Compliance with Distilled Spirits Bottling Standards
Rectifiers, proprietors of taxpaid bottling
houses and others concerned:
1. Representations have been made that some proprietors of
rectifying plants and taxpaid bottling houses have adopted practices
since September 1, 1954, when storekeeper-gauger supervision at
bottling premises was curtailed, which have resulted in unwarranted
discrepancies between actual and labeled proof and fill of bottled
distilled spirits. The alleged condition is presently being
investigated by this Division in order that it may be determined
whether such representations have any basis of fact.
2. It is recognized that bottling plants normally experience
losses between bottling tank gauges and case yields and that plant
managers are constantly attempting to maintain good production
records. Where proprietors, or their managers, resort to the shading
of fill or proof, or both, normal losses are improperly reduced, or
even become gains in some cases. These practices cannot be condoned,
as they do not comply with legitimate bottling standards and must be
3. All of you are aware of the efforts of this Division to
modernize and simplify the system of Governmental regulation of the
liquor industry, whereby supervision of operations nonessential to the
protection of the revenue and the safeguarding of consumers' interest
would be eliminated or drastically modified, so as to afford industry
the opportunity to achieve with minimum impediment a greater amount of
latitude in the scheduling of its work and to adapt its operations in
conformity with modern technological developments and business methods.
The evolution of this program, of necessity, has imposed a greater
degree of responsibility upon industry management for conducting its
operations in accordance with law and regulations. The manner in
which proprietors discharge their new responsibility will determine
the extent to which the liquor industry may expect a further relaxation
of Governmental restrictions in the future.
4. We are presently engaged in formulating a proposed over-all
revision of the Internal Revenue laws pertaining to distilled spirits.
The concept of the proposed revision program is based upon the theory
that the Federal Government should concern itself primarily with the
collection of taxes and the protection of the revenue, and that
Government supervision of distilled spirits' operations should bedirected to
those objectives, thus permitting an even greater freedom
of industry operations provided proprietors assume a proportionate
responsibility in maintaining and protecting the revenue. Accordingly,
if we are to achieve the basic purposes of the proposed legislative.
program and gain therefrom the mutual advantages which would accrue to
Government and industry, this would be a most inopportune time for
industry to attempt to take undue advantage of the relaxation of
supervisory controls already effectuated, or to conduct itself in a
manner inconsistent with the added responsibilities which it must
assume and satisfactorily discharge. In other words, the industry
must show that it has the desire and ability to discipline itself and
to discharge its obligations in a manner demanded by good business
practices and public acceptance.
5. If our investigations disclose conditions which require
corrective action, you may rest assured that vigorous steps will be
taken to remedy any questionable situation. It is hoped that
proprietors, if any, who may have resorted to questionable practices
will take immediate steps to set their houses in order, and that this
Division will not be forced to restore measures of control which would
be a backward step in the program which promises so much of benefit
to both Government and industry.
6. Inquiries concerning this industry circular should refer to
the number thereof and to the symbols O:AT:PPt.
Dwight E. Avis
Director, Alcohol and Tobacco Tax Division