Malt Beverage Certificates of Label Approval
On July 7, 2008, the Alcohol Tobacco Tax and Trade Bureau issued a Ruling clarifying the definition of “malt beverage” and the products which require Certificate of Label Approval under the Federal Alcohol Administration Act (“FAA Act”). “Malt Beverages” under the FAA Act are defined as alcoholic beverages fermented from malted barley with hops.
The Internal Revenue Code of 1986 (“IRC”) regulates excise tax on distilled spirits, wines and beer and defines “Beer” as fermented beverages produced from malt or a substitute of malt, limited to “rice, grain of any kind, bran glucose, sugar and molasses”. The IRC does not require beer to be fermented from malted barley or contain hops and the alcohol content must be one-half of one percent alcohol by volume or greater.
Only “Beers” which are fermented from both malted barley and hops will be subject to labeling requirements and other regulations of the FAA Act. However, all brewery products will be subject to excise tax and labeling and formula requirements of the IRC and the Federal, Food, Drug and Cosmetic Act. In addition, “malt beverages” as defined above, which are less than one-half of one percent of alcohol, and not “beer” under the IRC will need still label approval. The labels will include a statement that they are tax exempt under the IRC.
Note: Saké, a “beer” under the IRC, although not a “malt beverage” is subject to FAA Act labeling requirements, as it is included in the definition of wine.