June 2, 2003

Dear Industry Member:

The Alcohol and Tobacco Tax and Trade Bureau (TTB) recently published a final rule, amending the regulations to prohibit the appearance on labels or in advertisements of any health-related statement, including a specific health claim, that is untrue in any particular or tends to create a misleading impression. The final rule, TTB TD-1, takes effect on June 2, 2003, and has been posted on the TTB website for your convenience.

The Federal Alcohol Administration Act (FAA Act), 27 U.S.C. 205(e) and (f), authorizes TTB to issue regulations on the packaging, labeling, and advertising of alcohol beverages in order to prohibit deception of the consumer, and to prohibit, irrespective of falsity, statements relating to analyses, guarantees, and scientific or irrelevant matters that are likely to mislead the consumer. TTB's statutory mandate is to prevent consumer deception and ensure the label provides the consumer with adequate information as to the identity and quality of the product.

As you may know, on February 4, 1999, the Bureau of Alcohol, Tobacco and Firearms (ATF), our predecessor agency, approved two applications for certificates of label approval bearing health-related directional statements directing consumers to the Dietary Guidelines or their family doctor for information about the "health effects" of wine consumption. On October 25, 1999, ATF published a notice of proposed rulemaking on the use of health-related statements in the labeling and advertising of alcohol beverages. On December 9, 1999, ATF announced that pending the completion of rulemaking on this issue, it would suspend action on any new applications for label approval bearing health-related directional statements similar to the ones approved in February of that year.

After holding two public hearings and reviewing the comments received in response to the notice of proposed rulemaking, ATF has issued a final rule setting forth the standards for determining whether health-related statements on labels or in advertisements tend to mislead consumers. Among other things, the final rule provides that a health-related directional statement will be considered misleading unless it directs consumers in a neutral or other non-misleading manner to a third party or other source for balanced information regarding the health effects of alcohol consumption. In addition, a brief disclaimer must be included as part of the health-related statement, in order to dispel any misleading impression conveyed by the health-related directional statement.

The regulations provide the following example of an acceptable disclaimer for a health-related directional statement: "This statement should not encourage you to drink or to increase your alcohol consumption for health reasons." If you wish to use another disclaimer, you may submit it on an application for label approval, for TTB's review. Please note that the disclaimer must appear in the same type size, style, color and font as the directional statement and must immediately follow the directional statement as a continuation of that statement (i.e., no breaks between the two). In addition, the disclaimer must appear on the same label as the directional statement and that label must be firmly affixed to the container.

Our records indicate that your company holds at least one certificate of label approval bearing a health-related directional statement, relating to the health effects of wine consumption, that does not comply with the criteria set forth in the new final rule. As of June 2, 2003, this certificate is revoked by operation of regulation pursuant to the provisions of 27 C.F.R. 13.51 and 13.72(a)(2). The regulations provide that the Bureau will not individually notify all holders of certificates of label approval that their certificates have been revoked by operation of regulation. However, we are providing this notice to you as a courtesy.

Accordingly, as of June 2, 2003, you should surrender to TTB any certificates of label approval bearing health-related directional statements that do not comply with the standards set forth in the final rule. On and after June 2, 2003, you may no longer use such certificates to bottle or remove wine, or to remove wine from customs custody for consumption. If you wish to continue using a health-related directional statement on your label, you should submit a new application for label approval, bearing a statement that complies with the criteria set forth in the final rule.

If you have any questions or if we can be of further service, please contact the Advertising, Labeling and Formulation Division at (202) 927-8140, 1-866-927-ALFD (2533) or alfd@ttb.treas.gov.

Sincerely,

Karen T. Freelove
Chief, Advertising, Labeling and Formulation Division