Important New US TTB Rule Changes (Notice 176)

The US TTB (Alcohol and Tobacco Tax and Trade Bureau) is the
federal agent responsible for regulating alcoholic drinks, including distilled
spirits, wine, beer. Among their many roles is regulating how these drinks are
labeled. Every distilled spirit legally sold in the U.S. (imported or not) must
get TTB approval for their label.

The regulations on allowed wording on labels is incredibly
voluminous, complex, and arcane.

Recently, the TTB requested public comments on some proposed
changes (Notice 176) regarding labeling requirements and other issues. After many
months and extension of the comment period, the TTB received a huge number of
public comments.

Today (April 1st, 2020), the TTB issued a partial
set of decisions, and stated there were more to come.

The document explaining the new/revised regulations is extremely
lengthy and wide-ranging. In what follows, I’ve excerpted some particularly
interesting commentary/decisions:

  • Revised Standard of Identity for Vodka
  • New Agave Spirit category
  • Definition of Oak Barrel
  • Age Statements (First casking only)
  • Multiple Distillation Claims
  • Age Statements (Cognac and Brandy)

The full document can be found here


TTB received twelve comments in response to the proposed
changes to the standard of identity for vodka. 
TTB did not receive any comments relating to the proposal to incorporate
several past rulings related to treatment of vodka with sugar, citric acid, and
charcoal.   TTB requested comments on whether the
requirement that vodka be without distinctive character, aroma, taste, or color
should be retained and, if this requirement is no longer appropriate, what the
standards should be for distinguishing vodka from other neutral spirits.

TTB Response 

Based on its review of the comments, TTB agrees that the
requirement that vodka be without distinctive character, aroma, taste, or color
no longer reflects consumer expectations and should be eliminated.  Vodka will continue to be distinguished by
its specific production standards: vodka may not be labeled as aged, and unlike
other neutral spirits, it may contain limited amounts of sugar and citric
acid. 

Accordingly, TTB is amending the existing regulations at §
5.22(a)(1) to remove the requirement that vodka be without distinctive
character, aroma, taste, or color, and to incorporate in the regulations the
standards set forth in the rulings discussed above, obviating the need for
those rulings which will be canceled. 
TTB will also make a conforming change to existing § 5.23(a)(3)(iii), which
discusses the addition of harmless coloring, flavoring, or blending materials
to neutral spirits, to reflect the allowed additions to vodka in amended §
5.22(a)(1)


The TTB regulations currently in § 5.22(g) provide for a
standard for Tequila, and both Tequila and Mezcal are recognized as distinctive
products of Mexico that must be manufactured in Mexico in accordance with the
laws and regulations of Mexico governing their manufacture.  Currently, spirits that are distilled from
agave that are not Tequila or Mezcal are subject to formula requirements. 

In Notice No. 176, TTB proposed to create within the
standards of identity a class called “Agave Spirits” and two types within that
class, “Tequila” and “Mezcal” (see proposed § 5.148), replacing the existing
Class 7, Tequila.  The proposed standard
would include spirits distilled from a fermented mash, of which at least 51 percent
is derived from plant species in the genus Agave and up to 49 percent is
derived from sugar.  Agave spirits must
be distilled at less than 95 percent alcohol by volume and bottled at or above
40 percent alcohol by volume.  Tequila
and Mezcal would be types within the Agave Spirits class, and the standards of
identity for those products would not be changed.

TTB Response 

TTB believes that the creation of the “Agave Spirits” class
will provide more information to consumers and will allow industry members
greater flexibility in labeling products that are distilled from agave.  Accordingly, TTB is amending the regulations
in current § 5.22(g) to incorporate the proposed standard. 

Industry members who have approved labels for “spirits distilled from agave” may choose to change their labels to designate their products as “agave spirits,” but will not be required to do so.  New applicants will continue to have the option of designating their products as “spirits distilled from agave” if they meet the requirements for use of this statement of composition.  As a result of this change, products labeled as “agave spirits” are not subject to a requirement to submit a formula for approval, which reduces the burden on distillers and importers


In Notice No. 176, TTB proposed to incorporate into its
regulations in part 5 a definition of an “oak barrel” as a “cylindrical oak
drum of approximately 50 gallons capacity used to age bulk spirits,” and
specifically sought comments “on whether smaller barrels or non-cylindrical
shaped barrels should be acceptable for storing distilled spirits where the
standard of identity requires storage in oak barrels.” 

TTB received almost 700 comments in opposition to the
proposed definition, including comments from individuals, distillers, trade
associations, and a United States Senator. 
These comments generally opposed the proposed size restriction, and many
also opposed the proposed restriction on shape

TTB Response 

After careful review of the comments received on this issue, TTB has determined that it will not move forward with the proposal to define an “oak barrel” as a “cylindrical oak drum of approximately 50 gallons used to age bulk spirits” or otherwise define the term in the regulations.  After analysis of the comments, TTB has concluded that current industry practice and consumer expectations for aging whisky (and other spirits aged in oak barrels) do not support limiting the size and shape of the oak barrel in the manner proposed in Notice No. 176.  Under the standard of identity for whisky in the TTB regulations at 27 CFR 5.22(b), among other things, a product labeled as whisky “possesses the taste, aroma, and characteristics generally attributed to whisky,” and is “stored in oak containers.”  TTB’s intent was to define oak containers within objective parameters that would be consistent with a product possessing the taste, aroma, and characteristics generally attributed to whisky, not to unnecessarily limit innovation.


In Notice No. 176, TTB proposed to incorporate its current
policy that only the time in a first oak barrel counts towards the “age” of a
distilled spirit.  That is, if spirits
are aged in more than one oak barrel (for example, if a whisky is aged 2 years
in a new charred oak barrel and then placed into a second new charred oak
barrel for an additional 6 months), only the time spent in the first barrel is counted
in the ‘‘age” statement on the label. 
(See proposed § 5.74(a)(3).)

TTB also received 17 comments supportive of the provision in
proposed § 5.74 to eliminate the prohibition on age statements on many classes
of distilled spirits, including gin, liqueurs, cordials, cocktails, highballs,
bitters, flavored brandy, flavored gin, flavored rum, flavored vodka, flavored
whisky, and specialties.  Some of the
comments specifically noted that they are supportive of expanding the
permissibility of an age statement to gin. 
Three commenters stated that age statements should be permitted on all
distilled spirits, including vodka.

TTB Response 

After reviewing the comments, TTB agrees that all the time spent in all oak containers should count towards the age statement.  TTB notes that where a standard of identity requires aging in a particular kind of barrel, such as straight whisky, which requires aging two years in a new charred oak container, that aging must take place in that specified container type before being transferred to another vessel.  TTB is amending existing § 5.40(a)(1) regarding statements of age for whisky that does not contain neutral spirits to provide that multiple barrels may be used and to provide that the label may optionally include information about the types of oak containers used.  This does not affect current requirements to disclose aging in reused cooperage under 27 CFR 5.40(a)(4).


Proposed § 5.89 would have defined a distillation as a
single run through a pot still or one run through a single distillation column
of a column (reflux) still.  The proposal
also would have maintained the current rule that only additional distillations
beyond those required to meet the product’s production standards may be counted
as additional distillations.

TTB received nine comments in support of this
definition.  Commenters included
distillers and industry groups.  For
example, a distiller stated that “consumers would reasonably expect that a
distillation means a single pass through an alembic or column still and not,
for instance, a count of plates in a column.”…

TTB Response 

After review and consideration of the comments, TTB has
determined that allowing distillers to count all distillations, including those
required to meet a specific standard of identity when making labeling claims,
provides the consumer with truthful and adequate information.  TTB is liberalizing the provision found in current
§ 5.42(b)(6) accordingly. 

TTB is also incorporating the proposed definition of a
distillation (for purposes of multiple distillation claims) into existing §
5.42, as well as the clarification that distillations may be understated but
not overstated.  Multiple distillation
claims will remain optional, not mandatory. 
TTB is making conforming changes to the advertising regulations in § 5.65(a)(9).


TTB is finalizing the proposed reorganization of the
paragraph relating to brandy, Cognac, and rum to make the related provisions
easier to read.  In response to the
comment from Spirits Canada, TTB is also removing references to the Immature
Spirits Act for Canadian whisky, and also for Scotch and Irish whiskies.  The current reference to compliance with the
laws of the applicable foreign countries would cover any aging requirements of
those foreign governments, and there is no need to specify the particular laws
of those countries, which are subject to change.

New wording for Certificate of age and origin

§ 5.52 Certificates of age and origin. 

(a) Scotch, Irish, and Canadian whiskies.  (1) Scotch, Irish, and Canadian whiskies,
imported in containers, are not eligible for release from customs custody for
consumption, and no person may remove such whiskies from customs custody for
consumption, unless that person has obtained and is in possession of an invoice
accompanied by a certificate of origin issued by an  official duly authorized by the appropriate
foreign government, certifying: 

(i) That the particular distilled spirits are Scotch, Irish,
or Canadian whisky, as the case may be; and 

(ii) That the distilled spirits have been manufactured in
compliance with the laws of the respective foreign governments regulating the
manufacture of whisky for home consumption. 

(2) In addition, an official duly authorized by the
appropriate foreign government must certify to the age of the youngest
distilled spirits in the container. The age certified shall be the period
during which, after distillation and before bottling, the distilled spirits
have been stored in oak containers. 

(b) Brandy and Cognac.  Brandy (other than fruit brandies of a type
not customarily stored in oak containers) or Cognac, imported in bottles, is
not eligible for release from customs custody for consumption, and no person
may remove such brandy or Cognac from customs custody for consumption, unless the
person so removing the brandy or Cognac possesses a certificate issued by an
official duly authorized by the appropriate foreign country certifying that the
age of the youngest brandy or Cognac in the bottle is not less than two years,
or if age is stated on the label that none of the distilled spirits are of an
age less than that stated.  The age
certified shall be the period during which, after distillation and before
bottling, the distilled spirits have been stored in oak containers.  If the label of any fruit brandy, not stored
in oak containers, bears any statement of storage in another type of container,
the brandy is not eligible for release from customs custody for consumption,
and no person may remove such brandy from customs custody for consumption,
unless the person so removing the brandy possesses a certificate issued by an
official duly authorized by the appropriate foreign government certifying to
such storage.  Cognac, imported in
bottles, is not eligible for release from customs custody for consumption, and
no person may remove such Cognac from customs custody for consumption, unless
the person so removing the Cognac possesses a certificate issued by an official
duly authorized by the French Government, certifying that the product is grape
brandy distilled in the Cognac region of France and entitled to be designated
as “Cognac” by the laws and regulations of the French Government. 

(e) Rum.  Rum imported in bottles that contain any statement of age is not eligible to be released from customs custody for consumption, and no person may remove such rum from customs custody for consumption, unless the person so removing the rum possesses a certificate issued by an official duly authorized by the appropriate foreign country, certifying to the age of the youngest rum in the bottle.  The age certified shall be the period during which, after distillation and before bottling, the distilled spirits have been stored in oak containers.


The above is just my take on particularly noteworthy changes.
I may return and add some additional commentary but want to get this out
quickly.

Also, the selection of passages to include is my judgment
call. If you want more detail or further explanation, I refer you to the
original document.

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