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The Brewers of Europe Confédération Européenne

des Producteurs de Spiritueux

**cev**

**Comité Européen des Entreprises Vins**

To the attention of:

Dockets Management Branch (HFA-305)

Food and Drug Administration

5630 Fishers Lane, Room 1061

Rockville

Maryland 20852, USA

(fdadockets@oc.fda.gov)

# CP.COM-049A-2003 Brussels, 8 July 2003

## COMBINED THE BREWERS OF EUROPE / CEPS / CEV POSITION PAPER

## US BIOTERRORISM ACT AND ASSOCIATED PROPOSED REGULATIONS

**The Brewers of Europe** is the voice of the European brewing industry
to the European institutions and international organisations. Current
members are the national brewers' associations of the 15 EU Member
States, together with Norway and Switzerland. The Brewers of Europe also
has close links with brewers\' associations in the countries to join the
EU.

**CEPS** is the representative body for EU producers of spirits drinks.
Its membership comprises 38 national associations representing the
industry in 21 countries -- all EU Member States, the Czech Republic,
Hungary, Norway, Russia, the Slovak Republic and Switzerland -- as well
as a group of leading spirits producing companies.

**CEV** is the representative body of the European wine industry,
encompassing trade in still wines, aromatised wines, sparkling wines and
fortified wines. Its membership comprises 16 national associations in EU
Member States and 2 other associations from Switzerland and Hungary.

The three organisations are grateful to the Food and Drug Administration
to be able to comment on the Notice of proposed rulemaking (Docket No.
02N-0277) in regard to the provision for the Establishment and
Maintenance of Records under the Public Health Security and Bioterrorism
Preparedness and Response Act of 2002 (the Act).

#  

# US BIOTERRORISM ACT of 2002

# Docket No 02N-0277 -- Establishment and Maintenance of Records

## Listing of Ingredients

Alcoholic beverage producers are indeed concerned about the need to list
the ingredients in their product. There is no requirement to list
ingredients on the labels of alcoholic beverages in either the EU or the
US. In any event, in the event of a health risk situation, producers
would readily cooperate in providing from their own records information
on the source(s) of their ingredients.

As far as distilled spirits are concerned, there is a question of
interpretation as to what is meant by ingredients. The distilling
process changes substantially the character and chemical composition of
the raw materials and some of them may even be absent from the final
product. This is one reason why an ingredient list on a bottle label
would be misleading.

It has been assumed for the purpose of traceability that this is not
necessarily what the proposed regulation intends ingredients to mean.
For instance, a blended whisky consists of various whiskies blended
together to produce the final whisky, although in turn those individual
whiskies have been distilled from cereals, water, yeast.

There are potentially innumerable sources of 'ingredients' to be
recorded for an alcoholic beverage product, the actual number being
dependent on the category and particular brand. Under the proposed
regulation, although it is not entirely clear, it appears that all of
these would require to be identified.

In the event that the precise ingredients of a particular brand of
alcoholic beverage requires to be known, the most efficient and
acceptable way of establishing this is to locate the importer and/or
producer. This is most easily achieved through the TTB's existing
database.

## Duplication of Records

Alcoholic beverages are subject to overall regulation under the Alcohol
and Tobacco Tax and Trade Bureau (TTB) in accordance with Title 27 of
the Code of Federal Regulations (CFR). The particular regulations for
the maintenance of records of imported spirits, wine and beer are
contained in 27 CFR Part 251, Subpart I. The importer's records enable a
product to be traced from the point of importation on to its destination
as well as back to the producer/supplier.

It has recently been announced that the FDA and US Customs will work
together in order to enable the supply of a single set of information,
based on the information requirements of the FDA, by the importer
(exporter) to satisfy both the existing US Customs '24-hour rule' and
the FDA Prior Notice of shipment requirement under the Bioterrorism Act.
The EU alcoholic beverage industry welcomes this simplification and
logical solution to a duplication of requirements.

However, a duplication of requirements occurs once again by virtue of
the existing and soon to be amplified information that is/will be
required by US Customs/FDA under their respective advance notice
requirement(s) for shipments arriving in US ports and the FDA proposed
regulation to require a further set of records on the immediate previous
source of imported products.

EU alcoholic beverage producers hold comprehensive records that enable
full traceability for all components of their products. Many of them
also hold records for tracing key 'dry material' components, such as
bottles, capsules etc.

The FDA is aware that there may be existing requirements for record
keeping and appears flexible in regard to the manner in which records
are maintained. This begs the question why it is necessary for the FDA
to formulate at all another raft of recorded data requirements, most of
which is already on record in some form or another.

## Time frame for Accessing Records

The FDA requires records to be accessible within a time-frame of not
more than 4 to 8 hours, depending on the day and time. Naturally,
companies would endeavour to supply what may be requested as fast as
possible.

This time-frame is totally unrealistic for records that are held
'beyond' the US. Local time requires to be taken into consideration, eg
a request made at 2.00pm Washington time is received at 8.00pm in France
when no-one would be present at a distillery or even in an
administrative building. A delay of 24 hours would be essential and this
would not cover the eventuality of a request being made during a
weekend.

If the request takes place during a week end (using local times - 4 PM
Washington time on Friday afternoon is already the week-end in Europe),
we would be ready to respond within 72 hours.

Records, particularly older as opposed to recent, may be stored 'off
site'. In such circumstances, more than 24-hours would be needed in
order to retrieve such records.

The provision of 24-hour cover to assist with emergency access to
records, whether on or off site, would be extremely costly to
businesses.

# Costs Entailed

In order to comply fully with the record-keeping proposals, it is
estimated that a large company would have to employ 1-2 extra full time
persons and that this would cost some € 85,000-100,000 per year.

## Disclosure of Food Recipes 

The FDA bases its definition of a 'recipe' as the notification of the
actual quantity of each ingredient used in the manufacture of a product
and, accordingly, assumes that it is not requesting 'recipe' information
because it does not require to know the relative individual quantities.

The industry is very concerned by the risk of disclosure of sensitive
commercial information through having to provide a 'one-up' source
nontransporter record for each of the ingredients in a product. The
complete formula may not be disclosed but, for instance, listing the
source of each one of as many as 50 individual Scotch Malt and Scotch
Grain Whiskies in a blended Scotch Whisky is not only extremely
burdensome but would essentially reveal the trade secret 'recipe' for
that brand. This is often not even known by more than a few within the
company itself.

This leads to the serious question of how such commercially sensitive
information would be handled and by whom once the 'recipe' has passed
out of the producing company's control.

# Modification of existing records in order to comply

Documentation which records purchases (eg purchase orders and invoices)
and shipping, details (eg bills of lading and invoices) may be
inadequate for the possible addition of information under the proposed
record keeping requirements. Consequently, the format of a company's
documentation system may need to be modified to accommodate the extra
data, although the shipping company would be responsible for the bill of
lading. As a corollary to this, a company may require to obtain
additional information from suppliers in order to ensure that it has the
necessary data relating to what they receive from them. This all
involves extra time and administration for both purchaser and supplier.

## Small and Medium-sized Companies

A longer time-scale for compliance with the proposed regulation would be
permitted for companies with 10-500 employees and for those with up to
10 employees. This is appreciated.

The burden of record-keeping and ensuring accessibility to records
within the specified time-frame is considered totally impractical.
Exceptional expense, which it has not been possible to realistically
guesstimate, would be entailed.

### Application of the Requirements 'beyond' the importer

It is significant that the record keeping requirements of the TTB for
alcoholic beverages do not go 'beyond' the importer. This is as it
should be given that the TTB, together with the Bureau of Alcohol,
Tobacco, Firearms & Explosives (ATFE), its companion law enforcement
agency, have no jurisdiction 'beyond' the US border.

It has been acknowledged in the context of recent US Customs initiatives
that US Customs has no jurisdiction outwith US territory. Mutual
agreements on cooperation between US Customs and, for example, the EU
Commission have been reached in order to address responsibly together
their shared Customs security objective.

The proposed regulation for the establishment and maintenance of records
as drafted 'would require the establishment ... by certain domestic
persons who ...' but then makes an assumption that 'these requirements
apply to certain foreign facilities that ...'. This is unacceptably
open-ended, and reflects the FDA's uncertainty on the extent of its
jurisdictional remit.

The questions that must be asked are Why? and How? does the FDA justify
the application of its record keeping requirement 'beyond' its Federal
jurisdiction?

## Another Raft of Data

This new proposed raft of data, records for most of which are already
held in one form or another as the FDA has indicated would be
acceptable, appears to require two sets of data covering the (1)
'one-up' source and (2) 'one-down' recipient to be maintained by a
foreign nontransporter. (It is however, in contrast, quite clear that
similar records do not require to be maintained by foreign
transporters.)

  --------------------- --------------------- ---------------------------
  One-up Nontransporter One-down              One-up/one-down Transporter
                        nontransporter        

  1.name, address,      Same of immediate     1.name, address, phone of
  phone of immediate    subsequent recipient  immediate previous source +
  previous source                             date of receipt

  2\. type of food      Type of food          2.name, address, phone of
                                              immediate subsequent
                                              recipient + date of
                                              delivery

  3\. date received     Date delivered        3.type of food

  4\. lot number /other Lot number/other ID   4.lot number/other ID
  ID                                          

  5\. quantity          Quantity              5.quantity

  6.name, address,      Name, address, phone  6.ID of each & every
  phone of transporter  of transporter from   transport mode used from
  to you                you                   transporter's receipt to
                                              delivery
  --------------------- --------------------- ---------------------------

The 'one-up' nontransporter data required by an importer of alcoholic
beverages is already available for US Customs and the TTB. An importer
of a shipment of a brand of, for example, blended Scotch Whisky should
have only one 'one-up' list to cover (although he may have several
'one-down' lists for that shipment).

However, when applied to a foreign facility which produces, for example,
that same shipment of blended Scotch Whisky, the foreign producer may
have as many as 50 'one-up' lists to cover because as many different
Scotch malt and grain whiskies alone may be contained in a final blended
product. This serves as just one instance of the potentially endless
quantity of 'lists' of data that the FDA requires foreign facilities
'beyond' its legal jurisdiction to maintain. Nonetheless, production
records for alcoholic beverage producers are a sine qua non.

## Storage Facilities

The proposed regulation requires a record of all information reasonably
available to identify the specific source of each ingredient used in
every lot of finished product.

Some ingredients may not be held in common storage.

# Retention of Records

The FDA proposes that records are retained for a period of 2 years.

From the point of view of alcoholic beverage production and distilled
spirits in particular, retention of records for a period of only 2 years
would be inadequate to trace a matured product right back to source.
This suggests reliance should be placed upon alcoholic beverage
producers' own record systems to enable traceability.

## Traceability and Security 'Beyond' the US

The import of alcoholic beverages is prohibited unless the importer
holds a Federal Basic Permit to import and an alcoholic beverage cannot
be imported for sale in the US domestic market without first having
obtained a Certification/Exemption of Label/Bottle Approval (COLA) from
the TTB. Substantial information about a product imported legally into
the US is therefore already held in the TTB database.

In any event, EU spirits producers hold comprehensive records that
enable full traceability for all components of their products, as well
as records for tracing key 'dry material' components, such as bottles,
capsules etc. In addition, EU legislation requires the inclusion of lot
codes on the labels for the purpose of traceability; US regulations
require tamper-proof closures on spirits and wine products; and
containers are security sealed.

The traceability and security of EU spirits and wine products is already
provided for under EU and, in some cases, national legislation and also
in standard industry practice. For example, in the UK, a licence is
required to operate a distillery; the production of Scotch Whisky and
other UK spirits is carried out under HM Customs & Excise control; the
entire production process is subject to strict quality controls
including chemical analysis and profiling to safeguard against, inter
alia, contamination.

Emergency procedures are also in place in the event of a 'food safety'
emergency. A Rapid Alert System is in place, which has been set up to
deal with a scenario involving illness, microbiological contamination,
contamination of a product by a foreign body or malicious contamination.

In the same way as the US Customs and EU Commission have reached an
agreement to cooperate on security initiatives within the EU, it is
believed that the US FDA should trust the EU Commission to assist
quickly, efficiently and vigilantly in tracing the source of a suspect
element which is discovered in the US and traced back to the EU, through
the procedures that are already in place. The alternative would
potentially result in two parallel but separate tracking exercises being
undertaken, wasting both time and manpower.

## Inconsistency of application of the 'Requirement'

As stated in the EU alcoholic beverage industry's previous submissions
on the proposed Registration and Prior Notice requirements under the
Act, notwithstanding that all alcoholic beverages are tightly regulated
in the US under the jurisdiction of the US Department of Treasury (TTB)
and the Department of Justice (ATFE), the scope of the regulations under
the Bioterrorism Act apply to them. Meanwhile, meat, poultry and egg
products under the jurisdiction of another agency, the US Department of
Agriculture, are specifically exempt from the scope of the Act.

Another contrasting feature of the FDA legislation is that, despite the
exemption of some food products that are regulated by another US agency,
the FDA expects facilities 'beyond' the US border to comply with the
demands of its Bioterrorism legislation.

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**Marion Wolfers**

**CEV**

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**Rodolphe de Looz-Corswarem**

**The Brewers of Europe**

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**Robby Schreiber**

**Confédération Européenne des Producteurs de Spiritueux**