August 18, 2009
When Can FDA Regulate Beer Labeling? When the Beer is not a "Malt Beverage"
Generally speaking, the usual food regulators -- FDA and USDA -- do not regulate alcohol beverages. Most alcohol beverages are regulated by the Alcohol and Tobacco Tax and Trade Bureau (TTB), which is part of the Department of the Treasury (just like the IRS!)
Last summer TTB issued a ruling explaining that some beverages qualify as "beer" for excise tax purposes even though they are not "malt beverages" subject to TTB jurisdiction.
Section 5052(a) of the IRC (26 U.S.C. 5052(a)) defines the term “beer,” for purposes of Chapter 51, as “beer, ale, porter, stout, and other similar fermented beverages (including saké or similar products) of any name or description containing one-half of 1 percent or more of alcohol by volume, brewed or produced from malt, wholly or in part, or from any substitute therefor.” Essentially the same definition appears in the TTB regulations at 27 CFR 25.11. In addition, with reference to what may be a substitute for malt, § 25.15(a) of the TTB regulations (27 CFR 25.15(a)) states that “[o]nly rice, grain of any kind, bran, glucose, sugar, and molasses are substitutes for malt.”
The Federal Alcohol Administration Act, however, gives TTB authority to regulate "the labeling and advertising of wine, distilled spirits, and malt beverages."
Since the Internal Revenue Code definition of "beer" is broader than just "malt beverages," there are some beverages subject to the excise tax, but over which TTB was not given authority.
Accordingly, a fermented beverage that is brewed from a substitute for malt (such as rice or corn) but without any malted barley may constitute a “beer” under the IRC but does not fall within the definition of a “ malt beverage” under the FAA Act. Similarly, a fermented beverage that is not brewed with hops may fall within the IRC definition of “beer” but also falls outside of the definition of a “malt beverage” under the FAA Act. (TTB Ruling 2008-3)
So, FDA has issued Draft Guidance for labeling of those "beers" that are not "malt beverages":
From the Background section: Alcoholic beverages are regulated by FDA under the FFDCA, which includes "articles used for food or drink" in the definition of "food." 21 U.S.C. 321(f). As such, alcoholic beverages are subject to the FFDCA adulteration and misbranding provisions, and implementing regulations, related to food. For example, manufacturers of alcoholic beverages are responsible for adhering to the registration of food facilities requirements in 21 CFR part 1 and to the good manufacturing practices in 21 CFR part 110. However for the labeling of alcoholic beverages, as reflected in the 1987 Memorandum of Understanding (MOU) between FDA and TTB's predecessor agency (ATF) (Ref. 2), TTB is responsible for the promulgation and enforcement of regulations with respect to the labeling of distilled spirits, wines, and malt beverages pursuant to the FAA Act. In TTB Ruling 2008-3, dated July 7, 2008, TTB clarified that certain beers, which are not made from both malted barley and hops but are instead made from substitutes for malted barley (such as sorghum, rice or wheat) or are made without hops, do not meet the definition of a malt beverage under the FAA Act.3 Accordingly, TTB stated in its Ruling that such products (other than sake, which is classified as a wine under the FAA Act), are not subject to the labeling, advertising, and other provisions of the TTB regulations promulgated under the FAA Act.
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