TTB Takes Big Steps to Remove Burdens on Product Approval

The Tax and Trade Bureau (TTB) has been on a roll recently to reduce regulatory burdens for beverage alcohol suppliers.

On September 23, they announced changes to COLAs Online, including a redesign to the appellation and formula sections, and the removal of the alcohol content, net contents, wine vintage, and fax number fields. These fixes are designed to minimize the number of COLA applications being returned for correction—which could reduce approval times by weeks in some cases.

And then, on September 29, the TTB issued two Rulings2016-2 and 2016-3 changing the rules for formula approval requirements. Under these Rulings, certain wine and distilled spirits products will no longer need to get their formulas approved, and instead can rely on a “general-use” formula based on the federal definitions of these products.

To summarize these Rulings:

2016-2 affects “non-standard” wine products, reducing the cases where they need formula approval (“standard” wines already don’t need formula approval). By “non-standard” wine, the TTB is referring to three types of wines: 1) “special natural wine,” where natural flavorings from spices, herbs, and fruit juices are added to wine; 2) “agricultural wine,” where wine is made from non-fruit juice stock; and 3) “other than standard wines,” essentially everything else that doesn’t fit into another type of wine.

The TTB determined that the definitions for these wine types, as provided in 27 CFR part 24, are narrow enough that, if followed by the winery, formula approval can be avoided. Meeting these standards includes following certain “good commercial practices,” in particular: 1) not adding any wine spirits; 2) not adding any coloring or flavoring (except for hops in honey wine); and 3) not blending wines produced from different agricultural products (that is, don’t mix apple wine with carrot wine).

Specific standards for non-standard wines can be found at 27 CFR 24.202 for dried fruit wine, CFR 24.203 for honey wine, and CF 24.204 for other agricultural product wines (such as carrot, onion, pepper, pumpkin, or tomato wine).

2016-3 similarly reduces the formula approval requirements for vodka, rum, whisky, and brandy products. As the Ruling states, if these products are produced following the standards of identity in 27 CFR 5.22, they can again avoid formula approvals.

The Ruling did outline specific details on acceptable additives outside of the standards of identity, specifically that:

  • Vodka can have a small amount of sugar or citric acid added.
  • Rum can have a small amount of sugar, molasses, or caramel added for flavoring or coloring.
  • Whisky also can have a small amount of sugar, molasses, or caramel added for flavoring or coloring—except that “straight” and bourbon whiskies cannot have any additives.
  • Brandy can have a small amount of sugar, caramel, fruit juice, or wine fermented from the same fruit as the brandy added.

More discussion on Ruling 2016-3 can also be found on the Bevlog.

These Rulings only affect the formula approval process, and the TTB notes in them that other regulatory requirements, including label approval and general product safety standards, must still be followed. Further, in both Rulings, the TTB reserves its right to conduct a formula review on a case-by-case basis, if it’s deemed necessary.

If these standards are met, then the producer can rely on the Ruling to meet its formula approval requirements. If you are currently awaiting review or approval of your formula for one of these products, you should withdraw them right away. The TTB will no longer approve these formula submissions, as, under these Rulings, the general-use formula will now apply.

In all, these changes reflect a welcome trend over the last few years to reduce regulatory burdens on getting alcohol products to market, and follow similar reductions in formula requirements for beer a few years ago. There has been a spike in the number of products being submitted for approval, what with the growth of the craft industry, which has overwhelmed the TTB’s resources. By confirming that many products can fit into a standard definition, and thus avoid formula approvals, these Rulings should serve to reduce the current strain on the TTB, while also improving the burden faced by beverage alcohol suppliers.

If you have questions, concerns, or other comments on these Rulings, consider posting them on our BevAlc Community page.

Paul Leone