For suppliers of beverage alcohol, one of the most critical steps in getting to market is ensuring that their product labels comply with all applicable federal and state laws. An alcohol label contains critical information identifying the contents and producers, and as such it is highly regulated with rules at both the federal and state levels that must be met.
Federally, label review and approval is managed by the Alcohol and Tobacco Tax and Trade Bureau (TTB), which also establishes regulations for alcohol labels. Suppliers and producers selling in the United States will generally need to obtain a Certificate of Label Approval (COLA) from the TTB prior to distributing their products. This ensures that suppliers and producers are compliant with federal regulations when designing and marketing alcohol labels.
Obtaining a COLA is only the first step in getting individual products to market, as most states then have their own registration requirements that must be met before selling into those states.
There are numerous details here for producers and suppliers, which is why we’ve gathered key considerations for product registrations. Whether you are making your first foray into the three-tier system or are looking to expand into another state, ensuring accurate brand label registration will help you maintain compliance.
The label approval process
The first step of the label approval process is to know the required and prohibited information, which should be taken into account when designing labels, as getting ahead of those rules can prevent delays down the road. Federally, rules for labels are set out in both the Federal Alcohol Administration Act (FAAA) and the Internal Revenue Code (IRC). Often, the FAAA and the IRC overlap in what they require and prohibit, but they have jurisdiction over different types of alcoholic products, so it is important for a supplier to understand what applies specifically to the products they sell. Notably, the COLA process is only covered in the FAAA, so products not covered by the FAAA are exempt from COLA requirements.
In all cases, a label must include the brand name and area of production, and identify the type and volume of the container’s content. In addition, there are several things that cannot be included, such as health claims or disparaging remarks about competitors’ products. In all cases, the label must contain the Government Warning (mandated by both the FAAA and IRC), which also must be in a specific format. The TTB website for Beverage Alcohol Manuals (BAMs) provides invaluable outlines of the labeling requirements for beer, wine and distilled spirits, and all suppliers should read them carefully.
Once you’ve determined that your labels are ready for review, you can begin the COLA process. COLAs ensure that suppliers and producers are compliant with federal regulations for alcohol labels. Under the Federal law, most alcoholic products being distributed across state borders must first be registered with the TTB and receive a COLA before they can be sold. The TTB will review your label to ensure it incorporates all necessary information and excludes all prohibited messaging. If the TTB finds a label to be improper, they will send it back to be fixed. While the TTB has vastly improved the time for reviewing labels, having to work through multiple rounds of COLA review can add weeks to a supplier’s go to market plan, making first-round approval highly desirable. Often, it is a small thing, like improperly formatted Government Warning, that causes the TTB to send back a label.
Exceptions to the product label rules
While most products sold in the three-tier system require COLAs, there are a few notable exceptions.
As noted, some products are not regulated by the FAAA and are therefore entirely excluded from the COLA process. These include:
- Wines with an ABV under 7%, which primarily applies to cider and other low-ABV fruit-based products.
- Malt beverages that do not meet the FAAA definition of beer (containing water, malted grains and hops), which applies to many developing product types such as seltzers made from neutral grain spirits.
In addition, there are some products that are subject to the FAAA but are exempt in certain circumstances from needing to get a COLA, including:
- Beer that is only sold in the state where it is produced.
- Wine above 7% ABV that is only sold in the state where it is produced, though these products still must receive a Certificate of Exemption from Label Approval (CELA) from the TTB.
What do states look for in product registrations?
Once you have your federally-approved COLA in hand (unless your product meets the above exceptions), it’s time to get state-level specific. Nearly 40 states have their own product registration requirements. Often, these state registrations are something of a formality, more a notice to the state of what products they can expect to see on retailer shelves. But often enough, these state registrations get complicated.
Registrations can cost from free to hundreds of dollars per brand , and time for approval can run from instantaneous to six weeks. Notably, states that have moved towards electronic registrations such as through Product Registration Online have seen vast improvements in their time for approval.
Often states require suppliers to provide information on their distributors during product registration. Again, the goal is for the regulators to understand what is being sold in their state and who is involved. In many states, though, such distribution information is also used to manage the state’s franchise restrictions, such as documenting the approved territories for distributors or establishing a record of existing relationships in case a party wants to adjust their agreements in the future.
For importers and other resellers, product registrations also often require them to provide proof that they are permitted to sell those products. This can include submitting brand authorization or Primary American Source letters from the actual manufacturer. Understanding each state’s requirements and having the necessary documentation on hand can make the overall process much easier and quicker to get through.
What about revisions?
Product labels are not static documents; suppliers decide to change or update them regularly, whether that is a brewer selling a brand in a different size bottle or a winery redesigning a label for a new year. Suppliers should keep in mind that such changes may require additional approval or registration from regulators.
At the federal level, all suppliers should be aware of TTB’s allowable revisions, which have greatly reduced the number of labels that need federal approval. While often enough a new label means a new COLA, some changes, like font and color revisions or rewriting certain non-critical information, can be done without a new COLA. States, though, have their own rules about revisions, so even if a revised label doesn’t require a new COLA, it may still need to be resubmitted to the states where it is being distributed.
Double checking with the TTB and all state agencies before beginning the revising process can help to avoid costly mistakes. The key to compliance is understanding what you’re selling, where you’re selling it and contacting government agencies to fully understand their specifications ahead of time.
Whether you’re a brewery, winery or distillery, getting your product to market quickly is a top priority. As such, taking the time to know and understand the product label requirements is critical to avoiding delays. Varying processes can take longer than anticipated and may be at a different price point. Summer ale labels that are submitted in March may not hit the shelves until the fall if edits are needed. Planning ahead and following TTB guidelines are imperative to easing the process. You don’t want critical, but seemingly distracting, requirements to hold back your time to market.
The three-tier system for distribution doesn’t have to be confusing. Learn more about Sovos ShipCompliant’s Market Ready solution and streamline your compliance processes.