85514 Federal Register / Vol. 85, No. 249 / Tuesday, December 29, 2020 / Rules and Regulations 

investigations pursuant to section 19(c) 

of the Securities Act of 1933 (15 U.S.C. 

77s(c)), section 21(b) of the Securities 

Exchange Act of 1934 (15 U.S.C. 78u(b)), 

section 42(b) of the Investment 

Company Act of 1940 (15 U.S.C. 80a– 

42(b)), and section 209(b) of the 

Investment Advisers Act of 1940 (15 

U.S.C. 80b–9(b)). 

(20) To institute proceedings pursuant 

to section 12(j) of the Securities 

Exchange Act of 1934 (15 U.S.C. 78l(j)) 

with respect to a security based on the 

issuer’s alleged failure to file required 

periodic reports and, in connection with 

the institution of such proceedings, 

issue orders pursuant to section 

12(k)(1)(A) of the Securities Exchange 

Act of 1934 (15 U.S.C. 78l(k)(1)(A)). 

(21) With respect to disgorgement 

funds and Fair Fund plans established 

in administrative or cease-and-desist 

proceedings instituted by the 

Commission pursuant to the Federal 

securities laws, to: 

(i) Grant extensions of time to submit 

proposed distribution plans to the 

Commission; 

(ii) Appoint tax administrators, 

pursuant to a Commission-approved 

omnibus order; 

(iii) Publish notice of proposed plans, 

including plans that omit elements 

required by § 201.1101 of this chapter 

(Rule 1101 of the Rules on Fair Fund 

and Disgorgement Plans); 

(iv) Issue orders adopting plans as to 

which no negative comments have been 

received; 

(v) Approve disbursements to 

investors in accordance with the plans; 

(vi) Approve payment of the fees and 

expenses of administration; and 

(vii) Approve final fund accountings. 

* * * * * 

By the Commission. 

Dated: December 10, 2020. 

Vanessa A. Countryman, 

Secretary. 

[FR Doc. 2020–27537 Filed 12–28–20; 8:45 am] 

BILLING CODE 8011–01–P 

DEPARTMENT OF THE TREASURY 

Alcohol and Tobacco Tax and Trade 

Bureau 

27 CFR Parts 4, 5, and 7 

[Docket Nos. TTB–2019–0004 and TTB– 

2019–0005; T.D. TTB–165; Re: Notice Nos. 

182, 183, and 184] 

RIN 1513–AB56 and 1513–AC45 

Addition of New Standards of Fill for 

Wine and Distilled Spirits; Amendment 

of Distilled Spirits and Malt Beverage 

Net Contents Labeling Regulations 

AGENCY: Alcohol and Tobacco Tax and 

Trade Bureau, Treasury. 

ACTION: Final rule; Treasury decision. 

SUMMARY: This final rule amends the 

Alcohol and Tobacco Tax and Trade 

Bureau (TTB) regulations that govern 

wine and distilled spirits containers to 

add seven new standards of fill for wine 

and distilled spirits. Although TTB had 

originally proposed to generally 

eliminate the standards of fill for wine 

and distilled spirits, TTB is not 

adopting that proposal at this time. The 

amendments described in this final rule 

will provide bottlers with flexibility by 

allowing the use of the added container 

sizes, and will facilitate the movement 

of goods in domestic and international 

commerce, while also providing 

consumers broader purchasing options. 

TTB is also amending the labeling 

regulations for distilled spirits and malt 

beverages to reflect current policy by 

specifically stating in the regulations 

that distilled spirits may be labeled with 

the equivalent standard United States 

(U.S.) measure in addition to the 

mandatory metric measure, and that 

malt beverages may be labeled with the 

equivalent metric measure in addition 

to the mandatory U.S. measure. 

DATES: This final rule is effective 

December 29, 2020. 

FOR FURTHER INFORMATION CONTACT: 

Jennifer Berry, Alcohol and Tobacco 

Tax and Trade Bureau, Regulations and 

Rulings Division; telephone 202–453– 

1039, ext. 275. 

SUPPLEMENTARY INFORMATION: 

Background 

TTB Authority 

The Alcohol and Tobacco Tax and 

Trade Bureau (TTB) administers 

regulations setting forth standards of fill 

for containers of wine and distilled 

spirits products distributed within the 

United States. For wine, the authority to 

establish these standards is based on 

section 105(e) of the Federal Alcohol 

Administration Act (FAA Act), codified 

at 27 U.S.C. 205(e), which authorizes 

the Secretary of the Treasury to 

prescribe regulations relating to the 

‘‘packaging, marking, branding, and 

labeling and size and fill’’ of alcohol 

beverage containers ‘‘as will prohibit 

deception of the consumer with respect 

to such products or the quantity thereof 

* * *.’’ For distilled spirits, the 

authority to establish standards of fill is 

based on two provisions of law: (1) 

Section 205(e) of the FAA Act as 

discussed above, and (2) section 5301(a) 

of the Internal Revenue Code of 1986 

(IRC), codified at 26 U.S.C. 5301(a). 

Section 5301(a) of the IRC authorizes 

the Secretary of the Treasury to 

prescribe regulations ‘‘to regulate the 

kind, size, branding, marking, sale, 

resale, possession, use, and reuse of 

containers (of a capacity of not more 

than 5 wine gallons) designed or 

intended for use for the sale of distilled 

spirits * * *’’ when the Secretary 

determines that such action is necessary 

to protect the revenue. TTB administers 

these IRC and FAA Act provisions 

pursuant to section 1111(d) of the 

Homeland Security Act of 2002, as 

codified at 6 U.S.C. 531(d). In addition, 

the Secretary of the Treasury has 

delegated certain administrative and 

enforcement authorities to TTB through 

Treasury Order 120–01. 

Current Standards of Fill for Wine 

The standards of fill for wine are 

contained in subpart H of part 4 of the 

TTB regulations (27 CFR part 4). The 

term ‘‘standard of fill’’ is used in the 

TTB regulations and in this document to 

refer to the authorized amount of liquid 

in the container, rather than the size or 

capacity of the container itself. For 

better readability, however, this 

document sometimes uses the terms 

‘‘size’’ or ‘‘container size’’ and 

‘‘standards of fill’’ interchangeably. 

Within subpart H, paragraph (a) of 

§ 4.72 (27 CFR 4.72(a)) authorizes the 

use of the following metric standards of 

fill for containers other than those 

described in paragraph (b) of that 

section: 

• 3 liters; 

• 1.5 liters; 

• 1 liter; 

• 750 milliliters; 

• 500 milliliters; 

• 375 milliliters; 

• 187 milliliters; 

• 100 milliliters; and 

• 50 milliliters. 

Paragraph (b) of § 4.72 states that wine 

may be bottled or packed in containers 

of 4 liters or larger if the containers are 

filled and labeled in quantities of even 

liters (4 liters, 5 liters, 6 liters, etc.). 


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Current Headspace Requirements for 

Wine 

Requirements for headspace, the 

empty space between the top of the 

wine and the top of the container, are 

also contained in subpart H of 27 CFR 

part 4. Within subpart H, paragraph 

(a)(3) of § 4.71 (27 CFR 4.71(a)(3)) states 

that a standard wine container must be 

made and filled so as to have a 

headspace not in excess of 6 percent of 

the total capacity of the container after 

closure if the net content of the 

container is 187 milliliters or more and, 

in the case of all other wine containers, 

a headspace not in excess of 10 percent 

of such capacity. 

Current Standards of Fill for Distilled 

Spirits 

The standards of fill for distilled 

spirits are contained in subpart E of part 

5 of the TTB regulations (27 CFR part 

5). Within subpart E, paragraph (a)(1) of 

§ 5.47a (27 CFR 5.47a(a)(1)) specifies the 

following metric standards of fill for 

containers other than those described in 

paragraph (a)(2) of that section: 

• 1.75 liters; 

• 1 liter; 

• 750 milliliters; 

• 500 milliliters (authorized only 

until June 30, 1989); 

• 375 milliliters; 

• 200 milliliters; 

• 100 milliliters; and 

• 50 milliliters. 

In the case of distilled spirits in metal 

containers that have the general shape 

and design of a can, that have a closure 

which is an integral part of the 

container, and that cannot be readily 

reclosed after opening, paragraph (a)(2) 

of § 5.47a authorizes the use of the 

following metric standards of fill: 

• 355 milliliters; 

• 200 milliliters; 

• 100 milliliters; and 

• 50 milliliters. 

In addition to the metric standards 

specified above, § 5.47a contains 

provisions regarding tolerances 

(discrepancies between actual and 

stated fill), unreasonable shortages in 

fill, and distilled spirits bottled or 

imported before January 1, 1980, and 

marketed or released from customs 

custody on or after that date (the date on 

which the U.S. volumetric standards 

were replaced by the § 5.47a metric 

standards, as discussed in more detail 

below). 

Current Headspace Requirements for 

Distilled Spirits 

Requirements for headspace are 

contained in 27 CFR 5.46(b), which 

states that a standard liquor bottle of a 

capacity of 200 milliliters or more shall 

be held to be misleading if it has a 

headspace in excess of 8 percent of the 

total capacity of the bottle after closure. 

Malt Beverages 

Unlike wine and distilled spirits, 

there are no standards of fill prescribed 

for malt beverages under the FAA Act. 

However, in the case of malt beverages, 

§ 7.22(a)(4) of the TTB regulations (27 

CFR 7.22(a)(4)) requires the display of 

net contents on the brand label as 

mandatory label information. 

Notices of Proposed Rulemaking 

On July 1, 2019, TTB published 

Notice Nos. 182 and 183 in the Federal 

Register (84 FR 31257 and 84 FR 

31264). 

Notice No. 182 proposed to eliminate 

all but a minimum standard of fill for 

wine containers. The minimum 

container size was retained to ensure 

the container would be of sufficient size 

to accommodate required labeling. The 

notice also proposed, in response to a 

petition, to increase the minimum 

headspace from not in excess of 10 

percent of the container’s capacity to 

not in excess of 30 percent for clear 

containers 100 milliliters or less. 

Finally, TTB also sought comments on 

alternatives to eliminating the standards 

of fill, including authorizing some or all 

of the petitioned-for sizes that were 

discussed in the notice, and developing 

an expedited administrative process for 

adding new standards in the future. 

Notice No. 183 proposed to eliminate 

all but minimum and maximum 

standards of fill for distilled spirits. 

Retaining the minimum was proposed 

to ensure the container would be of 

sufficient size to accommodate required 

labeling, while the maximum maintains 

the distinction between bottled and bulk 

products. The FAA Act at 27 U.S.C. 

206(c) establishes a bulk distilled spirits 

container as one having a capacity in 

excess of one wine gallon, while 

paragraphs (a) and (b) of section 206 do 

not permit the retail sale of distilled 

spirits in bulk containers to consumers. 

In Notice No. 183, TTB also proposed 

to amend the labeling regulations for 

distilled spirits and malt beverages to 

reflect current policy by specifically 

stating that distilled spirits may be 

labeled with the equivalent standard 

U.S. measure in addition to the 

mandatory metric measure, and that 

malt beverages may be labeled with the 

equivalent metric measure in addition 

to the mandatory U.S. measure. Similar 

labeling is authorized for wine labels in 

27 CFR 4.37(b) and has been authorized 

for distilled spirits and malt beverage 

labels as a matter of policy, but has not 

been explicitly stated in the distilled 

spirits and malt beverage regulations. 

As in Notice No. 182, in Notice No. 

183 TTB also sought comments on 

alternatives to eliminating the standards 

of fill, including authorizing some or all 

of the petitioned-for sizes that were 

discussed in the notice, and developing 

an expedited administrative process for 

adding new standards in the future. 

In Notice Nos. 182 and 183, TTB 

provided reasons for proposing the 

elimination of the standards of fill, 

including the following: 

1. It would address several petitions 

TTB had received on this issue, would 

eliminate the need for industry 

members to petition for additional 

authorizations if marketplace conditions 

favor different standards in the future, 

and would eliminate restrictions on 

competition and the movement of goods 

in domestic and international 

commerce. 

2. It would address concerns that the 

current standards of fill unnecessarily 

limit manufacturing options and 

consumer purchasing options, 

particularly where consumers may seek 

smaller containers to target a specific 

amount of consumption. 

3. TTB believed that the current and 

proposed labeling requirements 

regarding net contents (see 27 CFR 

4.32(b)(2) and 4.37, 27 CFR 5.32(b)(3) 

and 5.38) and those regarding the design 

and fill of containers (see 27 CFR 4.71 

and 27 CFR 5.46) provide consumers 

with adequate information about 

container contents, so standards of fill 

are not necessary to prevent consumer 

confusion. 

4. Limiting standards of fill is no 

longer necessary to ensure accurate 

calculation of tax liabilities or to protect 

the revenue. 

5. TTB’s current experience with malt 

beverages, for which there is no Federal 

standard of fill requirement, shows no 

disproportionate level of revenue 

compliance or consumer deception 

issues related to bottle sizes. 

The comment periods for Notice Nos. 

182 and 183 originally closed on August 

30, 2019, but TTB reopened and 

extended the comment periods at the 

request of commenters (see Notice No. 

184, 84 FR 39786). The extended 

comment periods ended October 30, 

2019. Because Notice Nos. 182 and 183 

proposed similar regulatory 

amendments and the substance of the 

comments received were similar, TTB is 

finalizing the two notices in one final 

rule. 

Comments 

TTB received 644 comments in 

response to Notice No. 182 and 603 


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85516 Federal Register / Vol. 85, No. 249 / Tuesday, December 29, 2020 / Rules and Regulations 

comments in response to Notice No. 

183, for a total of 1,247 comments. 

Commenters included producers, 

wholesale distributers, retailers, trade 

associations (domestic and foreign), 

members of Congress, foreign 

government entities, and members of 

the public. 

TTB also considered 79 comments 

concerning standards of fill that were 

submitted in response to Notice No. 

176, Modernization of the Labeling and 

Advertising Regulations for Wine, 

Distilled Spirits, and Malt Beverages, 

published in the Federal Register (83 

FR 60562) on November 26, 2018. When 

these additional comments are taken 

into account, TTB reviewed 1,326 

comments regarding standard of fill 

issues as summarized below. 

Comments on the Proposed Elimination 

of the Standards of Fill 

Of the 1,326 comments TTB received, 

1,251 comments address the proposed 

elimination of the standards of fill. A 

total of 110 comments support the 

proposal—40 comments to Notice No. 

182, 40 comments to Notice No. 183, 

and 30 comments to Notice No. 176. Of 

the 1,141 comments opposed to 

eliminating the standards of fill—575 

commenters to Notice No. 182, 560 

commenters to Notice No. 183, and 6 

comments to Notice No. 176—960 are 

nearly identical form letters, a majority 

of which are associated with three 

wholesale distributing companies and 

their employees. 

Commenters supporting the 

elimination of the standards of fill 

generally state that the standards are 

unnecessary, restrictive to producers, 

and out-of-date. They note that there are 

no standards of fill for malt beverages or 

for other consumer products, and state 

that this does not cause difficulties. 

They contend that eliminating the 

standards of fill will result in lower 

costs for producers, will facilitate 

international trade, and will provide 

consumers with more options in 

beverage alcohol packaging. The 

American Craft Spirits Association 

(Notice No. 183, comment 78) states that 

it surveyed its membership concerning 

the rulemaking and ‘‘found 

overwhelming support for elimination 

of the current standards.’’ It adds that 

‘‘[i]n order to promote innovation 

within the industry and competitively 

enter products into the global 

marketplace, smaller spirits producers 

must have maximum flexibility to 

quickly meet consumer demand as well 

as diverse regulatory standards.’’ 

Several of the wine commenters who 

support elimination of the standards of 

fill cite the fact that they are unable to 

use certain can sizes to package wine 

because they are not among the 

authorized standard sizes. For example, 

Senator Charles Schumer (Notice No. 

182, comment 12) cites the inability of 

New York wineries to package their 

wine in 250 milliliter and 355 milliliter 

cans as grounds for eliminating the 

standard of fill regulations. The Senator 

argues that these sizes are popular 

single serving sizes that are readily 

available to producers since they are 

already mass produced for beer and 

soda. 

Commenters opposing the elimination 

of the standards of fill cite a number of 

reasons to retain the standards. The 

most often cited argument is that the 

standards of fill prevent consumer 

confusion. For example, commenters 

state that eliminating the standards of 

fill will cause a proliferation of sizes, 

making it difficult for consumers to 

compare prices on similar products. The 

Wine Institute (Notice No. 182, 

comment 162) states ‘‘consumers may 

not be able to tell the difference between 

a 750 milliliter wine bottle and a 700 

milliliter bottle, which could create an 

opportunity for producers to reduce 

costs and taxes while not necessarily 

reducing their prices. The current 

federal standards of fill allow 

consumers to shop by cost comparison 

without needing to calculate the price 

per milliliter.’’ 

A handful of commenters cite the 

European Union’s (EU) experience prior 

to 1990, when it had no standards of fill 

for distilled spirits. Drinks Ireland 

(Notice No. 183, comment 77) states that 

without standards of fill the market 

situation was ‘‘complex, expensive, and 

confusing for consumers.’’ The 

American Distilled Spirits Association 

(Notice No. 183, comment 111), citing 

comments submitted in response to the 

Bureau of Alcohol, Tobacco and 

Firearm’s 1987 Advance Notice of 

Proposed Rulemaking (Notice No. 633, 

June 24, 1987, 52 FR 23685) on 

standards of fill, notes that the EU’s lack 

of standards resulted in ‘‘a confusing 

array of bottle sizes being sold side-byside on retail shelves creating an 

environment ripe for consumer 

confusion.’’ 

A number of commenters state that 

eliminating the standards of fill is 

inconsistent with the FAA Act. A letter 

signed by 52 members of the 

Congressional Wine Caucus states it 

would ‘‘run directly counter to TTB’s 

stated mission of prohibiting consumer 

deception’’ (Notice No. 182, comment 

168). Similar comments include that of 

the Wine Institute, which comments 

that eliminating the standards of fill 

‘‘would lead to the chaotic consumer 

marketplace that the FAA Act was 

intended to prevent.’’ Six industry 

associations filing jointly (Notice No. 

183, comment 108) state that retaining 

the standards of fill is consistent with 

TTB’s statutory authority under the 

FAA Act to protect consumers. 

Opposing comments also argued that 

eliminating the standards of fill will 

result in conflicting State requirements. 

These commenters report that a number 

of States defer to the Federal standard 

of fill requirements, so elimination 

could result in a patchwork of different 

State rules. The Congressional Wine 

Caucus states: ‘‘38 states defer to the 

federal standard and if it is eliminated, 

these states will be forced to enact new 

container size requirements. This will 

create serious disruption to business as 

wineries would have to overhaul their 

sales, marketing, and compliance 

models to adjust to 38 varying state 

regulations.’’ 

No State entity submitted comments 

to either notice, although TTB did 

request comments in Notice Nos. 182 

and 183 from State regulators on 

whether the proposal would present 

regulatory issues at a State level. 

However, TTB did receive a comment 

from the National Alcohol Beverage 

Control Association (NABCA), which 

represents jurisdictions, including 

States, which directly control the 

distribution and sale of beverage alcohol 

within their borders. NABCA (Notice 

No. 182, comment 64; Notice No. 183, 

comment 55) opposes the elimination of 

the standards of fill and comments that 

the States currently using the Federal 

standards will enact new standard of fill 

requirements that could be different in 

each State. 

Numerous commenters state that a 

proliferation in sizes will cause harm to 

distributors and retailers. According to 

many of these commenters, more sizes 

will result in additional SKUs, which 

will increase costs for these industry 

members. Southern Glazer’s Wine & 

Spirits (Notice No. 183, comment 66) 

states that the increase in SKUs ‘‘will 

have cascading economic ramifications 

throughout the entire value chain—from 

supplier to wholesaler to retailer to the 

end consumer. It will require major 

wholesalers, for example, to invest in 

elevated inventory levels, enhanced 

material handling capabilities, and 

increased storage space.’’ The California 

Grocers Association (Notice No. 182, 

comment 169) states that ‘‘Eliminating 

the regulation on standard wine and 

spirits sizes will increase our costs,’’ 

and provides examples relating to such 

things as shelf space and inventory. 

Opponents also contend that 

eliminating the standards of fill will 


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Federal Register / Vol. 85, No. 249 / Tuesday, December 29, 2020 / Rules and Regulations 85517 

cause an increase in counterfeit and 

gray market imports that are currently 

prevented because the standards do not 

include some common international 

sizes, most specifically the 700 milliliter 

size. A large number of commenters 

state that adulterated products could 

more easily enter the country, resulting 

in injury and possibly death to 

consumers. This concern is expressed 

by Moe ̈t Hennessy USA, Inc. (Notice No. 

183, comment 100) in its comment: 

‘‘* * * we wish to express a serious 

concern that will be impacted by 

changes to the existing standards— 

unauthorized importation of distilled 

spirits and wine products * * *. 

Allowing unauthorized imports robs 

Moe ̈t Hennessy USA and other 

authorized importers of the opportunity 

to protect against those risks and to 

ensure that our products are being sold 

in the intended state and manner. U.S. 

consumers should never face the risk of 

injury or death due to untraceable 

adulterated or counterfeit product 

brought in by an unauthorized 

importer.’’ 

Finally, a few commenters argue that 

malt beverages are different in 

meaningful ways from wine and 

distilled spirits, and the fact that there 

are no standards of fill for malt 

beverages does not imply that there 

should not be standards of fill for wine 

and distilled spirits. These commenters 

state that because of historical practices 

consumers have different expectations 

for malt beverages than they do for wine 

and spirits. Additionally, Sazerac 

(Notice No. 183, comment 67) reports 

that a number of States mandate specific 

standards of fill for malt beverages, 

which it argues has driven 

standardization nationally. Heaven Hill 

Brands (Notice No. 183, comment 96) 

notes that in most states malt beverage 

distributors have the ability to distribute 

directly. It contends that ‘‘[t]his direct 

distribution by suppliers allows for 

more flexibility in size due to fewer 

limitations resulting from a distributor’s 

management of malt beverage inventory. 

Distilled spirits, however, must go 

through the distributor tier and have a 

much longer shelf life creating long 

periods of storage.’’ 

Comments Regarding the Addition of 

Specific Sizes 

Both Notice Nos. 182 and 183 stated 

that TTB was also considering 

maintaining the standards of fill, but 

‘‘liberalizing the existing regulatory 

scheme’’ by adding certain additional 

standards of fill. In the respective 

notices, TTB listed sizes for which it 

had received a petition as 200, 250, 355, 

620, and 700 milliliters and 2.25 liters 

for wine, and 700, 720, 900 milliliter 

and 1.8 liters for distilled spirits. A large 

number of commenters expressed 

support for the addition of specific 

petitioned-for sizes as follows: 

Wine—250 milliliter: This size was 

supported by 51 commenters. 

Proponents of this size note that some 

wines are currently being sold in 

aggregate packages of four 250 milliliter 

cans, which together equal one liter, an 

authorized standard of fill. Industry 

members state that the 250 milliliter is 

popular with consumers as a single 

serving size, with some further stating 

that this size promotes portion control 

and responsible drinking. In his 

comment, Senator Schumer states that 

‘‘a recent wine consumer survey by 

WICResearch.com concluded that ‘the 

total wine market will grow in order to 

satisfy consumer preferences,’ if TTB 

permitted sales of wine-in-a-can in a 

single 250 milliliter size, which the 

survey revealed is the single-serve size 

most popular with consumers.’’ Wine 

Institute notes that 250 milliliter 

containers are ‘‘ideal serving containers 

for consumption at certain licensed 

venues such as stadiums, parks and 

other locations where glass or larger 

containers are not viable,’’ and retailers 

wish to sell them individually in such 

venues. 

Some commenters report that retailers 

often separate the containers from the 

aggregate packages, causing trade 

enforcement issues at the State level. To 

remedy this, these commenters 

recommend TTB approve the 250 

milliliter size as an authorized standard 

of fill. 

Wine—355 milliliter (12 oz.): This size 

was supported by 38 commenters. 

Several cider producers state that since 

the 355 milliliter (12 oz) can size is 

standard in the beer industry, their 

customers want and expect that size, 

making it critical to their commercial 

success. These producers note that, in 

the production of cider, apples often 

naturally ferment to an alcohol by 

volume (abv) level just above 7.4%, so 

producers often take steps to lower the 

abv below 7% so that the standards of 

fill regulations will not apply, enabling 

them to use 355 milliliter containers. 

They state that sugar levels in apples 

vary widely depending on climate and 

other factors, making final alcohol levels 

difficult to predict. They argue that 

being able to use the 355 milliliter 

container size will eliminate this 

uncertainty. 

Wine—200 milliliter: This size was 

supported by 23 commenters. Several 

cider industry members state that their 

customers are seeking products in this 

size. The Vermont Grape and Wine 

Council (Notice No. 182, comment 74) 

and Presque Isle Wine Cellars (Notice 

No. 182, comment 37) state that this size 

is good for ice wine and is the size used 

in Canada for ice wine. Other 

commenters note that this size is 

authorized in Europe, so its approval 

will facilitate trade. 

Other wine sizes: The other container 

sizes proposed in Notice No. 182—620 

milliliter and 700 milliliter—were 

supported by two comments and one 

comment, respectively. TTB received no 

comments specifically addressing the 

proposed 2.25 liter size. However, TTB 

received comments proposing 

additional wine sizes that had not been 

proposed in Notice No. 182: 20 

milliliter, 180 milliliter, 225 milliliter, 

255 milliliter, 300 milliliter, 360 

milliliter, 473 milliliter (16 oz), 475 

milliliter, 550 milliliter, 568 milliliter, 

650 milliliter, 720 milliliter, 1.8 liters, 

and 3.5 liters. Several of these sizes 

were suggested in Notice No. 176 by 

cider producers who contend that the 

sizes are important for their industry’s 

success. Other proponents state that 

their proposed sizes are authorized in 

another country, so approval will 

facilitate trade. 

Distilled spirits—700 milliliter: This 

size was supported by 18 commenters, 

who generally state that the 700 

milliliter size is popular in other 

countries, so approval will facilitate 

trade and allow U.S. consumers more 

options in imported distilled spirits. 

However, several other commenters 

specifically cite the 700 milliliter size as 

a size that should not be approved. 

These commenters state that 700 

milliliter is too close to the currently 

approved 750 milliliter size, and also 

contend that the size is the most 

popular bottle size worldwide with 

counterfeiters. Constellation Brands, 

Inc. (Notice No. 183, comment 107) 

states that the ‘‘existence of both a 750 

ml and 700 ml size in the marketplace 

could lead to consumer confusion and 

allow for confusing or misleading 

pricing practices. The addition of a 700 

ml size could also enable sales by 

unauthorized importers.’’ Moet 

Hennessy USA, Inc. (Notice No. 183, 

comment 100) states that the prohibition 

against the 700 milliliter size has kept 

many unauthorized spirits imports out. 

Approval, it believes, ‘‘will ‘open the 

floodgates’ for unauthorized spirits 

imports into the U.S.’’ It further states 

that ‘‘unreputable operators * * * refill 

used spirits bottles with different liquid, 

causing potential serious risk to 

consumers.’’ 

Other distilled spirits sizes: Three of 

the petitioned-for sizes—720 milliliter, 

900 milliliter, and 1.8 liters—received 


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85518 Federal Register / Vol. 85, No. 249 / Tuesday, December 29, 2020 / Rules and Regulations 

support from three Japanese trade 

associations and the Japanese National 

Tax Agency. Several other additional 

distilled spirits sizes were proposed by 

commenters that had not been proposed 

in Notice No. 183: 20 milliliter, 250 

milliliter, 350 milliliter, 355 milliliter, 

500 milliliter, 1.5 liters, 2 liters, 3 liters, 

3.75 liters, and 5 gallons. Five 

commenters proposed the 1.5 liters size, 

stating that the size is used in other 

countries, so its approval will align the 

standards of fill more closely with the 

global marketplace. The EU referenced 

all nine of its authorized sizes (100 

milliliter, 200 milliliter, 350 milliliter, 

500 milliliter, 700 milliliter, 1 liter, 1.5 

liters, 1.75 liters and 2 liters) in its 

comment. The proponents of these sizes 

cite their usage in other countries and 

state that their approval will facilitate 

trade and offer additional options to 

U.S. consumers. 

Comments Opposing Addition of Any 

New Sizes 

Numerous commenters to both 

notices opposed the approval of any 

new sizes, stating that the existing 

standards of fill already provide a wide 

variety of package sizes. Some of these 

commenters are not against the addition 

of new sizes per se, but rather believe 

that the current rulemaking did not 

provide enough opportunity for the 

public to focus on the petitioned-for 

sizes. E. & J. Gallo Winery (Notice No. 

182, comment 146) states that ‘‘[e]ach 

proposed new standard of fill should be 

the subject of a separate rulemaking 

proceeding so that commenters can 

review each in the context of existing 

standards of fill and any other proposals 

under consideration. Among other 

things, those rulemakings should 

address whether a proposed new 

standard of fill should replace an 

existing standard of fill or whether it 

should be limited to a particular 

package type such as cans or Tetra Paks. 

This type of deliberation is not possible 

in the current rulemaking.’’ 

Comments on Proposal for an Expedited 

Approval Process 

Both Notice Nos. 182 and 183 

proposed the option of instituting an 

expedited approval process for 

standards of fill were TTB to continue 

to approve individual standards. A total 

of 33 comments from both notices 

specifically address this proposal. 

Only four comments express complete 

support for an expedited approval 

process. The U.S. Association of Cider 

Makers (Notice No. 182, comment 158) 

supports an expedited process because 

‘‘the industry and marketplace change 

faster than the existing proposed 

rulemaking process can react, and we 

believe it is unreasonable to rely on 

NPRMs to quickly respond to market 

innovations.’’ The National Association 

of Beverage Importers (Notice No. 182, 

comment 136 and Notice No. 183, 

comment 105) states that an 

administrative process would ‘‘enable 

TTB to ‘test the waters’ of multiple 

sizes.’’ It could, for example, permit the 

optional use of a 700 milliliter distilled 

spirits bottle for a limited period of time 

to determine how consumers react and 

the industry implements the 

introduction of this standard size from 

the global market. 

Thirteen comments express complete 

opposition to any administrative 

approval process. These commenters 

generally state that new sizes should be 

approved by rulemaking, which will 

allow for public comments and 

transparency. Some of them also 

comment that it is not clear how such 

a process would work. Sazerac 

Company, Inc. (Notice No. 182, 

comment 85) states that ‘‘the public 

should be given a meaningful 

opportunity to comment on potential 

changes as this should not be merely an 

administrative decision. Without 

sufficiently clear, publically-available 

standards, these standards could change 

over time without public input as 

officials change.’’ Sazerac also states 

that it believes comment would be 

required under the Administrative 

Procedure Act (APA) because the 

standards of fill are binding on industry. 

An additional 16 comments express 

support for an expedited process if it 

includes a public comment period or an 

opportunity for ‘‘open consultation’’ 

with all stakeholders before new sizes 

are approved. Several of these 

commenters also state that they would 

like additional information about how 

an expedited process would work. 

Other Comments 

No comments were received regarding 

the Notice No. 182 proposal to increase 

the minimum headspace for wine 

containers from not in excess of 10 

percent of the container’s capacity to 

not in excess of 30 percent for clear 

containers 100 milliliters or less. 

Comments on Labeling Distilled Spirits 

With U.S. Measure and Malt Beverages 

With Metric Measure 

Five comments to Notice No. 183 

opposed the proposal to amend the 

labeling regulations for distilled spirits 

and malt beverages to specifically 

provide that distilled spirits may be 

labeled with the equivalent standard 

U.S. measure in addition to the 

mandatory metric measure, and that 

malt beverages may be labeled with the 

equivalent metric measure in addition 

to the mandatory U.S. measure. Such 

labeling has been allowed under TTB 

policy, but it has not been explicitly 

authorized in the regulations. These 

commenters state that such dual 

labeling is unnecessary and will cause 

‘‘label clutter.’’ Six comments to Notice 

No. 182 expressed opposition to 

allowing U.S. units on wine labels, even 

though TTB made no proposal on the 

issue in Notice No. 182, as the wine 

labeling regulations already state that 

wine may be labeled with the equivalent 

U.S. unit in addition to the mandatory 

metric unit. See 27 CFR 4.37(b). 

TTB Analysis 

As discussed above, TTB received 110 

comments that expressed support for 

eliminating the standards of fill, 

asserting that eliminating the standards 

will provide them with greater 

flexibility to meet consumer demands 

and grow their businesses. TTB received 

1,141 comments that oppose eliminating 

the standards of fill (including the 937 

nearly identical comments from 

individuals associated with three 

industry members). These commenters 

contended that eliminating the 

standards of fill would cause consumer 

confusion and potentially lead to a 

proliferation of differing State container 

size requirements that could cause 

further consumer confusion. 

Commenters also expressed concern 

about significant market disruption. 

Based upon these comments, 

particularly those with regard to the 

potential consumer confusion, TTB 

believes that the appropriate action at 

this time is not to eliminate all 

standards of fill but instead to identify 

and authorize specific standards of fill 

from among those sizes that were the 

subject of notice and comment and for 

which TTB received sufficient 

information to make a determination. 

TTB notes that, while some 

commenters expressed support for 

eliminating of the standards of fill 

(including Senator Charles Schumer), 

the comments themselves focused 

specifically upon ensuring that certain 

can sizes, such as 250 milliliter and 355 

milliliter for wine, were authorized. 

TTB believes that its authorization of 

these sizes largely addresses these 

commenters’ concerns. 

Commenters expressed considerable 

support for most of the sizes TTB 

included in its proposals. However, few 

commenters supported authorizing the 

620 milliliter, 700 milliliter, and 2.25 

liter sizes for wine (which received 

specific support from 2, 1, and 0 

commenters respectively). 


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Federal Register / Vol. 85, No. 249 / Tuesday, December 29, 2020 / Rules and Regulations 85519 

The 700 milliliter size for distilled 

spirits was the only proposed size, for 

either wine or distilled spirits, for 

which some expressed opposition. With 

regard to the 700 milliliter size, TTB 

received supportive comments from 

industry members who state that 

approval of the 700 milliliter size for 

distilled spirits will facilitate trade for 

U.S. exporters and importers, because it 

is commonly used in other countries, 

and none of the commenters opposed to 

the 700-milliliter size provided 

information that would support a 

finding that the 700-milliliter size will 

be any more misleading to consumers 

than the other sizes supported by 

commenters generally. While some 

commenters noted that the 700-milliliter 

size is close to the already authorized 

750-milliter size, as noted above, 

commenters supported approving the 

355-milliliter size for wine, although 

375-milliter is already an authorized 

size, and no commenters suggested that 

the closeness in size would lead to 

confusion. Additionally, although TTB 

understands the concern that 

commenters raised with regard to the 

potential for counterfeit products in the 

700-milliliter size, TTB believes it is 

appropriate to continue to apply 

enforcement measures to deal with 

counterfeit products of any size. 

In light of this, TTB believes that the 

addition of most of the petitioned-for 

sizes will result in many of the same 

benefits that were intended when it 

proposed eliminating the standards of 

fill—providing bottlers with more 

flexibility, facilitating the movement of 

goods in domestic and international 

commerce, and providing additional 

purchasing options to consumers, but 

without causing the disruption 

commenters expressed concerns over 

regarding the proposed elimination of 

standards of fill. 

U.S.–Japan Trade Agreement 

On October 7, 2019, the United States 

and Japan reached an agreement (the 

Agreement) on market access for certain 

agriculture and industrial goods. On 

December 30, 2019, a Federal Register 

notice (84 FR 72187) was issued to 

implement the Agreement. As part of 

the Agreement, the United States 

reached a side letter agreement with 

Japan dated October 7, 2019, which 

addresses issues related to alcohol 

beverages, including standards of fill 

(‘‘Side Letter’’). See https://ustr.gov/ 

sites/default/files/files/agreements/ 

japan/Letter_Exchange_on_Alcoholic_

Beverages.pdf. The Side Letter states 

that the U.S. Department of the Treasury 

will take final action on Notice Nos. 182 

and 183. If the final action does not 

address certain sizes—180, 300, 360, 

550, 720 milliliters, and 1.8 liters for 

wine, and 700, 720, 900 milliliters, and 

1.8 liters for distilled spirits—then the 

U.S. Department of the Treasury shall 

propose new rulemaking to allow for 

those sizes. The Side Letter took effect 

with the U.S.-Japan Trade Agreement, 

which entered into force on January 1, 

2020. 

In Notice No. 183, TTB referenced the 

distilled spirits sizes listed in the Side 

Letter. It described the petitions from 

three Japanese trade associations and a 

Japanese government agency for those 

sizes. These entities submitted 

comments that supported the 

elimination of the standards of fill, but 

further stated that, if the standards are 

not eliminated, they support the 

approval of their petitioned-for sizes. 

These proposed sizes for distilled spirits 

are discussed in Notice No. 183. 

Because TTB had not received petitions 

for the wine sizes listed in the Side 

Letter, TTB did not reference those sizes 

for wine in Notice No. 182. 

Nevertheless, TTB did receive 

comments from a Japanese trade 

association and a Japanese government 

agency proposing the approval of those 

sizes. The two comments support the 

elimination of the standards of fill, but 

requested the approval of the 180, 300, 

360, 550, 720 milliliters, and 1.8 liters 

sizes for wine if the standards of fill for 

wine are not eliminated. 

Administrative Approval Process 

TTB requested comments regarding 

whether it should include in the new 

regulations an expedited administrative 

approval process that would replace the 

requirement for separate rulemaking in 

order to add new sizes to the standards 

of fill. This expedited approval process 

was offered as a quicker and less 

burdensome way to facilitate the 

expansion of bottled sizes without 

creating unnecessary industry burden. 

However, few commenters supported 

the process unless it included a public 

comment period or other means to 

consult with the industry, similar to the 

existing rulemaking process. Other 

commenters expressed support for an 

administrative approval process 

provided that TTB establishes criteria 

for approving additional sizes, and 

stated that TTB had not identified 

appropriate criteria for such a 

procedure. Consequently, TTB believes 

that an administrative procedure for 

approving new standards of fill is not 

appropriate at this time. 

TTB Finding 

After careful analysis of the comments 

discussed above, TTB has decided not 

to eliminate the standards of fill for 

wine and distilled spirits. Rather, TTB 

is adding certain sizes for which TTB 

had aired petitions in Notice Nos. 182 

and 183. Based upon the comments 

received to those notices, TTB is 

authorizing the addition of the 200, 250, 

and 355 milliliters sizes for wine to 

§ 4.72, and the 700, 720, 900 milliliters, 

and 1.8 liters sizes for distilled spirits to 

§ 5.47a. 

At this time, TTB is not adding the 

620 milliliters, 700 milliliters, and 2.25 

liter wine sizes for which it had aired 

petitions, because comments received 

regarding these sizes did not provide 

sufficient information for TTB to 

determine that they should be 

authorized standards of fill. TTB will 

consider including these sizes and any 

new petitions for additional sizes in 

subsequent rulemaking. Moreover, TTB 

is not adding a 2-milliliter size for 

distilled spirits that was the subject of 

a petition because, as discussed in 

Notice No. 183, TTB believes that a 

minimum size of 50 milliliters is needed 

to ensure sufficient space on the 

container for required labeling. 

TTB is adopting the proposal in 

Notice No. 182 to increase the minimum 

headspace in wine containers from not 

in excess of 10 percent of the container’s 

capacity to not in excess of 30 percent 

for clear containers 100 milliliters or 

less. TTB is likewise adopting the 

Notice No. 183 proposal to amend the 

labeling regulations for distilled spirits 

and malt beverages to specifically 

provide that distilled spirits may be 

labeled with the equivalent standard 

U.S. measure in addition to the 

mandatory metric measure, and that 

malt beverages may be labeled with the 

equivalent metric measure in addition 

to the mandatory U.S. measure. 

TTB will conduct rulemaking to 

propose the addition of new standards 

of fill for wine, including the 180, 300, 

360, 550, 720 milliliters, and 1.8 L sizes 

that Japanese government entities and 

Japanese industry associations 

requested during the comment period, 

and which were included in the Side 

Letter signed as part of the U.S.-Japan 

Trade Agreement discussed above. 

Regulatory Analysis and Notices 

Regulatory Flexibility Act 

TTB certifies that this final rule will 

not have a significant economic impact 

on a substantial number of small 

entities. This final rule will provide 

wine and distilled spirits bottlers and 

importers with additional flexibility to 

use new bottle sizes if they so choose. 

This proposed regulation does not 

impose any new reporting, 


KHAMMOND on DSKJM1Z7X2PROD with RULES
85520 Federal Register / Vol. 85, No. 249 / Tuesday, December 29, 2020 / Rules and Regulations 

recordkeeping, or other administrative 

requirements. Accordingly, a regulatory 

flexibility analysis is not required. 

Paperwork Reduction Act 

The collection of information in this 

rule has been previously approved by 

the Office of Management and Budget 

(OMB) under the title ‘‘Labeling and 

Advertising Requirements Under the 

Federal Alcohol Administration Act,’’ 

and assigned control number 1513– 

0087. This regulation will not result in 

a substantive or material change in the 

previously approved collection action, 

since the nature of the mandatory 

information that must appear on labels 

affixed to the container remains 

unchanged. 

Executive Order 12866 

It has been determined that this final 

rule is not a significant regulatory action 

as defined in Executive Order 12866 of 

September 30, 1993. Therefore, a 

regulatory assessment is not necessary. 

Inapplicability of the Delayed Effective 

Date Requirement 

Because these regulations relieve a 

restriction by providing wine and 

distilled spirits bottlers and importers 

with additional flexibility to use new 

bottle sizes if they so choose, and do not 

impose any new reporting, 

recordkeeping, or other administrative 

requirements, it has been determined, 

pursuant to 5 U.S.C. 553(d)(1), that 

these regulations will be issued without 

a delayed effective date. 

Drafting Information 

Jennifer Berry of the Regulations and 

Rulings Division drafted this document, 

along with other Department of the 

Treasury personnel. 

List of Subjects 

27 CFR Part 4 

Advertising, Alcohol and alcoholic 

beverages, Consumer protection, 

Customs duties and inspection, Export, 

Imports, Labeling, Packaging and 

containers, Reporting and recordkeeping 

requirements, Wine. 

27 CFR Part 5 

Advertising, Alcohol and alcoholic 

beverages, Consumer protection, 

Customs duties and inspection, Exports, 

Imports, Labeling, Liquors, Packaging 

and containers, Reporting and 

recordkeeping requirements. 

27 CFR Part 7 

Advertising, Alcohol and alcoholic 

beverages, Beer, Customs duties and 

inspection, Exports, Imports, Labeling, 

Malt beverages, Packaging and 

containers. Reporting and recordkeeping 

requirements. 

Amendment to the Regulations 

For the reasons discussed in the 

preamble, TTB is amending 27 CFR 

parts 4, 5, and 7 as follows: 

PART 4—LABELING AND 

ADVERTISING OF WINE 

■ 1. The authority citation for part 4 

continues to read as follows: 

Authority: 27 U.S.C. 205, unless otherwise 

noted. 

■ 2. Section 4.71(a)(3) is revised to read 

as follows: 

§ 4.71 Standard wine containers. 

(a) * * * 

(3) Headspace. It must be designed 

and filled so that the headspace, or 

empty space between the top of the 

wine and the top of the container, meets 

the following specifications: 

(i) 187 mL or more. If the net contents 

stated on the label are 187 milliliters or 

more, the headspace must not exceed 6 

percent of the container’s total capacity 

after closure. 

(ii) Less than 187 mL. If the net 

contents stated on the label are less than 

187 milliliters, except as described in 

(a)(3)(iii) of this section, the headspace 

must not exceed 10 percent of the 

container’s total capacity after closure. 

(iii) Exception. Wine bottled in clear 

containers with the contents clearly 

visible, with a net content stated on the 

label of 100 milliliters or less, may have 

a headspace that does not exceed 30 

percent of the container’s total capacity 

after closure. 

■ 3. In § 4.72, amend the table in 

paragraph (a) by adding to the list of 

authorized standards of fill three new 

sizes after the entry for 375 milliliters, 

to read as follows: 

§ 4.72 Metric standards of fill. 

(a) * * * 

* * * * * 

355 milliliters. 

250 milliliters. 

200 milliliters. 

* * * * * 

PART 5—LABELING AND 

ADVERTISING OF DISTILLED SPIRITS 

■ 4. The authority citation for part 5 

continues to read as follows: 

Authority: 26 U.S.C. 5301, 7805, 27 U.S.C. 

205. 

■ 5. In § 5.38, revise paragraph (a) to 

read as follows: 

§ 5.38 Net Contents. 

(a) Standards of fill. The net contents 

of distilled spirits shall be stated in 

metric measure. The equivalent 

standard U.S. measure may also be 

stated on the container in addition to 

the metric measure. See § 5.47a of this 

part for tolerances and for regulations 

pertaining to unreasonable shortages. 

* * * * * 

■ 6. In § 5.47a, amend paragraph (a)(1) 

by adding to the list of authorized 

standards of fill four new entries in 

numeric order, to read as follows: 

§ 5.47a Metric standards of fill (distilled 

spirits bottled after December 31, 1979). 

(a) * * * 

(1) * * * 8 liters. 

* * * * * 

900 milliliters. 

* * * * * 

720 milliliters. 

700 milliliters. 

* * * * * 

PART 7—LABELING AND 

ADVERTISING OF MALT BEVERAGES 

■ 7. The authority citation for part 7 

continues to read as follows: 

Authority: 27 U.S.C. 205. 

■ 8. In § 7.27, the introductory text of 

paragraph (a) is revised to read as 

follows: 

§ 7.27 Net contents. 

(a) Net contents shall be stated in 

standard U.S. measure as follows, and 

the equivalent metric measure may also 

be stated: 

* * * * * 

Signed: December 22, 2020. 

Elisabeth C. Kann, 

Acting Administrator. 

Approved: December 22, 2020. 

Timothy E. Skud, 

Deputy Assistant Secretary, Tax, Trade, and 

Tariff Policy. 

[FR Doc. 2020–28747 Filed 12–28–20; 8:45 am] 

BILLING CODE 4810–31–P 

DEPARTMENT OF HOMELAND 

SECURITY 

Coast Guard 

33 CFR Part 165 

[Docket No. USCG–2020–0719] 

RIN 1625–AA00 

Safety Zone; Oakland Ship-to-Shore 

Crane Arrival, San Francisco Bay, 

Oakland, CA 

AGENCY: Coast Guard, DHS. 


KHAMMOND on DSKJM1Z7X2PROD with RULES