TTB Announces Real and Potential Regulatory Relief

During a week when most of us were busy with hot dogs and fireworks, the Tax and Trade Bureau (TTB) issued two announcements that could prove to bring real benefit to the beverage alcohol industry.

Removal of Standard of Fill

First, on July 1, the TTB issued a press release announcing a deregulatory proposal that would eliminate the current requirements regarding the “standard of fill” for wine and spirits. The “standard of fill” is a term used by the TTB to specify the amount of liquid that wine and spirits containers are permitted to contain. Under these rules, all wine and spirits can be sold only in certain bottle sizes (such as 750, 500, 375, 100, and 50 milliliters—but not 400 or 600 milliliters). 

Under the proposed rulemaking, these specific amounts would be eliminated, leaving only a standardized minimum amount for wine, and a standardized minimum and maximum for spirits. If approved, thereafter, a wine or spirits producer would be able to fill any sized container above or within those thresholds, respectively. 

Besides being a welcome elimination of unnecessary regulatory requirements (as described by the TTB), this could expand the number and type of products made available to consumers. For producers who have worked to meet increased demands from consumers for wine and spirits in cans—and for more smaller-serving options—this change could be a particular boon. 

Currently wine may only be sold in cans sized 250 mL (and those only in 4-packs to reach a 1L “container”) or 375 mL. However, the standard can size in the U.S. is 12 oz, or 355 mL, which means that wineries are forced to source odd-sized cans, which can greatly increase the cost. But, if permitted to sell wine in a 12 oz can (as beer can be) or sell single 250 mL cans, they could better provide what consumers want: to be able to enjoy the wine they love in a more convenient and single-serving container.

The TTB is currently requesting that interested parties submit comments on the proposed rule changes through August 30, 2019, with submissions accepted here for wine and here for spirits.

Voluntary Disclosure Program

Then, on July 7, 2019, the TTB announced a new temporary voluntary disclosure program for beverage alcohol wholesalers or importers to correct unreported changes in their ownership schema. All parties importing alcohol into or distributing alcohol through the U.S. must be licensed with the TTB, which also requires them to report any changes to their control or proprietorship. 

However, it has become apparent in recent years, as the TTB has stepped up its enforcement of trade practice regulations, that many licensees have failed to report such changes. This has lead to a number of enforcement actions against wholesalers and importers. As such, this voluntary disclosure program is a welcome step by the TTB to enable parties that have, for one reason or another, failed to update changes in control or proprietorship to come into compliance with their license requirements without the risk of regulatory action.

This program is available to all industry members who are licensed by the TTB only as a wholesaler and/or importer, and who follow the procedures outlined here to disclose unreported changes to their control or proprietorship. The deadline to disclose such changes is December 31, 2019.

Summing Up

Both of these actions by the TTB should prove of benefit the industry. Providing wholesalers and importers a chance to freely update their licenses to indicate ownership changes could avoid many potential enforcement actions, relieving all parties of the cost in money and time those take. And if the proposed elimination of standards of fill becomes enacted, then wine and spirits suppliers could more effectively meet consumer thirst for alternative and smaller serving sizes. We at ShipCompliant by Sovos applaud these steps to relieve regulatory burdens.

 

ShipCompliant by Sovos is the only automated compliance tool integrated with the TTB. Find out how ShipCompliant helps producers stay in compliance with state and federal regulations, or download the 2019 DtC Wine Shipping Report.

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