Federal Register / Vol. 61, No. 115 / Thursday, June 13, 1996 / Proposed Rules 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.

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.
30016 Federal Register / Vol. 61, No. 115 / Thursday, June 13, 1996 / Proposed Rules

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, § 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 § 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:

§ 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:

§ 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
Federal Register / Vol. 61, No. 115 / Thursday, June 13, 1996 / Proposed Rules 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 § 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 § 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:

§ 5.65 Prohibited practices.

* * * * *

(c) Statement of age. * * * An

advertisement for any whisky or brandy

(except immature or unaged brandies, as

provided in § 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

Bureau of Alcohol, Tobacco and

Firearms

27 CFR Part 18

[Notice No. 823]

RIN 1512–AB59

Production of Volatile Fruit-Flavor

Concentrate (95R–026P)

AGENCY: Bureau of Alcohol, Tobacco

and Firearms (ATF), Department of the

Treasury.

ACTION: Notice of proposed rulemaking.

SUMMARY: Pursuant to the President’s

regulatory reform initiative, the Bureau

of Alcohol, Tobacco and Firearms (ATF)

is proposing to amend the regulations in

27 CFR Part 18. The proposed

amendment would specifically

authorize the transfer of volatile fruitflavor concentrate (VFFC) unfit for

beverage use from one VFFC plant to

another for further processing. The

proposed amendment would clarify the

regulations in order to allow greater

flexibility in the production processes of

VFFC plants.

DATES: Written comments must be

received on or before August 12, 1996.

ADDRESSES: Submit 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. 823.

FOR FURTHER INFORMATION CONTACT:

Mary A. Wood, Wine, Beer, and Spirits

Regulations Branch, Bureau of Alcohol,

Tobacco and Firearms, 650

Massachusetts Avenue NW.ca

a13jn2.071, Washington, DC 20226;

(202) 927–8210.

SUPPLEMENTARY INFORMATION:

Background

On February 21, 1995, President

Clinton announced a regulatory reform

initiative. As part of this initiative, each

Federal agency was instructed to

conduct a page by page review of all

agency regulations to identify those

which are obsolete or burdensome and

those whose goals could be better

achieved through the private sector,

self-regulation or state and local

governments. In cases where the

agency’s review disclosed regulations

which should be revised or eliminated,

the agency would, as soon as possible,

propose administrative changes to its

regulations.

The page by page review of all

regulations was completed as directed

by the President. In addition, on April

13, 1995, the Bureau published Notice

No. 809 (60 FR 18783) in the Federal

Register requesting comments from the

public regarding which ATF regulations

could be improved or eliminated. No

comments were received regarding 27

CFR part 18, Production of Volatile

Fruit-Flavor Concentrate; however, ATF

is proposing a clarifying amendment to

this part based on a variance request

received from a volatile fruit-flavor

concentrate (VFCC) producer.

The Internal Revenue Code of 1986,

26 U.S.C. 5511, authorizes the

manufacture of volatile fruit-flavor

concentrate by any process which

includes evaporations from the mash or

juice of any fruit. Section 5511 also

places certain restrictions on the

manufacture of volatile fruit-flavor

concentrate. Pursuant to section

5511(1), the concentrate, and the mash

or juice from which it is produced, must

contain no more alcohol than is

reasonably unavoidable in the

manufacture of such concentrate.

Section 5511(2) provides that the

concentrate must be rendered unfit for

use as a beverage before removal from

the place of manufacture; however,

concentrate which is fit for beverage use

and which does not exceed 24 percent

alcohol by volume may be transferred to

a bonded wine cellar for use in

production of natural wine. Finally,

section 5511(3) authorizes the Secretary

to prescribe such regulations as are

necessary for the protection of the

revenue regarding applications, records,

reports, bonds, and other requirements

with respect to the production, removal,

sale, transportation, and use of

concentrate and the mash or juice from

which the concentrate is produced.

Volatile fruit-flavor concentrate which

is produced in accordance with the

requirements of the regulations is not

subject to the distilled spirits or wine

excise tax. However, section 5001(a)(6)

provides for the imposition of tax on

any volatile fruit-flavor concentrate (or

any fruit mash or juice from which such

concentrate is produced) containing

one-half of 1 percent or more of alcohol

by volume, which is manufactured free

from tax under section 5511, and is then

sold, transported, or used by any person

in violation of Chapter 51 or the

regulations promulgated thereunder.

Proposed Amendment

The current regulations in 27 CFR

18.54(a) allow the transfer of volatile

fruit-flavor concentrate (‘‘concentrate’’)

which is unfit for beverage use for any

purpose authorized by law. However,

ATF recently received a request from a

VFFC producer as to whether a

concentrate unfit for beverage use could

be transferred from one VFFC plant to

another for further processing.

Apparently it was more cost-effective

for the second VFFC plant to conduct

the processing operation at issue. While

the transfer of the concentrate was

clearly authorized by current

regulations, since the concentrate was

unfit for beverage use, there was nothing

in the current regulations which

specifically authorized the second VFFC

plant to receive concentrate for further

processing.

The existing regulations in section

18.51 allow proprietors to receive

processing material which is produced

elsewhere, subject to certain restrictions