Mandatory E-Verify Passes House Committee

By Jennifer Montgomery

This week, the House Judiciary Committee passed the Legal Workforce Act (HR 2164), introduced by House Judiciary Chairman Lamar Smith (R-TX). The bill would mandate the use of E-Verify for all US employers. Administered by the Department of Homeland Security, E-Verify is an Internet-based system used by businesses to determine the eligibility of their employees to work in US. The Agriculture Coalition for Immigration Reform (ACIR), including WineAmerica, has repeatedly expressed its concerns to Congress over the inaccuracies of the E-Verify program, as well as concerns about passing this legislation without a provision to address the agricultural labor shortage.   

During the hearing, Rep. Dan Lungren (R-CA), co-chair of the Congressional Wine Caucus, offered an agriculture labor amendment, but it was struck down by the committee. The legislation contained a three-year waiver for the agriculture industry, but it was stripped from the bill in this week’s committee action as well. This means that HR 2164 will go to the floor of the House of Representatives with no provisions addressing the unique labor needs of agriculture. This is a development that will make the bill more difficult to pass in the House and more unlikely to pass the Senate.

Additionally, Chairman Smith plans to hold a hearing on a separate agriculture labor bill, the American Specialty Agriculture Act. Its prospects for passage are not known at this point.

We will keep you advised as the process moves forward.

TTB Issues New Guidance for "Personalized Labels"

By Michael Kaiser

The TTB has issued updated guidelines for the approval of "personalized labels".  In the past the TTB had allowed "templates" to be submitted for personalized labels.  Meaning, the required information for the wine would be on the label, but the artwork could change. This allowed a winery to submit one label for many events, rather than having to submit a separate label for weddings, birthday, etc.  A few years ago, the TTB started requiring new COLA submittals for any possible change in artwork.  That meant that a winery would need to submit COLAs for any specific event they might do.  This lead to increased work for wineries as well as the TTB.

Due to the dramatically increased turnaround times for COLA approvals, the TTB has now gone back allowing for a "template" for personalized labels.  The standard is as follows:

In addition, the application must contain in item 19 of the paper application, or in the special wording section found in Part II/Step 2 in COLAs Online, a description of the specific personalized information that may change. For example, the application may state: “The graphics, salutations, dates, and artwork presented on this label may be changed to personalize this label.” For bottles etched with personalized information, the application must also indicate in item 19 of the paper application or in the special wording section found in Part II/Step 2 in COLAs Online that personalized information will be etched on the bottle. The label submitted with the COLA may contain a “blank” area where customized artwork or information will appear when the actual labels are printed.

Additionally all personalized labels will be approved with this qualification:

The approval of this COLA covers this label and any additions, deletions or changes in graphics, salutations,  congratulatory dates and names, and artwork to personalize the label as indicated on the application. This approval to change the personalizing information does not permit the addition of any information that discusses either the alcohol beverage or characteristics of the alcohol beverage or that is inconsistent with or in violation of the provisions of 27 CFR parts 4, 5, 7or 16, as applicable, or any other applicable provision of law or regulations.

This is a step in the right direction for speeding up COLA turnaround times and WineAmerica suggested to TTB on numerous occasions to go back to template approvals for personalized labels.  We applaud TTB for taking this step.

If you have any questions please feel free to contact us and if you wish to read the entire release from TTB it can be found here:

Public Guidance for Personalized Labels

Make Sure Your Advertising is TTB Compliant

By Michael Kaiser

The TTB doesn't merely collect your taxes and approved your labels, they also regulate advertising for alcoholic beverages.  Now your advertisements do not need to be approved by the TTB, but they must be complaint with the regulations and it is up to the winery or "responsible advertiser" to make sure the advertisements are complaint.

Let's examine what is considered by TTB to be an advertisement.  According to TTB: 

The regulations define the term"advertisement" as any written or verbal statement, illustration, or depiction which is in, or calculated to induce sales in, interstate or foreign commerce, or is disseminated by mail.  Examples include ads in newspapers or magazines, trade booklets, menus, wine cards, leaflets, circulars, mailers, book inserts, catalogs, promotional materials, or sales pamphlets.  The definition includes any written, printed, graphic, or other material accompanying the container; markings on cases, billboards, signs, or other outdoor display; and broadcasts made via radio, television, or in any other media.  Though not specifically listed, this definition includes website and other Internet-based advertising.

That last sentence is very important.  The regulations for labeling and advertising of wine have not been updated for quite some time, and they were originally written before the Internet became what it is today.  So the TTB places Internet advertising under the "any other media" umbrella.  The TTB considers Facebook and other social media sites to be advertising. 

Required Information
There is some required information for advertising material.  They are listed in the regulations (27 CFR Part 4.62) as the following:
 

• Responsible advertiser. The advertisement shall state the name and address of the permittee responsible for its publication or broadcast. Street number and name may be omitted in the address.
• Class, type, and distinctive designation. The advertisement shall contain a conspicuous statement of the class, type, or distinctive designation to which the product belongs, corresponding with the statement of class, type, or distinctive designation which is required to appear on the label of the product.
• Exception. (1) If an advertisement refers to a general wine line or all of the wine products of one company, whether by the company name or by the brand name common to all the wine in the line, the only mandatory information necessary is the name and address of the responsible advertiser. This exception does not apply where only one type of wine is marketed under the specific brand name advertised.  (2) On consumer specialty items, the only information necessary is the company name or brand name of the product.

Prohibited Information
As with wine label, there are prohibited practices for wine advertising.  The regulations (27 CFR Part 4.64) list them as the following.

• Any statement that is false or untrue in any material particular, 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.
• Any statement that is disparaging of a competitor's products.
• Any statement, design, device, or representation which is obscene or indecent.
• Any statement, design, device, or representation of or relating to analyses, standards, or tests, irrespective of falsity, which the appropriate TTB officer finds to be likely to mislead the consumer.
• Any statement, design, device, or representation of or relating to any guarantee, irrespective of falsity, which the appropriate TTB officer finds to be likely to mislead the consumer. Money-back guarantees are not prohibited.
• Any statement that the wine is produced, blended, bottled, packed, or sold under, or in accordance with, any municipal, State, or Federal Government authorization, law, or regulations; and if a municipal, State, or Federal permit number is stated, the permit number shall not be accompanied by any additional statement relating thereto.
• Any statement of bonded winecellar and bonded winery numbers unless stated in direct conjunction with the name and address of the person operating such winery or storeroom. Statement of bonded winecellar and bonded winery numbers may be made in the following form: “Bonded Winecellar No. __,” “Bonded Winery No. __,” “B. W. C. No. __,” “B. W. No. __.” No additional reference thereto shall be made, nor shall any use be made of such statement that may convey the impression that the wine has been made or matured under Government supervision or in accordance with Government specifications or standards.
• Any statement, design, device, or representation which relates to alcohol content or which tends to create the impression that a wine contains distilled spirits, is comparable to a distilled spirit, or has intoxicating qualities.
• Any word in the brand name or class and type designation which is the name of a distilled spirits product or which simulates, imitates, or creates the impression that the wine so labeled is, or is similar to, any product customarily made with a distilled spirits base.

Additionally, wine advertising may not include information that is deemed be inconsistent with labeling. Any label depicted on a bottle in an advertisement shall be a reproduction of an approved label.
Further restricted items on wine advertisements are:

• Statement of age. No statement of age or representation relative to age (including words or devices in any brand name or mark) shall be made, except (1) for vintage wine, in accordance with the provisions of §4.27; (2) references in accordance with §4.38(f); or (3) use of the word “old” as part of a brand name.
• Statement of bottling dates. The statement of any bottling date shall not be deemed to be a representation relative to age, if such statement appears without undue emphasis in the following form: “Bottled in __” (inserting the year in which the wine was bottled).
• Statement of miscellaneous dates. No date, except with respect to statement of vintage year and bottling date, shall be stated unless, in addition thereto, and in direct conjunction therewith, in the same size and kind of printing there shall be stated an explanation of the significance of such date: Provided, That if any date refers to the date of establishment of any business, such date shall be stated without undue emphasis and in direct conjunction with the name of the person to whom it refers.
• Flags, seals, coats of arms, crests, and other insignia. No advertisement shall contain any statement, design, device, or pictorial representation of or relating to, or capable of being construed as relating to, the armed forces of the United States, or of the American flag, or of any emblem, seal, insignia, or decoration associated with such flag or armed forces; nor shall any advertisement contain any statement, device, design, or pictorial representation of or concerning any flag, seal, coat of arms, crest, or other insignia likely to mislead the consumer to believe that the product has been endorsed, made, or used by, or produced for, or under the supervision of, or in accordance with the specifications of the government, organization, family, or individual with whom such flag, seal, coat of arms, crests, or insignia is associated.
• Statements indicative of origin. No statement, design, device, or representation which tends to create the impression that the wine originated in a particular place or region, shall appear in any advertisement unless the label of the advertised product bears an appellation of origin, and such appellation of origin appears in the advertisement in direct conjunction with the class and type designation.
• Use of the word “importer” or similar words. The word importer or similar words shall not appear in advertisements of domestic wine except as part of the bona fide name of the permittee by or for whom, or of a retailer for whom, such wine is bottled, packed or distributed: Provided, That in all cases where such words are used as part of such name, there shall be stated the words “Product of the United States” or similar words to negate any impression that the product is imported, and such negating statements shall appear in the same size and kind of printing as such name. 
• Confusion of brands. Two or more different brands or lots of wine shall not be advertised in one advertisement (or in two or more advertisements in one issue of a periodical or newspaper, or in one piece of other written, printed, or graphic matter) if the advertisement tends to create the impression that representations made as to one brand or lot apply to the other or others, and if as to such latter the representations contravene any provision of §§4.60 through 4.64 or are in any respect untrue.
• Deceptive advertising techniques. Subliminal or similar techniques are prohibited. “Subliminal or similar techniques,” as used in this part, refers to any device or technique that is used to convey, or attempts to convey, a message to a person by means of images or sounds of a very brief nature that cannot be perceived at a normal level of awareness.

Health-related statements:    

• Health-related statement means any statement related to health and includes statements of a curative or therapeutic nature that, expressly or by implication, suggest a relationship between the consumption of alcohol, wine, or any substance found within the wine, and health benefits or effects on health. The term includes both specific health claims and general references to alleged health benefits or effects on health associated with the consumption of alcohol, wine, or any substance found within the wine, as well as health-related directional statements. The term also includes statements and claims that imply that a physical or psychological sensation results from consuming the wine, as well as statements and claims of nutritional value ( e.g., statements of vitamin content). Statements concerning caloric, carbohydrate, protein, and fat content do not constitute nutritional claims about the product.  
• Specific health claim is a type of health-related statement that, expressly or by implication, characterizes the relationship of the wine, alcohol, or any substance found within the wine, to a disease or health-related condition. Implied specific health claims include statements, symbols, vignettes, or other forms of communication that suggest, within the context in which they are presented, that a relationship exists between wine, alcohol, or any substance found within the wine, and a disease or health-related condition. 
• Health-related directional statement is a type of health-related statement that directs or refers consumers to a third party or other source for information regarding the effects on health of wine or alcohol consumption.

Rules for advertising

• Health-related statements. In general, advertisements may not contain any health-related statement that is untrue in any particular or tends to create a misleading impression as to the effects on health of alcohol consumption. TTB will evaluate such statements on a case-by-case basis and may require as part of the health-related statement a disclaimer or some other qualifying statement to dispel any misleading impression conveyed by the health-related statement. Such disclaimer or other qualifying statement must appear as prominent as the health-related statement.
• Specific health claims. A specific health claim will not be considered misleading if it is truthful and adequately substantiated by scientific or medical evidence; sufficiently detailed and qualified with respect to the categories of individuals to whom the claim applies; adequately discloses the health risks associated with both moderate and heavier levels of alcohol consumption; and outlines the categories of individuals for whom any levels of alcohol consumption may cause health risks. This information must appear as part of the specific health claim and in a manner as prominent as the specific health claim.
• Health-related directional statements. A statement that directs consumers to a third party or other source for information regarding the effects on health of wine or alcohol consumption is presumed misleading unless it: Directs consumers in a neutral or other non-misleading manner to a third party or other source for balanced information regarding the effects on health of wine or alcohol consumption; and includes as part of the health-related directional statement, and in a manner as prominent as the health-related directional statement, the following disclaimer: “This statement should not encourage you to drink or increase your alcohol consumption for health reasons;” or includes as part of the health-related directional statement, and in a manner as prominent as the health-related directional statement, some other qualifying statement that the appropriate TTB officer finds is sufficient to dispel any misleading impression conveyed by the health-related directional statement.

It is clear that the TTB has an extensive list of prohibited practices for advertising of wine (and other alcoholic beverages) but it is consistent with the prohibited practices on wine labels.  If you have any questions about anything listed in this blog post please let us know and we will clarify them further for you.  It is essential for wineries to be compliant with TTB advertising regulations.