July 4, 2022

Volume XII, Number 185

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TTB Publishes Phase 2 of Labeling and Advertising Modernization Rule

On February 9, 2022, the Alcohol and Tobacco Tax and Trade Bureau (TTB) published a final rule that implements Phase 2 of its rulemaking modernizing certain labeling and advertising regulations for malt beverages and distilled spirits. This follows Phase 1, implemented on April 2, 2020, which undertook multiple liberalizing measures, including increasing the tolerance applicable to the alcohol content statements of distilled spirits labels, removing the prohibition against age statements on certain classes and types of distilled spirits, and removing outdated prohibitions on the term “strong.”

Phase 2 is focused on improving the clarity and usability of the regulations regarding labeling and advertising of malt beverages and distilled spirits products. Note that these changes do not require industry members to make changes to labels or advertisements but will allow industry members greater flexibility in labeling and advertising their products moving forward. This final rule is effective March 11, 2022. The below provides a selection of the key changes implemented as part of Phase 2 rulemaking:

  • “Brand label” to “single field of vision.” TTB will no longer require mandatory labeling information appear on the so-called “brand label.” Previously, labeling mandatories had to appear on the “brand label,” defined as the “principal display panel that is most likely to be displayed, presented, shown or examined under normal retail display conditions.” Under the revisions of Phase 2, TTB will allow mandatory information to appear anywhere on the label so long as it appears within the same field of vision—meaning a single side of the container (which for a cylindrical container is 40% of the circumference)—where all the pieces of information can be viewed simultaneously without the need to turn the container.

  • Wholesaler, retailer or consumer information on malt beverage labels. TTB will allow the addition of a label identifying the wholesaler, retailer or consumer to malt beverages, so long as the label does not reference the characteristics of the product, does not violate the labeling regulations and does not obscure any existing labels on the product.

  • “Disparaging” statement prohibitions revised. TTB will prohibit only false or misleading statements that explicitly or implicitly disparage a competitor’s product. TTB does not prohibit statements of opinion or non-misleading comparisons between products.

  • Revised guidance on use of flags and certain US symbols. TTB has removed the blanket ban on the use of flags and other symbols of the United States and Armed Forces. The regulations now reinforce TTB’s existing policy of prohibiting the use of these symbols only when they create a misleading impression that there was an endorsement by, or affiliation with, the governmental entity represented.

  • Adding a “distilled spirits specialty products” class. TTB is adding a “distilled spirits specialty product” class designation for distilled spirits that do not meet one of the other standards of identity. Distilled spirits specialty products must be designated in accordance with trade and consumer understanding, or, if no understanding exists, with distinctive or fanciful name (which may be the name of a cocktail) appearing in the same field of vision as a statement of composition.

This is not an all-encompassing list of the modernizing changes to regulations of distilled spirits and malt beverage labeling and advertising in this final rule. TTB is also in the process of revising the Beverage Alcohol Manual to align with its labeling modernizations efforts and updating rulemaking for the labeling of wine advertising.

© 2022 McDermott Will & EmeryNational Law Review, Volume XII, Number 53
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About this Author

Nichole D. Shustack Alcohol Industry Attorney McDermott Will & Emery Washington, DC
Counsel

Nichole D. Shustack* focuses her practice on alcohol trade practice, regulatory, commercial agreements and distribution matters. She represents companies in the alcohol beverage industry, including brewers, distillers and wineries and has in-depth knowledge of the legal, regulatory and distribution issues facing the industry.

*Not admitted to practice in the District of Columbia; admitted only in New Jersey and Pennsylvania. Supervised by principals of the Firm who are members of the District of Columbia Bar.

202-756-8023
Staff Attorney

Isabelle R. Cunningham* focuses her practice on regulatory matters, particularly in the area of alcohol and distribution.

Isabelle concentrates her work on franchise law related to new product launches, transfers of brand rights, supplier rights in a distributor transaction and has experience drafting, reviewing and negotiating contracts. Additionally, Isabelle advises in-house teams on general contract risks and risk mitigation as well as providing legal support on trade practice issues and wholesaler relations. As an in-house attorney, Isabelle advised senior leadership on...

617-535-4415
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