Standards of Fill for Wine and Distilled Spirits

DEPARTMENT OF THE TREASURY <SUBAGY>Alcohol and Tobacco Tax and Trade Bureau</SUBAGY> <CFR>27 CFR Parts 4, 5, 19, 24, 26, and 27</CFR> <DEPDOC>[Docket No. TTB-2022-0004; Notice No. 210A, Ref: Notice No. 210]</DEPDOC> <RIN>RIN 1513-AC86</RIN> <SUBJECT>Standards of Fill for Wine and Distilled Spirits</SUBJECT> <HD SOURCE="HED">AGENCY:</HD> Alcohol and Tobacco Tax and Trade Bureau, Treasury. <HD SOURCE="HED">ACTION:</HD> Supplemental notice of proposed rulemaking; reopening of comment period. <SUM> <HD SOURCE="HED">SUMMARY:</HD> The Alcohol and Tobacco Tax and Trade Bureau (TTB) is reopening the comment period for a proposed rule (Notice No. 210) published on May 25, 2022, which proposed changes to the authorized standards of fill for wine and distilled spirits, to solicit comments on additional suggestions raised in public comments made in response to Notice No. 210 that go beyond the scope of the original proposal. In Notice No. 210, TTB proposed to add 10 authorized standards of fill to those already authorized for wine, and alternatively, eliminating all but a minimum standard of fill for wine containers and all but a minimum and maximum for distilled spirits containers. TTB did not propose any specific standards of fill for distilled spirits as an alternative to generally eliminating them. TTB received a number of comments in response to the notice of proposed rulemaking requesting that TTB add specific new standards of fill for distilled spirits, as well as for wine, and also requesting that TTB consider eliminating the distinction between the standards of fill for distilled spirits in cans and those for distilled spirits in containers other than cans. TTB is now reopening the public comment period based on these suggestions, to provide notice to stakeholders that TTB is considering these additional requests for potential inclusion in the final rule and to also provide an opportunity for stakeholders to submit additional information to assist TTB in assessing whether to incorporate some, all, or none of these proposals into the final rule. </SUM> <EFFDATE> <HD SOURCE="HED">DATES:</HD> The comment period for the proposed rule published on May 25, 2022 (87 FR 31787), is reopened. TTB must receive your comments on or before October 9, 2024. </EFFDATE> <HD SOURCE="HED">ADDRESSES:</HD> You may electronically submit comments to TTB on this document, and view copies of this document, the original notice of proposed rulemaking, supporting materials, and any comments TTB receives on it within Docket No. TTB-2022-0004 as posted at <E T="03">https://www.regulations.gov.</E> A direct link to that docket is available on the TTB website at <E T="03">https://www.ttb.gov/laws-regulations-and-public-guidance/laws-and-regulations/all-rulemaking</E> under Notice No. 210A. Alternatively, you may submit comments via postal mail to the Director, Regulations and Ruling Division, Alcohol and Tobacco Tax and Trade Bureau, 1310 G Street NW, Box 12, Washington, DC 20005. Please see the Public Participation section of this document for further information on the comments requested regarding this proposal and on the submission, confidentiality, and public disclosure of comments. <FURINF> <HD SOURCE="HED">FOR FURTHER INFORMATION CONTACT:</HD> Caroline Hermann, Regulations and Rulings Division, Alcohol and Tobacco Tax and Trade Bureau, 1310 G Street NW, Box 12, Washington, DC 20005; phone 202-453-1039, ext. 175. </FURINF> <SUPLINF> <HD SOURCE="HED">SUPPLEMENTARY INFORMATION:</HD> <HD SOURCE="HD1">I. Background</HD> <HD SOURCE="HD2">A. Authority</HD> The Alcohol and Tobacco Tax and Trade Bureau (TTB) administers regulations setting forth standards of fill for containers of beverage distilled spirits and wine products distributed within the United States. The authority to establish these standards is based on two provisions of law: (1) Section 5301(a) of the Internal Revenue Code of 1986 (IRC), codified at 26 U.S.C. 5301(a) in the case of distilled spirits, <SU>1</SU> <FTREF/> and (2) section 105(e) of the Federal Alcohol Administration Act (FAA Act), codified at 27 U.S.C. 205(e), for both distilled spirits and wine. Section 5301(a) of the IRC authorizes the Secretary of the Treasury to prescribe regulations “to regulate the kind, size, branding, marking, sale, resale, possession, use, and reuse of containers (of a capacity of not more than 5 wine gallons) designed or intended for use for the sale of distilled spirits . . .” when the Secretary determines that such action is necessary to protect the revenue. The FAA Act at 27 U.S.C. 205(e) authorizes the Secretary of the Treasury to prescribe regulations relating to the “packaging, marking, branding, and labeling and size and fill” of alcohol beverage containers “as will prohibit deception of the consumer with respect to such products or the quantity thereof . . . .” The FAA Act at 27 U.S.C. 206 generally prohibits the sale to consumers of distilled spirits in containers over one wine gallon. <FTNT> <SU>1</SU>  Sections 5041(e) and 5368 of the IRC also provide the Secretary the authority to set forth tax tolerances for containers of wine products. </FTNT> TTB administers the IRC and FAA Act pursuant to section 1111(d) of the Homeland Security Act of 2002, as codified at 6 U.S.C. 531(d). In addition, the Secretary of the Treasury has delegated certain administrative and enforcement authorities to TTB through Treasury Department Order 120-01. <HD SOURCE="HD2">B. Current Standards of Fill for Distilled Spirits</HD> The term “standard of fill” is used in the TTB regulations and in this document to refer to the authorized amount of liquid in the container, rather than the size or capacity of the container itself. For better readability, however, this document sometimes uses the terms “size” or “container size” and “standard of fill” interchangeably. The standards of fill for distilled spirits are contained in subpart K of part 5 of the TTB regulations (27 CFR part 5). Within subpart K, paragraph (a)(1) of § 5.203 (27 CFR 5.203(a)(1)) specifies the following metric standards of fill for containers other than those described in paragraph (a)(2) of that section: <FP SOURCE="FP-1">• 1.8 Liters.</FP> <FP SOURCE="FP-1">• 1.75 Liters.</FP> <FP SOURCE="FP-1">• 1 Liter.</FP> <FP SOURCE="FP-1">• 900 mL.</FP> <FP SOURCE="FP-1">• 750 mL.</FP> <FP SOURCE="FP-1">• 720 mL.</FP> <FP SOURCE="FP-1">• 700 mL.</FP> <FP SOURCE="FP-1">• 375 mL.</FP> <FP SOURCE="FP-1">• 200 mL.</FP> <FP SOURCE="FP-1">• 100 mL.</FP> <FP SOURCE="FP-1">• 50 mL.</FP> In the case of distilled spirits in metal containers that have the general shape and design of a can, that have a closure which is an integral part of the container, and that cannot be readily reclosed after opening, paragraph (a)(2) of § 5.203 authorizes the use of the following metric standards of fill: <FP SOURCE="FP-1">• 355 mL.</FP> <FP SOURCE="FP-1">• 200 mL.</FP> <FP SOURCE="FP-1">• 100 mL.</FP> <FP SOURCE="FP-1">• 50 mL.</FP> For better readability this document will refer to the containers referenced in 27 CFR 5.203(a)(1) as “containers other than cans” and those referenced in § 5.203(a)(2) as “cans.” In addition to the metric standards specified above, § 5.203 contains provisions regarding tolerances (discrepancies between actual and stated fill), unreasonable shortages in fill, and distilled spirits bottled or imported before January 1, 1980, and marketed or released from customs custody on or after that date (the date on which the U.S. volumetric standards were replaced by the § 5.203 metric standards). <HD SOURCE="HD2">C. Current Standards of Fill for Wine</HD> The standards of fill for wine are contained in subpart H of part 4 of the TTB regulations (27 CFR part 4). Within subpart H, paragraph (a) of § 4.72 (27 CFR 4.72(a)) authorizes the use of the following metric standards of fill for containers, in addition to those described in paragraph (b) which are discussed further below: <FP SOURCE="FP-1">• 3 liters;</FP> <FP SOURCE="FP-1">• 1.5 liters;</FP> <FP SOURCE="FP-1">• 1 liter;</FP> <FP SOURCE="FP-1">• 750 milliliters;</FP> <FP SOURCE="FP-1">• 500 milliliters;</FP> <FP SOURCE="FP-1">• 375 milliliters;</FP> <FP SOURCE="FP-1">• 355 milliliters;</FP> <FP SOURCE="FP-1">• 250 milliliters;</FP> <FP SOURCE="FP-1">• 200 milliliters;</FP> <FP SOURCE="FP-1">• 187 milliliters;</FP> <FP SOURCE="FP-1">• 100 milliliters; and</FP> <FP SOURCE="FP-1">• 50 milliliters.</FP> Paragraph (b) of § 4.72 states that wine may be bottled or packed in containers of 4 liters or larger if the containers are filled and labeled in quantities of even liters (4 liters, 5 liters, 6 liters, etc.). <HD SOURCE="HD1">II. Notice No. 210</HD> On May 25, 2022, TTB published a notice of proposed rulemaking, Notice No. 210, in the <E T="04">Federal Register</E> (87 FR 31787) proposing to add 10 authorized standards of fill for wine and, as an alternative, to eliminate all but a minimum standard of fill for wine containers and all but a minimum and maximum for distilled spirits containers. The 10 standards of fill proposed for wine are: 2.25 and 1.8 liters; and 720, 700, 620, 550, 360, 330, 300, and 180 milliliters. The proposed rule followed, and took into consideration, a Department of the Treasury report on competition in the markets for beer, wine, and distilled spirits that recommended rulemaking to “again consider eliminating the standards of fill requirements.” See Treasury Report on Competition in the Markets for Beer, Wine, and Spirits (February 9, 2022), available at <E T="03">https://home.treasury.gov/system/files/136/Competition-Report.pdf.</E> That report, produced in response to Executive Order 14036, “Promoting Competition in the American Economy” (published in the <E T="04">Federal Register</E> on July 9, 2021, at 86 FR 36987), noted that “[c]ontain ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Preview showing 10k of 32k characters. Full document text is stored and available for version comparison. ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━