Archive for the ‘alcohol beverages generally’ Category
I stumbled upon an interesting article in the Kentucky Journal of Equine, Agriculture, and Natural Resources Law of all places. Even though it’s based in Kentucky, I am startled to see that perhaps Mark Brown missed this, in the wee hours of the night, when he combs through the booze press near and far.
The article is entitled “‘Handmade’ or ‘Made By Hand’: Assessing Alcohol Labeling Practices and Evaluating a Popular Consumer Class Action.” It came out during the past year or so. I have followed the handmade litigations, a lot, in these pages. So I don’t want to rehash that stuff. I will mostly highlight a few points in this law review article, by then law student Hannah Simms. She says:
- “In 2013 alone, the alcoholic beverage industry in the United States generated nearly $456 billion in total economic activity.” This seems mighty high to me.
- “… courts have been entirely inconsistent on whether or not to apply safe harbor provisions contained in a majority of state deceptive and unfair practice laws.“
Noting that the trends are not yet settled, the author wraps up by saying:
If the courts are unwilling or unable to address the situation, the responsibility to take action to protect the industry must shift to the TTB. The TTB could provide clarification of the COLA approval processes that seem to be a hang up for courts. The agency could also opt to issue definitive rulings that provide guidance to industry officials on the correct use or understood meaning of common terms used on labels. This would not only give TTB officers some direction when approving or denying COLAs, but it would also give manufacturers an opportunity to protect themselves and avoid these suits that involve costly litigation since they would have a better understanding of the acceptable use of the terms. If this problem continues unaddressed, liquor consumers and connoisseurs will come out the real losers, because whether manufacturers are forced to go through a costly re-labeling process or continue to litigate these issues in court, it is sure to affect the market price of our favorite beverages.
Since the publication of this article, the pace of the alcohol beverage labeling litigations seems to have eased up markedly, especially since very few courts seem willing to dole out harsh outcomes, beyond the heavy costs of litigation in general.
Our law firm has been in the heart of Fairfax County, Virginia, since 2001. Before that, I worked a couple blocks from the White House. For the most part, we’ve handled federal beverage law during that time. But increasingly, we are handling local law matters, and this story made the shift seem more real.
Jim Vance says the zoning laws got loosened, to make it easier for breweries, wineries and distilleries to open in our county. Even before this change, we were noticing Caboose Brewing down the street, Fair Winds Brewing in Lorton, and The Winery at Bull Run across town in Centreville. There is also the Paradise Springs Winery in Clifton. This Bowman plant closed down in 1988, after beginning distilling operations in Fairfax in 1934. Less than 1.5 miles from the office, there was a winery for a while after Prohibition, producing “Virginia Maid” wine at what is now Nottoway Park. Come to think of it, that’s startlingly little activity for a big, upscale, increasingly urban county with over 1.1 million residents and covering over 400 square miles.
As locals and as lawyers, we look forward to many more fine beverage producers setting up in our county.
The plaintiff in a would-be class action lawsuit against Sazerac voluntarily dismissed all his claims in late January, ending the litigation. The case (Parker v. Buffalo Trace Distillery, Inc. et al.) began in November of last year, and concerned a subtle change on the label of Sazerac’s “Old Charter” brand of bourbon whiskey. The older and newer labels are above, side by side.
Among the various changes, the old label says, “AGED 8 YEARS,” while the new label simply displays the number “8.”
Plaintiff Nicholas Parker alleged that the Old Charter bourbon sold under the new label was no longer aged for 8 years, and that Sazerac’s continued use of the number “8” on the label caused consumers to believe that the bourbon was aged for 8 years. Sazerac responded with a motion to dismiss the complaint, alleging that Alcohol and Tobacco Tax and Trade Bureau (TTB) approval of the label provided Sazerac with a “safe harbor” from Mr. Parker’s claims.
Just two weeks after Sazerac filed its motion to dismiss, Mr. Parker voluntarily dismissed the action. This voluntary dismissal meant that the court did not have to rule on the merits of Sazerac’s safe harbor defense, or Mr. Parker’s claims. If the Tito’s “Handmade” Vodka cases are any indication, it is likely that the safe harbor defense would not have insulated Sazerac in this case. It would seem that the parties reached a settlement, although the terms of any such settlement will likely remain private. Old Charter drinkers should keep an eye out for future label changes, which might indicate the terms of a settlement reached.
The voluntary dismissal notwithstanding, Mr. Parker’s claims raise an interesting issue: Shouldn’t TTB have a policy for this sort of thing? As it turns out, TTB does. TTB’s general stance has been that unexplained numbers on spirits labels are prohibited. That is, if you want to say “8,” you need to explain the significance of the number (e.g., “AGED 8 YEARS,” or “A BLEND FROM 8 BARRELS”). Take Jack Daniel’s, for instance:
While the number “7” appears prominently, the context (i.e., “Old No. 7 Brand”) makes it clear enough that “7” is part of the brand name, not the age of the spirit.
Re-examining the Old Charter labels, the new label does not seem to fall in line with TTB’s tenet. Although Sazerac’s incorporation of the unexplained “8” did not lead to a label rejection in this instance, it probably goes a long way toward explaining why Mr. Parker pounced on Mr. Brown.
When was the last time you tried TTB’s Formulas Online (FONL) system? It continues to change every few months, since its inception a few years ago. When I went to use it earlier this week I was struck by how much information TTB is loading into the system.
As an example, let’s take a look at what FONL has to say about colors (food and beverage colors such as FD& Red #40). First you log in and get your home screen (as above).
Then you click along and go to enter some ingredients. Near this area, there is a handy definition of what is a “color” (in this context). It’s not always an easy question. Ok bigshot, is saffron a color? What about grape juice? The help points out that the predominant reason for the addition is the key, when the ingredient has more than one function (such as color and flavor).
Once we verify we are in fact talking about a color, you would proceed as here.
Once you click “Color,” it very helpfully pulls up a list of the most common and allowable colors, along with alternative names such as Red 40/E 129. This list goes on to cover fruit juice, grape skin extract/enocianina/E 163, mica, oak, paprika, riboflavin, saffron, titanium dioxide, tomato, turmeric, and vegetable juice.
Then there is more help, off to the right, with more links.
There is a lot of information and it can be a bit daunting at first, but once you get used to it, the extra information is quite helpful. Last but not least, many thanks and good wishes for Roberta Sanders, who retires from TTB (before Pres. Trump takes over) — after thousands of people helped, and tens of thousands of formulas approved.
The latest issue of Beverage Master just came in last week. It is the October-November issue and has a fine article about Moonshine University, if I may say so myself. A small excerpt is below, and you can find the entire article, and indeed the whole issue, here.
There is a lot of talk about Moonshine University, launched in early 2013. As this Louisville, Kentucky training center moves toward year five of educating new distillers, I contacted some of the principals, to see how it’s going. The questions are from me, and most of the answers are from Christin Head, Registrar at Moonshine University.
1. What is Moonshine University?
Moonshine University is an artisan distillery and education center located in downtown Louisville, Kentucky. Our distillery is adjacent to our state-of-the-art classroom and is set up for small runs and hands-on distilling training. We offer technical training and business management education for start-ups, industry professionals, and those looking for careers in the distilling industry. Our courses are designed and taught by distillery operators, industry insiders, and world-renowned master distillers.
2. When did it start and how many classes so far?
Moonshine University opened in January 2013. We have just completed our thirteenth session of our flagship course, the 5-Day Distiller Course. All in all, we have held 67 classes at Moonshine University, with an additional 19 classes currently open for registration.
3. How many graduates?
Since 2013 we are happy to say we have had over 1200 students cross our threshold. We have over 600 attendees in our professional level classes, which includes the 5-Day Distiller Course.
If you are not already getting this bi-monthly craft spirits and brew magazine, it is easy to subscribe, here.