You may apply for a certificate of exemption from label approval for your wine only if it is produced or bottled in the United States and only if it will be sold, offered for sale, shipped, or delivered for shipment within the state in which it was bottled or packed (in other words, it will not be introduced into interstate commerce). This can be accomplished by selecting and completing item 18b on your label application, TTB Form 5100.31. Imported bottled wines are not eligible for a certificate of exemption from label approval and therefore must be covered by a Certificate of Label Approval.
Wines labeled under a certificate of exemption from label approval must show the statement, "For sale in _________(name of State) only." This statement may be added to a label covered by a certificate of exemption, or may be on an additional label that is affixed to the container. The statement does not have to appear on the label that is submitted to TTB, but must be on the container before it is removed from bond for consumption or sale.
Although the labeling requirements in 27 CFR Part 4, Labeling and Advertising of Wine, do not apply when a certificate of exemption is used, all of the rules in the wine regulations under the Internal Revenue Code of 1986 (IRC), 27 CFR Part 24, continue to apply to all wine bottled and packed in the United States. For example, 27 CFR 24.257(a) outlines what information must appear on your label, as well as the minimum type size requirements, for each bottle or other container of beverage wine prior to removal for consumption or sale. In brief, each label must contain:
- Name & Address of the wine premises where bottled or packed
- Brand name if different from the above
- Alcohol content as percent by volume or as stated in accordance with 27 CFR Part 4
- The kind of wine
- Net contents
Please see the complete text of 27 CFR 24.257 for additional information and guidance. (Note that Part 24 does not apply in Puerto Rico. See 27 CFR 24.2.)
The recordkeeping requirements in the IRC wine regulations continue to apply when a certificate of exemption is used. The wine regulations state in 27 CFR 24.257(b): "The information shown on any label applied to bottled or packed wine is subject to the recordkeeping requirements of [27 CFR 24.314, Label information record]," which states:
A proprietor who removes bottled or packed wine with information stated on the label (e.g., varietal, vintage, appellation of origin, analytical data, date of harvest) shall have complete records so that the information appearing on the label may be verified by an [sic] TTB audit. A wine is not entitled to have information stated on the label unless the information can be readily verified by a complete and accurate record trail from the beginning source material to removal of the wine for consumption or sale. All records necessary to verify wine label information are subject to the record retention requirements of § 24.300(d).
In addition, Congress recently amended section 5388(c) of the IRC (26 U.S.C. 5388(c)) to restrict the use of certain wine names of European origin for wines sold in the United States. These wine names are: Burgundy, Claret, Chablis, Champagne, Chianti, Malaga, Marsala, Madeira, Moselle, Port, Rhine wine, Hock, Sauterne, Haut Sauterne, Sherry, Tokay and Retsina. These names may be used on labels for wine from the European Community (and made in accordance with the requirements of the Community) and on certain previously approved non-Community wine labels if their uses are grandfathered as of March 10, 2006. Because the IRC applies to wine regardless of whether it is in intrastate or interstate commerce, the restriction on the use of these names applies in both contexts. Accordingly, TTB will not issue a certificate of exemption for wine using one of these wine names in a manner not authorized by the statute. The change in the law was effective on December 20, 2006.
The Alcoholic Beverage Labeling Act of 1988, 27 U.S.C. 213 et seq., and implementing regulations in 27 CFR Part 16, which require a specified health warning statement on alcoholic beverages bottled or imported for sale or distribution in the United States, also apply equally to wine sold or shipped in intrastate or interstate commerce. Under Part 16, the required warning statement is a prerequisite for approval of a certificate of exemption from label approval, just as it is for a Certificate of Label Approval.
Finally, other laws may apply to fraudulent conduct used to sell mislabeled wine or to mislead consumers, including certain federal criminal statutes relating to fraud carried out through the use of: the mail; private or commercial interstate carriers; or wire, radio, or television communication in interstate or foreign commerce.