[Federal Register: July 31, 2007 (Volume 72, Number 146)]
[Proposed Rules]               
[Page 41859-41884]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr31jy07-26]                         


[[Page 41859]]

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Part III





Department of the Treasury





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Alcohol and Tobacco Tax and Trade Bureau



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27 CFR Parts 4, 5, 7, and 24



Labeling and Advertising of Wines, Distilled Spirits and Malt 
Beverages; Proposed Rule


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DEPARTMENT OF THE TREASURY

Alcohol and Tobacco Tax and Trade Bureau

27 CFR Parts 4, 5, 7, and 24

[Notice No. 73; Ref: Notice No. 41]
RIN 1513-AB07

 
Labeling and Advertising of Wines, Distilled Spirits and Malt 
Beverages

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 (TTB) proposes to 
amend its regulations to require a statement of alcohol content, 
expressed as a percentage of alcohol by volume, on all alcohol beverage 
products. This statement may appear on any label affixed to the 
container. TTB also proposes to require a Serving Facts panel on 
alcohol beverage labels, which would include a statement of calories, 
carbohydrates, fat, and protein. Industry members may also choose to 
disclose on the Serving Facts panel the number of U.S. fluid ounces of 
pure alcohol (ethyl alcohol) per serving as part of a statement that 
includes alcohol content expressed as a percentage of alcohol by 
volume. The proposed regulations would also specify new reference 
serving sizes for wine, distilled spirits, and malt beverages based on 
the amount of beverage customarily consumed as a single serving. 
However, TTB is not defining a standard drink in this document. TTB 
proposes to make these new requirements mandatory three years after the 
date of publication of the final rule in the Federal Register. The 
agency proposes these amendments to ensure that alcohol beverage labels 
provide consumers with adequate information about the product.

DATES: Comments must be received on or before October 29, 2007.

ADDRESSES: You may send comments on this notice to one of the following 
addresses:
     http://www.regulations.gov (Federal e-rulemaking portal; 

follow the instructions for submitting comments); or
     Director, Regulations and Rulings Division, Alcohol and 
Tobacco Tax and Trade Bureau, P.O. Box 14412, Washington, DC 20044-
4412.
    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 and any comments we receive 
about this proposal at http://www.regulations.gov. A direct link to the 

appropriate Regulations.gov docket is also available on the TTB Web 
site at http://www.ttb.gov/regulations_laws/all_rulemaking.shtml. In 

addition, you also may view copies of this notice and any comments we 
receive about this proposal by appointment at the TTB Information 
Resource Center, 1310 G Street, NW., Washington, DC 20220. To make an 
appointment, telephone (202) 927-2400.

FOR FURTHER INFORMATION CONTACT: Lisa M. Gesser, Regulations and 
Rulings Division, Alcohol and Tobacco Tax and Trade Bureau, P.O. Box 
128, Morganza, MD 20660; telephone (301) 290-1460; or Joanne C. Brady, 
Regulations and Rulings Division, Alcohol and Tobacco Tax and Trade 
Bureau, P.O. Box 45797, Philadelphia, PA 19149; telephone (215) 333-
7050.

SUPPLEMENTARY INFORMATION: 

I. Introduction

    The Alcohol and Tobacco Tax and Trade Bureau (TTB) and its 
predecessor agencies have considered the issue of requiring calorie and 
nutrient information on alcohol beverage labels in the past. As a 
result of a rulemaking initiative in 1993, TTB's immediate predecessor 
agency, the Bureau of Alcohol, Tobacco and Firearms (ATF), concluded 
that, at that time, there was no significant consumer interest in 
having nutrition information on alcohol beverage labels. Ultimately, 
ATF did not implement rules on this issue. For a detailed description 
of the rulemaking history concerning nutrition labeling on alcohol 
beverages see TTB Notice No. 41, 70 FR 22274 (April 29, 2005).
    The issue of requiring the labeling of alcohol beverage products 
with calorie and nutrient information was not raised again until 2003, 
when TTB received a petition requesting rulemaking action to require an 
``Alcohol Facts'' panel and ingredient labeling. Shortly thereafter, 
TTB was contacted by an industry member requesting approval to label 
its products with nutrition and other information on a ``Serving 
Facts'' panel. These panels, as well as TTB's authority to regulate 
alcohol beverage labels and advertisements, are discussed in detail 
below.

II. Petition for ``Alcohol Facts'' Label and Ingredient Labeling

    On December 16, 2003, the Center for Science in the Public Interest 
(CSPI), the National Consumers League (NCL), 67 other organizations, 
and eight individuals, including four deans of schools of public 
health, petitioned TTB to change the alcohol beverage labeling 
regulations. Hereinafter, we refer to this petition as ``the 
petition.'' After receipt of the petition, additional individuals wrote 
to TTB requesting the addition of their names to the petition. The 
petition asked TTB to require that labels of all alcohol beverages 
regulated by TTB include the following information in a standardized 
format:
     The beverage's alcohol content expressed as a percentage 
of volume;
     A standard serving size;
     The amount of alcohol (in fluid ounces) contained within 
each standard serving;
     The number of calories per standard serving;
     The ingredients (including additives) from which the 
beverage is made;
     The number of standard drinks per container; and
     The current definitions of moderate drinking for men and 
women published in the ``Dietary Guidelines for Americans,'' which is 
issued jointly by the United States Department of Health and Human 
Services and the United States Department of Agriculture (USDA).
    The petitioners proposed that all alcohol beverage containers bear 
this information on an ``Alcohol Facts'' panel. The petitioners 
provided the following example for a 750 milliliter bottle of wine:

[[Page 41861]]

[GRAPHIC] [TIFF OMITTED] TP31JY07.004

    The petition asked that the words ``Alcohol Facts'' be immediately 
followed by a declaration of the number of standard drinks (servings) 
per container. The petitioners asked that, consistent with the 
``Dietary Guidelines for Americans,'' (http://www.health.gov/DietaryGuidelines
) a serving should be defined as 12 ounces of beer, 5 

ounces of wine, and 1.5 ounces of 80-proof distilled spirits. The 
petitioners further recommended that for alcohol beverages not fitting 
into one of those standard categories, a serving should be defined as 
an amount of fluid containing approximately 0.5 ounces of ethyl 
alcohol. The petitioners recommended that a consistent graphic symbol 
(for example, a beer mug, wine glass, or shot glass) should appear 
first, followed by the number of drinks in the container (for example, 
``Contains 5 Servings''). The petition proposed requiring this 
information on labels of all malt beverages, wines, and distilled 
spirits products regulated by TTB that contain more than one-half of 
one percent alcohol by volume. The graphics and type size for the 
Alcohol Facts label should follow the Nutrition Labeling Education Act 
standards as set out in the Food and Drug Administration (FDA) 
regulations at 21 CFR 101.9(d), the petitioners suggested. Further, the 
petitioners stated that ingredient information should appear on the 
label immediately below, but segregated from, the ``Alcohol Facts'' 
box.
    The petitioners suggested that current regulatory requirements 
force consumers to guess about the calorie content of alcohol beverages 
and the alcohol content of malt beverages. The petitioners included a 
summary of the results of a census-balanced, nationally representative 
telephone study conducted in September of 2003, among 600 Americans, 
ages 18 and older. The study was conducted by the Global Strategy 
Group, an independent polling and marketing research firm. The results 
were that 91 percent of respondents supported requiring ingredient 
labeling on alcohol beverages; 94 percent supported requiring alcohol 
content on alcohol beverage labels; 89 percent supported the mandatory 
labeling of calorie content for alcohol beverages; and 84 percent 
supported the labeling of serving size information.

III. Requests for Voluntary Serving Facts Labeling

    Following receipt of the petition, TTB was contacted by an alcohol 
beverage industry member that wished to label its products with 
nutrient and other information on a ``Serving Facts'' panel. 
Subsequently, TTB received other requests from industry members to 
label products with similar information.
    In July and then again in September of 2004, TTB posted on its Web 
site, http://www.ttb.gov, a summary of specifications for a planned 

ruling concerning the manner in which alcohol beverage labels and 
advertisements might permissibly reflect information about a single 
serving in a Serving Facts panel, consistent with the statutory and 
regulatory standards administered by TTB. The Bureau sought input from 
interested parties, including the alcohol beverage industry, consumers, 
and consumer interest groups, about what information should be 
permitted on such a panel and in what format the Serving Facts panel 
should appear.
    In the first posting, TTB solicited comments on a variety of 
options. The Bureau informally asked for comments on an optional 
Serving Facts panel that would include the serving size in fluid ounces 
based on what was previously specified in TTB Ruling 2004-1 (1.5 fluid 
ounces for distilled spirits, 5 fluid ounces for wines, and 12 fluid 
ounces for malt beverages, regardless of alcohol content). The panel 
would also include the number of servings per container, and for each 
serving the following information:
     Fluid ounces of ethyl alcohol (to the nearest tenth of an 
ounce);
     Calories;
     Fat (in grams);
     Carbohydrates (in grams); and
     Protein (in grams).
    The Bureau also informally solicited comments on whether the term 
``standard drink'' should be defined and whether it and the number of 
standard drinks in a serving should be permitted on alcohol beverage 
labels and in advertisements. Finally, we solicited comments on the 
optional use of three icons similar to the ones at the bottom of the 
label presented below:

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[GRAPHIC] [TIFF OMITTED] TP31JY07.005

    In the second posting on our Web site, TTB informally solicited 
comments on an alternative label approach that omitted the icons and 
standard drink references. An example of this approach is as follows:
[GRAPHIC] [TIFF OMITTED] TP31JY07.006

    As a result of the two Web postings, TTB received several comments 
concerning a voluntary Serving Facts panel. The comments reflected 
strong and varying opinions. A significant proportion of those who 
commented felt that the issue should be addressed in public notice and 
comment rulemaking rather than in a TTB ruling. Furthermore, many 
commenters believed that certain elements of the Serving Facts panel 
would tend to confuse or mislead consumers about the product. In 
response to the issues raised by the commenters, on December 28, 2004, 
TTB issued a press release indicating that we would address these 
issues in an advance notice of proposed rulemaking.

IV. Notice No. 41

    On April 29, 2005, TTB published in the Federal Register (70 FR 
22274) Notice No. 41, an advance notice of proposed rulemaking entitled 
``Labeling and Advertising of Wines, Distilled Spirits, and Malt 
Beverages; Request for Public Comment.'' Notice No. 41 sought public 
comment on a wide range of alcohol beverage labeling and advertising 
issues to help the agency determine what regulatory changes in alcohol 
beverage labeling and advertising requirements, if any, TTB should 
propose in future rulemaking documents. Specifically, TTB sought 
comments on the petitioned ``Alcohol Facts'' panel and ingredient 
labeling, the ``Serving Facts'' panel presented in TTB's informal 
request for comments, and each panel's elements. Additionally, TTB 
requested comments on allergen labeling and the labeling of calorie and 
carbohydrate claims.
    In the preamble to Notice No. 41, TTB announced its interim policy 
on the use

[[Page 41863]]

of Serving Facts panels on labels, as follows:

    Pending the completion of rulemaking proceedings, TTB does not 
intend to issue certificates of label approval bearing the optional 
``Serving Facts'' panel. We believe it is important to have the 
benefit of public comments on these issues before making a decision 
as to whether the new elements in the panel might tend to mislead 
consumers.

    During the 60-day comment period, we received several requests from 
alcohol beverage industry representatives and organizations to extend 
the comment period for an additional 60 to 90 days beyond the original 
June 28, 2005, closing date. In support of the extension requests, 
industry members noted that some of the questions posed in the notice 
were broad and far reaching from a policy standpoint, while others were 
very technical, requiring research and coordination within the affected 
industries. In response to those requests, we extended the comment 
period for an additional 90 days. See Notice No. 48, 70 FR 36359, June 
23, 2005. The extended comment period for the ANRPM closed on September 
26, 2005.

V. TTB's Authority To Prescribe Alcohol Beverage Labeling and 
Advertising Regulations

A. Internal Revenue Code

    The Internal Revenue Code of 1986 (IRC) provides the Secretary with 
authority to issue regulations regarding the marking and labeling of 
containers of distilled spirits, wines, and beers. See 26 U.S.C. 5301, 
5368, and 5412. This authority is based on the Secretary's 
responsibility to protect the revenue and to collect the taxes imposed 
on alcohol beverages by Chapter 51 of the IRC.

B. Federal Alcohol Administration Act

    Sections 105(e) and 105(f) of the Federal Alcohol Administration 
Act (FAA Act), codified in the United States Code at 27 U.S.C. 205(e) 
and 205(f), set forth standards for regulation of the labeling and 
advertising of wine (containing at least 7 percent alcohol by volume), 
distilled spirits, and malt beverages, generally referred to as alcohol 
beverage products throughout this notice. These sections give the 
Secretary of the Treasury the authority to issue regulations to prevent 
deception of the consumer, to provide the consumer with ``adequate 
information'' as to the identity and quality of the product, to 
prohibit false or misleading statements, and to provide information as 
to the alcohol content of the product.
    The statutory requirements with respect to alcohol content differ 
among the three alcohol beverage categories. The FAA Act requires 
alcohol content statements on labels of distilled spirits products. The 
Act also requires alcohol content statements for wines with an alcohol 
content of over 14 percent alcohol by volume, leaving such statements 
optional for wines with an alcohol content below that level. The Act, 
when originally enacted, prohibited such statements on malt beverage 
labels, unless required by State law, but that prohibition was 
overturned in 1995 by the U.S. Supreme Court in Rubin v. Coors Brewing 
Company, 514 U.S. 476 (1995).
    The labeling and advertising provisions of the FAA Act also give 
the Secretary the authority to prohibit, irrespective of falsity, 
statements relating to age, manufacturing processes, analyses, 
guarantees, and scientific or irrelevant matters that are likely to 
mislead the consumer. In the case of malt beverages, the labeling and 
advertising provisions of the FAA Act apply only if the laws of the 
State into which the malt beverages are to be shipped impose similar 
requirements. TTB is responsible for the administration of the FAA Act 
and the regulations promulgated under it.

C. Legislative History of the Federal Alcohol Administration Act

    With respect to TTB's authority to regulate the labeling of alcohol 
beverage products under the FAA Act, the Act's legislative history 
provides some insight as to the general purpose of the labeling 
provisions:

    * * * the provisions of this bill show that the purpose was to 
carry that regulation into certain particular fields in which 
control of interstate commerce in liquors was paramount and 
necessary. The purpose was to provide such regulations, not laid 
down in statute, so as to be inflexible, but laid down under the 
guidance of Congress, under general principles, by a body which 
could change them as changes were found necessary.
    Those regulations were intended to insure that the purchaser 
should get what he thought he was getting, that representations both 
in labels and in advertising should be honest and straight-forward 
and truthful. They should not be confined, as the pure-food 
regulations have been confined, to prohibitions of falsity, but they 
should also provide for the information of the consumer, that he 
should be told what was in the bottle, and all the important factors 
which were of interest to him about what was in the bottle.

See Hearings on H.R. 8539 before the Committee on Ways and Means, House 
of Representatives, 74th Cong., 1st Sess. 10 (1935).

VI. Discussion of Comments on Notice No. 41

    In response to Notice No. 41, TTB received over 19,000 comments 
from consumers, consumer advocacy groups, Government officials, alcohol 
beverage industry members and associations, health organizations, and 
other concerned individuals.

A. Comments Regarding Alcohol Content

    In Notice No. 41, TTB requested comments on the issue of whether 
the regulations should be amended to require an alcohol content 
statement on all alcohol beverage labels. There was significant 
disagreement as to whether the listing of alcohol content should be 
mandatory.
    Many professional health organizations (including, among others, 
the American Society of Addiction Medicine, the American Medical 
Association (AMA), the American Nurses Association, and the American 
Council on Science and Health) as well as the Distilled Spirits Council 
of the United States (DISCUS), CSPI, NCL, and many consumers and other 
commenters supported mandatory alcohol content labeling for all alcohol 
beverage products. CSPI commented:

    Requiring all alcoholic beverages, whether beer, wine, distilled 
spirits, malternatives, or others, to be labeled for alcohol content 
is essential. Alcohol can be harmful when consumed in excess and 
even addictive for a substantial number of consumers. For that 
reason, labeling should provide clear information that allows 
consumers to measure and moderate their drinking. [Emphasis in the 
original.]

    As previously stated above, the original petition from CSPI, NCL, 
and others, noted that a consumer survey indicated that 94 percent of 
respondents supported mandatory alcohol content labeling on alcohol 
beverages, with 77 percent of consumers strongly supporting such a 
requirement. The petitioners argued that ``the growing popularity of 
new, non-standard types of alcoholic beverages (e.g., lite beers, ice 
beers, malt liquors, hard lemonades, hard colas, wine coolers, other 
ready to drink `alcopops,' fortified wines, and `zippers [ready-to-
drink liquor shots],' makes it even more difficult for consumers to 
accurately estimate their alcohol consumption.''
    Some commenters suggested that mandatory alcohol content labeling 
is especially important given the problems caused by alcohol abuse. The 
Marin Institute suggested that ``clear, consistent and informative 
labeling--particularly with respect to alcohol content and serving 
size--will help

[[Page 41864]]

consumers avoid some of these problems by reducing over consumption.'' 
The NCL also suggested that ``better information about alcohol content 
per serving is especially important and should be given the highest 
priority because of the many public health problems caused by excessive 
consumption of alcohol.''
    The Consumer Federation of America (CFA), a nonprofit association 
of 300 local, state and national consumer interest groups representing 
more than 50 million Americans, stated:

    Given the many public health problems caused by excessive 
consumption of alcohol, providing consumers better label information 
about alcohol content should be TTB's highest priority in this 
rulemaking. Providing consumers more information about alcohol 
content would help consumers make responsible drinking decisions and 
would help them follow the Dietary Guidelines' advice on moderate 
alcohol consumption. Potential benefits include reduced alcohol 
abuse, reduced drunk driving, and a reduction in the many diseases 
attributable to excessive alcohol intake.

The CFA further stated that such alcohol content is arguably required 
by the FAA Act, noting that it requires labels of alcohol beverages to 
provide ``adequate information'' on the identity, quality, and alcohol 
content of regulated products. The CFA also noted that the FAA Act 
provision prohibiting alcohol content information on labels of malt 
beverages was struck down as unconstitutional by the U.S. Supreme Court 
in Rubin v. Coors Brewing Company over ten years ago.
    DISCUS noted that both large and small distillers have had a 
mandatory alcohol content labeling requirement for the past seventy 
years, and suggested that all alcohol beverage products should be 
required to bear alcohol content information, as this information is 
used by consumers to drink responsibly.
    Other commenters, most notably members of the beer industry, 
objected to the extension of mandatory alcohol content labeling 
requirements to all malt beverages. The Beer Institute, a national 
trade association that represents domestic and international brewers, 
stated:

    The alcohol content of most beer is in a very narrow range, and 
consumers are generally aware of that fact. A weighted average of 
the alcohol content of the top 20 brands of domestic and imported 
beer based on 2004 sales data is 4.5 percent alcohol by volume. 
These brands account for 78.1 percent of the beer volume sold in the 
United States in 2004. Flavored malt beverage brands, none of which 
is in the top 20 brands, are required to display alcohol content by 
volume.

    The Brewers Association, an organization representing approximately 
1,400 small brewers and thousands of homebrewers and beer enthusiasts, 
commented in support of optional alcohol content statements on beer 
labels, but suggested that imposing mandatory alcohol content labeling 
requirements for malt beverages ``would stand congressional intent on 
its head and impose unnecessary costs on the industry.'' The comment 
noted that the FAA Act, as enacted, prohibited brewers from stating 
alcohol content on labels unless required by State law, and suggested 
that while the Supreme Court had overturned, on First Amendment 
grounds, the ban on the use of voluntary alcohol content statements, 
Congress had never distanced itself from its original intent on this 
matter. The Brewers Association thus stated that ``[w]hile TTB has, out 
of necessity, adjusted its alcohol content labeling rules to 
accommodate the demands of the First Amendment, it should not go 
further by imposing a rule that would require the very information that 
Congress saw fit to prohibit.'' [Emphasis in the original.]
    The Serving Facts and Alcohol Facts panels presented in Notice No. 
41 included alcohol content. Both panels expressed alcohol in U.S. 
fluid ounces of pure alcohol, and the Alcohol Facts panel also 
expressed alcohol content in percentage of alcohol by volume. 
Commenters disagreed on how to express alcohol content on an 
information panel. Diageo and many other commenters supported the 
listing of alcohol content in U.S. fluid ounces per serving, asserting 
that this information could be used by consumers to regulate their 
alcohol intake and follow the Dietary Guidelines advice on moderate 
drinking. It should be noted that the 2005 Dietary Guidelines provide 
that for purposes of explaining moderation, 12 fluid ounces of regular 
beer, 5 fluid ounces of wine, or 1.5 fluid ounces of 80-proof distilled 
spirits count as one drink; thus, the implication is that a ``drink'' 
would be equal to about 0.6 fluid ounces of pure alcohol. Some 
commenters further asserted that a consumer would not as easily be able 
to determine how many ``drinks'' he or she is consuming if alcohol 
content were only expressed as a percentage of alcohol by volume.
    The National Consumers League suggested that ``the alcohol content 
of a beverage is a function of both serving size and percent alcohol by 
volume. Providing the amount of alcohol per serving would express 
alcohol content in a single number and thereby enable consumers to make 
comparisons between different products based on their alcohol 
content.''
    The staff of the United States Bureau of Consumer Protection, the 
Bureau of Economics, and the Office of Policy Planning of the Federal 
Trade Commission (hereinafter collectively referred to as the FTC 
staff) supported disclosure of alcohol content in ounces of pure 
alcohol, stating:

    The amount of alcohol in beverages varies widely. Many popular 
beverages--12 ounces of regular beer containing 5% alcohol by volume 
(`ABV'), 5 ounces of wine containing 12% ABV or 1.5 ounces of 80 
proof distilled spirits--deliver 0.6 ounces of pure alcohol. 
Numerous other popular beverages, however, contain more or less 
alcohol. Beers in the marketplace range from approximately 3.3% to 
17% ABV, thus delivering between 0.39 and 2 ounces of pure alcohol 
per serving. Wines range from 6% to 18% ABV, i.e., providing between 
0.3 and 0.9 ounces of alcohol in a 5-ounce serving. Distilled 
spirits range from 15% to 75% ABV, i.e., providing 0.22 to 1.1 
ounces of alcohol per serving. [Footnotes omitted.]

    The FTC staff suggested that information about alcohol on labels 
may help consumers make better-informed decisions, stating that 
``research shows that in many instances, consumer decisions are made at 
the point of purchase.'' [Footnote omitted.]
    CSPI, which originally proposed the listing of alcohol content on 
labels as both a percentage of alcohol by volume and in U.S. fluid 
ounces of pure alcohol, submitted a comment reflecting a change in this 
position. CSPI explained that it no longer favored the labeling of 
alcohol in U.S. fluid ounces of pure alcohol, stating that ``[a]lthough 
a single drink of an alcoholic beverage may contain approximately 0.6 
ounces of alcohol, CSPI believes that it is unnecessary--and perhaps 
confusing--to put such information on a label.'' CSPI further stated 
that ``[c]onsumers do not think in those terms, but rather understand 
that drinks are served generally in standard, common sizes that vary 
according to the product.''
    Also voicing its opposition to the ounces of pure alcohol approach, 
a major brewer stated that when alcohol content is listed in fluid 
ounces per serving, the number of fluid ounces will rise and fall 
according to the serving size and, more importantly, will rise and fall 
according to the amount the consumer actually consumes. The brewer and 
many other commenters stated that depicting alcohol content in this 
manner may mislead consumers. The brewer suggested that alcohol content 
when expressed as a percentage of alcohol by volume is succinct, clear, 
accurate, neutral, easy to understand, and easy to compare. It also 
stated that

[[Page 41865]]

the percentage of alcohol by volume requires no explanation, 
definition, or graphic icon, but is a consistent measure that does not 
vary or fluctuate with the size of the drink.
    The Beer Institute opposed expressing alcohol content in fluid 
ounces for the following reasons:

    As compared to labeling beverages in terms of their alcohol 
concentration, or percent alcohol by volume, labeling beverages in 
ounces of absolute alcohol is misleading because beverage 
categories, types, and packages vary in alcohol potency. To achieve 
the informational goals of TTB and various petitioners, a consumer 
must compare disparate serving sizes for each product, number of 
servings in a container, and amount of pure alcohol contained in the 
stated serving size. Furthermore, the use of a standard serving size 
is not consistent with the manner in which many alcohol beverages 
are actually consumed. [Emphasis in original.]

    Several commenters further asserted that the display of a 
percentage of alcohol by volume remains the best means of indicating 
alcohol content on a product label or in advertising. Some commenters 
noted that the higher the percentage, the stronger the alcohol and its 
effect.
    Several other commenters stated that displaying alcohol content in 
U.S. fluid ounces per serving is unnecessary, misleading, and 
potentially harmful to the consumer. Other commenters contended that 
such labeling may be in violation of State law and regulations, as most 
states require alcohol content to be listed as a percentage of alcohol 
by volume.
    Several public health organizations suggested other methods of 
depicting alcohol content. These include content expressed as a 
percentage of alcohol by weight, and alcohol expressed in grams.
TTB Response
    TTB believes that the alcohol content of a beverage is one of the 
most important pieces of information about that product. We agree with 
those commenters who stated that labels should provide the consumers 
with this very basic information. We also believe that consumers use 
information about alcohol content to measure and moderate their 
drinking.
    As previously noted, the provisions of the FAA Act regarding the 
labeling of alcohol content differ by commodity. Accordingly, the 
current regulations that implement the labeling provisions of the FAA 
Act also differ by commodity. Alcohol content statements are already 
required for all distilled spirits products. See 27 CFR 5.32(a)(3), 
5.37 and 19.643(b). Wines containing more than 14 percent alcohol by 
volume must also bear alcohol content statements; however, under 
current regulations wines with an alcohol content of at least 7 percent 
but no more than 14 percent by volume may be labeled with the 
designation ``table wine'' or ``light wine'' in lieu of a percent 
alcohol by volume statement. See 27 CFR 4.36(a). Finally, with the 
exception of certain flavored malt beverages that derive alcohol from 
added ingredients (see 27 CFR 7.22(a)(5)), malt beverages are not 
required to bear an alcohol content statement under current 
regulations.
    In previous documents published in the Federal Register, TTB and 
its predecessor agency, ATF, have indicated an intention to examine the 
issue of requiring alcohol content on malt beverage labels. In 1993, 
after the United States District Court for the District of Colorado 
first struck down the ban on alcohol content on malt beverage labels as 
unconstitutional, and before the case went to the Supreme Court, which 
also held that the ban violated the First Amendment, ATF issued an 
interim rule allowing optional alcohol content labeling for malt 
beverages. See T.D. ATF-339, 58 FR 21228 (April 19, 1993). In the 
preamble to that final rule, ATF stated that it believed that ``if a 
future court action ultimately does not uphold the existing statute 
prohibiting statements of alcoholic content, or if future legislative 
action removes the current statutory prohibition, then ATF would 
consider making the statement of alcoholic content mandatory on labels 
of malt beverages.'' See 58 FR 21229. Similarly, in 2005, in the 
preamble to the final rule on flavored malt beverages, TTB addressed 
comments that favored mandatory alcohol content for all malt beverages 
by stating that while we were ``not unsympathetic to the comments 
suggesting mandatory alcohol content labeling for all malt beverages, 
we are not in a position to implement such a rule without notice and 
public comment.'' See TTB T.D.-21, 70 FR 194, 221 (January 3, 2005).
    After reviewing the comments received in response to Notice No. 41, 
TTB is now proposing to require alcohol content statements on the 
labels of all alcohol beverage products, including table wines and all 
malt beverages. As noted by CSPI, alcohol can be harmful when consumed 
in excess; thus, labeling should provide information that allows 
consumers to measure and moderate their drinking. We received many 
comments that made similar points from public health organizations, 
including the American Society of Addiction Medicine, the AMA, the 
American Nurses Association, and the American Council on Science and 
Health.
    We agree with those commenters who suggested that providing 
consumers with more information about alcohol content may help them 
make responsible drinking decisions. The Beer Institute commented that 
the alcohol content of most beer is generally in a narrow range, with a 
weighted average of the alcohol content of the top 20 brands in 2004 
being 4.5 percent alcohol by volume. However, while most beer sold is, 
in fact, within this narrow range, we are also aware of beers being 
sold today in the United States with an alcohol content as high as 24 
percent alcohol by volume. Unless the brewer chooses to place this 
information on the label, the consumer has no way of knowing whether 
the alcohol content of the malt beverage he is purchasing is 4.5 
percent alcohol by volume or over 5 times that amount. Consumers should 
not be forced to resort to guesswork about this important element of 
the alcohol beverages they consume. While table wines fall by 
definition within a certain range of alcohol content, those wines at 
the top of the range (14 percent) have an alcohol content twice as high 
as those wines at the bottom of the range (7 percent). Again, this is 
important information to consumers, and it should be presented on the 
label. We agree with the suggestion by the FTC staff that because of 
the significant variety in the alcohol content of alcohol beverages, 
label disclosures about alcohol content may assist consumers in 
choosing among categories and brands.
    The Brewers Association suggested that requiring alcohol content 
statements on malt beverages would be contrary to the congressional 
intent expressed when the FAA Act was enacted in 1935. We recognize 
that the FAA Act, as enacted, specifically prohibited the placement of 
alcohol content statements on malt beverage labels, unless required by 
State law. This provision of the law was found to be unconstitutional 
by the Supreme Court in Rubin v. Coors Brewing Co., 514 U.S. 476 
(1995). This action by the Court leaves the Secretary with authority to 
either allow or require alcohol content statements on malt beverage 
labels. In fact, as previously noted, we have already issued 
regulations requiring alcohol content statements on certain flavored 
malt beverage labels.
    We also recognize that the FAA Act does not require alcohol content 
statements on labels of wines containing 14 percent alcohol by volume 
or less. Accordingly, as stated above, our

[[Page 41866]]

regulations implemented under the FAA Act provide that labels for such 
products may either express alcohol content as a percentage of alcohol 
by volume or they may bear the type designation to which they are 
entitled based on the product's alcohol content (for example, ``table 
wine'' or ``light wine.'') See 27 CFR 4.36.
    The implementing regulations under the IRC require alcohol content 
to be labeled on all wine containers; however, they incorporate by 
reference the rules under 27 CFR part 4. See 27 CFR 24.257(a)(3). This 
incorporation of the rules under part 4 results in a somewhat 
inconsistent effect. The IRC regulations require wines under 7 percent 
by volume (which are not ``wines'' under the FAA Act and thus fall 
under the FDA's labeling jurisdiction) to bear a percent-alcohol-by-
volume statement; however, they do not require the same statement on 
wines with an alcohol content of 7 to 14 percent alcohol by volume. TTB 
believes that the listing of alcohol content should be consistent for 
all wines regardless of their alcohol content. Accordingly, we are 
proposing to amend Sec.  24.257(a)(3) of the TTB regulations to require 
alcohol content, expressed in terms of percent-alcohol-by-volume, on 
all wine labels. We believe that this amendment would serve an 
important revenue purpose, as the alcohol content of a wine is one 
factor in determining its tax classification. See 26 U.S.C. 5041(b). We 
also believe that our statutory authority under the FAA Act allows us 
to issue regulations regarding the placement of the mandatory alcohol 
content statement.
    Accordingly, TTB is proposing that alcohol content, expressed as a 
percentage of alcohol by volume, must appear on labels for all alcohol 
beverages subject to our labeling jurisdiction under the FAA Act.
    TTB is proposing to allow the mandatory alcohol content statement 
to appear on any label affixed to the container including, at the 
option of the industry member, as part of a Serving Facts panel as 
discussed later in this document. This approach is required in order to 
conform to a trade agreement among the United States, Australia, 
Argentina, Canada, Chile, and New Zealand, in which it was agreed that 
wines may be imported bearing certain common mandatory information 
(including alcohol content) on any wine label on the container, as long 
as such information is in a single field of vision. TTB is further 
proposing to remove Sec. Sec.  4.32(a)(3), 5.32(a)(3) and 7.22(a)(5), 
which mandate placement of alcohol content statements for wine, 
distilled spirits, and malt beverages on the brand label. Under the 
proposed regulatory changes, listing alcohol content on a Serving Facts 
panel or elsewhere on the label would satisfy the labeling requirement.
    After careful consideration of the comments, TTB continues to 
believe that the display of a percentage of alcohol by volume is the 
best way to express alcohol content on a product label or in 
advertisements. We believe that consumers are familiar with alcohol 
content expressed in this manner. By contrast, consumers have little or 
no familiarity with alcohol expressed in U.S. fluid ounces of pure 
alcohol. Indeed many commenters, including CSPI, suggested that such 
statements might confuse consumers.
    However, we note that several commenters suggested that presenting 
alcohol in fluid ounces per serving may provide consumers with useful 
information. As the NCL noted in its comment, providing this 
information may enable consumers to more easily make comparisons 
between different products based on their alcohol content.
    TTB does not believe that the disclosure of alcohol in fluid ounces 
is inherently misleading; however, we agree that consumers are used to 
seeing alcohol content expressed as a percentage of alcohol by volume 
and might be confused by a statement of alcohol in fluid ounces, 
without some context in which to evaluate this information. For these 
reasons, TTB is not proposing that the panel include a mandatory 
statement of alcohol in U.S. fluid ounces of pure alcohol per serving. 
We agree that the number of fluid ounces of alcohol per serving might 
be confusing in isolation; however, we believe that it would not be 
confusing if presented together with a traditional alcohol content 
statement. Furthermore, this information might be useful to consumers, 
and would allow them to compare the quantity of alcohol contained in 
single servings of different commodities without doing mathematical 
calculations.
    Accordingly, we are proposing to permit the additional display of a 
statement of the number of fluid ounces of alcohol per serving, as long 
as it includes a statement of alcohol content expressed as a percentage 
of alcohol by volume. The proposed rule further provides that the 
heading ``fl oz of alcohol'', if it appears in the Serving Facts panel, 
must be indented beneath the heading ``Alcohol by volume.''
    As previously noted, the proposed rule would allow the mandatory 
alcohol content statement to appear on the Serving Facts panel or 
elsewhere on the label, or both on the Serving Facts panel and 
elsewhere; however, if the industry member chooses to list the number 
of fluid ounces of pure alcohol in the product, the proposed rule 
provides that such information must appear as part of the Serving Facts 
panel. As noted in the comments, the percentage of alcohol by volume in 
a given product does not change based on the serving size; however, the 
number of ounces of pure alcohol does. Thus, to provide context for the 
consumer, the ounces of pure alcohol must appear as part of the Serving 
Facts panel, which also discloses the serving size and the number of 
servings per container. Because the number of fluid ounces of alcohol 
per serving must appear together with the alcohol content statement, 
this means that industry members choosing to disclose the number of 
ounces of alcohol per serving must put both this statement and the 
percentage of alcohol by volume together in the Serving Facts panel.
    We believe that by allowing the use of a statement of fluid ounces 
of alcohol only if it appears directly underneath a statement of 
alcohol content on a Serving Facts panel, consumers may come to 
understand the relationship between alcohol content expressed as a 
percentage of alcohol by volume and the expression of the number of 
fluid ounces of pure alcohol per serving.

B. Comments Regarding Calorie and Nutrient Labeling and Advertising

    In Notice No. 41, TTB requested comments on the issue of listing 
calorie and nutrient information on alcohol beverage labels and in 
advertisements. Over 18,500 consumers who responded to Notice No. 41 
indicated that they would like to see this additional information on 
alcohol beverage labels.
    Most of these comments were form letters generated through a 
letter-writing campaign initiated by Diageo, a major alcohol beverage 
producer, through its Web site at http://www.knowyourdrink.com. 

Consumers who visited the Web site were invited to submit a comment to 
TTB on this issue. If consumers chose to submit a comment, the Web site 
would then generate and forward one of over 20 different form letters 
to TTB. Many of these consumers expressed confusion as to why alcohol 
beverage labels do not currently bear this type of information, and 
some expressed the belief that TTB prohibited the use of this 
information on labels. The response by consumers who took the time to 
show their support for calorie and nutrient information on alcohol 

[[Page 41867]]

http://www.knowyourdrink.com Web site was numerically significant (over 

18,000).
    TTB received many other comments in support of the display of 
calorie and nutrient information per serving. Many of these commenters 
stated that they use facts about calories and nutrient content of the 
products they eat and drink to balance their diets. Several commenters, 
including the NCL, suggested that calorie information on alcohol 
beverage labels would help consumers maintain their weight within a 
healthy range consistent with the ``Dietary Guidelines for Americans'' 
advice. Commenting on this issue, CSPI explained that:

    * * * Alcohol provides a significant portion of calories (3% to 
5%) in the American diet (for heavier drinkers, it contributes even 
more generously) and many drinkers and other consumers watch their 
calorie intake in order to help maintain a healthy weight. 
Particularly today, when drinking is widely portrayed as an adjunct 
(if not a prerequisite) to a healthy lifestyle, and popular, newer, 
ready-to-drink concoctions often contain more than 200 calories per 
serving, calorie information takes on added importance. Obesity and 
excessive weight represent substantial threats to individual and 
public health. The medical and other costs related to those problems 
are staggering, and continue to grow, along with the human 
suffering. Calorie labeling could provide a constant, low-cost 
reminder that alcohol consumption adds generally empty, 
discretionary calories to the diet. Along with other educational and 
policy approaches, such labeling could help raise awareness and 
potentially provide information that consumers can use to modify 
their drinking behavior.

    The NCL, as well as Shape Up America, which is a non-profit 
organization concerned with public health issues, referred to a recent 
FDA report, Report of the Obesity Working Group, ``Calories Count,'' 
March 12, 2004, available at (http://www.cfsan.fda.gov/dms/owg-toc.html
), which concludes that maintaining a healthy weight is a 

matter of counting and balancing calories consumed and expended. Shape 
Up America explained that awareness of the calorie content of food and 
beverages is essential to implementing this energy balance strategy. 
Many other commenters, including the American Council on Science and 
Health, a consumer education consortium concerned with public health 
issues, asserted that at a time when the prevalence of obesity is 
becoming a significant public health threat, information about the 
content of all foods and beverages should be presented to consumers in 
a standardized, clear format to allow them to make well-informed 
choices.
    The American Dietetic Association (ADA), which is the largest 
association of food and nutrition professionals and represents nearly 
65,000 members, also commented in support of calorie and nutrient 
labeling. The ADA asserted that nutrition and ingredient labeling of 
alcohol beverage products will contribute positively to public health 
measures to reduce the current burden of chronic disease, including 
obesity, hypertension, diabetes, and dyslipidemia. The ADA stated that 
it supports initiatives to label wine, distilled spirits, and malt 
beverages to provide information consumers can use to maintain health, 
including a healthy body weight, and to manage chronic conditions such 
as diabetes. This comment asserted that such information would be best 
conveyed within the context of dietary guidance based on the ``Dietary 
Guidelines for Americans 2005,'' which includes advice on the 
consumption of alcohol beverage products. The ADA also stated that the 
growing health care costs associated with the rise in chronic diseases 
and conditions, which can be attributed to over-consumption of foods 
and beverages, including those containing alcohol, more than justify 
the costs of revising labels.
    TTB received several comments from individuals who suffer from 
diabetes. These commenters explained that access to nutrition 
information is critical to their efforts to control their disease. One 
commenter states that ``as a diabetic, I am especially interested in 
the carbohydrate content of all food and beverages. This is vital 
information in order to determine necessary insulin administration.'' 
Another commenter, a State policy maker and also a diabetic, stated 
that he regularly checks labels for portion size and nutritional 
content. He explained that this type of information is invaluable in 
his efforts to control his disease. Another commenter, The Social & 
Health Research Center, explained that between 2001 and 2004 diabetes 
rates grew by 55 percent. They state that the key to this disease is 
prevention, and explained that a large national study, the Diabetes 
Prevention Program, reported that high risk individuals who practiced 
healthy lifestyles were able to reduce their diabetes risk by 58 
percent. This commenter, like others, stressed that it is extremely 
important for people with diabetes and at risk for diabetes, who choose 
to drink alcohol, to have complete information about the contents of 
these beverages. The commenter further stated that alcohol is a 
significant source of calories and that excessive alcohol consumption 
makes it difficult to ingest sufficient nutrients within an 
individual's daily calorie allotment and to maintain a healthy weight.
    The FTC staff also commented in support of amending the TTB 
regulations to require that alcohol beverage labels disclose alcohol 
and nutrient content (calories, carbohydrates, fat, and saturated fat) 
per serving, stating that such a change would be likely to have 
beneficial effects on consumers and competition. The FTC staff did not 
comment on the listing of protein. Their comment asserted that 
information on labels about the attributes of alcohol beverages would 
help consumers select beverages they prefer, including making 
selections consistent with the recommendations of public health 
agencies. Additionally, the FTC staff indicated that such labeling 
would encourage manufacturers to compete based on the nutritional (for 
example, calorie and carbohydrate content) attributes of their 
beverages. The FTC staff also stated that such requirements should not 
extend to advertisements because advertising differs from labeling in 
important ways that make it likely that the costs of mandatory 
disclosure in advertisements would outweigh its benefits.
    The FTC staff also noted that alcohol varies significantly in 
calories per serving, pointing to beers that ranged from 95 to 340 
calories per serving; spirits that ranged from 48 to 180 calories per 
serving, and wines that ranged from 100 to 235 calories per serving. 
This comment also noted ranges in carbohydrate content, with beers 
ranging from 5 to 22 grams of carbohydrates per serving, spirits 
ranging from 0 to 18 grams of carbohydrates per serving, and wines 
ranging from 1 to 18 grams of carbohydrates per serving. While alcohol 
beverages generally do not contain fat, there are distilled spirits 
specialty products that contain fat from cream, milk, or coconut.
    TTB did not receive any specific comments against providing calorie 
information on alcohol beverage labels; however, a few commenters were 
generally opposed to listing any calorie or nutrient information on 
alcohol beverage labels. Some of these commenters stated that alcohol 
beverage products are consumed for pleasure and not for nutritional 
content; therefore, nutritional and calorie content labeling should not 
be required. One commenter cautioned that alcohol consumption is not a 
part of a healthy lifestyle and that those on diets should not be 
drinking any alcohol.
    A few commenters were opposed to listing information about certain 
nutrients. The AMA, while expressing

[[Page 41868]]

support for the listing of the number of calories as well as the number 
of grams of carbohydrate, fat, and protein per serving, suggested that 
fats and protein only be listed if they reach a threshold.
    Like the AMA, CSPI suggested that the listing of fats and proteins 
should be permitted only if they meet a certain meaningful, minimum 
threshold amount. CSPI commented that listing information on 
carbohydrate, fat, and protein content on alcohol beverage labels 
provides little value to consumers and may even do harm. Specifically, 
CSPI expressed concern that listing such information on alcohol 
beverage labels might suggest to consumers that the product is akin to 
food and represents an ordinary source of nutrition.
    Several other commenters stated that nutrition information on 
alcohol beverage products should be limited to only calories and 
carbohydrates. One commenter suggested that listing protein on alcohol 
beverage labels might convince a consumer to drink more of the product 
to get more protein. Some commenters also expressed concern that 
listing fat content could open the door to ``no-fat'' claims for 
alcohol beverages, which are typically directed towards health foods.
    A few commenters expressed concern that listing nutrient content on 
alcohol beverage labels could be misleading. A large brewing company 
commented that the Alcohol Facts panel would be inappropriate, and 
stressed the differences in the labeling of food and alcohol beverages. 
The commenter made the following point:

    Food labels present detailed nutrient content and dietary 
information in the context of a healthy diet. The servings of listed 
items such as carbohydrates, cholesterol, protein and fat are 
expressed not only in grams, but also in a percentage daily value 
based on a 2,000 calorie diet. The 2,000 calorie diet has no 
equivalent in alcohol products, which have no recommended daily 
nutritional value. Furthermore, adding nutritional recommendations 
would contradict TTB's statements opposing the placement of health 
claims on alcohol beverage labeling.

    The Beer Institute commented that TTB should move with extreme 
caution on any rulemaking to mandate or permit nutritional labeling 
similar to that required by FDA on the food and beverage products it 
regulates. Its comment suggested that any such change should only be 
considered after thorough research and a formal agency determination 
that changes in the label format or display of additional information 
would be consistent with the intent of Congress and in the public 
interest. The Beer Institute instead supported the current TTB policy 
of voluntary disclosure of a statement of average analysis on labels 
for all types and categories of alcohol beverages. (TTB Ruling 2004-1 
allows the use of calorie and carbohydrate references on alcohol 
beverage labels and in advertisements as part of, or in conjunction 
with, a statement of average analysis listing the serving size as well 
as the number of calories, and the number of grams of carbohydrates, 
protein, and fat, per serving.)
TTB Response
    As noted earlier in this document, the purpose of the FAA Act is, 
in part, to ensure that alcohol beverage products are labeled and 
advertised in a manner that will provide the consumer with ``adequate 
information'' as to the identity and quality of the product, and to 
prohibit false or misleading statements. As explained in the 
legislative history, Congress purposefully avoided laying out specific 
statutory requirements, opting instead to lay down general guidance so 
that the Department of the Treasury would have the flexibility to draft 
regulations and change them when necessary. Congress further intended 
that the purchaser or consumer should be told what was in the bottle, 
and all the important factors which were of interest to the consumer 
about the product.
    The comments resulting from Notice No. 41 clearly indicate that 
consumers are very interested in having information about the calorie 
and nutrient content of the alcohol beverage products they purchase. 
These consumers expressed the view that this information should be 
available on the product's label. In fact, many commenters feel that 
this information is vital to health decisions they make on a daily 
basis. These comments seem consistent with the results of the survey 
submitted with the CSPI and NCL petition, in which 89 percent of the 
respondents supported mandatory labeling of calorie content on alcohol 
beverage labels, with 65 percent of the respondents strongly supporting 
such a requirement.
    TTB agrees with those commenters who indicated that the calorie and 
nutrient content of alcohol beverages may constitute important 
information for consumers interested in monitoring their overall intake 
of calories, carbohydrates, protein, and/or fat. TTB believes it is 
important for consumers to have the ability to make informed decisions 
about the alcohol beverage choices they make. To make informed choices, 
consumers should have access to information on the calorie, nutrient, 
and alcohol content of alcohol beverage products. Without this 
information, TTB believes a consumer cannot adequately judge the 
consequences of the beverage selections that he or she makes.
    TTB notes that thousands of comments generated by the http://www.knowyourdrink.com
 Web site stated or implied that TTB does not 

allow the placement of calorie, carbohydrate, protein, and fat 
information on alcohol beverage labels. This is incorrect. As explained 
above, TTB's current policy, as most recently set forth in TTB Ruling 
2004-1, is to allow producers who wish to put this information on 
alcohol beverage labels to do so, as long as they include a complete 
statement of average analysis which lists the number of calories, and 
the number of grams of carbohydrates, protein, and fat, per serving. 
The fact that so many of the consumer commenters were unaware that this 
information already appears on many alcohol beverage labels gives rise 
to questions as to whether our current policy, which allows the 
optional placement of calorie and nutrient information on alcohol 
beverage labels, provides adequate information to consumers about the 
identity and quality of the product. Given the fact that consumers are 
used to seeing calorie and nutrient information presented in a 
standardized format on food labels, it is possible those labels that 
currently bear statements of average analysis are not presenting this 
information in a way that is consistent and easy for consumers to 
notice and understand.
    Based on our review of the comments, TTB believes that the calorie 
and nutrient content of alcohol beverages may constitute a material 
factor in a consumer's decision to purchase such beverages, and that 
under the FAA Act and as supported by its legislative history it is 
appropriate to require that labels present this data for the consumer's 
consideration. In this respect, our mandate under the FAA Act to ensure 
that consumers have adequate information about the identity and quality 
of the product is similar to the intent under those provisions of the 
current Food and Drug Cosmetic Act (FD&C Act) that state that the 
labeling of a food is misleading if it fails to reveal the material 
facts with respect to the consequences that may result from use of the 
food. See 21 U.S.C. 321.
    TTB does not agree with those commenters who suggested that certain 
nutrients should not be labeled unless they meet a certain threshold 
level. For 30 years, brewers have included calories, carbohydrates, fat 
and protein

[[Page 41869]]

in a statement of average analysis on labels of malt beverages that 
made calorie or carbohydrate claims. We have seen no evidence that 
these labels misled consumers into believing that such products 
constituted good sources of nutrients. Furthermore, such statements are 
not specific health claims or health-related statements. Our current 
regulations define the term ``health-related statement'' to include 
statements and claims of nutritional value, but go on to provide that 
``statements concerning caloric, carbohydrate, protein, and fat content 
do not constitute nutritional claims about the product.'' See 27 CFR 
4.39(h)(1)(i), 5.42(b)(8)(1)(A) and 7.29(e)(1)(i).
    Finally, as pointed out by the FTC staff, there is a significant 
range in calories and carbohydrates among alcohol beverages. While most 
alcohol beverages do not contain fat, some distilled spirits specialty 
products contain fat from cream, milk, or coconut. Consumers should be 
able to readily determine the calorie and nutrient content of an 
alcohol beverage before deciding whether to purchase or consume the 
product.
    Accordingly, pursuant to TTB's statutory authority under the FAA 
Act to require information on labels that will provide consumers with 
adequate information about the quality and identity of the product, we 
are proposing to amend the TTB regulations to require a ``Serving 
Facts'' panel on alcohol beverage labels, and to require such a panel 
on any advertisement that makes a calorie or carbohydrate 
representation. We believe that this information should be presented to 
consumers in a uniform, standardized format that is prominent on the 
label, so that consumers may easily avail themselves of this important 
information. The format and other elements included in the ``Serving 
Facts'' panel are discussed later in this document.

C. Comments Concerning Inclusion of a Definition of Moderate Drinking 
on Alcohol Beverage Labels

    In Notice No. 41, TTB sought comments on the feasibility and 
desirability of an Alcohol Facts panel containing, among other 
information, the statement: ``U.S. Dietary Guidelines advice on 
moderate drinking: No more than two drinks per day for men, one drink 
per day for women.'' Several commenters supported the idea of 
displaying this definition of moderate drinking on alcohol beverage 
labels. Specifically, these commenters stated that this information 
will help consumers moderate their drinking.
    DISCUS cautioned that including the Dietary Guidelines advice 
regarding moderate drinking may run afoul of the Bureau's rules and 
current guidance to industry regarding health claims and other health-
related statements. The Beer Institute asserted that the Dietary 
Guidelines statement represented in the Alcohol Facts panel is a health 
statement; therefore, TTB should prohibit it. Further, the Beer 
Institute contended that the Dietary Guidelines are detailed and 
carefully sourced, making the information impractical to disclose in a 
meaningful manner on a label or in an advertisement.
TTB Response
    The Dietary Guidelines recommend that if adults choose to drink 
alcohol beverages, they should consume them only in moderation. The 
term ``moderation'' is defined in the Dietary Guidelines as the 
consumption of up to one drink per day for women and up to two drinks 
per day for men. For purposes of illustrating moderation, the Dietary 
Guidelines explain that 12 fluid ounces of regular beer, 5 fluid ounces 
of wine, or 1.5 fluid ounces of 80-proof (40 percent alcohol by volume) 
distilled spirits, count as one drink. The Dietary Guidelines further 
state that this definition of moderation is not intended as an average 
over several days but rather as the amount consumed on any single day. 
In addition to the definition of moderate drinking, the Dietary 
Guidelines provide approximately two pages of additional information 
about responsible alcohol consumption and what that means.
    For example, the Dietary Guidelines caution that even moderate 
alcohol consumption may have adverse affects in specific situations and 
on specific individuals. The Dietary Guidelines explain that 
individuals who plan to drive, operate machinery, or take part in other 
activities that require attention, skill, or coordination should avoid 
drinking alcohol beverages. Additionally, the Dietary Guidelines advise 
that children and adolescents, women of child bearing age who may 
become pregnant, pregnant and lactating women, individuals taking 
medications that can interact with alcohol, and individuals with 
specific medical conditions, should not drink at all. Even moderate 
drinking during pregnancy may have behavioral or developmental 
consequences for the baby, the Dietary Guidelines stress. Finally, the 
Dietary Guidelines also suggest that individuals of any age who cannot 
restrict their drinking to moderate levels should not drink at all. 
This last category is obviously hard to define, and may include many 
individuals who do not even realize that they fall within it.
    Based on our consideration of the comments, TTB believes that 
labeling alcohol beverage products with information about the 
definition of moderate drinking could tend to mislead consumers, 
without more specific cautionary information about those individuals 
for whom even moderate consumption may create health risks. While many 
consumers may be concerned about moderate consumption, the Dietary 
Guidelines also advise many individuals that they should not consume 
any alcohol at all. We must avoid creating the misleading impression 
that the Dietary Guidelines condone the consumption of one or two 
alcohol beverages per day for those who should not consume any alcohol 
at all. Accordingly, this notice does not propose to include the 
definition of moderate drinking from the Dietary Guidelines as part of 
a Serving Facts panel.

D. Comments Regarding Labeling Alcohol Beverages With Standard Drink 
and Serving Size Information

    In Notice No. 41, both the Alcohol Facts and Serving Facts panels 
introduced the concept of a standard drink or standard serving size 
based on the Dietary Guidelines advice on alcohol consumption. The 
Alcohol Facts proposal in the petition suggested labeling that would 
include a declaration of the number of standard drinks (servings) per 
container. As noted above, the petitioners suggested that a serving 
should be defined as 12 ounces of beer, 5 ounces of wine, and 1.5 
ounces of 80-proof distilled spirits. The petition also suggested that 
for any alcohol beverages not fitting into one of those categories, a 
serving should be defined as the amount of fluid containing 
approximately 0.5 fluid ounces of pure alcohol. The petitioners later 
submitted comments in response to Notice No. 41 to change that figure 
to 0.6 fluid ounces of pure alcohol, which aligns their suggested 
definition with the standard drink definition on the ``Serving Facts'' 
panel.
    TTB received many comments in support of defining and listing 
standard drink information on labels and in advertisements. Many 
commenters suggested that standard drink information on alcohol 
beverage labels would help consumers measure, moderate, and make more 
informed decisions about their alcohol consumption. A number of 
commenters suggested that any information panel

[[Page 41870]]

would be more useful to consumers if TTB clearly defines what 
constitutes a ``serving'' of the product.
    Some commenters asserted that standard drink information listed on 
products would help consumers compare products across product 
categories. One commenter, a university professor and licensed clinical 
psychologist, indicated that a majority of his students have the 
impression that a beer is less intoxicating than a shot of distilled 
spirits. Further, he stated, it is essential that consumers understand 
that the alcohol content of beer and wine is no less significant than 
the alcohol content of distilled spirits. He explained, ``[m]any of my 
clients, and those of my colleagues, will assert with absolute 
certainty that they do not have a drinking problem because they `only 
drink beer.' '' He concluded that providing information as to what 
constitutes a standard serving of alcohol would be a more useful method 
of conveying alcohol content information than the tremendously 
misleading existing standards using alcohol by volume and proof, he 
concluded.
    TTB also received many comments opposing the listing of standard 
drink or standard serving size information on alcohol beverage labels 
and in advertisements. The strongest opposition came from the brewing 
industry. Specifically, a large brewer and other brewers and brewing 
industry associations commented that a ``standard drink'' contradicts 
the reality of how different types of alcohol beverages are packaged, 
poured, and consumed. These commenters noted that alcohol beverages 
vary in alcoholic strength not only among the categories but within 
each category as well. They also noted that while beer is usually 
consumed without being mixed, distilled spirits are often used and 
consumed in mixed drinks, which are measured using shot glasses of 
various volumes or are free poured. Because of these variations, these 
commenters asserted that standard servings do not exist.
    One commenter, a journalist who has covered alcohol beverages from 
both a recreational and health perspective for 10 years, argued that 
using the terms ``serving'' and ``standard drink'' synonymously, as in 
the CSPI petition, is a dangerous and irresponsible move. He made the 
following points:
     Servings are based strictly on volume both in the FDA 
regulations and in the consumer's mind. Standard drinks, which refer to 
how much alcohol is in one drink as defined by the Dietary Guidelines, 
must take into account alcohol content.
     Great variations in alcohol strength exist in both the 
wine and beer categories, with many higher-alcohol wines containing 150 
percent or more of the alcohol strength of their lower-alcohol 
counterparts and with higher-alcohol beers occasionally topping 300 
percent of the strength of the average beer.
     The standard drink equivalency is oversimplified and 
disregards the tremendous variation in alcoholic strength.
    CSPI also commented on this issue, stating:

    Providing ``standard drink'' information, though useful in some 
more general education contexts, might not be helpful on labels of 
particular products. For example, many over-sized containers, such 
as 16-ounce beers, are ordinarily sold--and meant to be consumed--as 
a single serving.

    A large brewer noted that FDA has undertaken a fundamental re-
examination of its labeling regulations concerning serving size and 
published an advance notice of proposed rulemaking (ANPRM) on April 4, 
2005 (70 FR 17010) seeking comments from consumers on a variety of 
issues. The FDA ANPRM stated that most consumers in focus groups 
conducted by FDA ``indicated that they incorrectly thought a serving 
size was a recommended portion size, rather than a standardized unit of 
measure.'' (See 70 FR 17012.) Given FDA's concern that consumers may 
perceive a serving size as a recommended portion size, the large brewer 
suggested that ``TTB should not make rules that would involve the 
display of serving size on labels for alcohol beverages until FDA has 
decided whether, and if so, how to amend its regulations concerning 
serving size on food products. Acting prior to the FDA's decision-
making process would be premature and possibly counterproductive.''
TTB Response
    As explained above, TTB Ruling 2004-1 set forth the following 
serving sizes: 1.5 fl. oz. for distilled spirits; 5 fl. oz. for wines; 
and 12 fl. oz. for malt beverages. These sizes were based on the 2000 
Dietary Guidelines, which suggested that the above amounts ``count as a 
drink'' for purposes of determining ``moderation,'' assuming that the 
distilled spirits are 80-proof and the malt beverages are ``regular 
beer.'' It should be noted that the 2005 Dietary Guidelines provide the 
same guidance with respect to what counts as a drink for purposes of 
explaining ``moderation;'' however, in illustrating the calorie content 
of various alcohol beverages, the 2005 Dietary Guidelines set forth 
``example serving volumes'' of various products as follows: 12 oz. for 
regular and light beers; 5 oz. for white and red wines; 3 oz. for sweet 
dessert wines, and 1.5 oz. for 80 proof distilled spirits (such as gin, 
rum, vodka, and whiskey). Moreover, the Guidelines go on to note that 
higher alcohol content and mixing alcohol with other beverages will 
increase the number of calories in the beverage.
    TTB acknowledged in its ``Frequently Asked Questions on TTB Ruling 
2004-1,'' published on the TTB Web site, that there ``are some good 
arguments for setting standardized serving sizes based on the alcohol 
content of the product; however, we believe that before we set 
permanent standards, we should engage in rulemaking to solicit comments 
from the public and the industry.''
    As indicated above, commenters varied in their opinions on the 
standard drink issue. TTB agrees with those commenters who asserted 
that alcohol beverages are not commonly packaged, poured, served, or 
consumed in standard drinks with exactly 0.6 fluid ounces of pure 
alcohol. In fact, rarely would the packaged or consumed quantity of an 
alcohol beverage product equal a ``standard drink'' of exactly 0.6 
fluid ounces of pure alcohol. Some products will contain less than one 
standard drink while others will contain multiple standard drinks. 
Additionally, TTB believes that consumers are likely to be confused 
about the difference between the terms ``standard drink'' and ``serving 
size.''
    In this proposed rule, we take into account the variations in the 
way that different commodities are consumed, and the fact that there 
are significant variations in alcohol content within the different 
categories of malt beverages, wines, and distilled spirits. We note 
that the Federal Food, Drug, and Cosmetic Act at 21 U.S.C. 343 
(q)(1)(A)(i), defines a serving size as ``an amount customarily 
consumed'' [emphasis added]. Serving sizes for all food and beverage 
products regulated by FDA are based on this definition rather than on 
the amount recommended by any dietary guidance. TTB believes that 
serving sizes for alcohol beverage products also should be based on 
customary consumption and not solely on the broad categories outlined 
in the Dietary Guidelines advice on moderate drinking. Those categories 
do not explicitly take into account either what is customarily consumed 
or what the alcohol content variations are within each respective 
category.
    TTB believes that what is ``customarily consumed'' should be 
determined on an individual package

[[Page 41871]]

basis according to the way the product is packaged, the alcohol content 
of that product, and how the product is typically consumed. Since the 
amount customarily consumed varies widely among and within the three 
alcohol beverage categories, TTB agrees with those commenters who argue 
that one standard for calculating the serving size does not fit all 
alcohol beverage product categories. Not only are there differences 
among wines, distilled spirits, and malt beverages in how they are 
packaged, sold, and consumed, there are differences within each 
category as well. For example, a lower alcohol distilled spirits 
product, such as a specialty product with an alcohol content of 5 
percent by volume, packaged in a 200 ml bottle (about 8 fl. oz.) might 
reasonably be consumed on one occasion, while higher alcohol distilled 
spirits in the same size bottle might typically be consumed over more 
than one occasion. While a 12 fl. oz. (355 ml) bottle of beer is 
typically considered one serving, this may not be true where the beer 
has an alcohol content of over 10 percent alcohol by volume. In fact, 
some specialty malt beverages have alcohol content levels of over 20 
percent by volume, making it less likely that such products would be 
consumed in one setting. Additionally, dessert wines, which have a 
higher alcohol content, are typically consumed in smaller servings than 
table wines.
    Accordingly, TTB is not proposing to define a standard drink but is 
instead proposing to adopt specific serving size reference amounts for 
each alcohol beverage product category based on the amount customarily 
consumed as a single serving. See Section VII of this notice for a 
detailed description of the serving size reference amounts for each 
category. TTB recognizes that these serving size reference amounts do 
not reflect the multiple servings or ``helpings'' that may be consumed 
on a single occasion. Serving size reference amounts are not intended 
as recommended consumption amounts but rather are intended to be used 
as a reference amount for the consumer to determine nutrient and 
calorie intake. We specifically invite comments on these serving size 
reference amounts including whether each accurately represents the 
amount of the product category that is customarily consumed. TTB would 
welcome any data that might enable us to identify a better standard for 
the amount customarily consumed for a specific product category, 
including consumer research or studies, or statistical data about 
consumption patterns.
    It should be noted that the proposed serving size reference amounts 
are largely based on the quantities set forth in TTB Ruling 2004-1 (5 
fluid ounces for wines, 1.5 fluid ounces for distilled spirits, and 12 
fluid ounces for malt beverages), with some significant differences. 
Most importantly, any product with an alcohol content outside the range 
of a typical product within the commodity classification may require a 
different serving size. For example, under TTB Ruling 2004-1, a 12 fl. 
oz. (355 mL) can of 8 percent alcohol by volume distilled spirits 
cocktail would contain approximately 8 servings, while an 8 percent 
alcohol by volume can of malt beverage would only contain one serving. 
In contrast, the proposed rule takes into account the alcohol content 
of the product in determining the serving size. We discuss the proposed 
serving sizes for wines, distilled spirits, and malt beverages in more 
detail in Section VII of this document.

E. Comments Concerning the Title of Any Alcohol Beverage Product 
Information Panel

    In response to Notice No. 41, we received several comments 
concerning the title of any information panel TTB ultimately permits or 
requires on alcohol beverage labels and in advertisements. These 
commenters expressed varying opinions as to what such a label should be 
called. One commenter stated that the caption ``Alcohol Facts'' does 
not best reflect the information components that would be set forth in 
such a panel. This commenter further suggested that the caption 
``Serving Facts'' is more appropriate to describe components in a 
serving of an alcohol beverage product. On the other hand, several 
commenters urged TTB to call such a label ``Alcohol Facts'' to 
distinguish it from the Nutrition Facts panel, which is present on 
other food and beverage products. One commenter explained that this 
approach was used by FDA to distinguish the label on dietary 
supplements (``Supplement Facts'') from the label on foods, and thus 
serves as a precedent for a similar name for the panel on alcohol 
beverage products.
TTB Response
    TTB agrees with those commenters who believe that the title 
``Serving Facts,'' is a better descriptor of the information presented 
in the panel, as that information will include more than just facts 
about alcohol content. Therefore, TTB is proposing ``Serving Facts'' as 
the title for the mandatory information panel.

F. Comments Concerning the Serving Facts Graphic

    TTB did not receive any specific comments in support of the graphic 
(shot glass, wine glass, and beer mug icons, with equal signs between 
the icons) depicted on the ``Serving Facts'' label in Notice No. 41. 
Many commenters, including brewers, wineries, and various industry 
associations, were strongly opposed to the graphic. This graphic, the 
commenters claim, is a political expression of ``equalization.'' 
Further, the commenters asserted that this image is used commonly by 
the distilled spirits trade associations in their attempt to achieve 
parity with wine and beer in various regulated areas, such as taxes, 
access to markets, advertising, and other forms of regulatory control.
    The Wine Institute, a trade association representing California 
wineries, stated as follows in opposition to the graphic:

    The equivalency graphic is an oversimplification of the concept 
of alcohol exposure. In context, the U.S. Dietary Guidelines' use of 
serving sizes to define moderation along with their recommendations 
offers useful information to consumers. It takes two pages for the 
Dietary Guidelines to explain its recommendation in clear and 
concise fashion. It is a message that cannot be reduced to a single 
ambiguous and misleading graphic. The use of the graphic out of the 
context of qualifying language or balance provides only a partial 
picture and might be as likely to mislead the consumer as those that 
are actually false.

    The Wine Institute also argued that the graphic is subject to 
different interpretations and provides little in the way of useful 
information. This comment stated that most hard liquor is not consumed 
in a shot glass and most wine is not presented in carefully measured 5-
ounce glasses.
TTB Response
    The comments show strong opposition to the use of the graphic 
described above on alcohol beverage labels and in advertisements. TTB 
believes that very rarely would a glass of beer, wine, or distilled 
spirits contain exactly 0.6 U.S. fluid ounces of pure alcohol. TTB 
agrees that such a graphic is subject to interpretation and could 
mislead consumers. Thus, we are not proposing to include this graphic 
as part of the Serving Facts panel.

G. Costs Associated With Mandatory Labeling Requirements

    We received several comments regarding the costs associated with 
any type of new mandatory labeling requirements, including new

[[Page 41872]]

requirements for the labeling of nutrient information and alcohol 
content. These comments generally referred to the costs of new labeling 
in general, rather than breaking down the costs associated with each of 
these different proposals.
    Many of these comments were from small alcohol beverage producers 
who stated that any new labeling requirements, particularly mandatory 
ingredient labeling, would be too costly and would place them at a 
distinct disadvantage because larger producers are better equipped to 
comply. Small producers described such costs as follows:
     Costs of new labeling equipment or costs to upgrade 
current equipment.
     Production disruption costs due to installation of new 
equipment.
     Costs of label redesign and new label stocks.
     Costs of laboratory testing equipment or laboratory 
services.
    The Brewers Association submitted a comment opposing the adoption 
of any new mandatory labeling requirements in the regulations other 
than the labeling of major allergens present in levels scientifically 
proven to be harmful to at-risk individuals and the disclosure of 
certain nutrient information for products labeled or advertised with 
calorie or carbohydrate claims. This comment stated that almost any 
other new mandatory labeling requirement ``would dramatically impact 
nearly every aspect of a small brewer's business, from its choice in 
ingredients to its ability to access markets. If TTB moves forward with 
mandatory labeling requirements, small brewers would face a potentially 
devastating economic double hit--the first from significantly higher 
production and administration costs and the second from severe 
restraints on their brewing creativity.''
    The Brewers Association conducted a survey of its members on the 
impact of new mandatory labeling requirements. Based on the cumulative 
responses of 97 small packaging brewers (who represent a combined 
volume of 5,698,924 barrels of the approximately 7 million barrels 
produced by small brewers), the Brewers Association concluded that 
``mandatory ingredient and nutrition labeling requirements would 
significantly increase small brewers' costs of doing business and deter 
the creativity and innovation that has made craft brewing both popular 
and profitable as small businesses.''
    The comment from the Brewers Association estimated that the 
aggregate average costs of new mandatory labeling requirements for 
respondents by size ranged from $35,530 per brewer for smaller brewers 
to $1.5 million per brewer for larger brewers. The Brewers Association 
stated that such mandatory labeling requirements would have a 
substantial financial impact on all small brewers. The survey also 
revealed that additional labeling costs would cause about 27 percent of 
survey respondents to cease bottling operations, and that mandatory 
ingredient or calorie labeling would force approximately 29 percent of 
survey respondents to withdraw from interstate sales.
    Some small wineries expressed similar concerns. For example, one 
small winery commented that new mandatory requirements for ingredient 
and nutrition information would be disastrous, noting that many of its 
annual lots were less than 100 cases and that the laboratory work 
required for each lot would be a prohibitive cost for small lots. 
Another winery stated that it did not have the laboratory equipment to 
test for carbohydrate and calorie content. Many wineries argued that 
nutrition is not a concern for consumers when choosing an alcohol 
beverage, and they questioned whether consumers were interested in 
either ingredient or nutrition labeling on alcohol beverage products.
    Both small winemakers and small brewers expressed their concern 
that new labeling requirements would negatively affect their market 
share. One small winemaker commented that such label requirements would 
make it even more difficult for small family wineries to compete with 
large wine conglomerates and low cost imports. Another small winemaker 
stated that any new labeling requirement would be onerous to all but 
the largest wineries that make 100,000 gallons or larger batches of 
wine. The commenter further suggested that if TTB imposes any new 
requirements, wines that are produced in batch quantities of less than 
5,000 gallons should be exempt. The Brewers Association also suggested 
an exemption for small brewers if TTB imposes any new label 
requirements.
    Some consumers who commented on this issue were concerned about the 
effect any new labeling requirements would have on small alcohol 
beverage producers. One commenter suggested longer phase-in periods for 
any mandatory requirements for small alcohol beverage producers. The 
commenter further suggested the possibility that brewers of small 
volume beers could be required to post this information on their Web 
sites, thereby eliminating the cost of printing new labels.
    On the other hand, we also received comments suggesting that the 
cost of additional labeling would not be excessive, given the benefits 
to consumers. CSPI and one individual commenter referenced a past cost 
assessment done by FDA that evaluated relabeling costs for a final rule 
adding trans fatty acid labeling requirements to foods (see 68 FR 
41434, 41477, July 11, 2003). In the study, FDA estimated that the 
average low relabeling cost per ``stock keeping unit'' (SKU) would be 
about $1,100 and the average high relabeling cost per SKU would be 
about $2,600. (An SKU is a specific product sold in a specific size.)
    CSPI and the individual commenter applied these FDA relabeling cost 
estimates to the alcohol beverage labeling changes aired for comment in 
the Notice No. 41. Applying the estimates to a winery selling 5 types 
of wine, they computed the average total cost of relabeling to be 
between $5,500 and $13,000 for the winery. They then applied the 
estimates to a particular brand of wine, stating that if the winery 
produced 320,000 9-liter cases (3,840,000 750 ml bottles), ``[e]ach of 
those bottles would incur a cost of $0.000677--less than 7/100ths of a 
penny--if the cost were $2,600 per sku.''
TTB Response
    A number of the comments discussed above suggested that we exempt 
small businesses from any new labeling requirement. Alcohol beverage 
products manufactured by small businesses are typically made in smaller 
batches, and each batch may be prepared a little differently each time. 
For example, craft brewers often produce seasonal malt beverages in 
very small quantities and small wineries often produce wine in batches 
of less than 5,000 gallons.
    Even if a rule is not a significant regulatory action, Executive 
Order 12866 requires us to design regulations in the most cost-
effective manner to achieve the regulatory objective. We seek to tailor 
our regulations to impose the least burden on society, including 
individuals, businesses of differing sizes, and other entities, 
consistent with the regulatory objective.
    We have considered several options to reduce the regulatory burdens 
and economic costs imposed by the proposed rule. One option would be to 
exempt small businesses from the requirements of the rule; however, we 
are not proposing that option for two related reasons. One of the 
primary purposes of the proposed rule is to enhance consumer 
protection; this purpose would be defeated by a permanent exemption for 
small businesses. There is no reason to believe that consumers of 
alcohol beverages

[[Page 41873]]

produced by small producers are less interested in obtaining 
information about the alcohol, calorie, and nutrient content of the 
beverages they consume. Moreover, we question whether such a permanent 
exemption would be consistent with the mandate, in the FAA Act, to 
ensure that labels provide consumers with adequate information about 
the identity and quality of the product.
    A second option we considered was a delay in the effective date of 
any final rule in order to provide adequate time for the industry to 
develop new labeling materials, deplete existing inventories, and 
coordinate the proposed labeling changes with their already scheduled 
labeling changes. TTB believes that most alcohol beverage industry 
members change their labels at least once every three years. This is 
consistent with FDA's conclusion, in a recent proposed rule relating to 
the labeling of health claims involving soluble fiber from certain 
foods, that ``firms typically update their label about every 3 years.'' 
(See 72 FR 5367 and 5372, February 6, 2007.) For this reason, TTB 
proposes a delayed effective date of three years from the date any 
final rule is published in the Federal Register. We further propose 
that manufacturers, bottlers, and importers who wish to label their 
products with a Serving Facts panel and alcohol content statement 
before the rule comes into effect may begin to do so as long as they 
adhere to the requirements of the final rule.
    TTB believes that by delaying the implementation date for the new 
labeling requirements, costs associated with label redesign and new 
label stocks would be significantly reduced. A three-year 
implementation period would allow affected industry members to use up 
existing label stocks and coordinate the redesigning of their labels 
with an already planned label redesign. We believe this option will 
minimize costs or burdens associated with the proposed new label 
information. Again, this is consistent with FDA's conclusion, in its 
proposed rule involving the labeling of health claims involving soluble 
fiber from certain foods, that if companies can add new labeling 
statements at the same time that they would normally update their 
labels, ``the cost of adding the new information on the package 
approaches zero.'' (See 72 FR 5372.)
    In addition to the proposed delayed effective date, we are 
proposing regulatory text that allows flexibility on the placement and 
appearance of the Serving Facts information. TTB also proposes to 
permit listing Serving Facts information in a linear fashion for 
containers 50 milliliters or smaller. See the regulatory text for an 
illustration of the linear display. In providing such flexibility, TTB 
believes that industry members would not have to purchase new, or 
upgrade current, labeling equipment. Instead, existing labeling 
equipment could be used. TTB is also seeking comments on whether the 
proposed linear display for small containers should be permitted on all 
containers irrespective of their size.
    Several commenters mentioned the costs associated with laboratory 
analysis of products. However, we believe that this will not impose a 
significant burden on small businesses. According to the FDA Labeling 
Cost Model Final Report (revised January 2003), the costs associated 
with analytical testing are the same regardless of how the product is 
packaged and sold; thus, manufacturers incur costs on a product (or 
formula) basis. (See 72 FR 5567.) TTB has determined that the costs 
associated with the analytical testing required for the proposed new 
labeling requirements would be approximately $250 per formulation. To 
develop these cost estimates, we obtained price quotes in the spring of 
2007 from four different companies that test alcohol beverage products. 
Accordingly, TTB believes that the costs associated with this proposal 
are not significant.

VII. Proposed Regulatory Changes

    Based on the above, TTB is proposing to amend parts 4, 5, 7 and 24 
of the TTB regulations to set forth requirements for mandatory alcohol 
content and for the presentation of certain calorie and nutrient 
information in a mandatory ``Serving Facts'' panel. These changes 
involve the addition of a new subpart L in part 4, a new subpart J in 
part 5, and a new subpart J in part 7, as well as conforming changes 
elsewhere in parts 4, 5, 7, and 24. We discuss the proposed regulatory 
amendments in more detail below.

A. Mandatory Alcohol Content Statement

    As stated in TTB's response to comments concerning alcohol content, 
TTB proposes in Sec. Sec.  4.32(b)(3), 5.32(b)(11), and 7.71(a) to 
require an alcohol content statement, expressed as a percentage of 
alcohol by volume, on the labels of all alcohol beverage products, 
including table wines and malt beverages.

B. Mandatory Serving Facts Panel

    As stated above, TTB proposes a mandatory nutrient information 
panel that must include the following information: The title ``Serving 
Facts''; serving size; the number of servings per container; the number 
of calories per serving; and the number, in grams per serving, of 
carbohydrates, fat, and protein. The Serving Facts label may also bear 
the mandatory alcohol content statement as a percentage of alcohol by 
volume. TTB also proposes to allow, on a voluntary basis, the 
disclosure of the number of U.S. fluid ounces of pure alcohol per 
serving, as part of a statement that includes alcohol content expressed 
as a percentage of alcohol by volume.
(1) Serving Size and Servings per Container
    TTB is proposing to define the term ``serving'' or ``serving size'' 
as the amount of the alcohol beverage customarily consumed as a single 
serving, expressed in both U.S. fluid ounces and, in parentheses, in 
milliliters for wines, distilled spirits, and malt beverages. In new 
Sec. Sec.  4.111(b), 5.81(b), and 7.91(b), TTB is proposing the use of 
serving size reference amounts, specific to each alcohol beverage 
category, which in each case most closely approximates the amount of 
the product that a consumer customarily drinks as a single serving. 
This amount is specified as a reference amount used only as a basis for 
the consumer to determine nutrient and calorie intake and not as a 
recommended consumption amount. These rules are intended to ensure as 
much uniformity as possible in labeling serving sizes within a product 
category. TTB proposes the following serving size reference amounts for 
each category:
     Wine: For wines with an alcohol content of not more than 
14 percent alcohol by volume, the serving size is 5 fluid ounces (about 
148 milliliters). For wines with an alcohol content higher than 14 
percent alcohol by volume and not more than 24 percent alcohol by 
volume, the serving size is 2.5 fluid ounces (about 74 milliliters).
     Distilled spirits: For distilled spirits products 
containing not more than 10 percent alcohol by volume, the serving size 
is 12 fluid ounces (about 355 milliliters). For products containing 
over 10 percent and not more than 18 percent alcohol by volume, the 
serving size is 5 fluid ounces (about 148 milliliters). For products 
containing over 18 percent alcohol by volume, the serving size is 1.5 
fluid ounces (about 44 milliliters).
     Malt beverages: For malt beverages with an alcohol content 
of not more than 10 percent alcohol by volume, the serving size is 12 
fluid ounces (355 milliliters). For malt beverages with an alcohol 
content higher than 10 percent

[[Page 41874]]

alcohol by volume, the serving size is 5 fluid ounces (148 
milliliters).
    Since wines and distilled spirits are subject to metric standards 
of fill under the TTB regulations, the proposed serving sizes for these 
categories are set forth in both fluid ounces and milliliters. We 
recognize that consumers may use fluid ounces rather than milliliters 
when pouring a glass of wine or a shot glass of distilled spirits. For 
consistency purposes, TTB is proposing to require serving sizes for 
malt beverages to be set forth in both fluid ounces and milliliters.
(2) Percentage of Alcohol by Volume
    In new Sec. Sec.  4.111(c), 5.81(c), and 7.91(c) for wines, 
distilled spirits, and malt beverages, respectively, TTB proposes to 
provide that if Serving Facts panels on labels or in advertisements 
include any information about alcohol content, the alcohol content must 
be expressed on those panels as a percentage of alcohol by volume. The 
Bureau is also proposing to amend Sec. Sec.  4.32, 5.32, and 7.22 to 
remove the requirement that an alcohol content statement appear on the 
brand label, so as to permit its inclusion in a Serving Facts panel or 
elsewhere on the label. We are also proposing to make conforming 
changes to Sec. Sec.  4.36 and 7.71(a). Finally, we are proposing to 
amend Sec.  24.257(a)(3) to provide that alcohol content, expressed as 
percent-by-volume, is required on labels for all products meeting the 
IRC definition of a ``wine.''
(3) Alcohol Expressed in Fluid Ounces
    In new Sec. Sec.  4.111(d), 5.81(d), and 7.91(d), TTB is proposing 
to permit the display of the number of U.S. fluid ounces of pure 
alcohol per serving as long as this statement is as part of a statement 
that includes alcohol content, expressed as a percentage of alcohol by 
volume.
(4) Calories
    In new Sec. Sec.  4.111(e), 5.81(e), and 7.91(e), TTB proposes 
standards for expressing a statement of the calorie content per serving 
for wines, distilled spirits and malt beverages, respectively.
(5) Carbohydrates
    In new Sec. Sec.  4.111(f), 5.81(f), and 7.91(f), TTB proposes 
standards for expressing carbohydrate content per serving for wines, 
distilled spirits, and malt beverages, respectively.
(6) Fat
    In new Sec. Sec.  4.111(g), 5.81(g), and 7.91(g), TTB proposes 
standards for expressing fat content per serving for wines, distilled 
spirits, and malt beverages, respectively.
(7) Protein
    In new Sec. Sec.  4.111(h), 5.81(h), and 7.91(h), TTB proposes 
standards for expressing protein content per serving for wines, 
distilled spirits, and malt beverages, respectively.

C. Format and Placement of the Serving Facts Panel

    New Sec. Sec.  4.112, 5.82, and 7.92 set forth proposed formatting 
specifications for the Serving Facts panel. While TTB would encourage 
presentation of the Serving Facts information in a horizontal or 
vertical panel format for all products, TTB proposes to permit listing 
Serving Facts information in a linear fashion for containers 50 
milliliters or smaller. See the regulatory text for an illustration of 
the linear display. TTB is also seeking comments on whether the 
proposed linear display for small containers should be permitted on all 
containers irrespective of their size. In addition, new Sec. Sec.  
4.113, 5.83, and 7.93 would permit the panel to appear anywhere on the 
alcohol beverage container or in the advertisement that is visible to 
the consumer.

D. Tolerance Levels

    New Sec. Sec.  4.114, 5.84, and 7.94 codify the existing tolerance 
levels specified in TTB Procedure 2004-2, Testing of Calorie, 
Carbohydrate, Protein, and Fat Content of Alcohol Beverages; Acceptable 
Tolerance Levels, which apply to label and advertisement statements of 
calorie, fat, carbohydrate and protein content. These sections also 
cross reference the tolerance levels for alcohol content as specified 
in the current regulations.

VIII. Public Participation

A. Comments Sought

    We request comments from anyone interested on the regulatory 
proposals outlined in this notice. All comments must reference Notice 
No. 73 and include your name and mailing address. They must be legible 
and written in language acceptable for public disclosure. Although we 
do not acknowledge receipt, we will consider your comments if we 
receive them on or before the closing date. We regard all comments as 
originals.
    TTB specifically solicits comments on the proposed serving size 
reference amounts for wines, distilled spirits, and malt beverages. Are 
these figures a reasonably accurate representation of the amount of the 
product customarily consumed as a single serving? If not, what data or 
other information should TTB consider that would give a better estimate 
of the amount customarily consumed for a specific product category? Are 
the proposed reference amounts more accurate than the serving sizes set 
forth in TTB Ruling 2004-1 (1.5 fl. oz. for distilled spirits, 5 fl. 
oz. for wines, and 12 fl. oz. for malt beverages, regardless of the 
alcohol content)? Why or why not? Should TTB instead retain the serving 
sizes set forth in Ruling 2004-1?
    We also solicit comments on whether the proposed elements of the 
Serving Facts panel will provide consumers with adequate information 
about the identity and quality of the product. For example, should the 
panel include additional elements? Alternatively, should certain 
elements (such as protein or fat content) be required only if the 
levels of these nutrients reach a certain threshold? Why or why not? 
Would it be confusing to the consumer to see protein and fat content on 
some labels but not on others? Why or why not?
    Additionally, TTB seeks comments on whether the proposed linear 
display for small containers should be permitted on all containers 
irrespective of their size. Why or why not? Would allowing the linear 
display on all containers reduce the costs associated with compliance 
while providing consumers with adequate information about the products?
    Finally, TTB solicits comments on the expected economic impact of 
the proposed rule, especially the impact on small businesses. Does the 
proposed delayed effective date suffice to limit the negative impact on 
small businesses and reduce overall costs of compliance while ensuring 
that consumers are protected? How many small businesses would be 
impacted by the proposed rule, and what would be the economic impact of 
the proposal on these small businesses? Please explain in detail and 
provide specific cost data.
    We welcome comments on all other issues presented in this Notice.

B. Submitting Comments

    You may submit comments on this notice by one of the following two 
methods:
     Federal e-Rulemaking Portal: To submit a comment on this 
notice using the online Federal e-rulemaking portal, visit http://www.regulations.gov
 and select ``Alcohol and Tobacco Tax and Trade 

Bureau'' from the agency drop-down menu and click ``Submit.'' In the 
resulting docket list, click the ``Add Comments'' icon for the 
appropriate docket number and complete the resulting comment form. You 
may

[[Page 41875]]

attach supplemental files to your comment.\1\ A direct link to the 
appropriate Regulations.gov docket is also available on the TTB Web 
site at http://www.ttb.gov/regulations_laws/all_rulemaking.shtml.

---------------------------------------------------------------------------

    \1\ More complete information on using Regulations.gov, 
including instructions for accessing open and closed dockets and for 
submitting comments, is available through the site's ``User Tips'' 
link.
---------------------------------------------------------------------------

     Mail: You may send written comments to the Director, 
Regulations and Rulings Division, Alcohol and Tobacco Tax and Trade 
Bureau, P.O. Box 14412, Washington, DC 20044-4412.
    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 http://www.regulations.gov
, please enter the entity's name in the 

``Organization'' blank of the comment form. If you comment via 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.

C. 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 inappropriate for 
public disclosure.

D. Public Disclosure

    On the Federal e-rulemaking portal, we will post, and you may view, 
copies of this notice and any electronic or mailed comments we receive 
about this proposal. To view a posted document or comment, go to http://www.regulations.gov
 and select ``Alcohol and Tobacco Tax and Trade 

Bureau'' from the agency drop-down menu and click ``Submit.'' In the 
resulting docket list, click the appropriate docket number, then click 
the ``View'' icon for any document or comment posted under that docket 
number.
    All submitted and 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 also may view copies of this notice 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 202-927-2400 to schedule an appointment or to request copies of 
comments or other materials.

IX. Regulatory Analysis and Notices

A. 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. 
Based on the comments we received in response to Notice No. 41, we 
believe that the proposed rule will not impose, or otherwise cause, a 
significant increase in reporting, recordkeeping, or other compliance 
burdens on a substantial number of small entities. The proposed rule is 
not expected to have significant secondary or incidental effects on a 
substantial number of small entities. Accordingly, a regulatory 
flexibility analysis is not required. Pursuant to section 7805(f) of 
the Internal Revenue Code of 1986, we will submit this notice of 
proposed rulemaking to the Chief Counsel for Advocacy of the Small 
Business Administration for comment on its impact on small businesses.
    As noted in the comment discussion in this proposed rule, several 
commenters suggested that new labeling requirements would impose 
significant costs on small businesses. Commenters stated that these 
costs would include the costs of new labeling equipment or costs to 
upgrade current equipment to accommodate a back label, production 
disruption costs due to installation of new equipment, costs of label 
redesign and new label stocks, and costs of laboratory testing 
equipment or laboratory services.
    In response to these comments, TTB considered options to minimize 
the regulatory burdens and economic costs imposed by the proposed rule. 
One option we considered was to exempt small businesses from the 
requirements of the rule. However, as previously noted, we are not 
proposing such an exemption because it might be inconsistent with our 
mandate to ensure that alcohol beverage labels provide consumers with 
adequate information about the identity and quality of these products.
    A second option we considered was a delay in the effective date of 
any final rule in order to provide adequate time for the industry to 
develop new labeling materials, deplete existing inventories, and 
coordinate the proposed labeling changes with their already scheduled 
labeling changes. Most alcohol beverage industry members change their 
labels at least once every three years.
    Accordingly, as explained earlier in this document, TTB is 
proposing a delayed effective date of three years from the date any 
final rule is published in the Federal Register. We further propose 
that manufacturers, bottlers, and importers who wish to label their 
products with a Serving Facts panel and alcohol content statement 
before the final rule comes into effect may begin to do so as long as 
they adhere to the requirements of the final rule.
    TTB believes that by delaying the implementation date for the new 
labeling requirements, costs associated with label redesign and new 
label stocks would be significantly reduced. A three-year 
implementation period would allow affected industry members to use up 
existing label stocks and coordinate the redesigning of their labels 
with an already planned label redesign. We believe this option will 
minimize costs or burdens associated with the proposed new label 
information.
    In addition to the proposed delayed effective date, we are 
proposing regulatory text that allows flexibility on the placement and 
appearance of the Serving Facts information. We are also proposing to 
permit a linear display of the Serving Facts information on containers 
50 milliliters or smaller. In providing such flexibility, TTB believes 
that industry members would not have to purchase new, or upgrade 
current, labeling equipment. Instead, existing labeling equipment could 
be used. TTB is also soliciting comments on whether we should also 
permit the linear display on all labels irrespective of the container 
size and whether doing so would reduce the costs associated with 
compliance while adequately informing consumers about the products.
    Several commenters mentioned the costs associated with laboratory 
analysis of products. However, we believe that this will not impose a 
significant burden on small businesses. As noted earlier in this 
document, according to the FDA Labeling Cost Model Final Report, the 
costs associated with analytical testing are the same regardless of how 
the product is packaged and sold; thus, manufacturers incur costs on a 
product (or formula) basis. TTB has determined that the costs 
associated with the analytical testing required for the proposed new 
labeling requirements would be approximately $250 per formulation. To 
develop these cost

[[Page 41876]]

estimates, we obtained price quotes in the spring of 2007 from four 
different companies that test alcohol beverage products. Accordingly, 
TTB believes that the costs associated with this proposal are not 
significant.
    We specifically solicit comments on the number of small producers, 
importers and bottlers that may be affected by this proposed rule and 
the impact of this proposed rule, if adopted as a final rule, on those 
small businesses. We ask any small business that believes that it would 
be significantly affected by this proposed rule to submit a comment 
telling us how the rule would affect it.

B. Executive Order 12866

    We have determined that this proposed rule is not a significant 
regulatory action as defined in Executive Order 12866. Therefore, a 
regulatory assessment is not required.

C. Paperwork Reduction Act

    The collections of information contained in this notice of proposed 
rulemaking have been submitted to the Office of Management and Budget 
(OMB) for review in accordance with the Paperwork Reduction Act of 1995 
(44 U.S.C. 3507(d)). Comments on the collections of information may be 
sent by e-mail to OMB at Alexander_T._Hunt@omb.eop.gov, or by paper 
mail to the Office of Management and Budget, Attention: Desk Officer 
for the Department of the Treasury, Office of Information and 
Regulatory Affairs, Washington, DC 20503, with copies to the Alcohol 
and Tobacco Tax and Trade Bureau at the address previously specified. 
Because OMB must complete its review of the collections of information 
between 30 and 60 days after publication, comments on the information 
collections should be submitted not later than August 30, 2007. 
Comments are specifically requested concerning:
     Whether the proposed collections of information are 
necessary for the proper performance of the functions of the Alcohol 
and Tobacco Tax and Trade Bureau, including whether the information 
will have practical utility;
     The accuracy of the estimated burden associated with the 
proposed collections of information (see below);
     How to enhance the quality, utility, and clarity of the 
information to be collected;
     How to minimize the burden of complying with the proposed 
collections of information, including the application of automated 
collection techniques or other forms of information technology; and
     Estimates of capital or start-up costs and costs of 
operation, maintenance, and purchase of services to provide 
information.
    The collection of information in this proposed regulation is in 27 
CFR Sec. Sec.  4.32, 4.62, 4.111, 4.112, 4.113, 4.114, 4.115, 4.116, 
5.32, 5.63, 5.81, 5.82, 5.83, 5.84, 5.85, 5.86, 7.22, 7.52, 7.91, 7.92, 
7.93, 7.94, 7.95, 7.96, and 24.257(a)(3) and involves disclosures of 
information on labels and performance standards for statements made on 
labels and in advertisements of alcohol beverages. This information is 
required to prevent deception of the consumer and will be used to 
provide the consumer with adequate information as to the identity and 
quality of alcohol beverage products. In addition, the collection of 
information under Sec.  24.257(a)(3) will be used to protect the 
revenue. These collections of information are mandatory. The likely 
respondents are businesses or other for-profit institutions, including 
associations, corporations, partnerships, and small businesses.
    This information constitutes only a portion of the labeling and 
advertising information on alcohol beverages required under authority 
of the Federal Alcohol Administration Act (FAA Act) and the Internal 
Revenue Code of 1986, as amended (IRC). OMB has previously approved a 
collection of information for Labeling and Advertising Requirements 
Under the FAA Act under control number 1513-0087.
     Estimated total annual reporting and/or recordkeeping 
burden: 7,071 hours.
     Estimated average annual burden hours per respondent and/
or recordkeeper: One hour.
     Estimated number of respondents and/or recordkeepers: 
7,071.
     Estimated annual frequency of responses: One.
    An agency may not conduct or sponsor, and a person is not required 
to respond to, a collection of information unless it displays a valid 
control number assigned by OMB.

X. Drafting Information

    The principal authors of this document are Lisa M. Gesser and 
Joanne C. Brady, Regulations and Rulings Division, Alcohol and Tobacco 
Tax and Trade Bureau.

List of Subjects

27 CFR Part 4

    Administrative practice and procedure, Advertising, Customs duties 
and inspection, Imports, Labeling, Packaging and containers, Reporting 
and recordkeeping requirements, Trade practices, Wine.

27 CFR Part 5

    Administrative practice and procedure, Advertising, Customs duties 
and inspection, Distilled spirits, Imports, Labeling, Packaging and 
containers, Reporting and recordkeeping requirements, Trade practices.

27 CFR Part 7

    Administrative practice and procedure, Advertising, Customs duties 
and inspection, Imports, Labeling, Malt Beverages, Reporting and 
recordkeeping requirements, Trade practices.

27 CFR Part 24

    Administrative practice and procedure, Claims, Electronic funds 
transfers, Excise taxes, Exports, Food additives, Fruit juices, 
Labeling, Liquors, Packaging and containers, Reporting and 
recordkeeping requirements, Research, Scientific equipment, Spices and 
flavorings, Surety bonds, Vinegar, Warehouses, Wine.

Proposed Amendments to the Regulations

    For the reasons discussed in the preamble, TTB proposes to amend 27 
CFR, chapter I, parts 4, 5, 7, and 24, 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. In Sec.  4.32, remove and reserve paragraph (a)(3) and add new 
paragraphs (b)(3) and (b)(4) to read as follows:


Sec.  4.32  Mandatory label information.

* * * * *
    (b) * * *
    (3) Alcohol content, in accordance with Sec.  4.36.
    (4) A Serving Facts panel, in accordance with subpart L of this 
part.
* * * * *
    3. Revise Sec.  4.36 to read as follows:


Sec.  4.36  Alcohol content.

    (a) Mandatory statement. The alcohol content for wines must be 
stated on wines as a percentage of alcohol by volume. For example, 
``Alcohol--% by volume,'' or similar appropriate phrase, or in 
accordance with the requirements set forth in Sec.  4.111(c) of subpart 
L of this part; Provided, that if the word ``alcohol'' and/or 
``volume'' are

[[Page 41877]]

abbreviated, they shall be shown as ``alc.'' (alc) and/or ``vol.'' 
(vol), respectively.
    (b) Tolerances. The following tolerances shall be allowed either 
above or below the stated percentage:
    (1) A tolerance of 1.5 percent for wines containing 14 percent or 
less of alcohol by volume.
    (2) A tolerance of 1 percent for wines containing more than 14 
percent of alcohol by volume.
    (c) Regardless of the tolerances normally permitted in statements 
of alcohol content, such statements must definitely and correctly 
indicate the class, type and taxable grade of the wine so labeled and 
nothing in this section shall be construed as authorizing the 
appearance upon the labels of any wine of an alcohol content statement 
that indicates that the alcohol content of the wine is within the 
prescribed limitations on the alcohol content of any class, type, or 
taxable grade of wine when in fact it is not.
    4. Amend Sec.  4.62 by redesignating paragraph (c) as paragraph (d) 
and adding a new paragraph (c) to read as follows:


Sec.  4.62  Mandatory statements.

* * * * *
    (c) Calorie and carbohydrate claims. If the advertisement makes an 
explicit or implicit calorie or carbohydrate claim, it must include a 
Serving Facts panel in accordance with subpart L of this part and an 
alcohol content statement disclosing the percentage of alcohol by 
volume.
* * * * *
    5. Add a new Subpart L to read as follows:

Subpart L--Nutrient Information

Sec.
4.111 Serving Facts panels.
4.112 Format for Serving Facts panels.
4.113 Placement of Serving Facts panels.
4.114 Tolerance Levels.

Subpart L--Nutrient Information


Sec.  4.111  Serving Facts panels.

    (a) General. A Serving Facts panel required under Sec.  4.32(b)(4) 
must include the following information: The single serving size; the 
number of servings per container; the number of calories per serving; 
and the number, in grams per serving, of carbohydrates, fat, and 
protein. Alcohol content statements, as provided in paragraphs (c) and 
(d) of this section, may appear on the Serving Facts panel.
    (b) Single serving size and servings per container--(1) Definition. 
The term ``single serving'' or ``serving size'' means an amount of the 
wine customarily consumed as a single serving, expressed in U.S. fluid 
ounces, and in parentheses, in milliliters to the nearest whole number. 
This amount is not a recommended amount, but rather is only a reference 
amount to help the consumer determine his or her nutrient and calorie 
intake. The single serving or serving size reference amounts for wines 
are:

------------------------------------------------------------------------
                                             a single serving or serving
         For products containing:                     size is:
------------------------------------------------------------------------
At least 7% and not more than 14% alc/vol.  5 fluid ounces (148
                                             milliliters).
Over 14% and not more than 24% alc/vol....  2.5 fluid ounces (74
                                             milliliters).
------------------------------------------------------------------------

    (2) Single and multi-serving containers. Products packaged and sold 
in containers with a volume of less than or equal to a single serving 
reference amount described in this section must be labeled as a single 
serving. Products packaged and sold in containers with a volume of more 
than a single serving reference amount described in this section will 
be treated as multi-serving containers and the number of servings per 
container must be labeled to the nearest \1/4\ serving.
    (c) Percentage of alcohol by volume. The Serving Facts panel may 
include a statement of alcohol content as a percentage of alcohol by 
volume, to which the tolerance ranges in Sec.  4.36 apply. A statement 
of alcohol content in the Serving Facts panel will satisfy the 
requirement for listing alcohol content in Sec.  4.32(b)(3).
    (d) Alcohol expressed in fluid ounces. A Serving Facts panel may 
declare the number of U.S. fluid ounces of pure alcohol (ethyl alcohol) 
per serving, expressed to the nearest tenth of an ounce, only if the 
panel also includes a statement of alcohol content expressed as a 
percentage of alcohol by volume, presented in accordance with Sec.  
4.112(g).
    (e) Calories. A Serving Facts panel must express the calorie 
content per serving to the nearest 5-calorie increment up to and 
including 50 calories, and to the nearest 10-calorie increment above 50 
calories. An amount less than 5 calories may be expressed as zero.
    (f) Carbohydrates. A Serving Facts panel must express carbohydrate 
content to the nearest gram per serving, except that the carbohydrate 
content may be expressed as zero if a serving contains less than 0.5 
gram.
    (g) Fat. A Serving Facts panel must express fat content in grams 
per serving to the nearest 0.5 gram below 5 grams and to the nearest 
gram above 5 grams. If the serving contains less than 0.5 gram, the fat 
content may be expressed as zero.
    (h) Protein. A Serving Facts panel must express protein content in 
grams per serving to the nearest gram. If the serving contains less 
than 0.5 gram, the protein content may be expressed as zero.


Sec.  4.112  Format for Serving Facts panels.

    The wine label or advertisement must present the Serving Facts 
panel in, or in a manner that closely follows, the specifications set 
forth in this section. While TTB encourages presentation of the Serving 
Facts information in a panel format as specified in paragraph (a) 
through (l) of this section, TTB will also permit the listing of 
Serving Facts information in a linear fashion for containers 50 
milliliters or smaller. See paragraph (m) of this section for an 
illustration of an appropriate linear display.
    (a) The Serving Facts panel information must be set off within a 
box by use of hairlines with all black or one color type, printed on a 
white or other neutral contrasting background.
    (b) The Serving Facts panel may be presented in either a horizontal 
or vertical orientation.
    (c) All information within the Serving Facts panel must:
    (1) Appear in a single easy-to-read type style;
    (2) Appear in upper and lower case letters;
    (3) Have at least one point leading (that is, space between lines 
of text); and
    (4) Not include letters that touch other letters, numbers, or 
lines.
    (d) The Serving Facts information specified in Sec.  4.111 must 
appear in the panel in the following order:
    (1) Serving size;
    (2) Servings per container;
    (3) Percentage of alcohol by volume (if included in the Serving 
Facts panel);
    (4) Alcohol in U.S. fluid ounces (if included in the Serving Facts 
panel);
    (5) Calories;
    (6) Carbohydrates;
    (7) Fat; and
    (8) Protein.
    (e) The following information must not appear in bold and must be 
in type or printing not smaller than 1 millimeter for containers of 237 
milliliters (8 U.S. fluid ounces) or less or not smaller than 2 
millimeters for containers of more than 237 milliliters:
    (1) ``Serving Size'', including the numeric figure denoting the 
size in U.S. fluid ounces and, in parentheses, in milliliters.
    (2) ``Servings Per Container'', including the numeric figure 
denoting

[[Page 41878]]

the correct number (rounded to the nearest \1/4\ serving); and
    (3) Numeric figures denoting alcohol content, calories, and 
carbohydrate, fat, and protein content.
    (f) The following headings must be highlighted by bold or extra 
bold type or printing that prominently distinguishes them from other 
information, and they must appear in type or printing size no smaller 
than that specified below:
    (1) ``Serving Facts'' (type or printing size no smaller than 2 
millimeters for containers of 237 milliliters or less and no smaller 
than 4 millimeters for containers of more than 237 milliliters);
    (2) ``Amount Per Serving'' and ``Amount Per Bottle'' (type or 
printing no smaller than 1 millimeter f