Judging a Beer By Its Label

This year, when looking to celebrate the U.S. Olympic team or fret over the Presidential election with a Budweiser, you may face a moment of confusion at the store. Instead of a “Budweiser,” you’ll have to pick up a beer labeled “America.” (No doubt the link between Olympics, elections, and patriotic beer is merely coincidental.)

This act of re-branding has incited a flurry of discussion, from the apparent contradictions of a Belgium-based company engaging in American jingoism to the legitimacy of using the good-will in the word “America” to sell your product.

For me, mired in the legal research end of the beverage alcohol industry, the key question is how did Anheuser-Busch get this label approved?

Labeling your beer, as I’m sure we’re all aware, is one of the most important steps in getting your beer sold–right after actually brewing the beer, of course. Your label is the most direct connection you can make with your customer while they may say you can’t judge a beer by its label, we all still inevitably do. A familiar name, an interesting design, a captivating blurb, can make all the difference in whether the customer buys your beer or goes for a different brew.

However, the marketing side of labeling is only half the battle. There is also the whole process of getting your label approved by regulators. Alcohol, after all, is a highly regulated market, and there are dozens of federal and state agencies out there to ensure that your label doesn’t upset the standards for selling beer.

This can be a very time-consuming process, too; the Tax and Trade Bureau (TTB), the federal agency responsible for licensing and approving alcohol sales, says that it typically takes between 20 and 30 days to approve a label. If your label requires revision, there can be months more before your beer can actually be sold. It is vital to be well-aware of when label approval is required, what is required to get your label approved, and why your label would be denied approval.

Hopefully, this article will provide some help for you.

Wherefore Art Thou Labelled?

I recently had the pleasure of attending the 2016 Craft Beer Conference, where I sat in on a seminar on TTB label rules (which, admittedly is a huge inspiration for this piece). One of the attendees asked the panel when beer could be sold in a blank bottle with no label. After a bemused pause, the answer came that that’s really only acceptable when sharing a homebrew with friends in the basement. If you sell your beer nationally, you need a Certificate of Label Approval (COLA) issued by the TTB; and even if you only sell within your home state, there are good odds that labeling rules exist.

These regulations are not arbitrary or designed merely to cause a headache for a small brewery just trying to sell its product. Generally, the rules behind labels are based on principles of marketplace fairness and public safety. They entail things like ensuring that the public is aware of the potential ill-effects of consuming alcohol, and that industry members aren’t disparaging of others’ products or relying on lewd material to sell their beer. The government has a very real interest in the proper sale of alcohol, and approving labels is fundamental to that interest.

A COLA indicates that a beer label has been thoroughly vetted and approved, at least on a federal level. However, because the TTB is a federal agency, a COLA is only required for beer that is sold between states (constitutionally, the federal government can only regulate interstate commerce). That is, only if your beer will cross a state border before being sold to a consumer, is a COLA necessary. However, many states have their own rules for what may or may not be on a label, and will need to review and vet labels on their own. So you may avoid TTB COLA approval by keeping your beer in its home state, but you won’t necessarily avoid labeling rules.

What’s In a Label?

On the federal level, there is a myriad of regulations dictating proper labels and the approval procedure. (Statutes are rules made by Congress, giving broad strokes; whereas regulations are drafted by agencies – with Congressional authority – and generally hammer out the details – but both are enforceable laws.) A quick look at the TTB’s website shows that labeling is no small matter. Indeed, the TTB provides extensive support for labeling approval, from their online COLA application process to their immensely useful Beverage Alcohol Manual (BAM). A review of these resources is vital for anyone already in or looking to enter the beer market.

While it is necessary to review TTB rules, I’ll try to provide some general information here, and point out the key required elements of an approvable label.

  1. Brand Name: Central to your label is the brand. The brand name identifies your beer to the world. According to the rules, it must appear clearly and legibly on the front label of the container so the public can know who’s behind the beer. If a beer doesn’t have a unique brand attached, then the name of the bottler, packer, or importer will work. A point of common confusion, a brand name isn’t the name given to the beer itself, but the product line under which it’s sold. So, despite having a prominent “America” on the label, that beer’s brand name is still listed as “Budweiser.”
  2. Class and Type Designation: You must indicate the character and category of your beer. In the most basic form, this can just be “malt beverage.” But more specific terms like “Ale,” “Lager,” “Stout,” “Pilsner,” or even “Dortmunder” can be used. However, whatever designation you use must agree with the common industry understanding of that term. The BAM has a useful chapter devoted to class and type designations, and when a specific designation should be used.
  3. Name and Address: You must identify who is responsible for the packaging of the beer and where it was packaged. The name on the label must match the name on your Brewer’s Notice (or Basic Permit, if you’re an importer). The address needs to state the city and state where the beer was bottled or packaged, or where the importer’s principal place of business is. If, however, you have multiple facilities, you can instead note the city and state of the principal place of business, which, again, should match what appears on your TTB permit.
  4. Net Contents: The beer container must clearly indicate how much product it holds. Per TTB rules, this statement must be expressed in American measurements, though metric measures can appear alongside. There are various rules for which units have to be used, based on the size of the container. For instance, if it’s less than a pint, it must use fluid ounces or fractions of a pint, but if it’s a pint or more, it must state how many pints (or fractions of a quart). These details are listed in the BAM.
  5. Alcohol Content: Under federal rules, a statement of alcohol content is optional. However, if you do choose to include it, there are only four acceptable formats for the statement. All of them are variations that can only have the exact phrases “Alcohol (ALC)” and “By Volume (VOL)” and use a % sign. They can also be found in the BAM. Notably, there are numerous state rules on including a statement of alcohol content, with some states requiring it and some states prohibiting it. You should be aware of these state rules before beginning distribution there.
  6. Government Warning: By law, all alcoholic beverages sold in the U.S. must have a statement warning of the risks of consuming alcohol. This statement cannot vary from the standard imposed by law, and must use the required format – again, more details can be found in the BAM. Frequently, COLA applications are sent back for correction because a fault in formatting or placement of the Government Warning. Common mistakes include failing to capitalize certain words, bolding words that shouldn’t be bolded, and failing to include parentheses around the numerals. These may seem like niggling concerns, but failing to account for them will require revision.
  7. Various Content Disclosures: Though perhaps not as common, if your beer contains certain elements, you must disclose them. These include FD&C Yellow #5, saccharin, sulfites, and aspartame. More details and formatting instructions are in the BAM.
  8. Country of Origin: If you import beer for sale in the U.S., you must disclose where it was produced. This can be a simple statement, though, again, the BAM has a list of acceptable formats.

This list should only be taken as a simple round-up of the basic requirements for a beer label. It is important to note that all of these statements have very specific rules on what has to be included, what cannot be included, where on the label they must appear, and detailed formatting rules. Listing all of these rules is far beyond the scope of this article, so make sure you thoroughly review the BAM and other TTB resources before submitting.

When Good Labels Go Bad

According to the TTB, a first-time label submission is returned roughly half the time. This leads to extra time fixing and resubmitting the label – which could mean months more before your beer ever enters stores. While knowing the key elements to make sure you include on a label is vital, it is thus also necessary to be aware of the top errors that cause a label to be returned for correction.

Per the TTB, the top six reasons a label requires revisions:

  1. Class and Type Missing: A common error is a failure to indicate the class or type of your beer. This should be a simple error to avoid – merely add a line saying what kind of beer (or even just that it is a malt beverage) to your label. Most of your consumers likely want to know what kind of beer they’re getting, and so does the TTB.
  2. Misleading Comment: This error occurs when a label includes a statement about the beer, which isn’t backed up by other information. An example is if the label describes flavors found in the beer, but the beer wasn’t actually made with those flavoring agents. The TTB will require you to reword the statement to clarify what’s actually in the beer.
  3. Formula Missing: Beers made with certain non-traditional ingredients require a formula approval by the TTB (which is a whole other ball of wax – click here for more information from the TTB). If a label indicates that it contains these non-traditional ingredients, but no formula approval form is included with the application, the TTB will require revision.
  4. Clarification Needed: With this error, the TTB has seen something it finds confusing on the label, and so it seeks an explanation of what you meant so it can properly assess the statement. Admittedly, this is a fairly amorphous, general error, but it basically means you should avoid overtly obscure or confusing phrasing on your labels.
  5. Wrong Brand Name: Your beer must have a brand name on the label, and that brand name must match the brand name listed on your COLA application. If there’s a discrepancy (for instance you put in the bottler’s name on the application), the TTB will send it back for revision.
  6. Alcohol Content Statement Format: Under federal rules, a statement of the alcoholic content of a beer is not required. However, if you do choose to include it, it must follow the approved formats.

Also, you should be aware of a number of things a label cannot include. Most notably, a beer label cannot contain any information, phrases, or images that: (1) are false or misleading about the product; (2) are disparaging about others’ products; (3) are lewd, indecent, or obscene; (4) uses the name or image of a prominent person or organization, which creates a false impression that they endorse the beer; (5) uses government stamps or flags, which creates a false impression of endorsement; or (6) contains “healthful” statements about the benefits of consuming the product that are not backed up by clear and convincing scientific proof, as approved by the TTB. This list is only a quick overview of the main prohibitions; there are more out there to be aware of, and of course, even these can lead to numerous disputes.

And Further Considerations

The rules discussed above only apply to federal COLA approvals. As with almost every other rule concerning the sale of beverage alcohol, each state can impose its own rules on what a label is required to have and what it is prohibited to have. For example, as mentioned above, some states require a statement of alcohol content, whereas others prohibit labels from stating alcohol content. If you sell in these states, you’ll need to support two different labels. Many states also impose their own registration and approval process–often they will say that having an approved COLA is sufficient, but for instance, Georgia imposes its own review process.

There are also other issues you should consider when designing a label. Trademark issues are a growing concern in beer labels, with a flurry of breweries suing to protect their brands and labels from infringement. Before designing a label, it is recommended that you conduct at least a Google search for similar brands. Searching through the Patent and Trademark Office’s website is also a good idea–and even consider hiring a trademark professional to ensure you will have a protectable and non-infringing mark.

Adding another wrinkle, you should be aware of the current flurry over consumer protection cases. These involve standard trade practice rules designed to protect the public from false advertising and wrongful claims. However, these rules have taken over the beverage alcohol industry as well. Perhaps the most notable example is the recently concluded case against Tito’s Vodka, who had been accused of misleading customers by using the word “handmade” on its labels. While there is a fair argument that no one would actually believe Tito’s handmakes all of its vodka, the company still had to fight in court.

As you design your labels, you should note that what may seem like mere puffery could be taken the wrong way.

Is There Help Out There?

Looking over these rules, it may seem like an overwhelming process to get a label approved. Indeed, the statistic that roughly half of COLA applications are returned for correction the first time supports that feeling. However, you shouldn’t despair; after all, thousands of labels are approved every year.

Just being aware of the basic requirements and prohibitions discussed in this article should go a long way in getting your labels approved. By thoroughly reviewing and understanding these rules, you stand a markedly better chance of getting your label approved. Beyond this, hiring an experienced professional, such as a beverage alcohol attorney or consultant, could be a necessary step.

And also, you can submit a COLA application through your ShipCompliant account, wherein we will guide you through the basic application process, checking to see that you are at least including necessary paperwork and certain label elements, such as the Government Warning. While we cannot guarantee that your label will get approved, submitting through ShipCompliant will provide you with at least a base compliance check on what your label needs.

Anheuser-Busch certainly kept these requirements in mind when drafting the “America” label. As this post from the Lehrman Bevlog notes, despite dripping with patriotic gloss, the “America” beer has all of the requisite parts, from the brand name (stuck up on the neck) to the class designation (crammed in a corner). As we know, if the label lacked these elements, the TTB wouldn’t have approved it—just going to show that not even “America” beer can escape American law.

 

1 Comment

  1. Steve

    Great article. What is the cost for Shipcompliant to assist in getting a label submitted to the TTB? This all still goes to prove that each label can still be different in the way it displays the required information. Wine labeling is also confusing. I have spent a lot of time trying to find the ABV percent on a bottle of beer only to find it is not there or where I could find it. Alcohol is becoming a big deal. It is easy to find beer now in the 10% or higher range and that is approaching the vast majority of wines.
    A lot of information in this article. Nice job.

    Reply

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