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The Food Safety Modernization Act (“FSMA”) was passed into law in early 2011 and amends parts of the Federal Food, Drug, and Cosmetic Act. The act’s purpose, which we previously blogged about here, is to ensure that food produced in the U.S. or imported into the U.S. meets safety standards. The FSMA and related FDA laws include alcohol in the definition of “food,” and a “Food Facility” includes any “factory, warehouse, or establishment (including a factory, warehouse, or establishment of an importer) that manufactures, processes, packs, or holds food,” not including restaurants and other retail food establishments. Accordingly, many in the alcohol industry stand to be affected by the FSMA, including wineries, breweries, distilled spirits plants, alcohol beverage distributors, importers, warehouses, and wholesalers.

Prior to the enactment of the FSMA, Food Facilities were required to register with the FDA one time only, and no renewal was required. Food Facilities are now required to renew their FDA registrations every two years, and the first renewal is required by December 31, 2012. However, the FDA’s registration renewal website was not available on October 1, 2012, when renewal was scheduled to open, leaving many scrambling to meet the deadline. The FDA has not formally extended the renewal deadline, but it recently confirmed that it would “exercise enforcement discretion” through January 31, 2013. Specifically, the FDA’s guidance provides that “because there was a delay in FDA’s implementation of biennial registration renewal for the 2012 cycle, and registration renewal did not become available until October 22, 2012, FDA intends to exercise enforcement discretion with respect to registration renewals submitted to FDA after December 31, 2012 for a period of 31 days, until January 31, 2013.”

FDA renewals can be completed online, but a registrant’s FDA number and login information is required before the process can be completed. Detailed guidance on the FSMA and the renewal process is available here. Contact one of the attorney’s at Strike & Techel if you have questions about the FSMA.

Imbiblog is published for general informational purposes only and is not intended as legal advice. Copyright © 2012 · All Rights Reserved ·

In response a request from industry members, the Alcohol and Tobacco Tax and Trade Bureau (“TTB”) recently issued Ruling 2012-4, which addresses whether brewers may require wholesalers to pull beer from retailers that is past its freshness date and replace it with fresh beer. Many beers now include freshness dates, and some brewers ask distributors to remove beer from the retail market that is past its freshness date. Brewers argue that this ensures that consumers get fresh product, but the practice is arguably at odds with laws prohibiting consignment sales.

The FAA act makes it unlawful for industry members, including beer producers, importers, and wholesalers, to sell, offer for sale, or contract to sell to any retailer on consignment, under conditional sale, with the privilege of return, or on any basis otherwise than a bona fide sale. See 27 U.S.C. § 205(d). There are limited exceptions to this prohibition, but only for those “ordinary and usual commercial reasons” included in 27 C.F.R. §§ 11.32 – 39. The limited exceptions when an industry member may accept a return include: a) defective product, b) shipment error, c) change in law preventing the sale of a product, d) termination of the buyer’s business or franchise, e) change in product from that held in inventory, and f) possible spoilage of product during the off-season of a seasonal retailer.

None of the exceptions to the consignment sales law clearly applies to returns based on freshness dating, thus prompting the TTB’s Ruling. The Ruling makes clear that under certain conditions, returns based on freshness dating are permitted under the exception for “defective products” found in 27 C.F.R. § 11.32. Those conditions are as follows:

-          The brewer has policies and procedures in place that specify the date after which the retailer must pull the product;

-          The brewer’s freshness return/exchange policies and procedures are readily verifiable and consistently followed by the brewer;

-          The container has identifying markings that correspond with this date; and

-          The malt beverage product pulled by the retailer may not re-enter the retail marketplace.

Finally, the TTB noted that wholesalers may not force retailers to overstock the wholesaler’s products under the pretext that the retailer may exchange product based on the freshness date, and that such practices would violate consignment sale and tied-house laws.

Contact one of the attorneys at Strike & Techel if you have any questions about TTB rules and regulations.

Imbiblog is published for general informational purposes only and is not intended as legal advice. Copyright © 2012 · All Rights Reserved ·

As more and more beverage brands are introduced into the U.S., it is becoming increasingly difficult for suppliers to come up with unique trademarks that do not infringe marks already in use by others. As a result, trademark disputes involving alcohol beverage brands are common. Such disputes typically come down to the issue of priority of use – if the marks and the products are very similar, i.e., both are alcoholic beverages – the party with first commercial use will have priority and will likely be entitled to register the trademark. One of the fundamental elements used to prove first-use for alcohol products and to establish priority over other users is the date on which a Certificate of Label Approval (“COLA”) was issued. As most alcoholic beverage producers and importers are aware, a COLA is required before alcohol products can be legally imported or sold in the U.S.  Sales of such products without a COLA would constitute an illegal sale under 27 CFR 4.50 (wine) 5.51 (distilled spirits) and 7.41 (beer). Because sales of a product without a COLA are not legal sales, they do not constitute bona fide use in commerce and may not be relied upon in establishing trademark priority. At least, that’s what many of us thought. But a recent decision of the Trademark Trial and Appeal Board (“TTAB”) suggests otherwise.

In an opposition proceeding involving the PARLAY trademark, both parties were using the same trademark on wines and the parties disagreed on who had priority. The opposer argued that the earliest use date relied on by the other party was actually before the labels had been issued a COLA; therefore, they were unlawful and did not count for trademark priority. But the TTAB ruled against the opposer, noting that even if sales without a COLA were not strictly compliant with the federal labeling regulations, that was not sufficient to deny that user priority rights. Rather, the opposing party is required to show either: (1) that a court or regulatory body had made a formal determination of non-compliance, or (2) that the improper usage was so “tainted” it could not create trademark rights. In other words, if the labels were otherwise approvable and not misleading or deceptive to consumers, sales of those products without a COLA may still be used to establish priority, even though not technically legal. In the PARLAY case, the TTAB also noted the Draconian result of denying priority because of a regulatory lapse occurring several years before. The TTAB decision is non-precedential, so it’s not binding and future decisions of the TTAB may come out differently. But for those of us who frequently scan the TTB COLA registry to determine trademark priority, this decision is of great interest.

For trademark or COLA help, contact one of the attorneys at Strike & Techel.

Imbiblog is published for general informational purposes only and is not intended as legal advice. Copyright © 2012 · All Rights Reserved ·

Ever wonder whether the claim that a wine uses “organic grapes” is really true?  Wine is one area where if such claims make their way onto a wine bottle, they are almost certainly valid, as the TTB and the National Organic Program (“NOP”) maintain extremely strict requirements for organic claims on the label.  The NOP has four primary categories for alcoholic beverages: 1) “100% Organic,” 2) “Organic,” meaning at least 95% organic and with no chemically added sulfites, 3) “Made with Organic [ingredients],” requiring at least 70% organic ingredients and may contain chemically added sulfites, and 4) for certain products that contain less than 70% organic ingredients, the ingredients statement may disclose the organic components.

In order to make any organic claims on a wine bottle or other alcohol label, TTB requires several sources of verification, making for a comprehensive but arduous application process.  Along with the items normally required for label approval, applicants must first provide a Processor’s or Handler’s Operation Certificate, which certifies that the winery uses accepted NOP standards. This is often referred to by the TTB as the “organic certificate.”  Notably, imported wines sometimes have difficulty meeting this requirement because foreign certifications are only sufficient if the foreign entity is also a USDA-Accredited Certifying Agent.  Next, applicants must provide an Accredited Certifying Agent Preview, which indicates that the label has been reviewed and found to be in compliance with TTB rules.  Additionally, applicants may need to provide a crop certificate that certifies that the agricultural produce used in the product were grown to NOP standards.

The TTB also has specific rules for the label itself, including requiring a “certification statement,” which includes the name of the accredited certifying agent.  These requirements must be repeated for each vintage year, as labels for new vintages must be resubmitted for approval.

Notably, despite these strict requirements for organic wine labels, other statements on wine bottles that pertain to farming techniques and other “green” claims are largely unregulated by the TTB.  However, this is a fast-evolving area, so stay tuned.

If you need assistance with organic labels, the attorneys at Strike & Techel are familiar with the process and able to help.

UPDATE: On June 12, 2012, the TTB announced a change to the organic documentation requirements. A copy of the organic certificate is no longer required to accompany COLA applications for alcoholic beverages with “100% Organic,” “Organic,” or “Made with Organic (ingredients)” on their labels.  The Accredited Certifying Agent Preview is still required. Please eee the TTB release, available here, for additional information.

Imbiblog is published for general informational purposes only and is not intended as legal advice. Copyright © 2010-2012 · All Rights Reserved ·

Welcome to IMBIBLOG, the blog of Strike & Techel. We are attorneys specializing in the laws and regulations governing alcoholic beverages, also known as liquor law or alcohol law.  Liquor law is a specialized area of legal practice.  Compared to other areas of legal specialization, there are relatively few lawyers specializing in alcoholic beverage law. If you are considering starting a business related to alcohol, you will benefit from working with a competent liquor lawyer.

The team at Strike & Techel is experienced and can serve as your TTB lawyer, ABC lawyer, beer lawyer, wine lawyer or distilled spirits lawyer.  We are familiar with TTB law as well as state ABC law in California and across the country.  Preparing and applying for the necessary alcohol beverage licenses is a big part of the alcohol beverage practice and Strike & Techel is highly experienced with ABC license applications and TTB license applications.  

We are based in San Francisco and are particularly familiar with the alcohol laws and regulations of our city. The attorneys at our firm practice alcoholic beverage law exclusively. This blog is our place to tell you about current issues of interest for those in the business of making, promoting, and selling alcoholic beverages.