[Federal Register Volume 61, Number 115 (Thursday, June 13, 1996)]
[Proposed Rules]
[Pages 30015-30017]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-14859]




[[Page 30015]]

Bureau of Alcohol, Tobacco, and Firearms

27 CFR Part 5

[Notice No. 826]
RIN 1512-AB46


Labeling of Unaged Grape Brandy (95R-018P)

AGENCY: Bureau of Alcohol, Tobacco and Firearms (ATF), Department of 
the Treasury.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Bureau of Alcohol, Tobacco and Firearms (ATF) is proposing 
to amend the regulations to permit the optional use of the word 
``unaged'', instead of ``immature'', to describe grape brandy which has 
never been stored in oak containers. ATF believes that the proposed 
regulations provide industry members with greater flexibility in 
labeling their unaged grape brandy, while ensuring that the consumer is 
adequately informed as to the identity of the product.
    The proposed amendment is part of the Administration's Reinventing 
Government effort to reduce regulatory burdens and streamline 
requirements.

DATES: Written comments must be received on or before September 11, 
1996.

ADDRESSES: Send written comments to: Chief, Wine, Beer and Spirits 
Regulations Branch; Bureau of Alcohol, Tobacco and Firearms; P.O. Box 
50221; Washington, DC 20091-0221; ATTN: Notice No. 826.

FOR FURTHER INFORMATION CONTACT: James P. Ficaretta, Wine, Beer and 
Spirits Regulations Branch, Bureau of Alcohol, Tobacco and Firearms, 
650 Massachusetts Avenue, NW., Washington, DC 20226 (202-927-8230).

SUPPLEMENTARY INFORMATION:

Background

    Section 105(e) of the Federal Alcohol Administration Act (FAA Act), 
27 U.S.C. 205(e), vests broad authority in the Director of ATF, as a 
delegate of the Secretary of the Treasury, to prescribe regulations 
intended to prevent deception of the consumer, and to provide the 
consumer with adequate information as to the identity and quality of 
the product.
    Regulations which implement the provisions of section 105(e), as 
they relate to distilled spirits, are set forth in Title 27, Code of 
Federal Regulations (CFR), Part 5. Subpart C of Part 5 sets forth the 
standards of identity for distilled spirits for labeling and 
advertising purposes. Section 5.22(d)(1) provides, in part, that 
``fruit brandy'' is brandy distilled solely from the fermented juice or 
mash of whole, sound, ripe fruit, or from standard grape, citrus, or 
other fruit wine. Fruit brandy, derived from grapes, must be designated 
as ``grape brandy'' or ``brandy''. This section further provides that 
in the case of brandy (other than neutral brandy, pomace brandy, marc 
brandy, or grappa brandy) distilled from the fermented juice, mash, or 
wine of grapes, or the residue thereof, which has been stored in oak 
containers (i.e., ``aged'') for less than 2 years, the statement of 
class and type must be immediately preceded, in the same size and kind 
of type, by the word ``immature'' (e.g., ``immature grape brandy'', 
``immature brandy'', ``immature residue brandy''). As a result of this 
section, brandy which has never been aged in oak containers is also 
labeled as ``immature.''

Petition

    ATF has received a petition, dated July 10, 1995, filed on behalf 
of a domestic brandy producer, requesting an amendment of the 
regulations concerning the labeling of grape brandy which has never 
been stored in oak containers. The petitioner wishes to produce and 
market a clear, unaged grape distillate which the petitioner states 
will have distinct varietal characteristics without the influence of 
wood extracts. According to the petitioner, aging such a distillate in 
oak containers for 2 years would remove most, if not all, of the 
varietal character. The petitioner states that an amendment of the 
regulations is needed ``so this style of brandy can be made and labeled 
in a manner that will not cause consumer deception or rejection based 
on the negative use of the word `immature' as now required.'' 
Therefore, the petitioner has requested an amendment of section 
5.22(d)(1) that would add a new sentence that states:

    Grape brandy which has not been aged in wood and does not have 
added coloring may use the statement `unaged' in lieu of `immature'.

Discussion

    The requirement to label grape brandy which has not been stored in 
oak containers for a minimum of 2 years as ``immature'' dates back to 
May 25, 1956, with the publication in the Federal Register of T.D. 6174 
(21 FR 3535). The need for such rulemaking was brought out in the 
December 1, 1955, hearing which preceded T.D. 6174. In his opening 
remarks at that hearing the Director of the Alcohol and Tobacco Tax 
Division, Internal Revenue Service, Department of the Treasury, stated:

    The single proposal contained in the notice has as its objective 
an improvement in the existing quality standards for grape brandy. 
Heretofore no minimum age has been specified for this product, the 
only requirement contained in the regulations with respect to young 
brandy being that an age statement must appear upon the brand label 
of any brandy which has not been aged for at least two years.

    The proposal precluded the use of the unqualified term ``brandy'' 
or ``grape brandy'' on the label of any grape brandy stored in wood 
containers less than 2 years.
    According to a trade association representing the California wine 
and brandy industry, the amendment of the regulations was necessary 
``to advise the consumer more adequately as to the difference between a 
proper standard brandy and a product that is only potentially a brandy 
because of the inadequacy of its age.''
    Several alternative proposals were offered in the Notice of Hearing 
(November 19, 1955; 20 FR 8574) to describe grape brandy not aged a 
minimum of 2 years, including ``young brandy'', ``substandard brandy'', 
and ``immature brandy''. The last designation was adopted in the final 
rule.
    ATF and its predecessor agencies have historically taken the 
position that the material from which a spirit is distilled is the 
determining factor insofar as the designation of the product is 
concerned. Since 1936, with the issuance of the first distilled spirits 
regulations promulgated under the FAA Act, brandy has generally been 
defined in the standards of identity as an alcoholic distillate 
obtained from the fermented juice, mash, or wine of fruit, or from the 
residue thereof, produced in such manner that the distillate possesses 
the taste, aroma, and characteristics generally attributed to the 
product. A newly distilled brandy has a characteristic taste and aroma, 
and aging does not change these basic properties. Although 
traditionally described as harsh, raw, etc., a newly distilled brandy 
still has brandy character. Likewise, a newly distilled brandy will 
have the same congeners (e.g., esters, aldehydes, furfurals, etc.) as 
an aged brandy, although there will be a difference in the amount 
present. Aging in wood generally serves to reduce or remove the harsh, 
burning taste and generally unpleasant character of a brandy distillate 
obtained directly from the still. This results in a smoother tasting 
and less harsh product.

[[Page 30016]]

    Although the material from which the spirits are distilled is the 
determining factor in designating the product, ATF and its predecessors 
have required modifiers on the label to further describe the final 
product. For example, section 5.22(b)(1)(iii) provides that whisky 
which has been aged in oak containers for a minimum of 2 years must be 
further designated as ``straight.'' In the matter at hand, a review of 
the earlier rulemaking record indicates that the designation ``immature 
brandy'' for newly distilled spirits aged less than 2 years in wood 
correctly describes the product, since the record shows that it takes 
at least 2 years of aging to remove the rawness from the brandy.

Proposed Regulatory Amendments

    ATF believes that a distinction should be made in the labeling of 
``mature'' grape brandy, i.e., brandy which has been aged for at least 
2 years, and ``immature'' grape brandy, i.e., brandy which has either 
never been aged or has been aged for some period of time less than 2 
years. These distinctions are necessary, pursuant to the Bureau's 
responsibilities under the FAA Act, to provide the consumer with 
adequate information as to the identity and quality of the product. On 
the other hand, the Bureau believes in reducing the regulatory burden 
placed upon the industry and providing industry members with greater 
flexibility in the labeling of their products. This is consistent with 
the Administration's Reinventing Government effort to reduce regulatory 
burdens and streamline requirements.
    ATF also believes that the word ``unaged'' accurately describes a 
grape brandy which has never been stored in oak containers and, as 
such, is equally as informative to consumers than the designation 
``immature.'' Therefore, the Bureau is proposing to require grape 
brandy that has never been aged in wood to be labeled either 
``immature'' or ``unaged''. ATF believes that either word on the label 
will provide consumers with adequate information as to the identity of 
the product. Nevertheless, ATF is interested in comments on whether the 
continued use of ``immature'' to describe brandy that has never been 
aged and brandy that has been aged for some time but less than 2 years 
could lead to consumer confusion. Furthermore, brandy producers will 
have greater choices in labeling their products.
    The proposal applies to grape brandy (other than neutral brandy, 
pomace brandy, marc brandy, or grappa brandy) distilled from the 
fermented juice, mash, or wine of grapes, or the residue thereof. Grape 
brandy stored in oak containers for any amount of time less than 2 
years must still be designated as ``immature''.
    Finally, the petitioner asked that ATF prohibit the addition of 
coloring to an ``unaged brandy''. Under the current regulations, 
Sec. 5.23, harmless flavoring, blending, or coloring materials 
(including caramel) may be added to any class and type of distilled 
spirits, within certain limitations, without altering the class or type 
of the distilled spirits. While ATF is not proposing to amend 
Sec. 5.23, the Bureau is soliciting comments on whether there should be 
any restrictions on the addition of harmless coloring, flavoring, or 
blending materials in the case of unaged grape brandy.

Executive Order 12866

    It has been determined that this proposed rule is not a significant 
regulatory action as defined in E.O. 12866. Therefore, a regulatory 
assessment is not required.

Regulatory Flexibility Act

    It is hereby certified that this proposed regulation will not have 
a significant economic impact on a substantial number of small 
entities. The proposed rule is liberalizing in nature in that brandy 
producers will have greater choices in labeling their products. 
Accordingly, a regulatory flexibility analysis is not required.

Public Participation

    ATF requests comments on the proposed regulations from all 
interested persons. Comments received on or before the closing date 
will be carefully considered. Comments received after that date will be 
given the same consideration if it is practical to do so, but assurance 
of consideration cannot be given except as to comments received on or 
before the closing date.
    ATF will not recognize any material in comments as confidential. 
Comments may be disclosed to the public. Any material which the 
commenter considers to be confidential or inappropriate for disclosure 
to the public should not be included in the comment. The name of the 
person submitting a comment is not exempt from disclosure.
    Any interested person who desires an opportunity to comment orally 
at a public hearing should submit his or her request, in writing, to 
the Director within the 90-day comment period. The Director, however, 
reserves the right to determine, in light of all circumstances, whether 
a public hearing is necessary.

Disclosure

    Copies of this notice and the written comments will be available 
for public inspection during normal business hours at: ATF Public 
Reading Room, Room 6480, 650 Massachusetts Avenue, NW, Washington, DC.

    Drafting Information: The author of this document is James P. 
Ficaretta, Wine, Beer and Spirits Regulations Branch, Bureau of 
Alcohol, Tobacco and Firearms.

List of Subjects in 27 CFR Part 5

    Advertising, Consumer protection, Customs duties and inspection, 
Imports, Labeling, Liquors, Packaging and containers.

Authority and Issuance

    ATF is proposing to amend Part 5 in Title 27 of the Code of Federal 
Regulations as follows:

PART 5--LABELING AND ADVERTISING OF DISTILLED SPIRITS

    Par. 1. 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.

    Par. 2. Section 5.22(d)(1) is amended by revising the third 
sentence to read as follows:


Sec. 5.22  The standards of identity.

* * * * *
    (d) * * *
    (1) * * * Fruit brandy, derived from grapes, shall be designated as 
``grape brandy'' or ``brandy'', except that in the case of brandy 
(other than neutral brandy, pomace brandy, marc brandy or grappa 
brandy) distilled from the fermented juice, mash, or wine of grapes, or 
the residue thereof: which has been stored in oak containers for some 
period of time less than 2 years, the statement of class and type shall 
be immediately preceded, in the same size and kind of type, by the word 
``immature''; or which has never been stored in oak containers, the 
statement of class and type shall be immediately preceded, in the same 
size and kind of type, by the word ``immature'' or ``unaged''. * * *
* * * * *
    Par. 3. Section 5.40 is amended by revising the first sentence in 
paragraph (b) and the second proviso in paragraph (e)(2) to read as 
follows:


Sec. 5.40  Statements of age and percentage.

* * * * *
    (b) Statements of age for rum, brandy, and Tequila. Age may, but 
need not, be stated on labels of rums, brandies, and

[[Page 30017]]

Tequila, except that an appropriate statement with respect to age shall 
appear on the brand label in the case of brandy (other than immature or 
unaged brandies, as provided in Sec. 5.22(d)(1), and fruit brandies 
which are not customarily stored in oak containers) not stored in oak 
containers for a period of at least 2 years. * * *
* * * * *
    (e) * * *
    (2) * * * And provided further, That the labels of whiskies and 
brandies (except immature or unaged brandies, as provided in 
Sec. 5.22(d)(1)) not required to bear a statement of age, and rum and 
Tequila aged for not less than 4 years, may contain general 
inconspicuous age, maturity or similar representations without the 
label bearing an age statement.
    Par. 4. Section 5.65(c) is amended by revising the last sentence to 
read as follows:


Sec. 5.65  Prohibited practices.

* * * * *
    (c) Statement of age. * * * An advertisement for any whisky or 
brandy (except immature or unaged brandies, as provided in 
Sec. 5.22(d)(1)) which is not required to bear a statement of age on 
the label or an advertisement for any rum or Tequila, which has been 
aged for not less than 4 years may, however, contain inconspicuous, 
general representations as to age, maturity or other similar 
representations even though a specific age statement does not appear on 
the label of the advertised product and in the advertisement itself.
* * * * *
    Signed: April 25, 1996.
Bradley A. Buckles,
Acting Director.
    Approved: May 15, 1996.

Dennis M. O'Connell,
Acting Deputy Assistant Secretary, (Regulatory, Tariff and Trade 
Enforcement).
[FR Doc. 96-14859 Filed 6-12-96; 8:45 am]
BILLING CODE 4810-31-U