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TTB Provides Guidance to Cider Producers - Tracy Jong Law Firm
February 7, 2015 Tracy Jong
The state and federal laws do not address cider clearly. In some cases, it is treated more like a beer and in others it is treated more like a wine. Here is some information that should help clarify some important issues for cider producers.
What products may be labeled as “cider” under the regulations implementing the Federal Alcohol Administration (FAA) Act?
The labeling regulations for wine set forth standards of identity for various classes of wine, including fruit wine. (See 27 CFR 4.21(e).) Under these regulations, “apple wine” or “cider” is a fruit wine produced by the normal alcoholic fermentation of the juice of sound, ripe apples. Cider must be derived wholly (except for sugar, water, or added alcohol) from apples.
The labeling of cider is subject to the regulations in 27 CFR part 4 only if the wine contains not less than 7 percent and not more than 24 percent alcohol by volume. Additional information about the standards of identity for cider and other fruit wines is contained in 27 CFR 4.21(e).
Do I need to obtain a Certificate of Label Approval (COLA) for my cider? Do I need to obtain a Certificate of Label Approval (COLA) for my cider?
The FAA Act generally requires that a bottler obtain a certificate of label approval (COLA) from TTB prior to bottling wine. A bottler may obtain a certificate of exemption from label approval from TTB upon establishing that the wine will not be sold, shipped, or otherwise introduced in interstate or foreign commerce. Importers are required to obtain a COLA from TTB prior to removing wine in containers from customs custody for consumption.
The FAA Act and its implementing regulations do not apply to wine that contains less than 7 percent alcohol by volume; thus, cider with an alcohol content of less than 7 percent alcohol by volume is not subject to the COLA requirement. However, please note that all wine removed from wine premises is subject to TTB wine labeling requirements contained in 27 CFR 24.257 (or 27 CFR 24.259 for containers larger than 4 liters).
Do Food and Drug Administration (FDA) food labeling requirements apply to cider containing less than 7 percent alcohol by volume?
Is a health warning statement required on the container of an apple wine (cider) containing less than 7 percent alcohol by volume?
Under the Federal Alcohol Administration (FAA) Act labeling regulations, is there a difference between “apple wine” and “cider”?
The labeling regulations allow either the term “apple wine” or “cider” as the designation for apple wine that complies with the standards of identity set forth in 27 CFR 4.21(e)(5). You may also designate this product as “apple cider.” Furthermore, the terms may be used interchangeably as part of a statement of composition for a wine specialty product (for example, “apple wine with natural blueberry flavor” or “cider with natural blueberry flavor”).
What are the labeling requirements for cider that contains not less than 7 percent alcohol by volume?
The label must meet the requirements of 27 CFR parts 4 and 16. This includes, but is not limited to, the following mandatory information on the label:
Class or type designation;
Name and address of the bottler or importer, as applicable;
Net contents of the container;
Sulfite statement, if applicable (Contains Sulfites); and
Health Warning Statement.
Other labeling statements may be required, in accordance with 27 CFR 4.32. Furthermore, all wines must be labeled and marked in accordance with IRC requirements in27 CFR part 24 (for domestic wines), 27 CFR part 26 (for wines coming into the United States from Puerto Rico or the Virgin Islands) or 27 CFR part 27 (for imported wines).
May I label my wine made exclusively from pears as “pear cider”?
If the pear wine contains not less than 7 percent alcohol by volume and is made exclusively (except for sugar, water, or added alcohol) from pears, it may not be labeled as “pear cider.”Wines designated as “cider” under 27 CFR 4.21(e) must be derived wholly (except for sugar, water, or added alcohol) from apples. The regulations provide that wine that is derived wholly (except for sugar, water, or added alcohol) from pears must be designated as either “pear wine” or as “perry.”
The labeling of perry is subject to the regulations in part 4 only if the wine contains not less than 7 percent and not more than 24 percent alcohol by volume. Additional information about the standards of identity for perry and other fruit wines are contained in 27 CFR 4.21(e).
How do I designate a wine fermented from both apple juice and pear juice, where the wine has not less than 7 percent alcohol by volume?
Under the regulations implementing the FAA Act, a wine produced from the fermentation of apple juice and pear juice must be designated with a truthful and adequate statement of composition such as “apple-pear wine,” “apple perry,” or “pear cider.” The designation “fruit wine” may appear in direct conjunction with the statement of composition. (See 27 CFR 4.21(e) for more information.)
Please note that this type of wine does not require formula approval as long as it is produced in accordance with the rules for natural fruit wine under 27 CFR part 24.
How do I designate a wine fermented from both apple juice and blueberry juice, where the wine has not less than 7 percent alcohol by volume?
Under the regulations implementing the FAA Act, a wine produced from the fermentation of apple juice and blueberry juice must be designated with a truthful and adequate statement of composition such as “apple-blueberry wine” or “blueberry cider.” The designation “fruit wine” may appear in direct conjunction with the statement of composition. (See 27 CFR 4.21(e) for more information.)
Please note that this type of wine does not require formula approval as long as it is produced in accordance with the rules for natural fruit wine under 27 CFR part 24. Under the regulations implementing the FAA Act, a wine produced from the fermentation of apple juice and blueberry juice must be designated with a truthful and adequate statement of composition such as “apple-blueberry wine” or “blueberry cider.” The designation “fruit wine” may appear in direct conjunction with the statement of composition. (See 27 CFR 4.21(e) for more information.)
How do I designate a wine made from blending apple wine with pear wine, where the wine has not less than 7 percent alcohol by volume?
Under the regulations implementing the FAA Act, a wine made from blending apple wine with pear wine must be designated with a statement of composition under 27 CFR 4.34(a), such as “apple wine – pear wine” or “cider – perry.” The wine may also be labeled with a fanciful name (such as “apple pear delight”). The fanciful name “apple perry” or “pear cider” would not be approved because it is misleading as to the identity of the product.
Please note that this type of wine would require formula approval as an “other than standard” wine under 27 CFR 24.211.
How do I designate a wine made from blending apple wine with blueberry wine, where the wine has not less than 7 percent alcohol by volume?
Under the regulations implementing the FAA Act, a wine made from blending apple wine with blueberry wine must be designated with a statement of composition under27 CFR 4.34(a), such as “apple wine – blueberry wine” or “cider and blueberry wine.” The wine may also be labeled with a fanciful name (such as “apple blueberry delight”). The fanciful name “blueberry cider” would not be approved because it is misleading as to the identity of the product.
Please note that this type of wine would require formula approval as an “other than standard” wine under 27 CFR 24.211
May I add flavoring materials, such as honey, spices, natural flavors, or artificial flavors, to my cider?
If you add flavoring materials to apple wine, the resulting product may be a special natural wine or an “other than standard” wine under the Internal Revenue Code (IRC), depending on how it is formulated. A proprietor of wine premises must obtain formula approval before producing either type of wine, even if the wine has less than 7 percent alcohol by volume.
How do I designate a wine made from apple wine that has been flavored with honey, spices, natural flavors or artificial flavors?
Under the labeling regulations that implement the FAA Act, this type of wine may not be designated as simply “cider” because it no longer meets the standards of identity set forth in 27 CFR 4.21(e). Instead, it must be labeled with a statement of composition in accordance with 27 CFR 4.22(a) and 27 CFR 4.34. As part of the formula approval, TTB will provide a suggested statement of composition for the product designation, such as “cider with artificial and natural blueberry flavors” or “apple cider with honey and spices.” If you wish, you may also label the wine with a fanciful name but this name may not be misleading as to the identity of the product. Accordingly, the fanciful name “blueberry cider” would not be approved for an apple wine with natural blueberry flavor.
If your flavored wines contains less than 7 percent alcohol by volume, the labeling regulations in 27 CFR part 4 do not apply; instead, FDA food labeling rules apply.
May I label my cider as “hard cider” even if it doesn’t qualify for the hard cider tax rate under 26 U.S.C. 5041(b)(6)?
Yes. If your wine has not less than 7 percent alcohol by volume, and it complies with the standards of identity for “cider” under 27 CFR 4.21(e)(5), it may be labeled as either “cider” or “hard cider.” Pursuant to 27 CFR 4.32 and 4.36, the wine must also be labeled with a numerical statement of alcohol content (unless it has no more than 14 percent alcohol by volume and it is designated as a “fruit table wine” or an “apple table wine”) – this labeling information will adequately convey that the product is not eligible for the “hard cider” tax rate.
If your wine is not subject to the FAA Act labeling requirements, it must still be labeled in accordance with the regulations at 27 CFR 24.257(a)(4)(iv) before removal from wine premises. These regulations require the wine to be labeled with the class or type of wine or with a statement of composition that, when viewed with the alcohol content, gives enough information to adequately identify the tax class of the wine. For example, a still wine that is labeled “hard cider with natural raspberry flavor” and “6 percent alcohol by volume” is adequately marked to identify the wine’s tax class, because the raspberry flavor makes it ineligible for the hard cider tax rate.
Do special labeling requirements apply to effervescent cider? Do special labeling requirements apply to effervescent cider?
Yes. An effervescent wine is a wine that contains more than 0.392 grams of carbon dioxide per 100 milliliters. See 27 CFR 24.10. Under 27 CFR 4.21(e)(5) and 27 CFR 24.257, effervescent cider must be labeled as “sparkling” or “carbonated,” as appropriate.
What is the difference between “sparkling” cider and “carbonated” cider?
A “sparkling wine” is made effervescent (containing more than 0.392 grams of carbon dioxide per 100 milliliters of wine) by carbon dioxide resulting solely from the secondary fermentation of the wine within a closed container, tank or bottle. A sparkling cider must be labeled either as “sparkling cider” or “sparkling apple wine.” A wine made effervescent in any other way (such as injection of carbon dioxide) is considered artificially carbonated, and must be labeled as “carbonated” (for example, “carbonated cider” or “carbonated apple wine”).
Are effervescent wines subject to different tax rates from still wines? Are effervescent wines subject to different tax rates from still wines?
Under the IRC, sparkling and artificially carbonated wines are subject to higher rates of tax than still wine.
Furthermore, sparkling and carbonated ciders are not eligible for the hard cider tax rate provided by 26 U.S.C. 5041(b)(6) or for the exemption from tax provided by 26 U.S.C. 5042(a)(1).
May I label my cider with an appellation of origin?
TTB regulations at 27 CFR 4.25 permit fruit wine (including cider) to be labeled with an appellation of origin such as a country, State or county, assuming that certain conditions are met. However, only grape wine may be labeled with an appellation that is a viticultural area.
Do TTB’s standards of fill apply to cider? May I sell my cider in 12 fl. oz. bottles or in kegs?
TTB’s standards of fill apply to wine (including cider) that contains not less than 7 percent alcohol by volume. See 27 CFR 4.72. Twelve fluid ounces (12 fl. oz.) is not an approved standard of fill for wine. Producers, importers and wholesalers are prohibited from selling or shipping, or delivering for sale or shipment, or otherwise introducing in interstate commerce, wine that is not bottled or packed in an authorized standard of fill. See 27 CFR 4.70.
You may use kegs as long as they conform to one of the standards of fill. However, wine packed in containers of 18 liters or more does not need to comply with these standards of fill requirements – see 27 CFR 4.70(b)(2).
If the cider contains less than 7 percent alcohol by volume, the standards of fill in 27 CFR part 4 do not apply.
What are the Federal excise tax rates for cider?
Ciders that are not subject to the special rules are taxed at the appropriate wine excise tax rate. The following are the basic tax classification categories for wine:
Still wine (containing not more than 0.392 grams of carbon dioxide per 100 milliliters):
Not more than 14 percent alcohol by volume: $1.07 per wine gallon
Over 14 and not more than 21 percent alcohol by volume: $1.57 per wine gallon
Over 21 and not more than 24 percent alcohol by volume: $3.15 per wine gallon
Effervescent wine (containing more than 0.392 grams of carbon dioxide per 100 milliliters):
Artificially Carbonated Wine: $3.30 per wine gallon
Sparkling Wine: $3.40 per wine gallon
In addition, domestic wine producers may be eligible for a small producer tax credit based on their volume of production.
For tax purposes, what is the difference between “sparkling” cider and “artificially carbonated” cider?
A “sparkling wine” is made effervescent (containing more than 0.392 grams of carbon dioxide per 100 milliliters of wine) by carbon dioxide resulting solely from the secondary fermentation of the wine within a closed container, tank or bottle. A wine made effervescent in any other way (such as injection of carbon dioxide) is considered artificially carbonated.
Please note that both sparkling ciders and carbonated ciders are not eligible for the hard cider tax rate provided by 26 U.S.C. 5041(b)(6) or for the exemption from tax provided by 26 U.S.C. 5042(a)(1).
What are the tax rates for hard cider?
The IRC provides a tax rate of 22.6¢ per wine gallon for “hard cider” that meets specific statutory criteria. To qualify for this tax rate, hard cider must be “a still wine derived primarily from apples or apple concentrate and water, containing no other fruit product, and containing not less than 0.5 percent and less than 7 percent alcohol by volume.” (See 26 U.S.C. 5041(b)(6))
The regulations at 27 CFR 24.10 set forth a definition of “hard cider” that is eligible for the hard cider tax rate of 22.6¢ per gallon. Under the law and regulations, cider must meet all of the following criteria in order to qualify for the “hard cider” tax rate:
The cider must be a still wine. This means it must contain no more than 0.392 gram of carbon dioxide per hundred milliliters of wine. Effervescent cider (including sparkling and carbonated cider) is not eligible for the hard cider tax rate;
The wine must be derived primarily from apples or apple concentrate and water. This means that apple juice, or the equivalent amount of concentrate reconstituted to the original brix of the juice prior to concentration, must represent more than 50 percent of the volume of the finished product;
The wine must contain no other fruit product (such as juice from a fruit other than apples); nor may it contain any artificial product that imparts a fruit flavor other than apple (such as an artificial pear or blueberry flavor); and
The wine must contain at least 0.5 percent but less than 7 percent alcohol by volume. Any wine containing 7 percent or more alcohol by volume is not eligible for the hard cider tax rate.
I add artificial raspberry flavor to my cider, which has an alcohol content of 6 percent alcohol by volume. Does the addition of this flavor affect the cider’s eligibility for the hard cider tax rate?
Yes. Because the IRC provides that the hard cider tax rate under 26 U.S.C. 5041(b)(6) is not available to wines that contain a fruit product other than apple, a cider containing either natural or artificial fruit flavors (other than apple flavors) is not eligible for the hard cider tax rate of 22.6¢ per gallon. Instead, a fruit-flavored cider would be taxed at the appropriate wine excise tax rate.
Please note that non-fruit flavors such as spices or honey would not affect a cider’s eligibility for the hard cider tax rate. You will need formula approval for this product because flavors have been added.
Are cider producers eligible for the small producer tax credit?
Like other domestic wine producers, domestic cider producers are eligible for the small producer tax credit under 26 U.S.C. 5041(c) if they produce not more than 250,000 gallons of wine during a calendar year. The credit may be taken on the first 100,000 gallons of wine removed for consumption or sale by an eligible person during a calendar year, and it does not apply to sparkling wine (including sparkling cider) or to wine that is not produced at a qualified bonded wine premises in the United States. (See 27 CFR 24.278 for more details about the conditions for taking the credit.) For additional information on computing the tax credit, please see TTB’s Quick Reference Guide to Wine Excise Tax.
How much is the small producer tax credit for hard cider?
An eligible producer of “hard cider” that is subject to the tax rate under 26 U.S.C. 5041(b)(6) may claim a credit of up to 5.6¢ per wine gallon. An eligible producer of cider that does not qualify as “hard cider” can claim a credit of up to 90¢ per gallon. In either case, the credit is reduced for persons who produce more than 150,000 gallons of wine during the calendar year. As noted in CID26, sparkling cider is not eligible for a credit, and other conditions apply. For additional information on computing the tax credit, please see TTB’s Quick Reference Guide to Wine Excise Tax.
Do I need to obtain TTB formula approval before producing cider or other fruit wine?
No formula approval is required to produce natural cider or other natural fruit wine, even if the wine is fermented from the juice of different fruits. A “natural” wine is the product of the juice or must of sound, ripe fruit (including berries) made with any cellar treatment authorized by Subparts F and L of part 24 and containing not more than 21 percent by weight (21 degrees Brix dealcoholized wine) of total solids. (See 27 CFR 24.10.) However, TTB formula approval is required for:
Wine produced by blending two finished fruit wines together (for example, apple wine and pear wine);
Wine with added flavors or spices; and
Wine made with excess sugar and/or water or other cellar treatments not authorized for natural wine in Subparts F and L of part 24.
What IRC labeling requirements apply to all cider and other wine removed from wine premises?
Although TTB’s FAA Act wine labeling regulations in part 4 do not apply to wine that contains less than 7 percent alcohol by volume, IRC labeling requirements and TTB regulations at 27 CFR 24.257 apply to all wines that are removed from wine premises. Under these regulations, labels must include the following information:
Name and address of the wine premises;
Net contents of the container; and
Kind of wine, which means –
Class or type in accordance with 27 CFR Part 4; or
An adequate statement of composition for wines not subject to part 4. Statements of composition must include enough information to identify the tax class when viewed with the alcohol content.
Containers larger than 4 liters removed from the winery for consumption or sale must be labeled with this information as required by 27 CFR 24.259. The required information may be cut, printed, or otherwise legibly and durably marked upon the container or placed on a label or tag securely affixed to the container.
Do I need to obtain a permit from TTB to produce apple wine (cider) for commercial purposes.
Yes. If you are producing wine (including cider) that is at least 0.5 percent alcohol by volume for commercial purposes, you must first establish winery premises, obtain a bond, and receive permission from TTB to operate. (See 27 CFR part 24, subpart D.) In addition, the FAA Act requires that anyone wishing to engage in the business of producing or blending wine (including cider) that contains not less than 7 percent alcohol by volume must first obtain a basic permit from TTB. (See 27 CFR part 1.) A basic permit under the FAA Act is not required for producers who only make wine that is less than 7 percent alcohol by volume. For more information on qualification requirements, see https://www.ttb.gov/wine/federal_app.shtml.
If you produce only tax-exempt cider that satisfies all of the requirements of 26 U.S.C. 5042(a)(1), and 27 CFR 24.76 you are not required to qualify as a bonded wine premises.
I import wine (including cider). What TTB requirements apply to my operations?
If you import wine (including cider) that contains not less than 7 percent alcohol by volume, you must:
Obtain an Importer’s Basic Permit under the Federal Alcohol Administration Act;
Obtain a certificate of label approval for your cider;
Label the wine in accordance with 27 CFR part 4;
Label the wine with the health warning statement required by 27 CFR part 16;
Submit a pre-import letter (or formula) if required by Industry Circular 2007-4;
Pay the appropriate wine excise tax rate for the wine; and
If required, obtain certification from the country of origin regarding the cellar treatment of the wine. (For more information, see our Web page on certification requirements for imported natural wine.)
If you also import wine (including cider) that contains at least 0.5 percent alcohol by volume and less than 7 percent alcohol by volume, the following requirements apply:
Label the wine in accordance with all applicable FDA food labeling requirements;
Pay the appropriate wine excise tax rate for the wine;
Label the wine in accordance with 27 CFR part 27; and
You do not need to obtain an Importer’s Basic Permit if you import only wine that contains less than 7 percent alcohol by volume. Additional information regarding the importation of alcohol beverages into the U.S. may be found on the International Affairs Division Web page.
General Businesscider, TTB