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TTB PROPOSES TO AMEND OR ELIMINATE STANDARD CONTAINER SIZES

When Prohibition was repealed in 1933, the federal government, in an effort to streamline the calculation and payment of excise taxes, passed regulations setting forth standards of fill. In a pre-digital world, standardizing bottle sizes eased the calculation of taxes. Although computers eventually removed the need to standardize sizes, manufacturers, wholesalers and retailers resisted change because standard bottle sizes made packing, shipping and shelving bottles more convenient and, to a certain extent, less costly.

Nearly 90 years later, on February 9, 2022, in response to President Biden’s executive order dated July 9, 2021, the Alcohol and Tobacco Tax and Trade Bureau (“TTB”) released a report called “Competition in the Markets for Beer, Wine, and Spirits.” That report concluded, in part, that “[c]ontainer size requirements can be a barrier to innovation and competition, insofar as producers must conform their packaging to the Treasury-mandated sizes.”

The TTB is proposing two regulatory alternatives to the current standard-of-fill requirements. One alternative would be to add ten standards of fill for wine (180, 300, 330, 360, 550, 620, 700 and 720 milliliters, and 1.8 and 2.25 liters). The TTB is requesting comments that address whether the addition of these proposed sizes would result in consumer confusion over the quantity of wine in the container, in addition to other pertinent comments.

The second proposed alternative would eliminate all existing standards of fill for wine and distilled spirts, except that the minimum size container for both commodities would be 50 milliliters. The TTB believes, if containers were any smaller, consumers would not be able to read the mandatory label material. In addition, in order to maintain the regulatory distinction between bottled goods and bulk distilled products in the regulations, the TTB proposes a maximum size for spirits containers of 3.785 liters.

A full explanation of the proposed regulations with instructions on how and where to comment can be found at 87 Federal Register 31787 (May 25, 2022). The deadline to submit comments to the TTB is July 25, 2022.

SLA ISSUES A WARNING ABOUT PUBLISHING NOTICES OF APPLICATIONS

Section 110-a of the Alcoholic Beverage Control Law (“ABCL”) requires everyone who applies for a new on-premises retail liquor license to publish a notice of the application in a newspaper within ten days after the date of the application’s submission.  

At the full-board meeting held on May 25, 2022, Deputy Commissioner Thomas Donohue notified all potential licensees and practitioners that the State Liquor Authority (“SLA”) recognizes it is not practical to publish the notice within ten days of the application’s submission date. In most cases, he recognized, the applicant will not have the license number that is required to be included in the posting within that time. That said, Mr. Donohue cautioned those who wait for conditional approval before publishing the notice that the affidavit of publication is a prerequisite for the issuance of the liquor license. Consequently, the SLA will deny any request for a “20-day letter” to operate pending the filing of the affidavit of publication.

In addition, Mr. Donohue warned practitioners representing an application subject to a 500-foot hearing not to file the public-interest questionnaire with the application. It will not reach the hearing officer. Instead, applicants must wait for the notice of the 500-foot hearing and follow the instructions for submitting the questionnaire.

CLARIFICATION ON 30-DAY NOTICES BY EMAIL

            Early in the pandemic, applicants and licensees enjoyed the temporary privilege of submitting their 30-day notices to community boards and municipalities by email. Recently, the legislature and Governor amended the ABCL to make this privilege permanent. There are, however, process requirements applicants and licensees should understand.

            Mr. Donohue clarified these requirements at the May 25 meeting. Specifically, the community board or municipality must have agreed to accept the filing via email. Therefore, before sending such a notice, applicants should verify that the recipient has agreed to accept notice by email. Only the community board or municipality is permitted to email proof of delivery of the notice to the SLA. The SLA will not accept read receipts or any other proof that the email was sent. Again, it is the applicant’s responsibility to make certain the community board or municipality has sent proof of receipt of the notice to the SLA. Those applicants who elect to send the notice via certified mail, should not send the return receipt card alone to the SLA. Rather, send a copy of the card on eight by ten paper.

This article is not intended to give specific legal advice.  Before taking any action, the reader should consult with an attorney familiar with the relevant facts and circumstances.

Written by

Keven Danow

Founding and Senior Partner
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