Labeling Cold War Heats Up Again

Diageo and consumer advocacy groups have reignited decades-long efforts to beef up beverage-labeling standards, triggering renewed fear of over-regulation among wineries
Feb 22, 2013

On Feb. 12, the Federal Trade Commission determined that the Alcohol and Tobacco Tax and Trade Bureau (TTB) should require a flavored malt beverage called Four Loko to bear a label indicating the amount of alcohol in a serving and the number of servings in a container. While this might seem like a minor bureaucratic tweak, it has reignited a long debate about what kind of information consumers should see on the back of wine bottles and other alcoholic beverages.

The next day, spirits giant Diageo, which also has significant wine and beer holdings, called for an "Alcohol Facts" or "Serving Facts" label for all alcoholic beverages. A group of four consumer advocacy groups, in a letter made public on Feb. 19, did the same. Since the early 1970s, various groups have battled over whether alcoholic beverages should be subjected to the same labeling laws regarding serving size, ingredients and nutritional information that the FDA requires of food. So far, printing most of those disclosures on labels is up to the producer and some, such as serving size, number of servings per container and alcohol content per serving are actually prohibited on labels.

As in any regulations fight, some stand to gain and others to lose—and right now, small wineries fear they'd be on the wrong side.

"We know from our research that consumers want this," Diageo North America executive vice president Guy Smith told Wine Spectator. "When we say, 'We're actually forbidden by the law to put this information on the labels,' [people think,] 'You've got to be making that up.'"

The Diageo petition would make the disclosure of serving size and alcohol per serving voluntary. The consumer groups, in a letter to Treasury Secretary-designate Jack Lew, go further, calling for "a final regulation to require the following information on all beer, wine and spirits labels: serving size, calories per serving, fluid ounces of alcohol per serving, percent alcohol by volume, the definition of a 'standard drink,' number of drinks per container, and the Dietary Guidelines recommendation on moderate drinking (a maximum of one standard drink per day for women and two for men)." It's this language that has some winemakers concerned.

"Most of us [in the Finger Lakes] don't have the equipment or can't afford to buy the equipment" to test for calorie levels, said Scott Osborn, owner of Fox Run Vineyards and president of the New York Wine Industry Association. He added that his winemaker thought the process of sending samples to an offsite lab to test could take weeks.

"You don't decide what the final blend is going to be—so you don't know what the sweetness level is—until you're getting ready to bottle it, and that can change the calorie count, how much sugar there is," Osborn said. "At that point, you've already had your labels printed." And with vintage variation and grape bulk sales, small wineries often see their blends change from year to year, another source of inconsistency.

"We're perfectly willing to accept certain parameters so that you don't have to test every day. There are many regulations that would allow a small bit of variance from what is actually on the label," said George Hacker, senior policy advisor at the Center for Science in the Public Interest and one of the letter's signatories. But Hacker insisted on the necessity of mandatory regulation. "Making it voluntary would further complicate the ability of consumers to make informed choices about all alcoholic beverages."

"Alcohol is the only consumable product sold in the United States where you can't tell what's inside the package," said Smith. "None of us want our products to be considered sin products, and they have been, since Prohibition. Wine thinks it's a food, beer says it's the product of moderation, spirits says it's a source of great enjoyment. The reality of it is they're all alcohol products."

Hacker said that such a stance may be what has held up the Alcohol Fact movement for so long. "I think it's just a question of political white knuckles," primarily pitting beer against spirits interests. "The liquor people have probably for 30 years now been promoting the concept that all of these beverages are equivalent in terms of alcohol content per drink. And naturally that's a stalking horse for an argument that the beverages ought to be taxed at the same level as well." (Beer is currently taxed at much lower rates, but "[taxes] are not on our agenda," said Smith.)

Osborn does not oppose a voluntary labeling scheme "because I wouldn't do it. But at a certain point somebody says, 'Well, nobody's doing it because it's voluntary, so let's make it mandatory.'"

Nancy Light, director of communications at the Wine Institute, said it was too soon to comment on this dispute, but noted that her organization and WineAmerica, another advocacy group for wineries, opposed a similar proposal from the TTB in 2008. In addition to the financial burdens of added lab work, "there's only so much room on the label, and we felt [the Facts panel] aesthetically would hurt the marketing of the wine," said Michael Kaiser, WineAmerica's director of communications.

"The larger the label is, the higher the cost is, obviously. Once you put in all the mandatory stuff and then you put in what you want to put in, you're looking at a back label that's going to be the size of the bottle potentially," said Osborn. "And all that information on a [half-bottle]?"

"Anything short of this basic information would leave alcoholic beverages as an enormous blind spot in the American diet and would be a failure of the regulatory process," wrote the signatories in their letter to Lew.

It's now up to the TTB to decide if issuing a new Alcohol Facts proposal is in the best interests of consumers and the industry.

Legal and Legislative Issues Labeling Regulations News

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