[Federal Register Volume 77, Number 73 (Monday, April 16, 2012)]
[Rules and Regulations]
[Pages 22485-22488]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-9101]


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DEPARTMENT OF THE TREASURY

Alcohol and Tobacco Tax and Trade Bureau

27 CFR Parts 4, 5, and 7

[Docket No. TTB-2010-0008; T.D. TTB-103; Ref: Notice No. 111]
RIN 1513-AB79


Disclosure of Cochineal Extract and Carmine in the Labeling of 
Wines, Distilled Spirits, and Malt Beverages

AGENCY: Alcohol and Tobacco Tax and Trade Bureau, Treasury.

ACTION: Final rule; Treasury decision.

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SUMMARY: The Alcohol and Tobacco Tax and Trade Bureau is revising its 
regulations to require the disclosure of the presence of cochineal 
extract and carmine on the labels of any alcohol beverage product 
containing one or both of these color additives. This rule responds to 
a final rule issued by the Food and Drug Administration. Consumers who 
are allergic to cochineal extract or carmine will now be able to 
identify and thus avoid alcohol beverage products that contain these 
color additives.

DATES: Effective Date: May 16, 2012. Transitional rules are provided 
which will require compliance by April 16, 2013. Voluntary compliance 
with this final rule, including making any required labeling changes, 
may begin immediately.

FOR FURTHER INFORMATION CONTACT: Lisa M. Gesser, telephone 202-453-
1039, ext. 292 or Joanne C. Brady, telephone 202-453-1039, ext. 291; 
Regulations and Rulings Division, Alcohol and Tobacco Tax and Trade 
Bureau, 1310 G Street NW., Box 12, Washington, DC 20005.

SUPPLEMENTARY INFORMATION: 

I. TTB's Authority To Prescribe Alcohol Beverage Labeling Regulations

    Section 105(e) of the Federal Alcohol Administration Act (FAA Act), 
codified at 27 U.S.C. 205(e), sets forth standards for regulation of 
the labeling of wine (containing at least 7 percent alcohol by volume), 
distilled spirits, and malt beverages, generally referred to as 
``alcohol beverage products'' throughout this final rule. This section 
gives the Secretary of the Treasury the authority to issue regulations 
to prevent deception of the consumer, to provide the consumer with 
``adequate information'' as to the identity and quality of the product, 
to prohibit false or misleading statements, and to provide information 
as to the alcohol content of the product.

[[Page 22486]]

    Section 105(e) of the FAA Act also requires that a person obtain a 
certificate of label approval (COLA) for all wines, distilled spirits, 
or malt beverages introduced into interstate or foreign commerce before 
bottling the product or removing the product from customs custody, in 
accordance with regulations prescribed by the Secretary. The labeling 
provisions of the FAA Act also give the Secretary the authority to 
prohibit, irrespective of falsity, statements relating to age, 
manufacturing processes, analyses, guarantees, and scientific or 
irrelevant matters that are likely to mislead the consumer. In the case 
of malt beverages, the labeling provisions of the FAA Act apply only if 
the laws of the State into which the malt beverages are to be shipped 
impose similar requirements.
    The Alcohol and Tobacco Tax and Trade Bureau (TTB) administers the 
FAA Act pursuant to section 1111(d) of the Homeland Security Act of 
2002, codified at 6 U.S.C. 531(d). The Secretary has delegated various 
authorities through Treasury Department Order 120-01 (Revised), dated 
January 21, 2003, to the TTB Administrator to perform the functions and 
duties in the administration and enforcement of this law.

II. Background

    In 1987, the Food and Drug Administration (FDA) and the Bureau of 
Alcohol, Tobacco and Firearms (ATF), TTB's predecessor agency, entered 
into a memorandum of understanding (published in the Federal Register 
at 52 FR 45502, November 30, 1987), to clarify the enforcement 
responsibilities of each agency with respect to alcohol beverages. ATF 
agreed that ``when FDA has determined that the presence of an 
ingredient in food products, including alcoholic beverages, poses a 
recognized public health problem, and that the ingredient or substance 
must be identified on a food product label, ATF would initiate 
rulemaking proceedings to promulgate labeling regulations for alcoholic 
beverages consistent with ATF's health policy with respect to alcoholic 
beverages.'' TTB operates under the same memorandum of understanding 
with FDA.
    Cochineal extract and carmine are color additives that are 
permitted for use in foods, including alcohol beverage products, in the 
United States. The FDA has listed these color additives, and the 
conditions for their safe use in foods, in Sec.  73.100 of the FDA 
regulations (21 CFR 73.100). On January 5, 2009, FDA published a final 
rule in the Federal Register (74 FR 207) requiring cochineal extract 
and carmine to be declared by name on the labels of all food and 
cosmetic products containing one or both of these color additives. FDA 
explained that this requirement was adopted in response to reports of 
severe allergic reactions, including anaphylaxis, to foods containing 
these color additives. The FDA final rule does not require food or 
cosmetics labels to disclose that these color additives are derived 
from insects.
    Accordingly, on November 3, 2010, TTB published in the Federal 
Register a Notice of Proposed Rulemaking, Notice No. 111, (75 FR 67669) 
which proposed to require cochineal extract and carmine to be listed on 
the labels of any alcohol beverage product containing one or both of 
these color additives. Specifically, TTB proposed amending Sec. Sec.  
4.32, 5.32, and 7.22 of Title 27 Code of Federal Regulations to require 
that all alcohol beverage products containing cochineal extract or 
carmine list the additive(s) prominently and conspicuously on the brand 
label or on a back label using its respective common or usual name 
``cochineal extract'' or ``carmine.'' Beginning on the implementation 
date, an alcohol beverage product containing cochineal extract or 
carmine would have to bear the mandatory statement on its label at the 
time of its removal from bond or from customs custody. TTB sought 
comments on the proposal as outlined in Notice No. 111. TTB 
specifically sought comments from affected industry members as to 
whether an implementation date beginning 90 days from the date of the 
final rule would provide a sufficient amount of time to incorporate 
these changes. Commenters had until January 3, 2011, to respond to the 
proposed rule.
    During the comment period, TTB received a request from the 
Distilled Spirits Council of the United States, Inc. (DISCUS), a 
national trade association that represents producers and marketers of 
distilled spirits and importers of wines sold in the United States, to 
extend the comment period for 60 days to allow more time to collect and 
review data from domestic and foreign companies regarding the issues 
raised in the proposed rule.
    In response to this request, on December 29, 2010, TTB published in 
the Federal Register Notice No. 114 (75 FR 81949) which extended the 
comment period for Notice No. 111 an additional 60 days. Accordingly, 
the comment period for the proposal outlined in Notice No. 111 closed 
on March 4, 2011.

III. Discussion of Comments and Agency Responses

    TTB received a total of six responses to TTB Notice No. 111, in 
addition to the request to extend the comment period discussed above. 
The commenters include three individuals, two trade associations 
(DISCUS and the International Association of Color Manufacturers 
(IACM)), and one alcohol beverage importer. Two of the individual 
commenters commented in support of TTB's proposal to require the 
disclosure of these color additives, which they characterize as known 
allergens, on alcohol beverage labels. Furthermore, none of the other 
commenters opposed TTB's proposal to require the disclosure of 
cochineal extract or carmine on alcohol beverage labels.
    With regard to the number of products that would be affected by the 
proposed rule, the comments did not provide specific numbers. However, 
DISCUS stated that it believed that ``several'' alcohol beverage 
products would be affected, and the IACM stated that ``few alcohol 
beverage products'' contained cochineal extract. Based on the comments, 
TTB has no reason to believe that a substantial number of industry 
members would be affected by the proposed rule. Nonetheless, several 
commenters suggested modifications to the proposed rule. The following 
is a summary of those comments and TTB's responses.

Comments Concerning Disclosure of the Origin of the Color Additives

    One individual commenter supported the requirement to list 
cochineal extract and carmine on alcohol beverage labels, but suggested 
that the TTB rule should go further and require statements on labels 
that disclose that the additives are animal products derived from an 
insect. The commenter stated that while industry groups may not want to 
list the source of the dye for fear that consumers would find the 
thought of insect derivatives unappealing, vegetarians or people of 
certain faiths may be interested in this information so they can avoid 
consuming products that conflict with their beliefs.
    IACM stated that it did not oppose the disclosure of cochineal 
extract and carmine on alcohol beverage labels. However, IACM opposed 
any requirement to disclose that the additives are derived from 
insects. IACM noted that FDA (in its proposed rule published in the 
Federal Register at 71 FR 4839 on January 30, 2006) specifically stated 
it saw no need to require the declaration of insect origin

[[Page 22487]]

for cochineal extract and carmine, as information on the origin of the 
additives was readily available to those who wanted it.

TTB Response

    As previously noted, the FDA final rule does not require that food 
or cosmetics labels disclose that these color additives are derived 
from insects. In the preamble to its final rule, which was published in 
the Federal Register on January 5, 2009 (74 FR 207), FDA explained that 
it did not agree with the commenters who suggested that declaring these 
color additives by name would provide insufficient information to 
consumers who choose to avoid products containing these additives. 
Similarly, TTB does not believe that the source of the color additives 
needs to be listed on the alcohol beverage label in order for consumers 
to have adequate information about the product. The purpose of the rule 
is to allow persons with sensitivities to cochineal extract or carmine 
the opportunity to avoid ingestion of or contact with these additives. 
Providing the common name of the color additives on the label will 
provide sufficient information to all consumers, including those with 
sensitivities to the additives as well as those who for other reasons 
wish to avoid these additives. Accordingly, TTB is not adopting this 
requested change in the final rule.

Comments Concerning the Implementation Period

    In their respective comments, the two trade associations and the 
alcohol beverage importer suggested that TTB extend the proposed 90-day 
implementation period in order to lessen the burden on affected 
industry members. IACM commented that while it does not anticipate that 
the proposed rule would have a substantial economic impact on color 
additive manufacturers, TTB should consider extending the 
implementation date from 90 days to 180 days after the date the final 
rule is published in order to reduce the burden on small companies that 
are already facing limited financial resources due to the sluggish 
economy.
    DISCUS stated in its comment that the proposed 90-day 
implementation period would not provide sufficient time to comply with 
the proposed labeling requirement. DISCUS suggested that TTB adopt a 
phased-in approach similar to the one which implemented the sulfite 
labeling disclosure. For that rule, TTB's predecessor agency, ATF, 
provided a one year transition period to fully implement the new 
requirement.
    The alcohol beverage importer stated in his comment that he 
currently imports a product that contains cochineal extract, and that 
he currently uses a TTB-approved label for this product that states 
that the product contains artificial color. He stated that although he 
does not oppose TTB's proposal, he is concerned about the 
implementation date, as he has a large supply of labels for this 
product. The commenter requested that the proposed labeling 
requirements be implemented no less than one year after the date the 
final rule is published, to allow more time to use up the labels. 
Alternatively, he requests that TTB grant him permission to use up the 
rest of his previously approved labels, as he believes the ``artificial 
color'' statement on the label will prevent consumers from being 
misled.

TTB Response

    After careful consideration of the comments concerning the 
implementation period, TTB agrees that a longer transition period is 
appropriate. A longer implementation period will allow more time for 
bottlers and importers to exhaust their label stocks before the new 
requirements become effective. Accordingly, the requirement to disclose 
the presence of cochineal extract and carmine by name on the labels of 
any alcohol beverage product containing one or both of these color 
additives will become mandatory for products that are removed on or 
after one year from the publication of this final rule in the Federal 
Register. TTB believes this longer implementation period will provide 
sufficient time for industry members to comply with the new labeling 
requirement, and is the most appropriate alternative to address the 
concerns expressed by commenters regarding the implementation date.
    Bottlers and importers may begin voluntarily complying with the 
requirements immediately upon publication of this final rule.

Comments Concerning COLA Requirements for New Label Disclosure

    In its comment, DISCUS also requested that TTB consider permitting 
industry members with existing approved COLAs covering affected 
products to revise the labels solely to include the mandatory 
declaration without applying for and receiving new label approvals. 
DISCUS also suggested that TTB allow the addition of a separate strip 
or neck label that shows the mandatory declaration, instead of having 
to apply for and receive a new label approval.

TTB Response

    TTB agrees with the suggestion by DISCUS that if a label is merely 
being changed to include the new label disclosure, without altering 
existing information on the label, an application for a new COLA would 
be unnecessary. Accordingly, by publication of this document in the 
Federal Register, TTB is adopting the policy that labels covered by 
existing approved COLAs which are revised solely to include the 
mandatory cochineal or carmine declaration are considered approved by 
TTB and do not require further approval. Bottlers and importers also do 
not require a new COLA to add a new neck or strip label solely to 
comply with the mandatory cochineal or carmine declaration. Any other 
changes to the label, other than those permitted in accordance with the 
instructions listed on the COLA application (TTB F 5100.31 or the 
electronic COLA submission through COLAS Online) will require the 
submission of a new COLA for approval.

IV. Changes to TTB Regulations

    As proposed in TTB Notice No. 111, this final rule amends 
Sec. Sec.  4.32, 5.32(b), and 7.22(b) of the TTB regulations to require 
the disclosure of the presence of cochineal extract and carmine on the 
labels of any alcohol beverage product containing one or both of these 
color additives. With regard to Sec.  7.22(b), TTB is incorporating the 
amendment in paragraph (b)(5) instead of (b)(8) as originally proposed, 
and, for clarity, TTB has made some changes from the language 
originally proposed in the amendments to Sec. Sec.  4.32, 5.32(b)(6), 
and 7.22(b). The regulations permit the disclosure to appear on the 
front, back, neck, or strip label and require that the disclosure be 
displayed prominently and conspicuously.

V. Regulatory Analysis and Notices

A. Regulatory Flexibility Act

    TTB certifies under the provisions of the Regulatory Flexibility 
Act (5 U.S.C. 601 et seq.) that the final rule will not have a 
significant economic impact on a substantial number of small entities. 
The final rule will not impose, or otherwise cause, a significant 
increase in reporting, recordkeeping, or other compliance burdens on a 
substantial number of small entities, because relatively few alcohol 
beverages are made using cochineal extract or carmine as color 
additives. Furthermore, in response to comments about allowing 
sufficient time to use up existing inventories of labels, the final 
rule provides for a one-year implementation

[[Page 22488]]

period. Accordingly, a regulatory flexibility analysis is not required.

B. Executive Order 12866

    This rule is not a significant regulatory action as defined by 
Executive Order 12866. Therefore, a regulatory assessment is not 
required.

C. Paperwork Reduction Act

    The collection of information contained in this final regulation 
has been reviewed and approved by the Office of Management and Budget 
(OMB) in accordance with the requirements of the Paperwork Reduction 
Act of 1995 (44 U.S.C. 3507(d)) under control number 1513-0087.
    The collection of information in this regulation is in 27 CFR 4.32, 
5.32, and 7.22, and involves mandatory disclosures of information on 
labels. This information is required to prevent deception of the 
consumer and to provide the consumer with adequate information as to 
the identity and quality of the alcohol beverage product. The likely 
respondents are businesses or other for-profit entities, including 
partnerships, associations, and corporations.
    This information constitutes only a portion of the labeling 
information on alcohol beverages required under authority of the FAA 
Act and approved under control number 1513-0087.
    An agency may not conduct or sponsor, and a person is not required 
to respond to, a collection of information unless it displays a valid 
control number assigned by OMB.

VI. Drafting Information

    The principal authors of this document are Lisa M. Gesser and 
Joanne C. Brady, Regulations and Rulings Division, Alcohol and Tobacco 
Tax and Trade Bureau.

List of Subjects

27 CFR Part 4

    Administrative practice and procedure, Advertising, Customs duties 
and inspection, Imports, Labeling, Packaging and containers, Reporting 
and recordkeeping requirements, Trade practices, Wine.

27 CFR Part 5

    Administrative practice and procedure, Advertising, Customs duties 
and inspection, Distilled spirits, Imports, Labeling, Packaging and 
containers, Reporting and recordkeeping requirements, Trade practices.

27 CFR Part 7

    Administrative practice and procedure, Advertising, Customs duties 
and inspection, Imports, Labeling, Malt Beverages, Reporting and 
recordkeeping requirements, Trade practices.

Amendments to the Regulations

    For the reasons discussed in the preamble, TTB amends 27 CFR, 
chapter I, parts 4, 5, and 7, as set forth below:

PART 4--LABELING AND ADVERTISING OF WINE

0
1. The authority citation for 27 CFR part 4 continues to read as 
follows:

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


0
2. In Sec.  4.32, add a new paragraph (d) to read as follows:


Sec.  4.32  Mandatory label information.

* * * * *
    (d) Declaration of cochineal extract or carmine. There shall be 
stated on a front label, back label, strip label, or neck label a 
statement that the product contains the color additive cochineal 
extract or the color additive carmine, prominently and conspicuously, 
using the respective common or usual name (``cochineal extract'' or 
``carmine''), where either of the coloring materials is used in a 
product that is removed on or after April 16, 2013. (For example: 
``Contains Cochineal Extract'' or ``Contains Carmine'' or, if 
applicable, ``Contains Cochineal Extract and Carmine'').
* * * * *

PART 5--LABELING AND ADVERTISING OF DISTILLED SPIRITS

0
3. The authority citation for 27 CFR part 5 continues to read as 
follows:

    Authority:  26 U.S.C. 5301, 7805, 27 U.S.C. 205.


0
4. In Sec.  5.32, add a new paragraph (b)(6) to read as follows:


Sec.  5.32  Mandatory label information.

* * * * *
    (b) * * *
    (6) A statement that the product contains the color additive 
cochineal extract or the color additive carmine, prominently and 
conspicuously, using the respective common or usual name (``cochineal 
extract'' or ``carmine''), where either of the coloring materials is 
used in a product that is removed on or after April 16, 2013. (For 
example: ``Contains Cochineal Extract'' or ``Contains Carmine'' or, if 
applicable, ``Contains Cochineal Extract and Carmine''). The statement 
that the product contains the color additive cochineal extract or the 
color additive carmine may appear on a strip label or a neck label in 
lieu of appearing on the brand label or back label.
* * * * *

PART 7--LABELING AND ADVERTISING OF MALT BEVERAGES

0
5. The authority citation for 27 CFR part 7 continues to read as 
follows:

    Authority: 27 U.S.C. 205.


0
6. In Sec.  7.22, a new paragraph (b)(5) is added to read as follows:


Sec.  7.22  Mandatory label information.

* * * * *
    (b) * * *
    (5) A statement that the product contains the color additive 
cochineal extract or the color additive carmine, prominently and 
conspicuously, using the respective common or usual name (``cochineal 
extract'' or ``carmine''), where either of the coloring materials is 
used in a product that is removed on or after April 16, 2013. (For 
example: ``Contains Cochineal Extract'' or ``Contains Carmine'' or, if 
applicable, ``Contains Cochineal Extract and Carmine''). The statement 
that the product contains the color additive cochineal extract or the 
color additive carmine may appear on a strip label or a neck label in 
lieu of appearing on the brand label or back label.
* * * * *

    Signed: March 12, 2012.
John J. Manfreda,
Administrator.
    Approved: March 12, 2012.
Timothy E. Skud,
Deputy Assistant Secretary (Tax, Trade, and Tariff Policy).
[FR Doc. 2012-9101 Filed 4-13-12; 8:45 am]
BILLING CODE 4810-31-P