RECOMMENDATIONS OF THE DISTILLED SPIRITS STANDARDS AND LABELING SURVEY COMMITTEE

Proprietors of Distilled Spirits Plants, Importers and Wholesalers of Distilled Spirits, and others concerned:

Last June a Distilled Spirits Standards and Labeling Survey Committee was established within the Alcohol and Tobacco Tax Division to reappraise the regulations issued pursuant to the Federal Alcohol Administration Act, as set forth in 27 CFR, Part 5, Labeling and Advertising of Distilled Spirits.

The first phase of the Committee's work is completed. A thorough study was made of the regulations and of suggestions presented by all interested parties. The Committee's study also included the petitions submitted to the Division within the past several years, the pertinent items set forth in the reports of the Tariff Commission on whisky, and the general views expressed by the various subcommittees of the Congress on deceptive packaging. The Committee's foremost consideration was to determine what would best serve the interests of all concerned that is, the consumer, the industry, and the Government. The Committee then undertook to explore the problem areas, analyze such areas, and develop an improved regulation.

In addition to proposing many substantive changes, the Committee found that the regulations would be improved by combining sections, rearranging subparts, rewording language to achieve a higher degree of clarity, adding new provisions, and deleting obsolete matter. For better appreciation and comprehension, it was felt that the Committee's work should be presented in the form of a complete regulation (see attachment). Also attached is a discussion of some of the problem areas which were explored by the Committee and its general approach in developing corrective solutions. This discussion was presented in a speech to the National Alcoholic Beverage Control Association, Inc., at its annual conference on May 16, 1966.

IMPORTANT. A hearing was held late last month in Washington to ascertain the truth or falsity of age representations on labels with respect to storage of neutral spirits in used cooperage. This hearing also explored the question of whether the standards of identity should be amended so as to provide that neutral spirits shall not be

stored in wood, and to consider the amendment of standards of identity for "whisky" so as to include spirits distilled from grain at 190° proof, or more, which have been stored in oak containers. The Committee's recommendations in this area were independently arrived at before the hearing.

CAUTION. The proposals contained in the attached document are the Committee's and not those of the Internal Revenue Service or the Treasury Department. They are presented for general review so that the Division may have the benefit of informal reaction and comment to the Committee's draft before proceeding with a specific program. However, it should be remembered that the present regulations can be amended only after public notice and hearing.

You are urged to study the Committee report and to submit your comments and suggestions. They should be forwarded to the Director, Alcohol and Tobacco Tax Division (Attention: CP:AT:JHL), Washington, D.C., 20224, by September 30, 1966. Your reactions will assist us in deciding upon formal proposals for modernizing this regulation.

Harold A. Serr

Director, Alcohol & Tobacco Tax Division

Attachment