The Federal Alcohol Administration Act (FAA Act), 27 U.S.C. §205(e), authorizes the Secretary of the Treasury to prescribe regulations for the labeling of alcoholic beverages and requires that the TTB administer those regulations in order to prohibit the use of misleading statements on labels, to assure the use of adequate information as to the identity and quality of beverage products, and to protect against consumer deception.¹ Parts 4, 5 and 7 of Title 27 of the Code of Federal Regulations (CFR) regulate the labeling and advertising of wine, distilled spirits, and beer, respectively. Certificate of Label Approvals (COLAs) are required to ensure that distilleries, wineries, breweries and importers comply with these federal regulations when marketing and designing labels for their alcoholic beverages.
Alcoholic Beverages Imported Into The Country
With respect to foreign beer, wine and spirits, the TTB requires that COLAs be obtained for each unique brand/label of alcoholic beverages to be imported into the country. Section 4.40(a) of Title 27 of the Code of Federal Regulations, which regulates the importation of wine only, provides that “[n]o imported beverage wine in containers shall be released from U.S. Customs custody for consumption unless there is deposited with the appropriate Customs officer at the port of entry the original or a photocopy of an approved certificate of label approval.” If the brand or lot of imported wine bears labels not in conformity with the approved COLA, then the brand or lot must be relabeled or it will not be released from the supervision and direction of Customs officers. 27 CFR §4.40(b)-(c). Similar rules apply to the importation of beer and distilled spirits.
Alcoholic Beverages Manufactured Domestically And Sold Interstate
With respect to alcoholic beverages manufactured in the United States, the TTB also requires that COLAs be obtained for each unique brand/label of alcoholic beverages to be sold in interstate commerce or, in other words, over state lines. Section 4.50(a)-(b) of Title 27 of the Code of Federal Regulations, which regulates wine only, provides that “[n]o person shall bottle or pack wine … or remove such wine from the plant where bottled or packed” without a certificate of label approval issued by the appropriate TTB officer, unless the bottler or packer of wine shows “that the wine to be bottled or packed is not to be sold, offered for sale, or shipped or delivered for shipment, or otherwise introduced in interstate or foreign commerce.” Similar rules apply to the removal and sale of beer and distilled spirits.
Alcoholic Beverage Wholesalers
The TTB does not require wholesalers to retain copies of COLAs for the products stored on their premises. Only when a wholesaler also serves as an importer, and purchases alcoholic beverages directly from a foreign supplier, will the wholesaler need to hold COLAs for the imported products and maintain copies of those COLAs on its premises. In this case, the wholesaler/importer will have applied for and obtained the COLAs, so its name will appear on the COLAs.
Section 4.30 of Title 27 of the Code of Federal Regulations provides that “[n]o person engaged in business as a producer, rectifier, blender, importer or wholesaler … shall sell or ship or deliver for sale or shipment, or otherwise introduce in interstate or foreign commerce, or receive therein … any wine in containers unless such wine is packaged, and such packages are marked, branded and labeled in conformity” with federal regulations. While this regulation applies to wholesalers as well as manufacturers and importers, the TTB has stated that it “would not cite a wholesaler who is not the importer of the product, for a label violation that was incurred as a result of a product purchased and shipped domestically from a producer or importer without an approved COLA.”² Absent any evidence of collusion between the wholesaler and importer, the TTB would deem the importer the responsible party for any violation of the FAA Act.
Applying For Certificate of Label Approval
Prior to applying for, or obtaining COLAs, the TTB must have issued a basic permit to a distilled spirits plant or importer applicant, a brewer’s notice to a brewery applicant, or approval to operate a bonded wine cellar or tax-paid wine bottling house to a winery applicant. Applicants filing for label approval for the first time will need to provide a copy of their approved TTB permit along with their COLA application. The application can be submitted for free on TTB’s COLAs Online website and requires samples of the labels for which the applicant is seeking approval. The TTB website estimates the processing time for COLA applications to be 35 days for distilled spirits labels, 25 days for wine labels and 17 days for beer labels.
Maintaining A Label In Compliance With Federal Regulations
The TTB requires that certain mandatory information appear on your beverage’s label. Every beverage must have a brand label, which clearly identifies the brand name, the class and type of alcohol, and the alcoholic content of the beverage. 27 CFR §5.32. In addition, every beverage label must include the following information, either on the brand label or on an additional back label: the net contents of the beverage, the existence of any coloring or flavoring used in the beverage, the health warning statement and, if imported, the beverage’s country of origin. 27 CFR §5.32. Further, either the brand or back label must conspicuously state the name and address of the bottler or importer of the beverage. This way, wholesalers are able to identify that party and gain access to that party’s COLAs. It is important to note that upon securing TTB approval, certain changes can be made to labels without notice to the TTB. These acceptable changes are listed in TTB Form 5100.31, Section V. Any other changes made to labels, which are not included on that form, however, will require the submission of a new COLA application.
For an example of a wine label that meets federal compliance, see the TBB’s brochure “What You Should Know About Grape Wine Labels,” here.
CONTRIBUTED BY COURTNEY N. McGEE
© Law Offices of John P. Connell, P.C., 2014.
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¹ “Streamlining the Certificate of Label Approval Review Process,” TTB Industry Circular No. 2011-04, April 29, 2011, https://ttb.gov/industry_circulars/archives/2011/11-04.html.
² “TTB Issues Guidance for Retention of COLAs by Alcohol Wholesalers,” January 5, 2006, https://www.ttb.gov/alfd/ttb_issues_guidance.shtml.