Several bev-alc trade groups, including the Brewers Association (BA) and Beer Institute (BI), submitted comments to the Alcohol and Tobacco Tax and Trade Bureau (TTB) last week, raising concerns over notices of proposed rulemaking (NPRM) regarding nutrition and allergen labeling on wine, distilled spirits and malt beverages.
The majority of comments were in support of new labeling requirements. However, trade groups shared their opposition of the implementation timeline, and asked for possible exemptions, particularly for smaller bev-alc producers.
The TTB had two NPRMs open for comments through August 15.
The first, NPRM 238, would require wine, distilled spirits and malt beverage brands shipped across state lines to label “all major food allergens used in the production” of the beverages, including milks, eggs, fish, shellfish, tree nuts, wheat, peanuts, soybeans, and sesame, “as well as ingredients that contain protein derived from these foods.” Businesses would have five years to comply with the new requirement if a final ruling is made.
NPRM 237 would require wine, distilled spirits and malt beverages to display “alcohol facts” on all beverage labels, disclosing alcohol per serving, calories and nutrient content information, for interstate commerce. The rule would also have a five-year compliance window.
Many bev-alc brands already disclose some of the information listed in NPRM 237 through TTB Ruling 2013-12, which allows “voluntary use of serving facts statements on labels” for bev-alc.
The BI has encouraged the practice through its Voluntary Disclosure Initiative (VDI), enacted in 2016. Participating brewers and importers committed to adding serving facts statements, freshness dates and ingredients to products – via labels, secondary packaging or websites available through a QR code – by 2020.
As of August 2021, 95% of the beer volume sold from BI members including Anheuser-Busch InBev (A-B), Molson Coors, Constellation Brands (beer division), Heineken USA and FIFCO had “nutritional information on products, packaging or websites,” according to the initiative’s webpage.
However, the BI and BA both raised concerns over NPRM 237, particularly with the use of the term “alcohol facts” instead of “serving facts.”
The BI said “consumers would be confused” by an “alcohol facts” label that “goes beyond alcohol content.” The trade group also noted that “serving facts” is already a “term widely used by brewers” to provide information such as alcohol content, calories, fat, protein and carbohydrates, and changing the term would “significantly increase compliance costs by altering a widely used disclosure.”
Both trade groups also opposed the TTB’s suggestion that bev-alc products have a “fluid ounces of pure ethyl alcohol” or “total alcohol” label, rather than the existing alcohol by volume (ABV) verbiage, and said the change would “pose a greater burden, not provide any recognized useful information and confuse consumers.”
The comments point to the beer industry’s opposition to the “standard drink” measurement, which has been used by spirits groups to compare the alcohol content of distilled spirits to beer and wine by measuring the amount of ethanol in a serving.
Additionally, the TTB posed questions about an increase in the “alcohol content tolerance,” or the margin of error allowed for alcohol content disclosures. The TTB proposed an increase from 0.3% to 1%, which the BI said is “too much and will misinform consumers when a producer uses the full tolerance.
“If TTB believes it must provide additional flexibility, BI recommends only a minor increase in the tolerance level, such as from 0.3% to 0.5%,” the BI wrote.
The BA, which represents small and independent craft brewers, also expressed its support for alcohol content labeling. However, the group raised concerns over the impact of new regulations on craft breweries, which are already facing “unprecedented headwinds.”
“Given these headwinds, we urge TTB to pay special attention to small businesses’ needs in proceeding with any new labeling mandate,” the BA wrote. “Those burdens will fall with particular force on small batch products of small producers, tilting the playing field even more in favor of large multinational brewers.”
Unlike the BI, the BA suggested “more generous tolerances” on nutritional measurements, such as calories, carbohydrates, fat and protein, which the TTB has proposed a 20% tolerance for. The BA also expressed support for the increase of the alcohol content tolerance to 1%, as it would “allow brewers to calculate alcohol content without side testing or sophisticated equipment.”
“Departue from the existing 0.3% standard is overdue,” the BA wrote.
“We see nothing misleading about a 1% ABV tolerance,” the trade group added. “Sadly, it is not surprising that advocates for the largest multinational brewers seek a tighter tolerance, as a tight tolerance imposes costs on small brewers and accordingly provides large companies with a competitive advantage.”
Overall, the BA expressed that proposed rulemaking will be a “burden” on small producers.
“Although the more realistic tolerances proposed in Notice 237 partially blunt these burdens, flavored and other specialty malt beverages will continue to face a difficult choice under final rules if adopted as proposed: (a) invest in expensive equipment to test such products; (b) send such products to an outside laboratory at considerable expense; or (c) discontinue such products in interstate commerce to avoid the added expense,” the BA wrote.
“In light of this, the Brewers Association renews its call for TTB to adopt a different standard for small producers or low-volume products – which would include most products from small producers – to mitigate a nutrition labeling rule’s impact on small businesses and on product innovation.”
The BA also argued that mandatory labeling would “remove an aspect of competition” within bev-alc – i.e. the strategy of attracting consumers by “providing more nutritional information” than a competitor – which the trade group believes is in conflict with the U.S. Department of Treasury’s 2022 report on competition.
The BI denied any significant impact on competition several times in its submitted comments.
The American Craft Spirits Association (ACSA) shared similar concerns as the BA in regards to the proposed rulemaking’s impact on small producers.
ACSA noted that the costs of new labeling requirements would “disproportionately impact” small distilleries, while “offering little public benefit,” citing an internal survey that found “only 4% of members have received consumer requests for nutrition details, compared to 29% for allergen information.”
The ACSA suggested instead of the proposed requirements, the TTB could require “a simple calorie statement, using QR codes for expanded information” or add “details into the existing government warning.”
The ACSA agreed a five-year compliance timeline was “enough time to adjust.”
All three trade groups agreed that label requirements should only apply to allergens and nutrients that are in “the finished product,” excluding proteins and other elements that are eliminated in the production process.