[Federal Register Volume 75, Number 212 (Wednesday, November 3, 2010)]
[Proposed Rules]
[Pages 67663-67666]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-27736]


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DEPARTMENT OF THE TREASURY

Alcohol and Tobacco Tax and Trade Bureau

27 CFR Part 4

[Docket No. TTB-2010-0007; Notice No. 110]
RIN 1513-AB58


Labeling Imported Wines With Multistate Appellations (2008R-265P)

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

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Alcohol and Tobacco Tax and Trade Bureau proposes to amend 
the wine labeling regulations to allow the labeling of imported wines 
with multistate appellations of origin. This amendment would provide 
treatment for imported wines similar to that currently available to 
domestic wines bearing multistate appellations. It would also provide 
consumers with additional information regarding the origin of these 
wines.

DATES: We must receive written comments on or before January 3, 2011.

ADDRESSES: You may send comments on this notice to one of the following 
addresses:
    <bullet> http://www.regulations.gov (via the online comment form 
for this notice as posted within Docket No. TTB-2010-0007 at 
``Regulations.gov,'' the Federal e-rulemaking portal);
    <bullet> Director, Regulations and Rulings Division, Alcohol and 
Tobacco Tax and Trade Bureau, P.O. Box 14412, Washington, DC 20044-
4412; or
    <bullet> Hand delivery/courier in lieu of mail: Alcohol and Tobacco 
Tax and Trade Bureau, 1310 G Street, NW., Suite 200-E, Washington, DC 
20005.
    See the Public Participation section of this notice for specific 
instructions and requirements for submitting comments, and for 
information on how to request a public hearing.
    You may view copies of this notice, selected supporting materials, 
and any comments we receive about this proposal within Docket No. TTB-
2010-0007 at http://www.regulations.gov. A direct link to this docket 
is posted on the TTB Web site at http://www.ttb.gov/wine/wine-rulemaking.shtml under Notice No. 110. You also may view copies of this 
notice, all supporting materials, and any comments we receive about 
this proposal by appointment at the TTB Information Resource Center, 
1310 G Street, NW., Washington, DC 20220. Please call 202-453-2270 to 
make an appointment.

FOR FURTHER INFORMATION CONTACT: Jennifer Berry, Alcohol and Tobacco 
Tax and Trade Bureau, Regulations and Rulings Division, P.O. Box 18152, 
Roanoke, VA, 24014; telephone 540-344-9333.

SUPPLEMENTARY INFORMATION:

Background on Wine Labeling

TTB Authority

    Section 105(e) of the Federal Alcohol Administration Act (FAA Act), 
27 U.S.C. 205(e), authorizes the Secretary of the Treasury to prescribe 
regulations for the labeling of wine, distilled spirits, and malt 
beverages. The FAA Act requires that these regulations, among other 
things, prohibit consumer deception and the use of misleading 
statements on labels, and ensure that labels provide the consumer with 
adequate information as to the identity and quality of the product. The 
Alcohol and Tobacco Tax and Trade Bureau (TTB) administers the 
regulations promulgated under the FAA Act.

[[Page 67664]]

Use of Appellations of Origin on Wine Labels

    Part 4 of the TTB regulations (27 CFR part 4) sets forth standards 
promulgated under the FAA Act for the labeling and advertising of wine. 
Section 4.25 of the TTB regulations (27 CFR 4.25) sets forth rules 
regarding the use of appellations of origin. An appellation of origin 
for an American wine is defined in Sec.  4.25(a)(1) as:
    <bullet> The United States;
    <bullet> A State;
    <bullet> Two or no more than three States which are all contiguous;
    <bullet> A county;
    <bullet> Two or no more than three counties in the same States; or
    <bullet> A viticultural area as defined in Sec.  4.25(e)(1)(i).
    Section 4.25(b)(1) provides that an American wine is entitled to an 
appellation of origin other than a multicounty or multistate 
appellation, or a viticultural area, if, among other requirements, at 
least 75 percent of the wine is derived from fruit or agricultural 
products grown in the appellation area indicated. Use of an appellation 
of origin comprising two or no more than three contiguous States is 
allowed under Sec.  4.25(d) if:
    <bullet> All of the fruit or other agricultural products were grown 
in the States indicated, and the percentage of the wine derived from 
fruit or other agricultural products grown in each State is shown on 
the label with a tolerance of plus or minus 2 percent;
    <bullet> The wine has been fully finished (except for cellar 
treatment pursuant to 27 CFR 4.22(c) and blending that does not result 
in an alteration of class or type under 27 CFR 4.22(b)) in one of the 
labeled appellation States; and
    <bullet> The wine conforms to the laws and regulations governing 
the composition, method of manufacture, and designation of wines in all 
the States listed in the appellation.
    An appellation of origin for imported wine is defined in Sec.  
4.25(a)(2) as:
    <bullet> A country;
    <bullet> A state, province, territory, or similar political 
subdivision of a country equivalent to a state or county; or
    <bullet> A viticultural area (which is defined in Sec.  
4.25(e)(1)(ii) in the case of imported wine).
    Section 4.25(b)(2) provides that an imported wine is entitled to an 
appellation of origin other than a viticultural area if: ``(1) At least 
75 percent of the wine is derived from fruit or agricultural products 
grown in the area indicated by the appellation of origin; and (2) the 
wine conforms to the requirements of the foreign laws and regulations 
governing the composition, method of production, and designation of 
wines available for consumption within the country of origin.'' There 
is no provision in the current TTB regulations for the use of 
multistate appellations on imported wines.
    The existing regulations regarding appellations of origin, 
including the provisions permitting multistate appellations for 
American wines, were promulgated by our predecessor agency, the Bureau 
of Alcohol, Tobacco and Firearms (ATF), in T.D. ATF-53 (43 FR 37675), 
published August 23, 1978. The preamble of T.D. ATF-53 noted that the 
regulations provided ``a comprehensive scheme for appellation of origin 
labeling'' resulting in ``more accurate information being provided to 
consumers about wine origin.'' According to T.D. ATF-53, multistate 
appellations were suggested by domestic wine industry members. ATF 
decided to allow multistate appellations ``in order to permit greater 
flexibility in appellation of origin labeling,'' provided that all the 
grapes come from the named States, that the percentage of grapes from 
each State be shown on the label, and that the wine conform to the laws 
and regulations governing the composition, method of manufacture, and 
designation of wines in all of the States listed in the appellation. 
There was no discussion in T.D. ATF-53 regarding multistate 
appellations for foreign wines, including why multistate appellations 
were limited to American wines.

Australian Petition

    The Australian Wine and Brandy Corporation (AWBC), a quasi-
governmental authority responsible for, among other activities, 
regulating the exportation of Australian wine, submitted a petition to 
TTB to amend Sec.  4.25(a)(2) to permit the labeling of Australian 
wines with multistate appellations. This proposal would allow an 
Australian wine imported into the United States to bear an appellation 
comprised of two or three Australian States, such as ``Victoria-New 
South Wales-South Australia.'' According to the AWBC petition, 
Australian regulations allow wines to be labeled with up to three 
Geographical Indications (officially defined wine regions) provided 
that 95 percent of the product is from the listed regions, the regions 
are listed in descending order of their proportions in the blend, and a 
minimum of 5 percent of the wine is from each listed region. Australian 
Geographical Indications include the Australian States, which are 
roughly equivalent to American States.

TTB Analysis

    TTB believes that the considerations that led to the adoption of 
multistate appellations for American wines expressed in T.D ATF-53, 
namely greater information for the consumer and greater flexibility to 
the winemaker, also apply to the use of multistate appellations for 
imported wines. Further, as noted above, Sec.  4.25(a)(2) already 
recognizes political subdivisions of a country equivalent to a State as 
qualifying as appellations of origin.
    TTB therefore proposes to amend Sec.  4.25 to permit the use of 
multistate appellations for imported wines. The proposed amendments 
reflect the following considerations:
    <bullet> TTB notes that other wine-producing countries do not 
necessarily have political subdivisions that are called ``states'' and 
Sec.  4.25(a)(2) already recognizes that there are ``similar'' 
political subdivisions equivalent to a State that qualify as 
appellations of origin for imported wine. Consistent with the current 
regulatory approach, TTB believes it is appropriate to refer to similar 
political subdivisions of a country that are equivalent to a State in 
the new texts covering multistate appellations. As a practical matter, 
before approving any certificate of label approval (COLA) for imported 
wine that contains a multistate appellation, TTB must be able to 
conclude that: (1) The entities named in the appellation are states, 
provinces, territories, or political subdivisions of the country 
equivalent to a State; and (2) the entities named in the appellation 
are contiguous. To assist TTB in reaching these conclusions, TTB may 
request, under the authority of 27 CFR 4.38(h), that COLA applicants 
provide documentation that supports these necessary conclusions. Such 
documentation may take the form of maps which delineate the entities 
named and are highlighted to show the entities' contiguity, or 
statements from officials within the country of origin which provide 
factual information in support of these conclusions.
    <bullet> TTB is proposing to require that all (100 percent) of the 
wine be derived from fruit or other agricultural products grown in the 
political subdivisions shown on the label and that the percentage of 
the wine derived from fruit or other agricultural products grown in 
each political subdivision be shown on the label. This amendment would 
mirror the current requirement for multistate appellations on American 
wines, which we believe provides the

[[Page 67665]]

consumer with useful information regarding the identity and quality of 
the wine.
    <bullet> TTB is also proposing to specify that imported wine 
labeled with a multistate appellation must conform to the requirements 
of the foreign laws and regulations governing the composition, method 
of production, and designation of wines available for consumption 
within the country of origin. This amendment would parallel the 
requirement applicable to imported wine with a single state (or similar 
political subdivision) appellation under Sec.  4.25(b)(2)(ii).
    The amendments to Sec.  4.25 proposed in this document entail 
revisions of paragraph (a)(2), the introductory text of paragraph 
(b)(2), and paragraph (d), as well as a conforming change in paragraph 
(e)(1)(ii). The revision of paragraph (a)(2) involves the addition of a 
subparagraph covering multistate appellations; the entire paragraph 
(a)(2) appears in the proposed regulatory text for clarity. The change 
to paragraph (b)(2) involves the addition of the words ``other than a 
multistate appellation'' similar to the wording of the introductory 
text of paragraph (b)(1) in regard to American wine. The revisions of 
paragraph (d) involve redesignation of the existing text as 
subparagraph (1) and adding a new subparagraph (2) to cover multistate 
appellations for imported wine. Finally, a number of nonsubstantive 
editorial-type organizational and wording changes have been made to the 
revised texts for clarity and readability purposes.

Public Participation

Comments Sought

    We request comments from interested members of the public. We are 
particularly interested in whether the proposed changes will result in 
treatment for imported wines comparable to that currently available to 
domestic wines bearing a multistate appellation of origin. We are 
interested in comments regarding subdivisions of foreign political 
systems, including the various political subdivisions that might be 
considered equivalents of U.S. States. In addition, we are interested 
in comments concerning the requirements for the use of multistate 
appellations for imported wine. We also are interested in receiving 
comments on whether this additional information is helpful to the 
consumer. Please provide specific information in support of your 
comments.

Submitting Comments

    You may submit comments on this notice by using one of the 
following three methods:
    <bullet> Federal e-Rulemaking Portal: You may send comments via the 
online comment form linked to this notice in Docket No. TTB-2010-0007 
on ``Regulations.gov,'' the Federal e-rulemaking portal, at http://www.regulations.gov. A link to the docket is available under Notice No. 
110 on the TTB Web site at http://www.ttb.gov/wine/wine-rulemaking.shtml. Supplemental files may be attached to comments 
submitted via Regulations.gov. For information on how to use 
Regulations.gov, click on the site's Help or FAQ tabs.
    <bullet> U.S. Mail: You may send comments via postal mail to the 
Director, Regulations and Rulings Division, Alcohol and Tobacco Tax and 
Trade Bureau, P.O. Box 14412, Washington, DC 20044-4412.
    <bullet> Hand Delivery/Courier: You may hand-carry your comments or 
have them hand-carried to the Alcohol and Tobacco Tax and Trade Bureau, 
1310 G Street, NW., Suite 200-E, Washington, DC 20005.
    Please submit your comments by the closing date shown above in this 
notice. Your comments must reference Notice No. 110 and include your 
name and mailing address. Your comments also must be made in English, 
be legible, and be written in language acceptable for public 
disclosure. We do not acknowledge receipt of comments, and we consider 
all comments as originals.
    If you are commenting on behalf of an association, business, or 
other entity, your comment must include the entity's name as well as 
your name and position title. If you comment via Regulations.gov, 
please include the entity's name in the ``Organization'' blank of the 
comment form. If you comment via postal mail, please submit your 
entity's comment on letterhead.
    You may also write to the Administrator before the comment closing 
date to ask for a public hearing. The Administrator reserves the right 
to determine whether to hold a public hearing.

Confidentiality

    All submitted comments and attachments are part of the public 
record and subject to disclosure. Do not enclose any material in your 
comments that you consider to be confidential or that is inappropriate 
for public disclosure.

Public Disclosure

    On the Federal e-rulemaking portal, Regulations.gov, we will post, 
and the public may view, copies of this notice, selected supporting 
materials, and any electronic or mailed comments we receive about this 
proposal. A direct link to the Regulations.gov docket containing this 
notice and the posted comments received on it is available on the TTB 
Web site at http://www.ttb.gov/wine/wine-rulemaking.shtml under Notice 
No. 110. You may also reach the docket containing this notice and the 
posted comments received on it through the Regulations.gov search page 
at  http://www.regulations.gov. All posted comments will display the 
commenter's name, organization (if any), city, and State, and, in the 
case of mailed comments, all address information, including e-mail 
addresses. We may omit voluminous attachments or material that we 
consider unsuitable for posting.
    You and other members of the public may view copies of this notice, 
all related petitions, maps and other supporting materials, and any 
electronic or mailed comments we receive about this proposal by 
appointment at the TTB Information Resource Center, 1310 G Street, NW., 
Washington, DC 20220. You may also obtain copies at 20 cents per 8.5- x 
11-inch page. Contact our information specialist at the above address 
or by telephone at 202-453-2270 to schedule an appointment or to 
request copies of comments or other materials.

Regulatory Flexibility Act

    We certify under the provisions of the Regulatory Flexibility Act 
(5 U.S.C. 601 et seq.) that this proposed rule will not have a 
significant economic impact on a substantial number of small entities. 
The proposed amendments merely provide optional, additional flexibility 
in wine labeling decisions. Accordingly, a regulatory flexibility 
analysis is not required.

Executive Order 12866

    This proposed rule is not a significant regulatory action as 
defined by Executive Order 12866. Therefore, it requires no regulatory 
assessment.

Drafting Information

    Jennifer Berry of the Regulations and Rulings Division, Alcohol and 
Tobacco Tax and Trade Bureau, drafted this document.

List of Subjects in 27 CFR Part 4

    Administrative practice and procedure, Advertising, Customs duties 
and inspection, Imports, Labeling,

[[Page 67666]]

Packaging and containers, Reporting and recordkeeping requirements, 
Trade practices, Wine.

Proposed Amendments to the Regulations

    For the reasons discussed in the preamble, TTB proposes to amend 27 
CFR part 4, Labeling and Advertising of Wine, as set forth below:

PART 4--LABELING AND ADVERTISING OF WINE

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

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

    2. Section 4.25 is amended:
    a. By revising paragraph (a)(2), the introductory text of paragraph 
(b)(2), and paragraph (d); and
    b. In paragraph (e)(1)(ii), by removing the words ``(other than an 
appellation defined in paragraph (a)(2)(i) or (a)(2)(ii))'' and adding, 
in their place, the words ``(other than an appellation defined in 
paragraph (a)(2)(i), (a)(2)(ii), or (a)(2)(iii))''.
    The revisions read as follows:


Sec.  4.25  Appellations of origin.

    (a) * * *
    (2) Imported wine. An appellation of origin for imported wine is:
    (i) A country;
    (ii) A state, province, territory, or similar political subdivision 
of a country equivalent to a State or county;
    (iii) Two or no more than three states, provinces, territories, or 
similar political subdivisions of a country equivalent to a State which 
are all contiguous; or
    (iv) A viticultural area (as defined in paragraph (e) of this 
section).
    (b) * * *
    (2) Imported wine. An imported wine is entitled to an appellation 
of origin other than a multistate appellation, or a viticultural area, 
if:
* * * * *
    (d) Multistate appellations. (1) American wine. An appellation of 
origin comprising two or no more than three States which are all 
contiguous may be used, if:
    (i) All of the fruit or other agricultural products were grown in 
the States indicated, and the percentage of the wine derived from fruit 
or other agricultural products grown in each State is shown on the 
label with a tolerance of plus or minus 2 percent;
    (ii) The wine has been fully finished (except for cellar treatment 
pursuant to Sec.  4.22(c), and blending that does not result in an 
alteration of class or type under Sec.  4.22(b)) in one of the labeled 
appellation States; and
    (iii) The wine conforms to the laws and regulations governing the 
composition, method of manufacture, and designation of wines in all of 
the States listed in the appellation.
    (2) Imported wine. An appellation of origin comprising two or no 
more than three states, provinces, territories, or similar political 
subdivisions of a country equivalent to a State which are all 
contiguous may be used if:
    (i) All of the fruit or other agricultural products were grown in 
the states, provinces, territories, or similar political subdivisions 
of a country equivalent to a State indicated, and the percentage of the 
wine derived from fruit or other agricultural products grown in each 
state, province, territory, or political subdivision equivalent to a 
State is shown on the label with a tolerance of plus or minus 2 
percent; and
    (ii) The wine conforms to the requirements of the foreign laws and 
regulations governing the composition, method of production, and 
designation of wines available for consumption within the country of 
origin.
* * * * *

    Signed: June 2, 2010.
John J. Manfreda,
Administrator.
    Approved: June 30, 2010.
Timothy E. Skud,
Deputy Assistant Secretary (Tax, Trade, and Tariff Policy).
[FR Doc. 2010-27736 Filed 11-2-10; 8:45 am]
BILLING CODE 4810-31-P