Saturday, July 19, 2008

When Beer is not Beer

The Alcohol and Tobacco Tax and Trade Bureau (“TTB”) exercises jurisdiction over labeling of distilled spirits, wines, and malt beverages subject to the Federal Alcohol Administration Act (“FAA Act”), but FDA regulates the labeling of other alcohol beverages, such as wine coolers with less than seven percent alcohol by volume.

TTB issued a ruling clarifying that certain brewed products—which meet the definition of a “beer” under the Internal Revenue Code (IRC)—do not meet the definition of “malt beverages” under the FAA Act. The IRC broadly defines “beer” as “beer, ale, porter, stout, and other similar fermented beverages (including saké or similar products) of any name or description containing
one-half of 1 percent or more of alcohol by volume, brewed or produced from malt, wholly or in part, or from any substitute therefor.” On the other hand, the FAA Act defines “malt beverage” as a beverage made by the alcoholic fermentation of malted barley with hops, with or without other cereals and other carbohydrates.

Beers that do not conform to the definition of a “malt beverage” in the FAA Act are outside the scope of the FAA Act and, therefore, are not subject to the labeling, advertising, and other provisions of the TTB regulations under the FAA Act. This means that brewers and importers of such products are not required to obtain a certificate of label approval for these beers. However, such beverages are subject to FDA’s ingredient and other labeling requirements.

Sake and similar beverages—when they contain at least seven percent alcohol by volume—fall within the definition of “wine” under the FAA Act. Thus, those beverages continue to be subject to the requirements of the FAA Act.
Hat Tip to Ricardo Carvajal for his blog post on this topic Beer With Nutrition Labeling Becomes a Reality.

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