UNLAWFUL REPRESENTATION OF STILL WINE AS EFFERVESCENT
WINE OR AS SUBSTITUTE FOR EFFERVESCENT WINE.
Proprietors of Bonded Wine Cellars,
Taxpaid Wine Bottling Houses, Importers
of Wine, Wholesalers of Wine, and others
Purpose. The purpose of this Circular is to inform dealers in wines
of the penalties provided by law for packaging, labeling or advertising still
wines as being effervescent or effervescent wine substitutes. Since there
have been some instances, of late, where the labeling, packaging, and adver-
tising of certain still wines has been subject to question, it is believed
advisable for this reason, to inform all bottlers, importers, and wholesale
distributors of wine of these legal requirements.
Background. Section 5662 of the Internal Revenue Code, provides, in
"Any person who * * * *, directly or indirectly, and whether
by manner of packaging or advertising or any other form of
representation, represents any still wine to be an effervescent
wine or a substitute for an effervescent wine, shall be fined
not more than $1,000, or imprisoned not more than 1 year, or
both, for each such offense."
Conclusion. Since this is a Federal law relating to wine, and since
basic permits issued under the provisions of the Federal Alcohol Administration
Act are conditioned upon compliance with all "Federal laws relating to distilled
spirits, wine, and malt beverages, including taxes with respect thereto,"
(27 U. S. C. 204(d)), any violation of this provision of the Internal Revenue
Code may also result in the suspension or revocation of the violator's Federal
basic permit to engage in business.
A typical example of the form of packaging held to violate the provisions
of law, above cited, is the use of a champagne shape bottle and closure of
the "agraffe" type (or wired-down cork) or the kind of shoulder and neck
wrappings customarily employed on sparkling wines for the packaging of still
wine even though the designation on the label may be proper for a still wine.
It is to the interest of all permittees to make certain, as to
still wines bottled, imported, or distributed by them, that the packaging or advertising of such wines is not in conflict with the cited provisions of the Internal Revenue Code.
Inquiries. Correspondence in regard to this Industry Circular
should refer to its number and be addressed to the Director, Alcohol and
Tobacco Tax (O:AT:B), Washington 25, D. C.
Harold A. Serr
Acting Director, Alcohol and Tobacco Tax Division