September 26, 2005

Chief, Regulations and Rulings Division

Alcohol and Tobacco Tax and Trade Bureau

1310 G Street, N.W.

Washington, DC 20220

> RE: ANPRM Notice No. 41 -- Labeling and Advertising of Wines,
> Distilled Spirits and Malt Beverages

Dear Sir/Madam:

Before getting into the text of our comments, NABI members would like to
thank you for granting us the extension of the comment period.
Unfortunately even after months of meetings and discussions, we were
unable to reach a consensus position for NABI on the more controversial
issues contained in the ANPRM. NABI members finally decided that
comments on those controversial issues should be left up to individual
member companies that represent diverse positions on those issues. The
following are NABI's comments on issues on which we could develop a
consensus.

1\) [Nutritional Labeling]{.underline}

Nutritional labeling should not be mandatory for all alcohol beverages.
We are unaware of any demand for this information from the consumers of
our products other than from two special interest organizations.
Nutritional labeling should be voluntary. TTB should establish specific
guidelines for the text of the nutritional label to prevent consumer
confusion, but, nutritional labeling should not be mandatory for all
alcohol beverages.

September 26, 2005

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2\) [Ingredient Labeling]{.underline}

We believe the question of ingredient labeling of alcohol beverages was
resolved when in October 6, 1983, ATF published T.D. ATF-150 in the
[Federal Register]{.underline} rescinding T.D. ATF-66 ingredient
disclosure regulations. ATF concluded then that there was no
overwhelming desire on the part of the consumers for comprehensive
ingredient labeling. ATF went on to state that the substantial
transformation brought about by distillation and/or fermentation means
there is only a "strained relationship between the initial ingredients
and the contents of the final product." This conclusion by ATF was later
supported by the United States Court of Appeals for the DC Circuit in
its decision handed down on August 5, 1986, in Center for Science in the
Public Interest vs. Department of the Treasury, 797 F.2d 995. NABI
members are unaware of anything that has happen or been brought to TTB's
attention that would change the decision made in 1983 by ATF.

The Center for Science in the Public Interest and the National Consumers
League failed to present any new information in their December 16, 2003
petition requesting ingredient labeling that would in fact change the
position taken by ATF in 1983. The petitioners have again failed to
establish there is anything but a "strained relationship" between the
initial ingredients and the contents of the final product the consumer
actually consumes nor have the petitioners established there is a
groundswell of public demand for ingredient information on alcohol
beverages.

Ingredient labeling should be permitted on a voluntary basis and only in
accordance with rules and guidelines necessary to avoid confusion and
anything that might mislead the consumer.

3\) [Harmonization]{.underline}

Government guidelines for voluntary ingredient and/or voluntary
nutritional labeling should be consistent among U.S. Federal agencies to
the extent appropriate for alcohol beverages as compared to other food
products.

September 26, 2005

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New labeling requirements, for the most part, should apply to both
labeling and advertising. However, there are some requirements that do
not lend themselves to advertising, such as, signage or outdoor
advertising while other requirements could work for any type of
advertising. Some forms of advertising such as neo signs and billboard
advertising do not lend themselves to detailed information.

[Calorie and Carbohydrate Claims]{.underline}

TTB ruling 2004-1 dated April 7, 2004 is working well in our opinion. It
provided all of the guidelines industry needed to market its products.
The consumer is being provided with the information be/she needs to make
an informed purchasing decision.

Any new attempt to regulate should only be done in coordination with
FDA. Obviously, TTB must take into consideration the unique
characteristics of alcohol beverages but, TTB should at least take FDA
regulations into consideration before embarking on a regulatory project
dealing with calorie or carbohydrate claims in alcohol beverages.

In its petition CSPI failed to establish that current
regulations/rulings dealing with calorie and carbohydrates are
insufficient. NABI is unaware of any consumer complaints that have been
filed with TTB dealing with current TTB rules/regulations on the use of
a calorie or carbohydrate claim in advertising.

TTB should continue to prohibit the use of the terms "effective
carbohydrates" and "net carbohydrates" because those terms are
misleading when sanding alone and in our opinion lack sufficient
consumer understanding to be useful to the consumer.

TTB ask if it should define the terms "low calorie" and "reduced
calorie." In our view this is another example of trying to fix something
that no one has demonstrated is broken. "Low calorie" and "light"
references in the labeling and advertising of malt beverages have been
with use for over twenty (20) years. Reference to "low calorie" on the
label or in advertising

September 26, 2005

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triggers the need for nutritional information. Current rules/regulations
dealing with these terms have proven to be effective and to provide the
consumer with the information needed to make an informed decision.

["Alcohol Facts" Label]{.underline}

NABI takes no position on this issue. Instead, individual company
members will take position and submit their own comments as appropriate.

[Allergen Labeling]{.underline}

The Bureau's advance notice poses several questions regarding the
implementation of the Food Allergen Labeling and Consumer Protection Act
of 2004. Allergen labeling is not new for beverage alcohol products as
evidenced by the current requirement for sulfite labeling and, as in the
past, we are confident the Food and Drug Administration (FDA) and TTB
working in tandem will provide guidance and rules that will serve the
interests of the consuming public and meet the objectives of the
Allergen act.

One of the United States' largest trading partners, the European Union,
also recently adopted allergen labeling requirements for food products.
With a global economy and with free travel among consumers, we urge that
determinations made by respective government bodies about allergen
labeling be harmonized so that the applicability of an allergen labeling
requirement for a particular product is the same from one country to
another and the ability to comply with such a requirement does not
impede trade serving a public interest.

To that end, we respectfully submit regulations for the labeling of
beverage alcohol products pursuant to the Allergen Act. The Bureau's
approach to sulfite labeling has served its intended purpose of alerting
consumers about this allergen and also has allowed the flow of global
commerce. We submit that the Bureau's response to sulfite disclosures
has served well the regulated communities, the public and the Bureau,
without erecting barriers to trade for products imported into the United
States. Similarly, the EU's

September 26, 2005

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determinations regarding what and how products are to be labeled
pursuant to its allergen law. We urge the TTB to coordinate its labeling
regulation with the EU and other trading partners to ensure
harmonization where possible.

Pursuant to the Food Allergen Labeling and Consumer Protection Act of
2004, food products, including beverage alcohol products, that contain
an ingredient of a major food allergen (i.e. milk, eggs, fish,
Crustacean shell fish, tree nuts, peanuts, wheat and soybeans) must
include this information on labels unless the food ingredient does not
cause an allergic response that poses a risk to human health or does not
contain allergenic protein.

For all food products, including beverage alcohol products, and pursuant
to the 1987 Memorandum of Understanding between FDA and the Bureau, FDA
will be making decisions regarding what food products will or will not
require allergen labeling. In that regard, NABI understands that FDA is
in the process of promulgating guidance in establishing thresholds for
these major food allergens in terms of the application of the Act's
labeling requirement. We applaud that undertaking and, as stated above,
also encourage due regard to the actions taken by the European Union
regarding what products do or do not require labeling under the EU
Allergen Directive (2003/89/EU).

Many beverage alcohol products are outside the scope of the Food
Allergen Labeling and Consumer Protection Act since they do not contain
protein. Other beverage alcohol products also will fall outside the Act
either because their food ingredients do not cause an allergic response
posing a human health risk or do not contain allergenic protein. For
these other beverage alcohol products, we urge FDA and the Bureau to
follow the approach taken by the EU that excludes categories of products
that are produced and/or processed in a similar manner, i.e., the
exclusions from the allergen labeling requirement are linked to the
specific methods of manufacture and/or uses identified in the
documentation supporting the exclusions

September 26, 2005

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Finally, for those products that will require labeling, NABI urge the
Bureau to follow the approach currently utilized in Parts 4, 5, and 7
regarding sulfite labeling. We also urge the Bureau to take into account
the approach adopted by the EU whereby a labeling indication is not
necessary when the allergen already is included under its specific name
on the label of a product, for example, in the statement of composition
pursuant to 27 C.F.R. § 5.35, or in the name under which the beverage is
sold. These approaches have served and will continue to serve all
interests well -- the Bureau, the consuming public and industry members
both here and abroad.

We submit that this proposed framework for products requiring allergen
labeling will meet and satisfy the Congressional directive to the Bureau
set forth in the Act's conference report: "The Committee expects,
consistent with the November 30, 1987 Memorandum of Understanding, that
the Alcohol and Tobacco Tax and Trade Bureau (TTB) of the Department of
Treasury will pursuant to the Federal Alcohol Administration Act
determine how, as appropriate, to apply allergen labeling of beverage
alcohol products and the labeling requirements for those products.  The
Committee expects that the TTB and the FDA will work together in
promulgation of allergen regulations, with respect to those products."

We trust that, working in tandem, TTB and FDA will implement the Food
Allergen Act in a manner that meets its objectives. In that regard, the
Food Allergy & Anaphylaxis Network (FAAN) has stressed during the recent
FDA stakeholder meetings that any labeling for food allergens must take
into account whether or not that food will produce an allergic reaction
and that labeling for all allergen levels may lead to further restricted
diets, increased frustration and risk-taking, and undermining the
integrity of labeling statements. Consumers need to trust that the
allergen labeling information is reliable and not be subjected to
precautionary statements where the statement will be ignored based upon,
for example, prior experience consuming the food product in question.

September 26, 2005

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A robust, scientifically-based allergen labeling schema, which properly
identifies those products containing allergenic protein capable of
causing adverse reaction, will satisfy all of these interests and
concerns by providing consumers with beneficial, non-misleading
information

As stated above, the matter of allergen labeling is not new for the
Bureau. The Bureau has required sulfite labeling for allergenic purposes
since 1987 where sulfur dioxide or a sulfiting agent is detected at a
level of ten or more parts per million, measured as total sulfur
dioxide. In implementing this requirement, the Bureau set forth
procedures in terms of how to proceed with existing and revised labels;
the submission and approval of new applications for label approval;
formula and statement of process submissions; and analyses of product
samples.

We believe that the staged approach undertaken by the Bureau for sulfite
labeling provides a successful template in terms of now implementing the
Allergen Act. First, the Bureau implemented a tripartite, phased process
for the label declaration of sulfites for products affected by the 10 or
more parts per million of sulfites label declaration once that action
level was determined.

The Bureau established an effective date for the final sulfite rule,
followed by a one-year transition period for the full implementation of
the rule. As of the effective date of the sulfite rule, the Bureau's
rules provided that all labels [submitted]{.underline} for approval for
affected beverage alcohol products were required to bear the mandatory
label disclosure. Six months after the effective date of this rule, all
beverage alcohol products affected by the sulfite rule were required,
[at the time of bottling]{.underline}, to be labeled with the mandatory
label disclosure.

Twelve months after the effective date of the rule, the labels of all
beverage alcohol products affected by the sulfite rule were required to
include the mandatory declaration [upon removal]{.underline} of
domestically-bottled products from bonded premises, brewery premises or
from a taxpaid wine bottling house and from customs in the case of
foreign-bottled products. During the 180-

September 26, 2005

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day period beginning on the first day of the sixth month after the
effective

date of the sulfite rule, producers, bottlers and importers were allowed
to remove beverage alcohol products affected by the sulfite rule from
bottling premises or from customs custody without a sulfite disclosure
provided such products were bottled prior to the first day of that
six-month period.

On or after 12 months from the effective date of the sulfite rule, the
labels of all beverage alcohol products affected by this rule were
required to bear a sulfite declaration upon the removal of such products
from bottling premises in the case of domestically-bottled products or
withdrawal from customs custody in the case of foreign-bottled products.
As of that date, beverage alcohol products affected by the rule could no
longer be removed from bottling premises or from customs custody without
the mandatory sulfite label declaration, regardless of the dates of
bottling.

Given that the volume of applications for certificates of label approval
covering previously approved labels would impose a large burden upon the
Bureau and upon industry, the Bureau deemed that product labeling
covered by an existing certificate of label approval, which solely was
revised to include the mandatory sulfite label declaration, was deemed
approved without the necessity of submitting a new certificate of label
approval. In that regard, the Bureau also permitted the addition of a
separate strip or neck label that showed the mandatory sulfite
declaration and determined that the use of such a strip label with a
previously-approved label would not require the submission of a new
certificate of label approval.

Further, the Bureau also determined that the addition of the sulfite
label declaration with no other changes to a previously-approved strip
or neck label bearing other information also did not require the
submission of a new label application. Finally, the Bureau's sulfite
implementation rules also provided for the approval of new certificates
of label approval for products with a qualification statement indicating
when the label must be revised to include the mandatory label
declaration.

September 26, 2005

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By all of these actions, the Bureau set up a system that allowed the
flow of existing inventory into the marketplace and provided a clear
"rules of the road" for both domestic and foreign product in terms of
requirements for new certificates of label approval and the removal from
bonded premises of previously produced and/or bottled product. These
implementation procedures were predicated upon the previous
determination by FDA of thresholds for declarations of this allergen,
with the Bureau then creating a smooth system to satisfy its own
statutory and regulatory requirements regarding product label approvals.

NABI respectfully submit that these procedures again should be followed
by the Bureau in implementing the labeling requirements for beverage
alcohol products that will be affected by the provisions of the 2004
Allergen Act.

Once FDA promulgates guidance in terms of what products will be subject
to the labeling requirements of the Allergen Act, we urge that the
Bureau follow the EU scheme in terms of exclusions and the Bureau's
approach to products affected by the sulfite label declaration.

As stated above, many beverage alcohol products are outside the scope of
the Allergen Act given their respective "recipes" and/or production
processes. For other beverage alcohol products, the Allergen Act also
provides for an exemption process from its labeling requirements via two
routes: (1) the filing of a petition with FDA demonstrating that the
food ingredient does not cause an allergic response that poses a risk to
human health, which FDA must act upon within 180 days of receipt or the
petition shall be deemed denied unless an extension of time is afforded;
(2) the filing of a notification with FDA demonstrating that the food
ingredient does not contain allergenic protein and such food may be
introduced into interstate commerce 90 days after the date of receipt of
the notification by FDA unless FDA within that 90-day period determines
otherwise.

September 26, 2005

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For products that fall outside of the Act due to these exemptions, we
urge the Bureau to put in place a mechanism indicating that these
categories of products are exempted from the Act's labeling
requirements. For example, an entry on a formula approval or statement
of process application could indicate that the product subject to the
application falls outside the Act because an exemption has been granted
for a category of products using specific methods of manufacture and/or
uses as specified in the exemption that covers the product subject to
the instant application. Alternatively, a data sheet similar to the
Flavor Ingredient Data Sheet could be used for this purpose and/or for
flavors in that regard.

We submit that the proposed system will serve the interests underpinning
the Allergen Act and the interests of the Bureau and its regulated
communities. Further, the Bureau is very familiar with the production
processes, raw materials and constituents of the beverage alcohol
products it regulates. This familiarity should provide the Bureau with
an added reason to adopt this approach, an approach that also has been
adopted by the EU in terms of implementing its allergen label law.

A product-by-product analysis would be an unnecessary expenditure of TTB
resources, without any commensurate benefit for either the Bureau or the
consuming public. It only would serve to impede commerce for both
domestically-produced and foreign-produced goods with no countervailing
purpose served pursuant to the Allergen Act or otherwise.

On behalf of NABI members representing importers of beer, wine and
distilled spirits, we appreciate the opportunity to comment upon the
Bureau's allergen labeling initiative. We fully support the purpose and
objectives of the Allergen Act and stand ready to work with TTB in the
implementation of this Act.

September 26, 2005

Page -11 --

["Serving Facts Labeling"]{.underline}

NABI takes no position on this issue as an association. Individual
member companies will submit their comments as each deems appropriate.

Sincerely,

Robert J. Maxwell

Robert J. Maxwell

President -- NABI