF to announce a new date, not later than one 
year from the date of the order, to put the regulations of T.D. ATF-66 
into effect. Accordingly, in a notice published in the Federal Register 
(48 FR 10309) on March 11, 1983, ATF reinstated the ingredient labeling 
regulations as originally promulgated in T.D. ATF-66 and mandated 
compliance by February 8, 1984.
    Subsequently, ATF decided to reexamine the ingredient disclosure 
issue. On June 17, 1983, ATF published Notice No. 469 in the Federal 
Register (48 FR 27782), proposing to reconsider prior decisions 
concerning ingredient disclosure on labels of alcohol beverages and 
again proposing to rescind TD ATF-66.
    During the comment period, a total of 1,840 comments containing 
1,897 signatures were received. Of the total number of comments 
received, 1,538 supported the proposal to rescind the ingredient 
labeling regulations. Of these comments, 413 were from American alcohol 
beverage industry members or related industry members, 64 were from 
foreign industry members, four were from foreign governments, one was 
from a Federal agency, and 1,056 were from individuals. A total of 290 
comments, representing 303 individuals, were received opposing the 
rescission of the ingredient labeling regulations.
    After considering all of the comments, ATF published T.D. ATF-150 
in the Federal Register (48 FR 45549) on October 6, 1983. This final 
rule rescinded the T.D. ATF-66 ingredient disclosure regulations 
published in 1980 but required the labeling of FD&C Yellow No. 5 by 
October 6, 1984. ATF determined that there was no clear evidence that 
any other ingredient posed a special health problem. ATF also concluded 
that there was no overwhelming desire on the part of consumers for 
comprehensive ingredient labeling and questioned its usefulness even if 
it were required. ATF further explained that substantial transformation 
during the production process means that there is only a strained 
relationship between the initial ingredients and the contents of the 
final product.
    CSPI and others brought suit against the Department of the Treasury 
in the United States District Court for the District of Columbia, again 
challenging the rescission of T.D. ATF-66. See Center for Science in 
the Public Interest v. Department of the Treasury, Civil Action No. 84-
2079, 1985 U.S. Dist. LEXIS 14329 (D.D.C. October 30, 1985). The 
plaintiffs challenged T.D. ATF-150, contending primarily that ATF's 
rescission violated the FAA Act and was arbitrary and capricious and an 
abuse of discretion in violation of the Administrative Procedure Act. 
The district court granted summary judgment to the plaintiffs and 
ordered the final rule contained in T.D. ATF-150 vacated.
    The Government appealed the district court's decision and on August 
5, 1986, the United States Court of Appeals for the D.C. Circuit 
reversed the decision, affirming ATF's rescission of T.D. ATF-66. See 
Center for Science in the Public Interest v. Department of the 
Treasury, 797 F.2d 995 (D.C. Cir. 1986). The court concluded that ATF's 
rationale for rescinding the labeling rule, that the ingredient 
disclosure rule would not achieve its intended purpose of providing 
consumers with information upon which to make an informed choice, was 
reasonably sufficient to support its decision. In particular, the court 
upheld ATF's conclusion that the record failed to establish that 
ingredient disclosure would provide useful information as to the actual 
contents of the alcohol beverage. The court noted that there was ``more 
than enough evidence in the record to support the agency's conclusion 
that, in many cases, both basic ingredients and additives will be 
substantially transformed by distillation and fermentation.'' See 797 
F.2d at 1000. Thus, the ingredient labeling rules were rescinded in 
accordance with T.D. ATF-150.
    The ingredient labeling issue was reopened on December 16, 2003, 
when CSPI, together with the National Consumers League and other 
organizations and individuals, forwarded a petition to TTB requesting 
changes to the labeling regulations in 27 CFR parts 4, 5 and 7. This 
petition is discussed in further detail in Section V of this notice.

IV. Alcohol Beverage Nutrition Labeling History

    On August 10, 1993, in response to a petition submitted by a law 
firm on behalf of an unnamed client, ATF published an advance notice of 
proposed rulemaking (ANPRM) in the

[[Page 22278]]

Federal Register soliciting comments from the public on whether the 
regulations should be amended to require nutrition labeling for alcohol 
beverages. See Notice No. 776, 58 FR 42517. The petitioner's stated 
purpose was to bring the nutrition labeling requirements for alcohol 
beverages in line with the requirements for food and beverage products 
regulated by FDA.
    In response to the advance notice, ATF received 55 comments. Of 
these comments, 41 commenters opposed nutrition labeling (including the 
Wine Institute, the Beer Institute, CSPI, and the Delegation of the 
Commission of the European Communities). Seven commenters supported 
mandatory nutrition labeling (including Seagram's, Brown-Forman, the 
American Association of Diabetes Educators, and the petitioner). Two 
commenters supported voluntary nutrition labeling. One commenter 
supported mandatory nutrition labeling only for ``light,'' reduced 
alcohol, and non-alcoholic beverages (for example, near beer).
    Based on the comments received in response to the ANPRM, ATF 
concluded that there was neither significant consumer interest in 
nutrition information for alcohol beverages nor any convincing evidence 
that nutrition labeling would provide substantial useful information to 
consumers. Consequently, ATF denied the petition and terminated the 
rulemaking on this issue.
    Presently, TTB requires a Statement of Average Analysis, in effect 
a nutrition statement, on all alcohol beverage product labels that bear 
calorie or carbohydrate claims. In addition, if an advertisement bears 
a carbohydrate or calorie claim (other then the term ``lite'' or 
``light'' in the brand name) the advertisement must also bear a 
Statement of Average Analysis. These requirements are explained in more 
detail in Section V of this notice.

V. Major Issues Under Consideration

    The specific issues and questions on which TTB is seeking public 
comment are discussed in the remainder of this notice.

A. Calorie and Carbohydrate Claims

    In 1976, ATF issued a ruling that allowed the use of caloric and 
carbohydrate references as part of a statement of average analysis on 
malt beverage labels. See ATF Rul. 76-1, 1976 ATF C.B. 82. In 
subsequent rulings, ATF modified certain requirements with respect to 
malt beverage labeling statements, and announced its intention to 
engage in rulemaking on the use of the terms ``light'' and ``lite'' on 
malt beverage labels. See ATF Rul. 79-17, ATF Q.B. 1979-3, 3, and ATF 
Rul. 80-3, A.T.F.Q.B. 1980-2, 13.
    In the 1980s, ATF published in the Federal Register three notices 
of proposed rulemaking, soliciting comments on substantive standards 
for use of the terms ``light'' and ``lite'' on alcohol beverage labels. 
In Notice No. 362 (45 FR 83530, December 19, 1980), ATF proposed a rule 
that would have required, among other things, that whenever references 
to calorie or carbohydrate content were made on wine, distilled 
spirits, or malt beverage labels, a statement of average analysis must 
also appear on the label. However, no statement of average analysis 
would be required if the word ``lite'' were used in accordance with 
current regulations (such as part of the designation ``light wine''), 
or if it was used to describe a characteristic of the product, such as 
``light taste'' or ``light flavor.''
    After the issuance of Notice No. 362, CSPI petitioned the Bureau 
for an amendment that would require mandatory caloric content labeling 
for all alcohol beverages and establish a maximum calorie limit for 
alcohol beverages designated as ``light,'' ``lite,'' or low in 
calories. In Notice No. 600 (51 FR 28836, August 12, 1986), ATF 
announced its conclusion that mandatory caloric labeling for all 
alcohol beverages was unnecessary, and also rejected CSPI's suggestion 
to establish upper limits on low-calorie alcohol beverages. It again 
solicited comments on requiring a statement of average analysis on 
labels where the terms ``light'' or ``lite'' were used to denote low 
calories, and proposed that the calorie statement must appear on the 
brand label, while the remainder of the statement of average analysis 
could appear on any label.
    In Notice No. 659 (53 FR 22678, June 17, 1988), ATF proposed a 
substantive standard for the use of ``light'' or ``lite'' as part of 
the brand or product name of a wine, distilled spirits, or malt 
beverage product. ATF solicited comments on two alternatives. The first 
would restrict the terms to products that contain at least 20 percent 
fewer calories than the producer's regular product, or if the producer 
did not make a regular product, 20 percent fewer calories than a 
competitor's same or similar regular product. The second alternative 
would require a statement on the label of the number of calories in the 
light product and in a ``regular'' product made by the producer or (if 
the producer does not make a ``regular'' product), a competitor.
    After reviewing the comments on these various proposals, the Bureau 
decided not to issue a regulation governing the use of the terms 
``light'' and ``lite'' on alcohol beverage labels.
    Within the past few years, the industry expressed greater interest 
in the use of carbohydrate claims on alcohol beverage labels. 
Furthermore, TTB received inquiries from producers of wines and 
distilled spirits who wanted to know whether ATF Rul. 80-3 applied to 
their products in addition to malt beverages. Accordingly, on April 7, 
2004, TTB issued Ruling 2004-1 to provide guidance to industry about 
the use of calorie and carbohydrate claims in the advertising and 
labeling of alcohol beverages.
    The ruling allows for the use of truthful and specific statements 
about carbohydrate and calorie content while prohibiting statements 
that are false or misleading or that imply that consumption of low-
carbohydrate alcohol beverages may play a healthy role in a weight 
maintenance or weight reduction plan. TTB believes that such claims are 
misleading in that they provide incomplete information about the health 
effects of alcohol consumption.
    The ruling held that calorie and carbohydrate representations in 
the labeling and advertising of alcohol beverages are considered to be 
misleading unless they provide with such representations a ``statement 
of average analysis.'' A statement of average analysis must list the 
serving size as well as the quantity of each of the following contained 
in a single serving size:
     Calories;
     Carbohydrates (in grams);
     Protein (in grams); and
     Fat (in grams).
    As part of the ruling, TTB issued interim standards for the use of 
terms such as ``low carbohydrate,'' ``reduced carbohydrate,'' and 
``lower carbohydrate.'' The ruling did not, however, provide specific 
standards for the use of terms such as ``low calorie,'' ``reduced 
calorie,'' or ``lower calorie.'' TTB Ruling 2004-1 allows for the use 
of:
     ``Low carbohydrate'' (or ``low carb'') on labels and in 
advertisements where: (1) a statement of average analysis is present; 
and (2) the standard serving size for the product (12 fl. oz. for malt 
beverages, 5 fl. oz. for wines, and 1.5 fl. oz. for distilled spirits) 
contains no more than 7 grams of carbohydrates.
     ``Reduced carbohydrate'' and ``lower carbohydrate'' on a 
label or in an advertisement that bears a statement of average 
analysis, as long as the term is

[[Page 22279]]

used as part of a statement that specifies the number of carbohydrates 
per serving size and compares that number with the number of 
carbohydrates in another specified product made by that producer; for 
example, ``Reduced carbohydrate--10 grams of carbohydrates per 12 fl. 
oz. serving--40 percent fewer than in our [Brand name] malt beverage'' 
or ``Lower carbohydrate--15 grams of carbohydrates per 5 fl. oz.--less 
than half the carbohydrates in our [brand name] wine.''
    The ruling also held that, pending rulemaking on this issue, the 
terms ``effective carbohydrates'' and ``net carbohydrates'' are 
considered misleading and that their use on labels and in 
advertisements is prohibited.
    TTB recognizes that the best way to develop standards for the use 
of terms such as ``low carbohydrate'' and ``low calorie'' is through 
the public notice and comment rulemaking process. Moreover, because TTB 
and FDA both have jurisdiction over alcohol beverages under their 
respective statutory mandates, TTB would prefer to have the benefit of 
FDA's decision-making process before setting a final ``low 
carbohydrate'' standard for alcohol beverage products that do not fall 
within FDA's exclusive jurisdiction. FDA has received several 
rulemaking petitions to set a standard for the use of the term ``low 
carbohydrate'' on food and beverage products they regulate, but has not 
yet set a standard.
    We would also like to solicit comments on whether we should set 
additional substantive standards for the use of calorie claims in the 
labeling and advertising of alcohol beverages. FDA has set standards 
for the use of calorie claims (including ``calorie-free'', ``low-
calorie,'' ``reduced calorie,'' and ``light'' or ``lite'') on food and 
beverage products they regulate. See 21 CFR 101.56 and 101.60(b).
    To assist TTB in deciding whether to formulate specific regulatory 
proposals, we are soliciting comments from consumers, consumer and 
other interest groups, trade associations, and industry members on the 
following specific questions. We also are interested in receiving any 
additional information that a comment submitter believes is relevant to 
the issue of carbohydrate and calorie claims:
    1. Should TTB promulgate regulations that define ``low 
carbohydrate'' for alcohol beverage products as containing no more than 
7 grams of carbohydrates per standard serving size, as specified in 
Ruling 2004-1? Why or why not?
    2. Should TTB continue to prohibit use of the terms ``effective 
carbohydrates'' and ``net carbohydrates'' on labels and in 
advertisements? Why or why not?
    3. Should TTB wait for the conclusion of FDA's regulatory decision-
making process for the use of the term ``low carbohydrate'' for food 
and beverage products FDA regulates before issuing regulations on a low 
carbohydrate standard for alcohol beverage products?
    4. How should TTB define the terms ``low calorie'' and ``reduced 
calorie'' for alcohol beverage products? Should we propose standards 
for these claims consistent with FDA's standards? Should we develop our 
own alternate set of standards and, if so, what should they be?
    5. Should TTB establish regulations for the use of the terms 
``light'' and ``lite'' on alcohol beverage labels? If so, should we 
propose standards for these claims consistent with FDA's standards? How 
would these standards apply to products for which the term ``light'' is 
part of the standard of identity (such as ``light whisky'' or ``light 
wine'')?

B. Petition for ``Alcohol Facts'' Label and Ingredient Labeling

    On December 16, 2003, CSPI, together with the National Consumers 
League, 67 other organizations, and eight individuals, forwarded a 
petition to TTB requesting changes to the labeling regulations in 27 
CFR parts 4, 5, and 7. After receipt of the CSPI petition, additional 
individuals wrote to TTB requesting the addition of their names to the 
petition. This petition requests issuance of a final rule amending 
parts 4, 5, and 7 to require that labels of all alcohol beverages 
regulated by TTB include the following information in a standardized 
format:
     The beverage's alcohol content expressed as a percentage 
of volume;
     The serving size;
     The amount of alcohol in fluid ounces per serving;
     The number of calories per serving;
     The ingredients (including additives) from which the 
beverage is made;
     The number of standard drinks per container; and
     The U.S. Dietary Guidelines advice on moderate drinking 
for men and women.
    The petitioners propose that all alcohol beverage containers bear 
this information on an ``Alcohol Facts'' label and provide the 
following as an example for a 750 milliliter bottle of wine:
[GRAPHIC] [TIFF OMITTED] TP29AP05.090

    The petition asks that the words ``Alcohol Facts'' be immediately 
followed by a declaration of the number of standard drinks (servings) 
per container. The petitioners ask that, consistent with the U.S. 
Dietary Guidelines, a serving should be defined as 12 ounces of beer, 5 
ounces of wine, and 1.5 ounces of 80-proof distilled spirits. The 
petitioners further recommend that for alcohol beverages not fitting 
into one of those standard categories, a serving should be defined as 
an amount of fluid containing approximately 0.5 ounces of ethyl 
alcohol. The petitioners recommend that a consistent graphic symbol 
(for example, a beer mug, wine glass, or shot glass) should appear 
first, followed by the number of drinks in the container (for example, 
``Contains 5 Servings'').

[[Page 22280]]

The petition proposes requiring this information on labels of all malt 
beverages, wines, and distilled spirits products regulated by TTB that 
contain more than \1/2\ of one percent alcohol by volume. The graphics 
and type size for the ``Alcohol Facts'' label should follow the 
Nutrition Labeling Education Act (NLEA) standards as set out in 21 CFR 
101.9(d), the petitioners suggest. Further, the petitioners state that 
ingredient information should appear on the label immediately below, 
but segregated from, the ``Alcohol Facts'' box.
    To assist TTB in deciding whether to propose specific regulatory 
changes in response to the above petition, we are requesting 
information from consumers, consumer and other interest groups, trade 
associations, and industry members on the desirability and feasibility 
of alcohol facts, including ingredient, labeling for alcohol beverages. 
Although TTB is soliciting comments on the following specific 
questions, the Bureau is also requesting any other relevant information 
on the subject.
    1. Should alcohol beverage containers bear an Alcohol Facts label 
similar to the one presented in the CSPI petition? Why or why not?
    2. Should such a label include an ingredient list as suggested in 
the CSPI petition?
    3. Should the label be voluntary or mandatory?
    4. If mandatory, should there be any exemptions from the alcohol 
facts and ingredient labels, such as for small businesses or for small 
containers?
    5. Should current alcohol content statement labeling requirements 
be expanded to cover wines with an alcohol content of 14 percent 
alcohol by volume or less and malt beverages?
    6. What would be the costs associated with mandatory alcohol facts 
and ingredient labeling to the industry and, ultimately, the consumer?
    7. How might consumers benefit from such a label?
    8. As a consumer, how much extra would you be willing to pay for 
alcohol facts and ingredient labeling information?
    9. Are there alternatives to mandatory alcohol facts and ingredient 
labeling for alcohol beverages? For example, if a label lists a Web 
site or telephone number where a consumer could obtain such information 
about the product, would this be sufficient?

C. Allergen Labeling

    On April 10, 2004, Christine A. Rogers, PhD., a senior research 
scientist in the Exposure, Epidemiology and Risk Program at the Harvard 
School of Public Health, petitioned TTB to change the regulations to 
require labeling on alcohol products to list all ingredients and 
substances used in processing. Dr. Rogers, who is allergic to egg 
protein, is particularly concerned with alcohol beverage products that 
contain potentially allergenic substances (wheat, milk, and egg or nut 
proteins).
    On August 2, 2004, the President signed the Food Allergen Labeling 
and Consumer Protection Act of 2004 (FALCP Act, Title II of Public Law 
108-282). The FALCP Act amends section 403 of the Federal Food, Drug, 
and Cosmetic Act (21 U.S.C. 343) to require food and beverage products 
that contain an ingredient that bears or contains a major food allergen 
to include this information on its label. The FALCP Act's definition of 
``major food allergens'' includes milk, eggs, fish, Crustacean 
shellfish, tree nuts, peanuts, wheat, and soybeans (as well as most 
proteins derived from these foods). The FALCP Act requires that 
products containing these ingredients be labeled using plain, common 
language; for example, instead of merely listing ``semolina,'' the 
label must list ``wheat'', instead of merely listing ``sodium casein,'' 
the label must list ``milk.'' The FALCP Act allows for several options 
for the labeling of allergens in a food or beverage product:
     The common name of the allergen can be labeled within 
parentheses in the ingredient list, for example: ``Ingredients: Water, 
wheat, whey (milk), albumen (eggs), and peanuts''. The label can list 
the allergen in summary form after or adjacent to an ingredient list, 
for example: ``Ingredients: Water, sugar, whey, and albumen. Allergens: 
Milk and egg''.
    The House of Representatives Committee Report accompanying the 
legislation indicates that TTB is to work with FDA to promulgate 
appropriate allergen labeling regulations for alcohol beverages (H.R. 
Rep. No. 608, 108th Cong., 2d Sess., at 3 (2004)).
    In response to this Congressional instruction and the petition 
received from Dr. Rogers, TTB has been meeting with FDA and is 
considering rulemaking to require allergen labeling for alcohol 
beverages. To assist TTB in determining appropriate allergen labeling 
requirements for alcohol beverages, we are requesting information from 
consumers, consumer and other interest groups, trade associations, and 
industry. Although TTB is soliciting comments on the following specific 
questions, the Bureau is also requesting any other relevant information 
on the subject.
    1. Should TTB require allergen labeling on alcohol beverage 
containers to be part of or adjacent to a larger list of all 
ingredients found in the product, similar to the requirements of the 
Food Allergen Labeling and Consumer Protection Act of 2004? Why or why 
not?
    2. If the product name appearing on the label of an alcohol 
beverage container indicates that an allergen is present in the 
product, is it helpful to the consumer to have the allergen labeled 
again in a standardized allergen statement elsewhere on the container? 
To illustrate: If a product is called ``Wheat Beer,'' should it also 
have a label elsewhere on the container that reads: ``Allergens: 
wheat''? Why or why not?
    3. TTB's current regulations allow certain allergens such as milk, 
albumen (egg), isinglass (a protein from fish bladders), and soy flour 
to be used as fining, processing, and filtering agents in the 
production of alcohol beverages. While fining, processing, and 
filtering agents are not primary ingredients in an alcohol beverage 
product, low levels of an agent may remain in the final product after 
production. When an allergen is used as a fining, processing, or 
filtering agent to produce an alcohol beverage, should TTB require that 
the product be labeled ``Processed with [a specific allergen]'' or 
``May contain [a specific allergen]''? Why or why not?
    4. Should allergenic fining, processing, and filtering agents be 
labeled in the exact same fashion as all other allergen ingredients? 
Why or why not?
    5. Testing methods for detecting allergens in food and beverage 
products typically can only detect an allergen if it is present at or 
above a certain minimum value. In light of that fact, would it be 
helpful to consumers for TTB to require an allergenic fining, 
processing, or filtering agent to be labeled regardless of whether a 
detection test shows that the allergen is or is not present in the 
final product? Why or why not?
    6. What is the lowest amount of an offending food allergen (or 
minimum threshold level) in an alcohol beverage product necessary to 
provide a mild, yet perceptible adverse allergic reaction in consumers 
with the most sensitive food allergies?
    7. Is it possible to define a minimum threshold level for each 
major food allergen? If so, what are the minimum threshold levels for 
each major food allergen?
    8. If FDA and/or the scientific community establish conclusively a 
minimum threshold level for a

[[Page 22281]]

particular allergen, should TTB exempt from any allergen labeling 
requirements products containing the allergen proteins, but at a level 
below the established minimum threshold level? Why or why not?
    9. What would be the costs associated with mandatory allergen 
labeling to the industry and, ultimately, the consumer?
    10. How might consumers benefit from allergen labeling?

D. Requests for Voluntary ``Serving Facts'' Labeling

    Following receipt of the petitions discussed above, TTB received 
inquires from industry members who would like to begin voluntarily 
providing on their labels certain facts about a serving of their 
product.
    Because of the immediate interest in labeling products in this 
fashion, and in light of the length of time needed to conclude public 
notice and comment rulemaking procedures, TTB concluded that there was 
a need for interim guidance to the industry on what type of ``serving 
facts'' information we would allow on alcohol beverage labels and in 
advertisements, and in what format TTB would accept this information.
    Accordingly, in July and then again in September of 2004, TTB 
posted on its Web site, http://www.ttb.gov, a summary of specifications 
for a planned ruling concerning the manner in which alcohol beverage 
labels and advertising may permissibly reflect information about a 
single serving in a ``Serving Facts'' panel, consistent with the 
statutory and regulatory standards administered by TTB. The Bureau 
sought input from interested parties, including the alcohol beverage 
industry, consumers, and consumer interest groups, about what 
information should be permitted on such a panel and in what format the 
voluntary ``Serving Facts'' panel should be presented.
    TTB solicited comments on a variety of options. We asked for 
comments on an optional ``Serving Facts'' panel that would include the 
serving size in fluid ounces based on what was previously specified in 
TTB Ruling 2004-1, the amount of servings per container, and for each 
serving the following information:
     Fluid ounces of alcohol (ethyl-alcohol) (to the nearest 
tenth of an ounce);
     Calories;
     Fat (in grams);
     Carbohydrates (in grams); and
     Protein (in grams).
    We also solicited comments on a definition of a ``standard drink'' 
(defined as 0.6 fluid ounces of alcohol) and the number of standard 
drinks in a serving. Finally, we solicited comments on the optional use 
of three icons similar to the ones at the bottom of the label presented 
below:
[GRAPHIC] [TIFF OMITTED] TP29AP05.091

    In the second posting on our Web site, TTB solicited comments on an 
alternative label approach that omitted the icons and standard drink 
references. An example of this approach is as follows:

[[Page 22282]]

[GRAPHIC] [TIFF OMITTED] TP29AP05.092

    As a result of the two white papers, TTB received several comments 
concerning a voluntary serving facts panel. The comments reflected 
strong and varying opinions. A significant proportion of the comment 
submitters felt that the issue should be addressed in public notice and 
comment rulemaking rather than in a TTB ruling. Furthermore, many 
commenters believed that certain elements of the voluntary serving 
facts panel would tend to confuse or mislead consumers about the 
product.
    In response to the issues raised by the commenters, on December 28, 
2004, TTB issued a press release indicating that we would address these 
issues in an advance notice of proposed rulemaking. Pending the 
completion of rulemaking proceedings, TTB does not intend to issue 
certificates of label approval bearing the optional ``Serving Facts'' 
panel. We believe it is important to have the benefit of public 
comments on these issues before making a decision as to whether the new 
elements in the panel might tend to mislead consumers. We will, of 
course, continue to allow the use of statements of average analysis on 
alcohol beverage labels.
    Accordingly, TTB is requesting comments from consumers, consumer 
and other interest groups, trade associations, and industry members on 
the desirability and feasibility of adopting serving facts labeling for 
alcohol beverages. Although TTB is soliciting comments on the following 
specific questions, the Bureau is also requesting any other relevant 
information on the subject.
    1. Should alcohol beverage containers bear a Serving Facts label 
similar to the one presented in this section? Why or why not?
    2. Should such a label include a definition of a ``standard drink'' 
and if so, how should a ``standard drink'' be defined?
    3. Should such a label include graphic icons similar to, but not 
necessarily limited to, the one presented in this section? Why or why 
not?
    4. Should the label be voluntary or mandatory?
    5. If mandatory, should there be any exemptions from the serving 
facts label, such as for small businesses or for small containers?
    6. If not mandatory for all alcohol beverage products, should the 
Serving Facts label be required at least on alcohol beverages that make 
certain calorie or carbohydrate claims?
    7. What would be the costs associated with mandatory serving facts 
labeling to the industry and, ultimately, the consumer?
    8. How might consumers benefit from such a label?
    9. As a consumer, how much extra would you be willing to pay for 
serving facts labeling information?
    10. Are there alternatives to mandatory serving facts labeling for 
alcohol beverages? For example, if a label lists a Web site or 
telephone number where a consumer could obtain such information about 
the product, would this be sufficient?
    11. Should TTB allow a further breakdown of nutrients (for example, 
trans fat, sugars, fiber)?
    12. Does the use of ``standard drink'' and ``serving size'' on the 
same label create confusion? Does any confusion arise if a label 
specifies ounces of alcohol in conjunction with serving size and 
percent alcohol?

E. Composite Label Approach

    The proposed ``Alcohol Facts'' label and the ``Serving Facts'' 
label have the following informational components in common: (1) 
Calorie representation; (2) serving size; (3) number of servings per 
container; and (4) alcohol content expressed in fluid ounces. The 
components that are unique to only one label type are noted below:
     The ``Alcohol Facts'' label also includes the following 
information: (1) Alcohol content expressed as a percentage of alcohol 
by volume; (2) an icon of an alcohol beverage serving container; (3) 
the U.S. Dietary Guidelines advice on moderate drinking; and (4) an 
ingredient list.
     The ``Serving Facts'' label also includes the following 
information: (1) Fat content; (2) carbohydrate content; (3) protein 
content; (4) a definition of a ``standard drink'' as well as the number 
of standard drinks found in a serving of the alcohol beverage; and (5) 
three icons depicting three different alcohol beverage serving 
containers, separated by equal (=) signs and each carrying the legend 
``0.6 oz.''
    TTB is interested in receiving comments on whether a composite 
label, which combines the essential information on the examples 
discussed, would be appropriate to provide the consumer with 
information they want and need to see on alcohol beverage product 
labels. TTB is also seeking comments on whether such a composite label 
should be mandatory or voluntary.

VI. Submitting Comments

    Please submit your comments by the closing date shown above in this 
notice. Your comments must include this notice number and your name and 
mailing address. Your comments must be legible and written in language 
acceptable for public disclosure. We do not acknowledge receipt of 
comments, and we consider all comments as originals. You may submit 
comments in one of five ways:
     Mail: You may send written comments to TTB at the address 
listed in the ADDRESSES section.

[[Page 22283]]

     Facsimile: You may submit comments by facsimile 
transmission to 202-927-8525. Faxed comments must--
    (1) Be on 8.5 by 11-inch paper;
    (2) Contain a legible, written signature; and
    (3) Be no more than five pages long. This limitation assures 
electronic access to our equipment. We will not accept faxed comments 
that exceed five pages.
     E-mail: You may e-mail comments to nprm@ttb.gov. Comments 
transmitted by electronic mail must--
    (1) Contain your e-mail address;
    (2) Reference this notice number on the subject line; and
    (3) Be legible when printed on 8.5 by 11-inch paper.
     Online form: We provide a comment form with the online 
copy of this notice on our Web site at http://www.ttb.gov/alcohol/
rules/index.htm. Select the ``Send comments via e-mail'' link under 
this notice number.
     Federal e-Rulemaking Portal: To submit comments to us via 
the Federal e-rulemaking portal, visit http://www.regulations.gov and 
follow the instructions for submitting comments.
    You may also write to the Administrator before the comment closing 
date to ask for a public hearing. The Administrator reserves the right 
to determine, in light of all circumstances, whether to hold a public 
hearing.

Confidentiality

    All submitted material is part of the public record and subject to 
disclosure. Do not enclose any material in your comments that you 
consider confidential or inappropriate for public disclosure.

Public Disclosure

    You may view copies of this advance notice, the petitions, and any 
comments we receive by appointment at the TTB Library at 1310 G Street, 
NW., Washington, DC 20220. You may also obtain copies at 20 cents per 
8.5 by 11-inch page. Contact our librarian at the above address or 
telephone 202-927-2400 to schedule an appointment or to request copies 
of comments.
    For your convenience, we will post this advance notice and any 
comments we receive on this proposal on the TTB Web site. We may omit 
voluminous attachments or material that we consider unsuitable for 
posting. In all cases, the full comment will be available in the TTB 
Library. To access the online copy of this notice, visit http://
www.ttb.gov/alcohol/rules/index.htm. Select the ``View Comments'' link 
under this notice number to view the posted comments.

VII. Drafting Information

    Lisa M. Gesser and Joanne C. Brady of the Regulations and 
Procedures Division drafted this advance notice.

    Signed: March 16, 2005.
John J. Manfreda,
Administrator.
    Approved: March 31, 2005.
Timothy E. Skud,
Deputy Assistant Secretary (Tax, Trade, and Tariff Policy).
[FR Doc. 05-8574 Filed 4-28-05; 8:45 am]
BILLING CODE 4810-31-P