October 24, 2005

Frank Foote, Chief

Regulations and Procedures Division

Alcohol and Tobacco Tax and Trade Bureau

P. O. Box 14412

Washington, DC 20044-4412

ATTN: Notice No. 51

Dear Mr. Foote:

This comment is being submitted by the members of the National Association of Beverage Importers, Inc (NABI). NABI members are responsible for the importation of a significant portion of wine and spirits imported into the United States annually. NABI also represents a segment of the industry that imports 95% of all beer imported into the United States each year. In view of the fact that NABI represents wine importers that import significant quantities of wine from countries that currently do not have reciprocal wine importation agreements with the United States, we have a high level of interest in this proposed rulemaking. The following are our specific comments concerning the temporary and proposed final rule.

Importers who do not buy their wines directly from the foreign producer.

NABI members are not aware of any particular problems that the proposed regulations will cause an importer who does not buy wine directly from the foreign producer.

Importers that buy their wines from a broker or negotiante should be able to get the necessary certification from the broker or negotiante.

Certification Retention

The temporary regulation and NPRM No. 51 make it clear that the “importer” is required to maintain a copy of the certification on file for appropriate inspection by a TTB representative. We strongly agree with the TTB decision not to make the certification a part of the U.S. Customs entry process. Instead, TTB chose to require the importer to “maintain the certification in their records where TTB officers can inspect them as may be necessary.” However, the temporary regulation and NPRM No. 51 fail to define the term importer. As TTB knows, there are two different types of importers that hold TTB importer’s permits. In the industry, one importer is known as the “authorized” importer and the other is known as the “importer of record.” The authorized importer is authorized by the foreign supplier to import his/her wine into the United States. The importer of record, on the other hand, is the importer that physically imports the wine into the United States, most often using a Certificate of Label Approval (COLA) owned by the authorized importer.

NABI along with other industry associations has had ongoing discussions with TTB representatives in an effort to develop a mutually agreed upon TTB policy regarding the physical retention of the COLA. It is our understanding that TTB has decided that the COLA owner is required to maintain the COLA on file for inspection by a TTB officer. It is further understood that the COLA owner must provide the “importer of record” with a copy of the COLA at the time of importation, and upon request by the TTB.

NABI members believe that the COLA owner should be required to keep a copy of the certification, cross referenced to the COLA to which it applies.

Wine Blending

A unique problem is created when the foreign supplier produces a wine that is a blend of wines from multiple suppliers. Must each of the producers of the wines used in the blend certify or is a certification only required from the producers who blended the wines and created the final product that will be imported and sold to the consumer?

NABI members believe that the temporary and proposed final regulations do not adequately address the issues of the blending of wines and fermented juice. One NABI member asked the following question: “Producers may purchase fermented juice to be blended together with other fermented juice. One or both may have been cellared (fermented) at another facility. If the final producer purchases fermented wines to bottle, must all producers in the process certify the wine(s) or must the final producer obtain lab analysis and attest to all cellaring conditions during the in wines’ evolution?”

Perhaps putting it another way would help clarify the issue. Must the certification and lab analysis relate only to the finished product (wine) in the bottle or is it required of all wines used in a blend.

Summary

We thank you for this opportunity to comment on the proposed regulations. NABI members do not believe the proposed regulations will cause any special problems for importers who do not buy their wines directly from the foreign producer. However, we do believe TTB needs to clarify the records (certification) retention issue outlined in the body of this comment.

One important issue not addressed in the proposed regulations deals with the certification and laboratory analysis required for a blended wine. NABI members are aware of the fact that in order for a foreign supplier to produce a unique wine, which when blended is better than its component parts, or to maintain continuity of supply for certain brands/labels, may buy bulk wines from more than one source. We believe that this practice is common in appellations like Burgundy where many of the vineyards are quite small. In our opinion, the certification requirement should only relate to the finished product being exported to the United States.

Again, thank you for this opportunity to comment.

Sincerely,

Robert J. Maxwell

President - NABI