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TTB Ruling 2020-1

September 28, 2020 Number: 2020-1

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Expanded Tolerances for Voluntary Calorie Statements in the Labeling and Advertising of Wine, Distilled Spirits, and Malt Beverages

TTB is expanding the tolerances for voluntary calorie statements on labels and in advertisements for wine, distilled spirits, and malt beverages. This action will result in calorie tolerances that are more consistent with the food labeling regulations of the U.S. Food and Drug Administration (FDA), and may facilitate the broader use of voluntary nutrient content statements in the labeling and advertising of alcohol beverages. TTB is also clarifying that industry members are not required to obtain laboratory analyses of each batch to substantiate voluntary nutrient content statements on labels or in advertisements for wines, distilled spirits, or malt beverages. TTB is updating these policies in a new guidance document, TTB Procedure 2020-1, which supersedes TTB Procedure 2004-1 in its entirety. This ruling modifies TTB Ruling 2013-2 only to the extent that the 2013 ruling specifically refers to tolerance ranges for nutrient content statements as set forth in TTB Procedure 2004-1. The other elements of TTB Ruling 2013-2 remain in effect.  This ruling does not require any changes to approved labels, but instead allows greater flexibility for industry members who choose to use voluntary nutrient content statements on labels or in advertisements.

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Background

Law and Regulations The Federal Alcohol Administration Act (FAA Act) provides for regulation of the labeling and advertising of wine, distilled spirits, and malt beverages in 27 U.S.C. 205(e) and 205(f).  These sections give the Secretary of the Treasury the authority to issue regulations intended to prevent deception of the consumer, to provide the consumer with adequate information as to the identity and quality of the product, and to prohibit false or misleading statements. Additionally, the law provides the Secretary with the authority to prohibit, irrespective of falsity, statements relating to age, manufacturing processes, analyses, guarantees, and scientific or irrelevant matters that are likely to mislead the consumer. The FAA Act generally requires bottlers and importers to obtain a certificate of label approval in accordance with regulations prescribed by the Secretary for wine, distilled spirits, or malt beverages before bottling the alcohol beverages, or removing bottled alcohol beverages from customs custody for consumption, for introduction in interstate or foreign commerce.  In the case of malt beverages, the labeling and advertising provisions of the FAA Act apply only if the laws of the State into which the malt beverages are to be shipped impose similar requirements.  The implementing regulations, which appear in 27 CFR parts 4, 5, and 7, also contain more specific prohibited practices with respect to the labeling and advertising of alcohol beverages.  The regulations prohibit the use of labeling or advertising statements that are false or untrue in any particular.  The regulations also prohibit, irrespective of falsity, statements that tend to create a misleading impression directly; by ambiguity, omission, or inference; or by the addition of irrelevant, scientific, or technical matter.  See27 CFR 4.39(a)(1), 4.64(a)(1), 5.42(a)(1), 5.65(a)(1), 7.29(a)(1), and 7.54(a)(1). TTB administers the FAA Act pursuant to section 1111(d) of the Homeland Security Act of 2002, codified at 6 U.S.C. 531(d).  The Secretary of the Treasury has delegated to the TTB Administrator various functions and duties in the administration and enforcement of this law through Treasury Department Order 120–01.  TTB and its predecessor agencies have utilized rulings to express interpretations of the regulations implementing the labeling and advertising provisions of the FAA Act. Under the above authority, TTB issued TTB Ruling 2004–1, “Caloric and Carbohydrate Representations in the Labeling and Advertising of Wine, Distilled Spirits, and Malt Beverages” (April 7, 2004).  TTB Ruling 2004-1 clarified TTB’s position with respect to statements about calorie and carbohydrate content on labels and in advertisements of wine, distilled spirits, and malt beverages.  It is TTB’s position that nutrient content statements are permitted by current regulations, as long as they are truthful and do not mislead consumers. The policy set forth in TTB Ruling 2004–1 provided, in part, that calorie or carbohydrate representations on product labels or in advertisements would be considered misleading unless they include a statement of average analysis that lists the number of calories and the number of grams of carbohydrates, protein, and fat contained in the product based on a single serving.  The ruling was followed by TTB Procedure 2004-1, “Testing of calorie, fat, carbohydrate, and protein content of alcohol beverages; Acceptable tolerance levels” (July 12, 2004), which set forth the methods that TTB uses to test the calorie, carbohydrate, protein, and fat content of alcohol beverages to verify labeling and advertising claims.  This procedure also addresses tolerance ranges with regard to labeling and advertising statements of calorie, carbohydrate, protein, and fat content. The intent of the tolerances is to provide for normal production and analytical variables while continuing to ensure that the labeling does not mislead the consumer. In TTB Ruling 2013-2, “Voluntary Nutrient Content Statements in the Labeling and Advertising of Wines, Distilled Spirits, and Malt Beverages” (May 28, 2013), TTB allowed the use of optional “Serving Facts” statements on labels and in advertisements.  The ruling was intended to allow industry members to use the Serving Facts statement as a way to provide truthful, accurate, and specific information to consumers about the nutrient content of their products on a per serving basis.  A Serving Facts statement, as authorized by the ruling, has the same elements as a statement of average analysis (as authorized in TTB Ruling 2004-1), in that both statements include the number of calories and the number of grams of carbohydrates, protein, and fat contained in the product based on a single serving.  The difference is that a Serving Facts statement includes a title, a serving size that more accurately reflects how the product is typically consumed, information about the number of servings per container, a specified format, and the option of providing information about alcohol content. TTB Ruling 2013-2 also held that where statements or representations of calorie or carbohydrate content are made on labels or in advertisements, they must be truthful, accurate, specific, and non-misleading.  TTB set forth the position that such statements are misleading within the meaning of the applicable regulations when not accompanied by either a statement of average analysis in accordance with TTB Ruling 2004–1 or a Serving Facts statement in compliance with TTB Ruling 2013-2.  The other elements of TTB Ruling 2004–1 continue in force, and statements of average analysis that comply with the requirements of TTB Ruling 2004-1 may continue to be used on labels and in advertisements.  Finally, TTB Ruling 2013-2 stated that the tolerances set forth in TTB Procedure 2004-1 would apply to Serving Facts statements. In Frequently Asked Questions issued after TTB Ruling 2013-2, TTB provided further guidance on acceptable formats for “Serving Facts” statements.  Subsequently, TTB also issued Frequently Asked Questions that permitted the use of an optional “Alcohol Facts” statement for industry members who wish to provide per-serving alcohol content information without including any nutrient content statements or claims.  These FAQs are not superseded by this ruling.

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Tolerances and Other Laboratory Procedures

TTB Procedure 2004-1 set forth the methods that TTB uses to test the calorie, carbohydrate, protein, and fat content of wine, distilled spirits, and malt beverages in order to verify labeling and advertising claims.  This procedure also addressed tolerance ranges with regard to statements of calorie, carbohydrate, protein, and fat content.  TTB Procedure 2004-1 applied to statements of average analysis, as well as “Serving Facts” statements. Tolerances for Calories TTB Procedure 2004-1 provided that a statement of calories on labels or in advertisements is acceptable as long as the actual caloric content, as determined by TTB analysis, is within a range of plus 5 or minus 10 calories of the labeled or advertised amount.  For example, a label showing 100 calories is acceptable if TTB analysis of the product shows a caloric content of no less than 90 and no more than 105 calories. In response to a request from industry members, TTB has reviewed its calorie tolerance and considered whether TTB should continue to maintain a tolerance that is narrower than the FDA tolerance for labeled calorie statements.  The FDA food labeling regulations (see 21 CFR 101.9(g)) provide, in pertinent part, that subject to certain exceptions, a food with a label declaration of calories is deemed to be misbranded if the calorie content is greater than 20 percent in excess of the value stated on the label.  The FDA regulations also provide that reasonable deficiencies of calories under labeled amounts are acceptable within current good manufacturing practice.  Thus, for example, a labeled value of 100 calories per serving would be an acceptable understatement of the actual calorie level under current TTB policy if the actual value is no more than 105 calories, while the FDA tolerance would allow the actual value to be no more than 120 calories. Industry members have suggested that broader tolerances for calorie content would facilitate the increased use of voluntary nutrient content statements in the labeling and advertising of alcohol beverages, both by allowing for expanded variations in calorie content between batches of a product and by facilitating the use of databases and “typical value” charts in lieu of laboratory analysis as a basis for nutrient content statements.  They have also noted that restaurants may rely on alcohol beverage producers for nutrient content information to comply with FDA menu labeling requirements, and that the inclusion of statements of average analysis or Serving Facts statements on labels provides restaurants with readily available nutrient content information to use for menu labeling purposes. The pertinent FDA regulations on menu labeling provide that a covered establishment must have a “reasonable basis” for its nutrient declarations, and that nutrient values may be determined by using nutrient databases, cookbooks, laboratory analyses, or other reasonable means, including the use of Nutrition Facts statements on labels on packaged foods (see 21 CFR 101.11(c)).  The FDA’s final rule on menu labeling specifically stated that statements of average analysis or other nutrient content disclosures on alcohol beverage labels in accordance with TTB guidance “could be a reasonable basis for a covered establishment’s corresponding nutrient content disclosures.”  See 79 FR 71156, 71188 (2014). After reviewing its procedure, TTB has decided to expand the current tolerances for calories, which will achieve greater consistency with FDA tolerances for calorie statements on package labels and facilitate industry members’ ability to provide truthful, accurate, and non-misleading voluntary nutrient content information to consumers.  Please note that TTB tolerances and policies will still differ in some ways from FDA package labeling regulations, as well as FDA’s menu labeling requirements, due to differences in statutory and regulatory authorities. Accordingly, we are issuing TTB Procedure 2020-1, which provides that a calorie statement on a label or in an advertisement will be acceptable as long as the calorie content, as determined by TTB analysis, is within a reasonable range below the labeled or advertised amount (within good manufacturing practice limitations) but may not be more than 20 percent above the labeled or advertised amount.  For example, a labeling or advertising statement of 100 calories per serving will be considered an acceptable understatement if TTB analysis of the product shows a calorie content of not more than 120 calories per serving. Industry members have also asked if they may express calories to the nearest 10-calorie increment for per-serving amounts above 50 calories (and to the nearest 5-calorie increment for per-serving amounts up to and including 50 calories) to be more consistent with FDA requirements.  The revised procedure provides that industry members may, but are not required to, round the calorie statement in this way, as long as the labeled or advertised calorie content falls within the tolerances set forth in that document.  Thus, for example, regardless of whether the calories per serving for a particular product are expressed as 98 calories or 100 calories, the labeled or advertised calorie statement must be within the prescribed tolerance for the value that is expressed.  TTB will continue to allow amounts less than 5 calories to be expressed as zero. This ruling does not change the tolerances for other nutrients.  Under TTB Procedure 2004-1, TTB already allowed a 20 percent tolerance for understatements of carbohydrate and fat content, and a 20 percent tolerance for overstatements of protein content.  Overstatements of carbohydrate and fat content, and understatements of protein content, are acceptable as long as the actual content, as determined by TTB analysis, is within a reasonable range of the labeled or advertised amount (within good manufacturing practice limitations).  TTB Procedure 2020-1 will not change those tolerances.  Similarly, this ruling does not affect the regulatory tolerances for alcohol content statements, expressed as a percentage of alcohol by volume, which are set forth in the regulations at 27 CFR 4.36, 5.37 and 7.71. This ruling modifies TTB Ruling 2013-2 only to the extent that the 2013 ruling refers to the tolerances set forth in TTB Procedure 2004-1, which is now superseded.  Current TTB policies, including expanded tolerances for calorie statements consistent with this ruling, are now set forth in TTB Procedure 2020-1. This ruling will not require any changes to approved labels, but instead allows greater flexibility for industry members who choose to use voluntary nutrient content statements on labels or in advertisements. Compliance with Tolerances and Use of Databases TTB has been asked about the use by industry members of databases or typical value charts (rather than laboratory analysis) as a basis for nutrient content statements in the labeling and advertising of alcohol beverages.  Although industry members may conduct laboratory analyses to determine nutrient content, they may also choose to rely on an appropriate combination of analyses and other sources to accurately label their products, including databases and typical value charts.  TTB’s regulations do not require industry members to analyze each batch of a product prior to making voluntary nutrient content statements.  Regardless of what approach is taken by industry members, it is their responsibility to ensure that the labeling and advertising statements are reliable and accurate, and fall within the tolerances set forth in TTB guidance documents.  TTB will determine compliance with the tolerances as described in Procedure 2020-1.

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TTB Finding:

Held, A calorie statement on a label or in an advertisement is within acceptable tolerance levels as long as the actual calorie content, as determined by TTB analysis, is within a reasonable range below the labeled or advertised amount (within good manufacturing practice limitations) but may not be more than 20 percent above the labeled or advertised amount.  For example, a label or advertisement showing 100 calories per serving will be considered an acceptable understatement if TTB analysis of the product shows a calorie content of not more than 120 calories per serving. Held further, Calorie statements on labels and in advertisements may, but are not required to, be rounded to the nearest 10-calorie increment (for per-serving amounts above 50 calories) or the nearest 5-calorie increment (for per-serving amounts up to 50 calories), as long as the labeled or advertised calorie content falls within the tolerances described in this ruling.  Thus, for example, regardless of whether the calories per serving for a particular product are expressed as 98 calories or 100 calories, the labeled or advertised calorie statement must be within the prescribed tolerance for the value that is expressed.  It continues to be TTB’s policy that amounts less than 5 calories may be expressed as zero. Held further, This ruling modifies TTB Ruling 2013-2 only to the extent that the 2013 ruling refers to the tolerances set forth in TTB Procedure 2004-1, which has now been superseded.  Current TTB policies, including expanded tolerances for calorie statements consistent with this ruling, are now set forth in Procedure 2020-1. Held further, Consistent with current policy, industry members are not required to obtain laboratory analyses of each batch to substantiate voluntary nutrient content statements on labels or in advertisements for wine, distilled spirits, or malt beverages.  To the extent that  industry members choose to rely on databases or “typical value” charts to determine nutrient content values for the labeling and advertising of alcohol beverages, it is their responsibility to ensure that the labeling and advertisement statements will be reliable and accurate, within the tolerances set forth in TTB guidance documents.  TTB will continue to publish the methods it uses to verify labeling and advertising claims for products in the marketplace. Date signed: September 28, 2020 Mary G. Ryan Administrator Alcohol and Tobacco Tax and Trade Bureau