***This post was originally posted on BreweryLaw.com, the nation’s first, and maybe the only, blog devoted to beer law! The blog is published by Reiser Legal, LLC, a Seattle, Washington law office. Reiser Legal’s Douglas Reiser is our regular legal columnist.***
The Tax and Trade Bureau (TTB) and the US Department of Agriculture (USDA) released a new Memorandum of Understanding pertaining to the use of the term “Organic” on alcoholic beverage labels. Of course, this news is of utter importance to brewers, especially those in the NW who have focused on brewing organically.
We learned about this Memorandum on Davis Wright & Tremaine’s Hospitality Law Blog by attorney Kelly Luzania. According to Luzania, the TTB will continue to review all labels and advertising for alcoholic beverages, subject to a caveat. Any labels or advertising making claims that the product is “100% organic”, “organic” or “made with organic (ingredients)” must be reviewed with regard to USDA National Organic Program regulations.
From Kelly’s article:
COLAs for wine, beer and spirit labels that contain “organic” claims will now be approved by the TTB as “approved subject to compliance with the Organic Foods Production Act of 1990 and the National Organic Program regulations[.]” If they do not comply with USDA organic laws, the labels will be rejected and the TTB will let applicants know what changes need to be made to make the label compliant. An applicant may only appeal this rejection with the USDA’s Agricultural Marketing Service.
The Memorandum provides an interesting look at two of the alcoholic beverage industry’s regulatory bodies working together to reduce confusion and maintain consistency in COLA reviews.
Beer labeling, we seldom think about it. We grab a beer, read the label for ingredients and down the hatch. Why else is there a label, but to tell consumers what your wondrous tonic is comprised of? You mean there is a marketing element?
Well of course there is a marketing element; there is a reason your beer label includes flashy vocabulary and catchy imagery. The brewer is selling beer – a product (we know its more than that, but for the sake of argument…)
There is a whole mess of regulation that prohibits your favorite brew from donning a more sexy label. Beer labeling laws restrict brewers from utilizing images and names that might raise more interest in their grog. This has to be the reason that you do not see gory, sexual, or off the cuff labeling – someone is saying no.
There is a lot of information on the web about beer labeling regulation. A great starter article by Andy Pasquesi, illustrates the laundry list of “no-nos” in the beer labeling world. A sample of the bad and ugly:
On the container or other packaging (for example, the cardboard box surrounding a case of beer cans or the cardboard holder for a six-pack of beer bottles), you are aren’t allowed to:
• Make false statements.
• Say anything bad about a competitor’s product.
• Put obscene or tasteless writing, images or device (for example, pop-ups or microphones).
• Mislead consumers with manipulated information from tests, standards or other analytical data.
• Use a name that suggests your product is endorsed or supervised by a person or organization when it isn’t. The exception to this is if you’ve sold the product under that name for five years or more without incident.
• Make misleading guarantees. You can offer money-back guarantees.
• Use a name that suggests your product is made from distilled spirits. However, existing distilled spirits brands can co-brand themselves with beers, as long as it’s clear from the label that “Johnny Walker Summer Ale” is a malt beverage and not a distilled spirit. This goes for cocktails as well. (You can sell a mudslide-flavored beer, but it must be clear that there is no vodka in the beverage.)
• Use a design or image that simulates a government stamp, meaning no presidential seals, armed services insignias, fire or police emblems, currency graphics or state flags.
• Claim or imply the health benefits of your product.
• Direct consumers to a third-party for information about the health benefits of your product or ingredients therein.
Yuck. You mean to tell us that we need to figure what is “obscene and tasteless” before we print 1000 bottle labels? Statutory ambiguity in the regulations leads to too much discretion for Alcohol and Tobacco Tax and Trade Bureau (TTB) officials, the body entrusted with the power to shut down product packaging and labeling.
You can read more about the TTB powers, rights and regulations on their website’s “labeling” page. For all you nerds out there, the beer labeling laws are located at 27 CFR Part 7, Labeling and Advertising of Malt Beverages and 27 CFR Part 16, Alcoholic Beverage Health Warning Statement. Exhilarating reading.
So who is the rouge challenger of beer labeling? I think that no one goes above and beyond the call of duty to fight restriction better than Scotland’s BrewDog. BrewDog has again and again toyed with regulators and private organizations formed to restrict alcohol marketing devices.
The Portman Group is one such private organization. Here is their mission statement:
“Just as people should show personal responsibility when drinking alcohol, companies must demonstrate responsibility in the way that they conduct their business.
We work with drinks producers to raise standards of alcohol marketing. We challenge companies to be socially responsible and inspire them to achieve best practice.”
Well then, what say you Portman Group about BrewDog’s recent super heavy alcohol releases? They didn’t like it. Shocker.
BrewDog’s release of the 18.2% brew Tokyo, included labeling which implies that life sometimes needs excess – this beer is for those times. Apparently that struck a cord with Portman, who released the following statement:
Portman Group Chief Executive David Poley said: “We don’t regulate the alcohol content of drinks but we do control how they are promoted. It’s obviously unwise for any company to urge consumers to drink to excess.
“We won’t allow any irresponsible marketing whether it’s for a big brand or a niche product. That’s why we’re taking action to restrict future sales of this beer.”
BrewDog’s response……target major producers who push 24 packs of Keystone Light, Natural Light and plethora of “light” products, the sole intention of which is to drink in heavy quantity in party atmospheres.
“They should perhaps concentrate their efforts on targeting the brands selling 24 cans of lager for £7 – where literal excess is contributing to Scotland’s problem with alcohol.”
So, the battle comes down to whether a restriction unfairly restricts craft brewers who brew at a high level of alcohol, but less volume, versus those massive producers who keep the ABV low, but package in massive volume. Remember 24 cans of 12 oz is 288 oz. The price of a BrewDog Tokyo’s 22 oz bottle is roughly 18.00, whereas a case of Keystone Light is roughly 16.00. Hint: there is much more alcohol in that case of Keystone.
You can take many different angles on this argument, but the result should be that beer is a changing industry that requires a new approach to regulation. No longer is the beer market wholly comprised of sub-5% malt beverages. The craft industry has made beer climb towards the ranks of spirits. Beer is no longer only consumed in heavy quantities, but can also be enjoyed one bottle at a time, over a lengthy period of time.
Luckily for you beer aficionados who do not see a problem with beer marketing, there is BrewDog. BrewDog seemingly fears no backlash, poking fun at regulators by producing, back to back, Nanny State (a 1.1% beer) and Tactical Nuclear Penguin (at the time the highest ABV on the planet at 32%). Take that regulators.
Even more recently, BrewDog spawned a battle of the heavy beer with German brewer Schorschbraeu, who did back to back releases of a 32% brew and a 40% brew named “Schorschbock.”
Not to be outdone, BrewDog immediately released “Sink the Bismarck,” a brew weighing in at 41%.
Now, we love beer, but has this battle brought out the worst in beer? Is it still about the complexity, flavor and ingredients – or merely the alcohol?
Schorschbraeu Managing Director and brew master Georg Tscheuschner told the media, after BrewDog’s recent release:
“We’ll just brew another, stronger one,” he said. “Forty-five percent shouldn’t be a problem and we have beer enthusiasts waiting for it.”
We just hope they stay on the shelf. Bad or good, the beer is these brewer’s income. Regulators who may aim to shut it down, could easily hit these brewers right in the pocket.
Is it time for a new discussion of beer labeling laws? We think so. How about you? Leave comments below.