William H. Foster Assistant Administrator, Headquarters Operations October 27, 2008

1. William H. Foster Assistant Administrator, Headquarters Operations October 27, 2008 NABCA Administrators Conference Product Labeling and Packaging

2. Background • The Alcohol and Tobacco Tax and Trade Bureau (TTB) is a part of the Department of the Treasury, with about 525 employees. • TTB is a part of the Office of Tax Policy, reporting to the Deputy Assistant Secretary (Tax, Trade, and Tariff Policy). • Our Bureau and its predecessor agencies trace a history of more than 200 years.

3. TTB’s Mission • Collect Federal excise taxes for alcohol, tobacco products, and firearms and ammunition (about $15 billion annually; • Ensure that these products are labeled, advertised, and marketed in accordance with applicable laws and regulations; and • Administer the laws and regulations in a manner that protects the consumer and the revenue, and also promotes voluntary compliance.

4. TTB’s Statutory Authority • Internal Revenue Code (26 U.S.C.): • Chapter 51—distilled spirits, wine, and beer • Chapter 52—tobacco products and cigarette papers and tubes • Federal Alcohol Administration Act of 1935 (27 U.S.C. Chapter 8) • Alcohol Beverage Labeling Act (Government warning label) • Webb-Kenyon Act (27 U.S.C. Section 122)

5. TTB’s Mission — “Protect the Public” and “Collect the Revenue” Authority for alcohol consumption • The authority to regulate or enforce laws relating to alcohol consumption, such as issues relating to underage drinking or drunk driving is contained in the 21st amendment; there is no TTB authority in these areas.

6. Regulation and Control of Alcohol Beverage Industry Today • Permit system — Producers and distributors must have permits • Records — Comprehensive system of records (production, storage, processing, and removal of alcohol) • Reports — Regular reports submitted to TTB’s National Revenue Center • Audits and inspections — Periodic audits and inspections by field personnel

7. Current Labeling Issues Serving Facts Labeling Allergen Labeling

8. Serving Facts • On December 16, 2003, TTB was petitioned by the Center for Science in the Public Interest (CSPI) and others to amend the regulations to require an information panel (Serving Facts) and an ingredient list on all alcohol beverages.

9. “Serving Facts” Panel • While evaluating the CSPI petition, TTB received a request from an industry member to begin using “Serving Facts” panels on their alcohol beverage labels. • The format requested closely resembled the information and format of the Nutrition Facts Label the FDA requires.

10. Notice No. 41 • April 29, 2005—TTB published Notice No. 41 in the Federal Register — “Labeling and Advertising of Wines, Distilled Spirits, and Malt Beverages; Request for Public Comment,” which solicited comments on: • Calorie and carbohydrate references; • “Alcohol Facts” label (as petitioned by CSPI and others); • Ingredient labeling; • Allergen labeling; and • Voluntary “Serving Facts” label (as requested by industry members).

11. Notice No. 41 (Continued) • Comment period closed September 26, 2005, after being extended by an additional 90 days from its original 60-day comment period. • TTB received more than 19,000 comments, which are available on TTB’s Web site for viewing.

12. Allergen Labeling • TTB separated the allergen labeling issue and on July 26, 2006, published two rulemaking documents in the Federal Register. • Interim Rule: • Voluntary allergen labeling according to specific temporary guidelines. • Notice of Proposed Rulemaking: • Proposes mandatory allergen labeling of all alcohol beverages.

13. Allergen Labeling (Continued) • The proposed regulations require alcohol beverage product labels to declare the presence of milk, eggs, fish, Crustacean shellfish, tree nuts, wheat, peanuts, and soybeans, as well as ingredients that contain protein derived from these foods. • The interim and proposed regulations also provide procedures for petitioning for an exemption from allergen labeling.

14. Allergen Labeling (Continued) • TTB received 51 comments as a result of NPRM No. 62. • TTB is in the process of reviewing all the issues presented in the comments and will be drafting a final rule in the near future.

15. Packaging Issues

16. TTB’s Authority in Approving Alcohol Beverage Containers • TTB approves containers that hold approved standards of fill for wine and distilled spirits products (27 CFR 4.71 and 5.27(a), respectively). • There are no standard of fill requirementsfor malt beverages. • Some exceptions apply: • Different fill standards are outlined in theregulations for metal or aluminum packaging. • Container/packaging suitability is regulatedby the FDA.

17. Aggregate Packaging • Products that do not meet the standard of fill requirement on their own are packaged as multi-packs; the total package is standard of fill compliant. • Notice No. 872, an NPRM that ATF issued in 1999, sought comments on aggregate standards of fill and nontraditional containers of alcohol beverages. • No final TTB Ruling to date.

18. Aggregate Packaging Concerns • We expressed concern that “aggregate packaging” might confuse consumers, undermine State and local controls, and encourage consumption by underage individuals. • In the interim, safeguards encouraged by TTB include: labeling the individual containers as “not for individual sale” and “not for children,” sealing the outer container with shrink wrap, and encouraging bottlers to bottle the individual units of the package in authorized standards of fill.

19. Alcohol Beverage Packaging Trends 70% paper packaging Ergonomic bottles Environmental Responsibility Plastic Corks Plastic Beer Bottles Wine in a can

20. Alcohol and Tobacco Tax and Trade Bureau Questions? www.ttb.gov