Updated: Jun 17, 2020
(NABI Press Release) | National Association of Beverage Importers, Inc. | Washington, DC
The National Association of Beverage Importers, Inc. (NABI) put forth a number of key revisions to the proposed labeling and advertising regulations last week in its comment letter to TTB that would greatly enhance the alcohol importation industry without undermining the important consumer protection purpose of the Federal Alcohol Administration Act of 1935.
Adopting a Notice to TTB approach in lieu of the present application approval approach for COLA Waivers. Importers would simply notify TTB of samples coming in for trade shows or sales promotions and affix the standard strip label stating the restricted nature of the bottled product. Delay times awaiting approval and staff resource time by TTB would be gone and these imports would not be interrupted by any lapse in appropriations. Targeted post-audit reviews by TTB would prevent abuse of this Notice approach.
Since enactment of the labeling provisions in 1935, the “commercial speech doctrine” under the First Amendment has significantly changed how a Federal agency may restrict truthful and accurate information on labels so the NABI comments point out ways that the “misleading” standard may be applied more transparently in label approval reviews.
Today’s consumer is more sophisticated than the dry-consumer coming out of Prohibition who perhaps needed greater government protection so the 21st Century labeling and advertising regulations need not be as comprehensive. Moreover, the younger generation of consumers use I-phone and online research for immediate information about the brands of alcohol beverages they are consider purchasing. Self-policing of label claims by consumers is greater today and the “brand death” from a misleading claim going viral on social media is a more effective deterrent than many government regulations.
Private labels and controlled labels are claiming more and more of the retail market space and the labeling regulations need to include provisions recognizing the ways to inform consumers about these brands. Additional NPRM notice and comment opportunity is needed here.
Global trade is bringing new distinctive products to consumers in the United States. The regulations must include an administrative process to provide formal recognition to these distinctive products from other countries so that consumers may purchase with certainty the authentic product.
The “approximately 50-gallon barrel” standard is unworkable for imported products. Production practices in other countries cannot be expected to conform to a United States requirement like this one, nor can importers be expected to police this type of production requirement on the bottled alcohol beverages they import.
Mandatory Certificate of Label Approvals (COLAs) retention by importers should not be required because the approved COLAs are always available online with TTB so this is an unnecessary and duplicative burden on the industry. Optional retention by the importer should be the norm.
The new regulations on “Substantiation Requirements” must be clarified and narrowed to inform adequately the industry member of the requirements. The proposed regulations impose a new requirement for importers (and domestic bottlers) to provide upon demand from TTB “evidence” sufficient to substantiate “any claim made on any label or container subject to the requirements of this part.” A claim may be “implicit or explicit.” As worded, this provision is far too vague under due process requirements of informing the industry member of its obligations. What might be an implicit claim is too open ended for an importer to know what informational evidence it must maintain for five years. In light of the huge numbers of different brands and SKUs entering the United States marketplace each year, this regulatory burden is enormous, unlimited in scope, and unmanageable. “Due process” requires far more clarity than what is in these proposed sections.
NABI greatly appreciates the NPRM by TTB and sees this as an important opportunity to reduce regulatory burdens and adopt new, creative, and innovative approaches to labeling and advertising regulation reflective of the mature consumers and the sophisticated industry business models. TTB has a great opportunity here to move some proposals quickly to final regulations and in the near future re-notice those proposals from the comments that may require further notice and comment opportunity under the Administrative Procedures Act before moving to a final regulation. We commend TTB in advance for consideration of such a two-step approach.
NABI’s extensive comment letter is available as Comment No. 984, at: