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Industry Circular

Number: 85-9

Date: ,1985

Department of the Treasury

Bureau of Alcohol, Tobacco, and Firearms

Washington, D.C. 20226


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Proprietors of bonded wine cellars, brewers, distillers, importers, and others concerned:

This circular notifies industry members of an ATF ruling which will be published in a forthcoming issue of the Alcohol, Tobacco and Firearms Quarterly Bulletin. The ruling will read substantially as follows:

ATF Rul. 85-6

The Bureau of Alcohol, Tobacco and Firearms has received a request from a winemaker for authorization to use reverse osmosis to reduce alcohol in standard wine. The use of reverse osmosis technology and equipment allows a "feed" of standard wine to be routed under pressure through a filtration chamber housing filters or membranes which are selective for molecules having nominal molecular weights (NMW) of less than 500, thereby separating standard wine into a "permeate", namely, a byproduct consisting essentially of alcohol and water, and a "retentate", consisting of standard wine with reduced levels of alcohol and water. The Bureau's analyses of samples representative of the feed, retentate and permeate confirm the winemaker's claim that the retentate has the characteristics of standard wine.

HELD, based upon a review of the provisions of 26 U.S.C. 5382 and 27 CFR 240.1053, the Bureau approves the use of reverse osmosis technology and equipment to reduce the ethyl alcohol in wine as an authorized process for the treatment of standard wine under Section 240.1051b where the process produces a finished wine acceptable in good commercial practice.

HELD FURTHER, the byproduct of such processing is alcoholic spirits which meets the definition of "distilled spirits" prescribed in 26 U.S.C. 5002 and is subject to the provisions of the Internal Revenue Code relating to tax liability and qualification and registration of premises and equipment.

HELD FURTHER, in accordance with the provisions of 26 U.S.C. 5362, wine subjected to such processing shall be transferred to the premises of a bonded winery or bonded wine cellar in order to be removed for consumption or sale as wine.

HELD FURTHER, processed wine to which is added water other than that originally present in the wine prior to processing is "other wine" under the provisions of 27 CFR 240.488 and is subject to the formula requirements of 27 CFR 240.482. A winemaker desiring to lower the alcohol content of wine by means of this process may obtain approval for such use from the Regional Director (Compliance) of the region in which the bonded winery or bonded wine cellar is located by filing application pursuant to the provisions of 27 CFR 240.1053 and by qualifying contiguous distilled spirits plant premises or by shipping the wine to premises qualified as a distilled spirits plant.

INQUIRIES. Any person having a question regarding this circular should refer to it by number and address the inquiry to the Associate Director (Compliance Operations), ATTN: Chief, FAA, Wine and Beer Branch, Washington, DC 20226.


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