Labeling and Advertising of Flavored Malt Beverages
To: Brewers, Importers, And Others Involved In The Beer Industry
What is the purpose of this circular?
This circular announces a Bureau of Alcohol, Tobacco and Firearms
(ATF) Ruling regarding the labeling and advertising of flavored
malt beverages. It reminds brewers and importers of the requirements
of ATF Rul. 96-1, ATF Q.B. 96-1, 49, regarding the production of
flavored malt beverages and the requirements for preparing statements
of process for these products. Finally, this circular announces
that ATF is undertaking a study of the production and labeling of
flavored malt beverages made using alcohol flavoring materials and
may initiate rulemaking in the future regarding these products
What is the ATF Ruling to be announced?
ATF will publish in the appropriate ATF Quarterly Bulletin an ATF
Ruling that interprets regulations in 27 CFR Part 7 regarding the
labeling and advertising of flavored malt beverages. This Ruling
also restates and amplifies the provisions of ATF Rul. 96-1. The
text of ATF
Ruling 2002-2 is reproduced below:
ATF Ruling 2002-2
This Ruling interprets regulations in 27 CFR Part 7 regarding
the labeling and advertising of flavored malt beverages. This
Ruling also restates and amplifies the provisions of ATF Rul.
96-1, ATF Q.B. 1996-1, 49.
Flavored malt beverages have been produced and marketed in the
United States for many years. Recently the production and marketing
of many flavored malt beverages has changed dramatically. Within
the last 2 years, brewers and importers have begun to associate
flavored malt beverages with well-known brands of distilled spirits.
This association is made several ways: by using a distilled spirits
brand name as the brand name of a flavored malt beverage; through
the use of labeling and packaging that resembles packaging of
well-known brands of distilled spirits; and by the use of specific
distilled spirits terms in describing flavorings added to flavored
malt beverages. Although the direct addition of distilled spirits
is not permitted in the production of any malt beverage, ATF has
permitted the addition of flavoring materials that are alcohol
based under the definition of malt beverage in the Federal Alcohol
Administration Act (FAA Act). ATF Ruling 96-1 was issued in part
to limit the contribution of alcohol to flavored malt beverages
through this practice.
Sales of these newer types of flavored malt beverages have increased
dramatically within the last year. As a result of these sales
increases and widespread marketing campaigns, the media has given
these products wide exposure. Another fact drawing media attention
to these products is the impression given that these flavored
malt beverages are made with distilled spirits or contain distilled
ATF believes the association drawn between distilled spirits
and malt beverages through the use of well-known distilled spirits
brand names and terms on labels of flavored malt beverages causes
confusion for consumers, the media, and State regulatory and taxing
organizations. ATF believes this practice is confusing and leads
consumers to believe distilled spirits are present in these flavored
One of the practices ATF finds to be particularly misleading
is the use of a distilled spirits brand name or the use of a distilled
spirits class and type term to describe a flavor element that
is part of a statement of composition on malt beverage labels.
Examples of misleading labels would be:
- "[Distilled Spirits Brand Name] - Flavored malt beverage
made with natural flavors containing vodka."
- "[Distilled Spirits Brand Name] - Flavored malt beverage
with natural flavors containing genuine [Distilled Spirits Brand
ATF finds statements such as these to be misleading. The fact
that the statement of composition draws particular attention to
the apparent use of distilled spirits in a malt beverage leads
consumers to believe the product is made with or contains distilled
spirits. Distilled spirits used to manufacture flavors lose their
class and type identity (such as rum or tequila) when blended
with other ingredients to make a flavor extract. Accordingly,
it is misleading to represent that a malt beverage contains a
particular class or type of distilled spirits. Further, this type
of statement in the statement of composition, together with the
use of a distilled spirits brand name, misleads consumers into
believing that the product is, or contains, distilled spirits.
The misleading impression presented by these label statements
and representations has caused many media outlets to identify
distilled spirits as an ingredient in these flavored malt beverages.
Further, ATF has been contacted by many State regulatory and tax
agencies that are concerned about the proper classification and
correct taxation of these products.
ATF also believes that other references to distilled spirits
on a malt beverage label (i.e., "tastes like rum") may
mislead consumers to believe that the named distilled spirit is
an independent ingredient in the finished malt beverage product,
or that the finished product is actually a distilled spirit as
opposed to a malt beverage. Examples of statements that will be
presumed to be misleading include:
"Tastes like rum,"
"The flavor of brandy,"
"Serve like a liqueur,"
"Made by Old Sourmash Whisky Company, City, State."
As a result of these recent labeling practices, ATF has reexamined
its policy regarding the labeling and advertising of flavored
malt beverages. ATF is issuing this Ruling to clarify the labeling
and advertising of flavored malt beverages under Part 7, to prevent
consumer deception, and to provide consumers with accurate information
about the composition and identity of flavored malt beverages.
Statutory authority for labeling and advertising regulations
for malt beverages.
Sections 105(e) and (f) of the FAA Act, 27 U.S.C. § 205(e)
and (f), vest broad authority in the Director, Bureau of Alcohol,
Tobacco and Firearms (ATF) to prescribe regulations with respect
to the bottling, packaging, labeling, and advertising of wine,
distilled spirits, and malt beverages. The FAA Act provides that
these regulations shall prevent the deception of the consumer
and provide the consumer with adequate information as to the identity
and quality of the product. Regulations that implement the provisions
of Sections 105(e) and (f), as they relate to malt beverages,
are set forth in Title 27, Code of Federal Regulations, Part 7,
Labeling and Advertising of Malt Beverages.
Labeling requirements that apply to the class and type
designation of flavored malt beverages.
Part 7 regulations require that all malt beverages sold, shipped,
or otherwise introduced into interstate commerce bear labels that
contain certain mandatory information. Section 7.22 provides that,
among other information, malt beverage labels must contain a statement
relating to the class, type, or other designation of the malt
beverage. If a malt beverage product is not known to the trade
under a particular designation, Section 7.24 requires that a distinctive
or fanciful name, together with an adequate and truthful statement
of composition of the product, appear on the label and that this
information will be considered the statement of class and type.
Malt beverages made with flavoring ingredients are not considered
to be "beer," "lager beer," "lager,"
"ale," "porter," "stout," or other
designation provided in Part 7 as a class and type designation
commonly applied to malt beverages. Section 7.24 requires these
flavored malt beverages to bear a distinctive or fanciful name,
together with an adequate and truthful statement of composition
of the product, as the class and type designation. An example
of a designation for a malt beverage flavored with natural lemon
flavoring might be:
- "Hard Lemonade - Malt Beverage with Natural Lemon Flavor."
ATF policy permits a bottler or importer to designate the specific
flavor(s) that are indicated in the statement of composition of
a flavored malt beverage. Alternatively, bottlers or importers
may use the phrases: "made with natural flavors" or
"made with artificial flavors" in lieu of identifying
specific flavors. Thus, a flavored malt beverage may be designated
- "Hard Lemonade - Malt Beverage with Natural Flavor(s)."
Brewers and importers have marketed flavored malt beverages for
many years in the United States. Until recently, most of these
products were designated by the flavor used in their production,
were designated by a fanciful name, or, in some cases, were designated
using a cocktail term. Examples are:
- "Cherry Ale - Ale with natural cherry flavor,"
- "Krazy Kola - Malt Beverage with natural flavors,"
- "Pina Colada Delight - Malt Beverage with natural flavors."
Labeling requirements that apply to other information appearing
on labels of flavored malt beverages.
Section 7.28(e) provides that labels of malt beverages may contain
information that is not mandatory under Part 7 if the additional
information complies with the requirements of Part 7, and does
not conflict with, or in any manner qualify, statements required
by Part 7. Although there is no similar provision specifically
authorizing additional information in advertising, Section 7.54(b)(1)
prohibits any statement in advertising that is inconsistent with
statements on the labels of malt beverages.
Regulations that apply to deceptive and misleading practices
in the labeling and advertising of malt beverages.
Section 7.29(a) prohibits containers, labels, or cartons of malt
beverages from bearing any statement that is false or untrue,
or that, irrespective of falsity, directly, or by ambiguity, omission,
or inference, or by the addition of irrelevant, scientific, or
technical matter, tends to create a misleading impression. A similar
provision exists with respect to advertising of malt beverages
at Section 7.54.
Although there is no provision in Section 7.29 or 7.54 that specifically
prohibits a malt beverage label, carton, or advertisement from
resembling a distilled spirits product, ATF believes that the
depiction of a malt beverage product as a distilled spirits product,
or the likening of a malt beverage to a distilled spirits product
is misleading, and creates a misleading impression as to the identity
of the malt beverage.
ATF Ruling on labeling and advertising of flavored malt beverages
that use distilled spirits terms or brand names, or that bear
labels that resemble distilled spirits labels.
With regard to the use of distilled spirits terms and brand names
on labels and in the advertising of malt beverages, it is:
Held, for brand names.
- The use of a brand name of a distilled spirits product as
the brand name of a malt beverage is not in itself misleading.
- The use of a distilled spirits term found in the standards
of identity in 27 CFR Part 5 such as whisky, rum, vodka, brandy,
gin, and so forth, as the brand name for a malt beverage is
misleading. ATF will not approve labels where a distilled spirits
term is used as the brand name for a malt beverage.
- The use of a coined term that is similar to or resembles a
class and type of distilled spirits as part of the brand name
for a malt beverage will be examined on a case-by-case basis
to determine if it is misleading as to the identity of the product.
Held, for class and type statements including statements
of composition and fanciful names.
- The use of a distilled spirits term found in the standards
of identity in 27 CFR Part 5, or the use of a distilled spirits
brand name, in the statement of composition or in the fanciful
name for a flavored malt beverage is misleading as to the identity
of the product. ATF will no longer approve labels where distilled
spirits terms or brand names appear in the fanciful name or
the statement of composition for a malt beverage.
- Use of a cocktail term as the fanciful name of a malt beverage
is not misleading if there is no misleading impression about
the identity of the product, based on the overall labeling and
advertising of the product.
Held, for all other labeling and advertising statements.
The use of any distilled spirits terms found in the standards
of identity in 27 CFR Part 5 or of distilled spirits brand names
appearing in any other place on a malt beverage label or in an
advertisement for a malt beverage will be presumed to be misleading.
Use of cocktail terms on a label or advertisement for a malt
beverage is not in itself misleading if there is no misleading
impression about the identity of the product, based on the overall
labeling or advertising of the product.
Effect on new and existing Application for and Certificate/Exemption
of Label/Bottle Approval forms.
Section 7.20 requires labels of malt beverages to be in compliance
with the provisions of Part 7. Upon the effective date of this
Ruling, new applications for certificates of label approval (ATF
Forms 5100.31 (COLAs), Applications for and Certificate/Exemption
of Label/Bottle Approval) must be in compliance with Part 7 regulations,
including the provisions of this Ruling.
While this Ruling does not cancel or revoke existing certificates,
ATF is undertaking action to revoke COLAs that are not in compliance
with this Ruling. Industry members are offered the opportunity
to immediately voluntarily surrender for cancellation all COLAs
for labels not in compliance with the requirements of this Ruling
and, thereby, avoid the formal revocation process.
In order to allow an opportunity to use up current label stocks,
ATF may grant temporary COLA approval to cover currently approved
labels that do not comply with this Ruling. Brewers and importers
may submit new applications for COLAs to ATF for temporary approval
of labels that do not comply with this Ruling. These labels must
be identical to approved labels that have been returned for cancellation.
ATF may grant temporary COLA approval for these labels for a period
of time ending not later than September 30, 2002.
ATF Ruling 96-1 is amplified.
ATF issued Ruling 96-1, ATF Q.B. 1996-1, 49, to clarify the application
of the malt beverage definition in the FAA Act to flavored malt
beverages. This Ruling was intended to limit the alcohol contribution
derived from the use of alcohol flavoring materials and to specify
the information that is required to be submitted on a statement
of process for a flavored malt beverage under 27 CFR Section 25.67.
Prior to issuing Ruling 96-1, ATF determined that some brewers
producing flavored malt beverages were using alcohol flavoring
materials to such an extent that, in some cases, a substantial
portion of the alcohol content in the flavored malt beverage was
derived from the flavoring material rather than from the fermented
malt base. As a result of this practice, ATF issued Ruling 96-1
to place a limit on the use of alcohol flavoring materials in
malt beverages over 6 percent alcohol by volume and to specify
exact requirements for submission of statements of process for
This Ruling reminds brewers and importers of the provisions of
ATF Ruling 96-1, and stresses the importance of compliance with
the findings in that Ruling. Consequently, ATF is restating and
amplifying ATF Ruling 96-1:
- A malt beverage under the FAA Act may only contain alcohol
which is the result of alcohol fermentation at the brewery.
Pending enforcement of this requirement, ATF announced that
it might engage in further rulemaking.
- Pending the completion of rulemaking, ATF will allow the continued
production or importation of fermented beverages that contain
alcohol not solely the result of fermentation at the brewery
if: (1) they are flavored malt beverages that contain not more
than 6 percent alcohol by volume in the finished product; or
(2) they are flavored malt beverages that contain in excess
of 6 percent alcohol by volume in the finished product and derive
not more than 1.5 percent of their overall alcohol content from
alcohol added through the use of alcohol flavoring materials.
Pending the completion of rulemaking, ATF will continue to
approve statements of process and applications for certificates
of label approval meeting these criteria. Statements of process
submitted under Section 25.67 for flavored malt beverages that
include the use of any alcohol flavoring materials shall explicitly
- The volume and alcohol content of the malt beverage base.
- The maximum volumes of such alcohol flavoring materials
proposed to be used.
- The alcohol strength of such flavoring materials.
- The overall alcohol contribution to the finished product
provided by the addition of any alcohol flavoring materials.
- The final volume and alcohol content of the finished
ATF reminds brewers and importers of the requirements of Ruling
96-1 with respect to the information required on statements of
process for flavored malt beverages. ATF receives many proposed
statements of process that do not comply with these requirements.
In the future, ATF will not approve any statements of process
for flavored malt beverages made with alcohol flavoring materials
unless they are prepared in compliance with Ruling 96-1.
ATF announces it is studying the production and labeling
of flavored malt beverages made with alcohol flavoring materials.
ATF is engaging in a thorough study of the production, labeling,
advertising, standard of identity, and taxation of flavored malt
beverages that contain alcohol flavoring materials. The findings
of this study could result in ATF proposing changes in the methods
by which these products are produced, labeled, advertised, or taxed
under the FAA Act and Internal Revenue Code. Any findings that ATF
believes should be implemented will be proposed through a notice
of proposed rulemaking, and will be subject to the full rulemaking
process under the Administrative Procedures Act. There is no time
period set for the completion of this study.
Who should I contact with questions?
Inquiries about this circular should be addressed to: Alcohol Labeling
and Formulation Division, Office of Alcohol and Tobacco, Bureau
of Alcohol, Tobacco and Firearms, 650 Massachusetts Avenue, NW.,
Washington, DC 20226.
Bradley A. Buckles,