production of a spirit. TTB does, for example, permit spirit labels to truthfully describe products other than whiskey, rum, brandy and tequila as “rested in” or “stored in” oak barrels. TTB also permits the use of barrel imagery on the labels of such products. Although every state follows TTB labeling rules most of the time, states have at least the theoretical ability to impose different labeling rules than those established by TTB. While few if any states have done so in the case of barrel aging statements for distilled spirits, the growth of craft distilling might prompt more state interest in the subject, just as the growth of the California wine industry led to specific California rules on the labeling and advertising of wine.
..... There are, no doubt, examples of labels making barrel claims not in compliance with the regulations and policies outlined above. Under TTB’s Certificate of Label Approval (COLA) system, TTB label-review specialists must review thousands of labels per year, and a combination of errors, shifting policy and differences of opinions make complete consistency impossible. Fortunately for distillers, once TTB approves a specific label, Due Process protections make it hard for TTB to stop the use of that label, although an earlier approval does not automatically entitle a distiller to approval of the same label or claim in the future. Finally, a number of TTB’s regulations appear out-of-date, overly complex, or even outright unconstitutional. For example, under modern First Amendment free speech principles, the government would be very hard pressed to justify the suppression of truthful statements describing, say, a gin, as “aged two years in oak barrels.” To take another example, the regulations on the form and format of age statements on whiskey labels are overcomplicated. They reflect a bygone era when whiskey was the American spirit and most consumers understood fine distinctions such as those between “straight” and “blended” product. Unfortunately, given the many other resource commitments faced by TTB in an era of shrinking budgets, a reform of the spirits labeling regulations does not seem likely in the near future. Until winds of reform blow through this obscure corner of American law, distillers should familiarize themselves with the laws, regulations and policies governing the use of barrels in producing distilled spirits. Knowing the rules will help maximize the marketing benefits of barrel aging while minimizing inadvertent errors.
Marc E. Sorini is a partner in the law firm of McDermott Will & Emery LLP. For more info visit www.mwe.com/Marc-E-Sorini or call (202) 756-8284.
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