July 3, 2019 – In a move certain to set off fireworks within the distilled spirits industry, the U.S. Treasury Department’s Tax & Trade Bureau appears to be “fast-tracking” a plan to eliminate most of the requirements for distilled spirits and wine bottle sizes. The agency published its notices of proposed rule making on Monday, kicking off a public comment period that has been extended until October 30, 2019.
There are separate proposals covering distilled spirits and wine, since they appear in different sections of Title 27, the section of the Code of Federal Regulations that covers alcoholic beverages. While the wine proposal only sets a minimum size, the proposal for distilled spirits would set a minimum and maximum size for the “standards of fill,” which defines what sizes distilled spirits can be packaged in. The current standards have been in place since a switch to metric sizes in 1980.
When the agency first announced on June 10 that its agenda for upcoming regulatory changes would include the standards of fill question, TTB officials declined to say be more specific on when the proposals would be published. A number of industry officials believed at the time that the proposal would not receive more attention until later this year. The Distilled Spirits Council has already expressed opposition to a large-scale revision of bottle sizes, while allowing that some flexibility might be appropriate.
The agency’s rationale for considering the change covers both increased purchasing options for consumers while eliminating regulations that “inhibit competition and the movement of goods in domestic and international commerce.” The current regulations ban the import and sale of distilled spirits in 700 milliliter bottles, which is the European Union standard. As a result, U.S. whisky makers who want to export their products to Europe face the increased cost of producing 750ml bottles for the domestic market and 700ml bottles for export. European whisky and spirits makers, including all Scotch and Irish Whiskey brands, face the same problem when they want to export their products to the United States.
Last week, the TTB closed its extended public comment period on a wider re-write of many Title 27 regulations. The agency acknowledged that a number of comments on that proposal also included feedback on the standards of fill issue, and will apply those comments to this rulemaking as well.
Editor’s note: This story was updated to reflect the TTB’s extension of the public comment period originally scheduled to end August 30 to October 30, 2019.
Links: Tax & Trade Bureau