Standards of Identity for Pisco and Cognac, 28739-28742 [2013-11705]
Download as PDF
Federal Register / Vol. 78, No. 95 / Thursday, May 16, 2013 / Rules and Regulations
Dated: May 10, 2013.
Thomas M. Harrigan,
Deputy Administrator.
[FR Doc. 2013–11593 Filed 5–15–13; 8:45 am]
BILLING CODE 4410–09–P
DEPARTMENT OF THE TREASURY
Alcohol and Tobacco Tax and Trade
Bureau
27 CFR Part 5
[Docket No. TTB–2012–0001; T.D. TTB–113;
Re: Notice No. 126]
RIN 1513–AB91
Standards of Identity for Pisco and
Cognac
Alcohol and Tobacco Tax and
Trade Bureau, Treasury.
ACTION: Final rule; Treasury decision.
AGENCY:
This final rule amends the
Alcohol and Tobacco Tax and Trade
Bureau regulations setting forth the
standards of identity for distilled spirits
to include Pisco as a type of brandy that
must be manufactured in accordance
with the laws and regulations of either
Peru or Chile, as appropriate, governing
the manufacture of those products. This
final rule also removes ‘‘Pisco brandy’’
from the list of examples of geographical
designations in the distilled spirits
standards of identity, and it includes a
technical correction to remove
‘‘Cognac’’ from the same list of
examples. These changes provide
greater clarity in distilled spirits
labeling.
SUMMARY:
Effective Date: This final rule is
effective July 15, 2013.
FOR FURTHER INFORMATION CONTACT:
Karen Welch, Alcohol and Tobacco Tax
and Trade Bureau, Regulations and
Rulings Division; telephone 202–453–
1039, ext. 046; email ITD@ttb.gov.
SUPPLEMENTARY INFORMATION:
DATES:
Background
erowe on DSK2VPTVN1PROD with RULES
TTB Authority
Section 105(e) of the Federal Alcohol
Administration Act (FAA Act), codified
in the United States Code at 27 U.S.C.
205(e), authorizes the Secretary of the
Treasury (Secretary) to prescribe
regulations relating to the packaging,
marking, branding, labeling, and size
and fill of containers of alcohol
beverages that will prohibit consumer
deception and provide the consumer
with adequate information as to the
identity and quality of the product.
Section 105(e) of the FAA Act also
generally requires bottlers and importers
VerDate Mar<15>2010
14:43 May 15, 2013
Jkt 229001
of alcohol beverages to obtain
certificates of label approval prior to
bottling or importing alcohol beverages
for sale in interstate commerce.
Regulations implementing those
provisions of section 105(e) as they
relate to distilled spirits are set forth in
part 5 of title 27 of the Code of Federal
Regulations (27 CFR part 5). The
Alcohol and Tobacco Tax and Trade
Bureau (TTB) administers the FAA Act
pursuant to section 1111(d) of the
Homeland Security Act of 2002,
codified at 6 U.S.C. 531(d). The
Secretary has delegated various
authorities through Treasury
Department Order 120–01 (Revised),
dated January 21, 2003, to the TTB
Administrator to perform the functions
and duties in the administration and
enforcement of this law.
Certificates of Label Approval
TTB’s regulations prohibit the release
of bottled distilled spirits from customs
custody for consumption unless an
approved Certificate of Label Approval
(COLA) covering the product has been
deposited with the appropriate Customs
officer at the port of entry. See 27 CFR
5.51. The TTB regulations also generally
prohibit the bottling or removal from a
plant of distilled spirits unless the
proprietor possesses a COLA covering
the labels on the bottle. See 27 CFR
5.55.
Classes and Types of Spirits
The TTB labeling regulations require
that the class and type of distilled
spirits appear on the product’s brand
label. See 27 CFR 5.32(a)(2) and 5.35.
Those regulations provide that the class
and type must be stated in conformity
with § 5.22 of the TTB regulations (27
CFR 5.22) if defined therein. Otherwise,
the product must be designated in
accordance with trade and consumer
understanding thereof, or, if no such
understanding exists, by a distinctive or
fanciful name, and in either case (with
limited exceptions), followed by a
truthful and adequate statement of
composition (see 27 CFR 5.35).
Section 5.22 establishes standards of
identity for distilled spirits products
and categorizes these products
according to various classes and types.
As used in § 5.22, the term ‘‘class’’ refers
to a general category of spirits, such as
‘‘whisky’’ or ‘‘brandy.’’ Currently, there
are 12 different classes of distilled
spirits recognized in § 5.22, including
whisky, rum, and brandy. The term
‘‘type’’ refers to a subcategory within a
class of spirits. For example, ‘‘Cognac’’
is a type of brandy, and ‘‘Canadian
whisky’’ is a type of whisky.
PO 00000
Frm 00021
Fmt 4700
Sfmt 4700
28739
Brandy and Pisco
Brandy is Class 4 in the standards of
identity, where it is defined in § 5.22(d)
as ‘‘an alcoholic distillate from the
fermented juice, mash, or wine of fruit,
or from the residue thereof, produced at
less than 190° proof in such manner that
the distillate possesses the taste, aroma,
and characteristics generally attributed
to the product, and bottled at not less
than 80° proof.’’ ‘‘Pisco’’ is a term
recognized by both the governments of
Peru and Chile as a designation for a
distilled spirits product made from
grapes. Generally, Pisco is classified as
brandy under the terms of TTB’s current
labeling regulations. However, Pisco is
not currently listed as a type of brandy
in Class 4. Rather, ‘‘Pisco brandy’’ has
been included in Class 11, at
§ 5.22(k)(3), as an example of a
geographical name that is not a name for
a distinctive type of distilled spirits, and
that has not become generic.
International Agreements
Pursuant to the United States-Peru
Trade Promotion Agreement, the United
´
States recognized Pisco Peru as a
distinctive product of Peru (Article
2.12(2) of the Agreement). Accordingly,
the United States agreed not to permit
´
the sale of any product as Pisco Peru
unless it has been manufactured in Peru
in accordance with the laws and
regulations of Peru governing Pisco.
In addition, pursuant to the United
States-Chile Free Trade Agreement, the
United States recognized Pisco Chileno
(Chilean Pisco) as a distinctive product
of Chile (Article 3.15(2) of the
Agreement). Accordingly, the United
States agreed not to permit the sale of
any product as Pisco Chileno (Chilean
Pisco) unless it has been manufactured
in Chile in accordance with the laws
and regulations of Chile governing the
manufacture of Pisco.
In like manner, Peru and Chile agreed,
respectively, to recognize Bourbon
Whiskey and Tennessee Whiskey
(which is defined in both Agreements as
a straight Bourbon Whiskey authorized
to be produced only in the State of
Tennessee), as distinctive products of
the United States, and not to permit the
sale of any product as Bourbon Whiskey
or Tennessee Whiskey unless it has
been manufactured in the United States
in accordance with the laws and
regulations of the United States
governing the manufacture of Bourbon
Whiskey and Tennessee Whiskey. (TTB
notes that there are alternative spellings
for the same term—‘‘whisky’’ in the TTB
regulations in 27 CFR part 5 and
‘‘whiskey’’ in the Agreements with Peru
and Chile.)
E:\FR\FM\16MYR1.SGM
16MYR1
28740
Federal Register / Vol. 78, No. 95 / Thursday, May 16, 2013 / Rules and Regulations
Pisco Production
‘‘The Oxford Companion to Wine’’
(Jancis Robinson, ed., Oxford University
Press, 2d ed., 2001, p. 536) reports that
Spanish colonists began producing
aguardiente (grape spirits) in both Peru
and Chile in the sixteenth century, and
it describes such spirits as being
produced near the town of Pisco, Peru.
Further, ‘‘The Oxford Companion to
Wine’’ says ‘‘‘‘Pisco’’ is an aromatic
brandy made in Peru, Chile, and
Bolivia, mainly from Moscatel (muscat)
grapes.’’ According to ‘‘Alexis Lichine’s
Encyclopedia of Wines and Spirits’’
(Alexis Lichine, ed., 5th ed., Alfred A.
Knopf, Inc., 1987), ‘‘Pisco brandy’’ is
brandy distilled from Muscat wine in
Peru, Chile, Argentina, and Bolivia.
Peru and Chile have promulgated
standards for the production of Pisco.
erowe on DSK2VPTVN1PROD with RULES
Notice of Proposed Rulemaking
On March 27, 2012, TTB published
Notice No. 126 in the Federal Register
(77 FR 18146) proposing to amend
§ 5.22 to clarify the status of Pisco under
the standards of identity. Specifically,
TTB proposed amending § 5.22(d),
which lays out the standard of identity
for brandy. In Notice No. 126, TTB
stated that it believes that Pisco
generally meets the U.S. standard for
brandy and should be classified as a
type of brandy. TTB also asserted that
evidence suggests that the generally
recognized geographical limits of the
Pisco-producing areas do not extend
beyond the boundaries of Chile and
Peru. The wine and spirits authorities
cited above indicate that Pisco
production is not associated with any
areas outside of South America.
As stated in Notice No. 126, COLAs
naming ‘‘Pisco’’ as the brand name or
fanciful name of a distilled spirits
product are almost exclusively for
products from Chile and Peru. TTB
could not locate any COLAs naming
‘‘Pisco’’ as the brand name or fanciful
name for any products from Argentina,
or from any other country in South
America other than Peru, Chile, and
Bolivia. COLAs for products from
Bolivia that name ‘‘Pisco’’ as the brand
name or fanciful name also use the term
‘‘Singani.’’ ‘‘The Oxford Companion to
Wine’’ defines ‘‘Singani’’ as an
‘‘aromatic grape-based spirit rather like
pisco in that it is high in terpenes and
made under a strictly controlled regime,
principally from Muscat of Alexandria
grapes’’ that is a specialty of Bolivia
(Robinson, p. 638). Bolivia maintains
standards for Singani production in
Bolivia, but does not have standards for
Pisco production.
VerDate Mar<15>2010
14:43 May 15, 2013
Jkt 229001
In Notice No. 126, TTB specifically
proposed to amend the standard of
identity in § 5.22(d) to add Pisco as a
type of brandy that is manufactured in
Peru or Chile in compliance with the
laws of the country of production
regulating the manufacture of Pisco. The
proposed amendment would also
´
recognize the phrases ‘‘Pisco Peru’’
(with or without the diacritic mark, i.e.,
´
‘‘Pisco Peru’’ or ‘‘Pisco Peru’’), ‘‘Pisco
Chileno,’’ and ‘‘Chilean Pisco,’’ as
equivalent class and type names of the
product, to reflect the provisions of the
trade agreements. TTB clarified that if
Pisco is recognized as a type of brandy,
persons who distribute it in the United
States will be entitled to label the
product according to its type
designation ‘‘Pisco’’ without the term
‘‘brandy’’ on the label, in the same way
that a product labeled with the type
designation ‘‘Cognac’’ is not required to
also bear the class designation
‘‘brandy.’’
TTB noted that the Peruvian standard
allows products designated as Pisco to
have an alcohol content ranging from 38
to 48 percent alcohol by volume, and
the Chilean standard allows products
designated as Pisco to have an alcohol
content as low as 30 percent alcohol by
volume. TTB further clarified that since
the standard proposed in Notice No. 126
would identify Pisco as a type of
brandy, and the U.S. standard requires
that brandy must be bottled at not less
than 40 percent alcohol by volume, or
80° proof, any ‘‘Pisco’’ imported into the
United States would have to conform to
this minimum bottling proof
requirement. A product that is bottled at
below 40 percent alcohol by volume
would fall outside the class and type
designation. TTB stated that under the
proposed regulations, depending on the
way that such a product is
manufactured, it could be labeled as a
‘‘diluted Pisco’’ or as a distilled spirits
specialty product bearing a statement of
composition.
Finally, TTB proposed to remove both
‘‘Pisco brandy’’ and ‘‘Cognac’’ from
§ 5.22(k)(3), where they are listed as
examples of geographical names that are
not names for distinctive types of
distilled spirits, and that have not
become generic. TTB proposed this
amendment for two reasons. First, Pisco
will appear in new § 5.22(d)(9), where it
will be a type of brandy defined as grape
brandy manufactured in Peru or Chile in
accordance with the laws and
regulations of the country of
manufacture governing the manufacture
of Pisco. Second, Cognac currently
appears in § 5.22(d)(2), where it is a type
of brandy defined as ‘‘grape brandy
distilled in the Cognac region of France,
PO 00000
Frm 00022
Fmt 4700
Sfmt 4700
which is entitled to be so designated by
the laws and regulations of the French
Government.’’ The inclusion of
‘‘Cognac’’ in the list of examples of
geographical names that are not names
for distinctive types of distilled spirits,
and that have not become generic, in
§ 5.22(k)(3) is duplicative and
confusing. Accordingly, TTB proposed
to remove the reference to Cognac in
§ 5.22(k)(3) as a technical correction to
the regulations.
Effect on Currently Approved Labels
In Notice No. 126, TTB stated that the
proposed change to the regulations
would revoke by operation of regulation
any COLAs that specify ‘‘Pisco’’ as the
class and type or, brand name, or
fanciful name of distilled spirits
products that are not products of Peru
or Chile. TTB also noted that it had
searched its COLA database, and
believes that this rulemaking will affect
only a small number of labels.
Comments Received and TTB Response
TTB received eleven comments in
response to Notice No. 126. All
comments appear on ‘‘Regulations.gov,’’
the Federal Rulemaking portal, at https://
www.regulations.gov, in Docket No.
TTB–2012–0001. The Distilled Spirits
Council of the United States (DISCUS)
(Comment 5) wrote ‘‘in strong support
of the proposed amendments.’’ Another
commenter identifying his organization
as Campo de Encanto Pisco (Comment
4) wrote that Pisco’s ‘‘history, tradition
and current resurgence in the U.S.
should be respected and its status as a
unique category of distillate should be
labeled and promoted accordingly.’’ The
Regulatory Council to Guarantee the
Origin and Quality of Pisco, which is a
non-profit organization subject to the
laws and courts of the Republic of Peru
and which represents the beneficiaries
of the Pisco denomination of origin
submitted an informative comment
(Comment 7) detailing the Pisco
production process. The comment did
not state a position on TTB’s proposal.
TTB did not receive any comments
concerning any COLAs that would be
revoked by operation of regulation were
the proposed rule to be adopted as a
final rule.
Comments Concerning Aging in Wood/
Oak Containers
One individual’s comment (Comment
2) stated, ‘‘[t]he technical premise for
this proposed rule, at least in the case
of Peruvian Pisco, is erroneous. Pisco is
a distilled spirit, NOT a brandy because
it is not stored in wood casks.’’
[Emphasis in original.] Another
commenter, Chile’s Agricultural and
E:\FR\FM\16MYR1.SGM
16MYR1
Federal Register / Vol. 78, No. 95 / Thursday, May 16, 2013 / Rules and Regulations
Livestock Service (SAG), (Comment 11)
also argued that classifying Pisco as a
type of brandy ‘‘is not appropriate
because it does not take into account
international definitions such as the
OIV [(International Organization of Vine
and Wine)],’’ which define Pisco as a
‘‘spirit product’’ and provide that
brandy must be aged in oak containers.
erowe on DSK2VPTVN1PROD with RULES
TTB Response
TTB disagrees with the two
commenters who assert that Pisco is not
a brandy because it might not be aged
or stored in wood/oak containers. TTB
and its predecessor agencies have long
considered Pisco to be a brandy, as
evidenced by its listing in § 5.22(k)(3) as
‘‘Pisco brandy’’ since 1936. The relevant
definition is the definition of brandy in
§ 5.22(d), rather than definitions of
brandy in other jurisdictions, and this
regulation does not specify that brandy
must be stored or aged in oak
containers. TTB notes that § 5.22(d)(1)
generally provides that grape brandy
that has been stored in oak containers
for less than two years must be labeled
with the word ‘‘immature,’’ but also lists
several types of brandy (specifically
neutral brandy, pomace brandy, marc
brandy, and grappa, as well as any fruit
brandy that is not derived from grapes)
that are exempt from this requirement.
To recognize that Peruvian and Chilean
Pisco production practices do not
generally require that Pisco be stored or
aged in oak containers, in the final rule
text, TTB is amending § 5.22(d)(1) to
clarify that Pisco not stored in oak
containers for at least 2 years is also
exempt from any requirement that it be
labeled with the word ‘‘immature.’’
Comments Concerning the 40 Percent
ABV Requirement
Six commenters expressed concerns
about the proposed 40 percent alcohol
by volume minimum alcohol content for
Pisco. One individual commenter
(Comment 1) stated, ‘‘To ensure that the
integrity of the Pisco brandy * * * is
not compromised, the requirement . . .
[for] Pisco brandy to be consumed in the
United States [should] not require 40%
alcohol by volume.’’ Another individual
(Comment 3) stated that, ‘‘TTB should
reconsider the classification of Pisco as
a brandy so that the regulation
recognizes all Piscos that are
manufactured in compliance with the
laws’’ of their respective countries of
origin. A third individual (Comment 6)
proposed that TTB adopt an exception
for Pisco to the requirement that brandy
be bottled at not less than 40 percent
alcohol by volume. The commenter also
argued that requiring Pisco bottled at
less than 40 percent alcohol by volume
VerDate Mar<15>2010
14:43 May 15, 2013
Jkt 229001
to be labeled differently would confuse
consumers.
The Pisco Producers Association of
Chile (Comment 9), the DirectorateGeneral for International Economic
Relations of Chile’s Ministry of Foreign
Affairs (Comment 10), and Chile’s
Agricultural and Livestock Service
(SAG) (Comment 11) also expressed
concerns about the proposed 40 percent
alcohol by volume minimum alcohol
content for Pisco. These commenters
pointed out that Chilean law permits
production of Pisco with an alcohol
content by volume of as low as 30
percent, and requested that TTB take
this into consideration.
TTB Response
TTB notes that the U.S. standards of
identity for distilled spirits require that
all of the major classes of distilled
spirits (neutral spirits (including vodka),
whisky, gin, brandy, rum, and tequila)
be bottled at not less than 80° proof
(which is equivalent to 40 percent
alcohol by volume). TTB believes it is
appropriate to apply this 80° proof
standard to like products of foreign
countries so that the same standard
applies to domestic producers and
foreign producers. There is precedent
for applying this 80° proof standard to
distinctive products of other countries.
The standard of identity for Tequila in
§ 5.22(g), which states that ‘‘Tequila is a
distinctive product of Mexico,
manufactured in Mexico in compliance
with the laws of Mexico regulating the
manufacture of Tequila for consumption
in that country,’’ applies the 80° proof
minimum despite the fact that Mexican
regulations allow Tequila to be bottled
at 35 percent alcohol by volume (70°
proof).
As noted above, products that are
manufactured in Peru or Chile in
accordance with the laws and
regulations governing the manufacture
of Pisco in those countries and that
contain less than 40 percent alcohol by
volume could be imported into the
United States labeled as a ‘‘diluted
Pisco’’ or as distilled spirits specialty
products bearing a statement of
composition. This is not a new
requirement; under TTB’s current
practice and that of its predecessor
agencies, ‘‘Pisco’’ products imported
into the United States from Chile or
Peru containing less than 40 percent
alcohol by volume must be labeled as
‘‘diluted Pisco’’ or as a distilled spirits
specialty product bearing a statement of
composition. This final rule does not
change that requirement. Finally, TTB
believes that maintaining this consistent
and long-standing 80° proof minimum
for the major classes of distilled spirits
PO 00000
Frm 00023
Fmt 4700
Sfmt 4700
28741
would prevent consumer confusion
rather than create it.
Comment From the Government of Peru
The Government of Peru submitted a
comment concerning several different
issues (Comment 8). The comment
included a history of the name ‘‘Pisco’’
and a description of the production
process for Peruvian Pisco. The
Government of Peru also suggested that
the current regulations prevent the
import and trade of products with the
name ‘‘Pisco’’ that ‘‘do not come from
the place of origin of ‘Pisco’ (Peru).’’
Second, the Government of Peru
requests that we confirm its
understanding that 27 CFR 5.51 and
5.55, which require a COLA before
imported and domestic products are
removed from bond, will apply to
‘‘imported and domestic
commercialization’’.
Finally, the Government of Peru
argued that Pisco produced in Peru is
very different from other grape or wine
brandies, and proposed that TTB,
instead of creating one type designation
in Class 4 for ‘‘Pisco’’ that would
include both Peruvian and Chilean
Pisco, create a Class 4 type designation
for Peruvian Pisco to include the terms
‘‘Pisco Peru’’ and ‘‘Pisco’’. The
Government of Peru, in its comment,
leaves to the consideration of United
States authorities what standard of
identity should be created for the
‘‘grape/wine brandy’’ manufactured in
Chile.
TTB Response
TTB believes that evidence suggests
that the generally recognized
geographical limits of the Piscoproducing areas do not extend beyond
the boundaries of Peru and Chile. TTB
believes this rulemaking is necessary to
prevent confusion on this issue.
Furthermore, TTB confirms that the
standard of identity for Pisco will apply
to the universe of distilled spirits
removed either from U.S. Customs
custody or from the bonded premises of
a domestic distilled spirits plant.
TTB considered the alternate proposal
from the Government of Peru, and found
that it would give rise to several
unintended consequences. Currently,
pursuant to § 5.22(k)(3), TTB allows the
terms ‘‘Pisco’’ and ‘‘Pisco brandy’’ to be
used on labels for products
manufactured in either Peru or Chile. If
TTB amended its regulations to remove
‘‘Pisco brandy’’ from § 5.22(k)(3) and
provide type designations for ‘‘Pisco
´
Peru’’ and ‘‘Pisco Chileno (Chilean
Pisco)’’ but not a type designation for
‘‘Pisco,’’ all of the existing COLAs using
‘‘Pisco’’ or ‘‘Pisco brandy’’ as the class
E:\FR\FM\16MYR1.SGM
16MYR1
28742
Federal Register / Vol. 78, No. 95 / Thursday, May 16, 2013 / Rules and Regulations
erowe on DSK2VPTVN1PROD with RULES
and type designation—estimated at
approximately 100 COLAs— would be
revoked by operation of regulation. The
existing COLAs using ‘‘Pisco’’ or ‘‘Pisco
brandy’’ would not fit into either the
´
‘‘Pisco Peru’’ or the ‘‘Pisco Chileno
(Chilean Pisco)’’ type designation, and
these COLAs would not comply with
TTB’s regulations without the broader,
overall type designation for ‘‘Pisco.’’
TTB does not believe that such a
disruption to the trade is warranted.
TTB also notes that consumers will
easily be able to identify the country of
origin of any Pisco product because
under 27 CFR 5.32(b)(2), imported
distilled spirits product labels must
include the country of origin.
Clarification of the Regulatory
Language
DISCUS, in response to Notice No.
127, which proposed a standard of
identity for Cachaca, questioned the
¸
wording of that proposed standard of
identity. In Notice No. 127, TTB
proposed to define Cachaca as ‘‘a type
¸
of rum that is a distinctive product of
Brazil, manufactured in Brazil in
compliance with the laws of Brazil
regulating the manufacture of Cachaca
¸
for consumption in that country’’
(emphasis added). DISCUS commented
that the highlighted language could
inadvertently cause confusion as to
whether a product that is produced in
full conformity with Brazil’s regulations
governing the manufacture of Cachaca
¸
for consumption in Brazil and bottled at
less than 40 percent alcohol by volume
could be labeled and sold in the United
States as ‘‘Cachaca.’’ DISCUS also noted
¸
that deleting this language would be
consistent with TTB Notice No. 126,
Standards of Identity for Pisco and
Cognac.
TTB believes that including the
phrase ‘‘for consumption in that
country’’ is appropriate for both
Cachaca and Pisco because the wording
¸
clarifies that the laws of the country of
manufacture cannot provide standards
that are different for products being
exported than for products to be
consumed within the country of
manufacture. TTB inadvertently omitted
this phrase in its proposed standard of
identity for Pisco in Notice No. 126, and
believes, for clarity, that the phrase
should be included in the final rule text.
However, such a requirement does not
override the current practice, described
above, that ‘‘Pisco’’ products imported
into the United States from Chile or
Peru containing less than 40 percent
alcohol by volume must be labeled as
‘‘diluted Pisco’’ or as a distilled spirits
specialty product bearing a statement of
composition.
VerDate Mar<15>2010
14:43 May 15, 2013
Jkt 229001
TTB Finding
After careful review of the comments
discussed above, and after consideration
of the obligations incurred in the
international agreements, TTB has
determined that it is appropriate to
adopt the proposed regulatory
amendments contained in Notice No.
126, with the two modifications (the
clarification that Pisco need not be aged
in oak containers, and the addition of
the phrases ‘‘for consumption in the
country of manufacture’’ and ‘‘for
consumption in that country,’’) as
discussed above. TTB notes that these
regulatory changes will revoke by
operation of regulation any COLAs that
specify ‘‘Pisco’’ as the class and type or,
brand name, or fanciful name of
distilled spirits products that are not
products of Peru or Chile.
Regulatory Flexibility Act
Pursuant to the requirements of the
Regulatory Flexibility Act (5 U.S.C.
chapter 6), TTB certifies that this final
rule will not have a significant
economic impact on a substantial
number of small entities. These
amendments clarify the status of Pisco
under the standards of identity for
distilled spirits and do not impose, or
otherwise cause, a significant increase
in reporting, recordkeeping, or other
compliance burdens on a substantial
number of small entities. Accordingly, a
regulatory flexibility analysis is not
required.
Executive Order 12866
This final rule is not a significant
regulatory action as defined by
Executive Order 12866. Therefore, it
requires no regulatory assessment.
Drafting Information
Karen E. Welch of the Regulations and
Rulings Division, Alcohol and Tobacco
Tax and Trade Bureau, drafted this
document.
List of Subjects in 27 CFR Part 5
Advertising, Consumer protection,
Customs duties and inspection, Imports,
Labeling, Liquors, and Packaging and
containers.
Amendment to the Regulations
For the reasons discussed in the
preamble, TTB amends 27 CFR part 5 as
follows:
PART 5—LABELING AND
ADVERTISING OF DISTILLED SPIRITS
1. The authority citation for part 5
continues to read as follows:
■
Authority: 26 U.S.C. 5301, 7805, 27 U.S.C.
205.
PO 00000
Frm 00024
Fmt 4700
Sfmt 4700
2. Section 5.22 is amended by:
a. In paragraph (d) introductory text,
removing the words ‘‘paragraphs (d)(1)
through (8)’’ and adding, in their place,
the words ‘‘paragraphs (d)(1) through
(9)’’;
■ b. In paragraph (d)(1), in the third
sentence, revising the parenthetical
phrase to read ‘‘(other than neutral
brandy, pomace brandy, marc brandy,
´
grappa brandy, Pisco, Pisco Peru, or
Pisco Chileno)’’;
■ c. In paragraph (k)(3), by removing the
words ‘‘Cognac,’’ and ‘‘Pisco brandy,’’;
and
■ d. Adding new paragraph (d)(9) to
read as follows:
■
■
§ 5.22
The standards of identity.
*
*
*
*
*
(d) * * *
(9) ‘‘Pisco’’ is grape brandy
manufactured in Peru or Chile in
accordance with the laws and
regulations of the country of
manufacture governing the manufacture
of Pisco for consumption in the country
of manufacture.
´
(i) ‘‘Pisco Peru’’ (or ‘‘Pisco Peru’’) is
Pisco manufactured in Peru in
accordance with the laws and
regulations of Peru governing the
manufacture of Pisco for consumption
in that country.
(ii) ‘‘Pisco Chileno’’ (or ‘‘Chilean
Pisco’’) is Pisco manufactured in Chile
in accordance with the laws and
regulations of Chile governing the
manufacture of Pisco for consumption
in that country.
*
*
*
*
*
Signed: February 7, 2013.
John J. Manfreda,
Administrator.
Approved: March 5, 2013.
Timothy E. Skud,
Deputy Assistant Secretary (Tax, Trade, and
Tariff Policy).
[FR Doc. 2013–11705 Filed 5–15–13; 8:45 am]
BILLING CODE 4810–31–P
DEPARTMENT OF HOMELAND
SECURITY
Coast Guard
33 CFR Part 165
[Docket No. USCG–2012–0375]
Safety Zone; Milwaukee Harbor,
Milwaukee, WI
Coast Guard, DHS.
Notice of enforcement of
regulation.
AGENCY:
ACTION:
The Coast Guard will enforce
a safety zone for the 2013 Pridefest
SUMMARY:
E:\FR\FM\16MYR1.SGM
16MYR1
Agencies
[Federal Register Volume 78, Number 95 (Thursday, May 16, 2013)]
[Rules and Regulations]
[Pages 28739-28742]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-11705]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF THE TREASURY
Alcohol and Tobacco Tax and Trade Bureau
27 CFR Part 5
[Docket No. TTB-2012-0001; T.D. TTB-113; Re: Notice No. 126]
RIN 1513-AB91
Standards of Identity for Pisco and Cognac
AGENCY: Alcohol and Tobacco Tax and Trade Bureau, Treasury.
ACTION: Final rule; Treasury decision.
-----------------------------------------------------------------------
SUMMARY: This final rule amends the Alcohol and Tobacco Tax and Trade
Bureau regulations setting forth the standards of identity for
distilled spirits to include Pisco as a type of brandy that must be
manufactured in accordance with the laws and regulations of either Peru
or Chile, as appropriate, governing the manufacture of those products.
This final rule also removes ``Pisco brandy'' from the list of examples
of geographical designations in the distilled spirits standards of
identity, and it includes a technical correction to remove ``Cognac''
from the same list of examples. These changes provide greater clarity
in distilled spirits labeling.
DATES: Effective Date: This final rule is effective July 15, 2013.
FOR FURTHER INFORMATION CONTACT: Karen Welch, Alcohol and Tobacco Tax
and Trade Bureau, Regulations and Rulings Division; telephone 202-453-
1039, ext. 046; email ITD@ttb.gov.
SUPPLEMENTARY INFORMATION:
Background
TTB Authority
Section 105(e) of the Federal Alcohol Administration Act (FAA Act),
codified in the United States Code at 27 U.S.C. 205(e), authorizes the
Secretary of the Treasury (Secretary) to prescribe regulations relating
to the packaging, marking, branding, labeling, and size and fill of
containers of alcohol beverages that will prohibit consumer deception
and provide the consumer with adequate information as to the identity
and quality of the product. Section 105(e) of the FAA Act also
generally requires bottlers and importers of alcohol beverages to
obtain certificates of label approval prior to bottling or importing
alcohol beverages for sale in interstate commerce. Regulations
implementing those provisions of section 105(e) as they relate to
distilled spirits are set forth in part 5 of title 27 of the Code of
Federal Regulations (27 CFR part 5). The Alcohol and Tobacco Tax and
Trade Bureau (TTB) administers the FAA Act pursuant to section 1111(d)
of the Homeland Security Act of 2002, codified at 6 U.S.C. 531(d). The
Secretary has delegated various authorities through Treasury Department
Order 120-01 (Revised), dated January 21, 2003, to the TTB
Administrator to perform the functions and duties in the administration
and enforcement of this law.
Certificates of Label Approval
TTB's regulations prohibit the release of bottled distilled spirits
from customs custody for consumption unless an approved Certificate of
Label Approval (COLA) covering the product has been deposited with the
appropriate Customs officer at the port of entry. See 27 CFR 5.51. The
TTB regulations also generally prohibit the bottling or removal from a
plant of distilled spirits unless the proprietor possesses a COLA
covering the labels on the bottle. See 27 CFR 5.55.
Classes and Types of Spirits
The TTB labeling regulations require that the class and type of
distilled spirits appear on the product's brand label. See 27 CFR
5.32(a)(2) and 5.35. Those regulations provide that the class and type
must be stated in conformity with Sec. 5.22 of the TTB regulations (27
CFR 5.22) if defined therein. Otherwise, the product must be designated
in accordance with trade and consumer understanding thereof, or, if no
such understanding exists, by a distinctive or fanciful name, and in
either case (with limited exceptions), followed by a truthful and
adequate statement of composition (see 27 CFR 5.35).
Section 5.22 establishes standards of identity for distilled
spirits products and categorizes these products according to various
classes and types. As used in Sec. 5.22, the term ``class'' refers to
a general category of spirits, such as ``whisky'' or ``brandy.''
Currently, there are 12 different classes of distilled spirits
recognized in Sec. 5.22, including whisky, rum, and brandy. The term
``type'' refers to a subcategory within a class of spirits. For
example, ``Cognac'' is a type of brandy, and ``Canadian whisky'' is a
type of whisky.
Brandy and Pisco
Brandy is Class 4 in the standards of identity, where it is defined
in Sec. 5.22(d) as ``an alcoholic distillate from the fermented juice,
mash, or wine of fruit, or from the residue thereof, produced at less
than 190[deg] proof in such manner that the distillate possesses the
taste, aroma, and characteristics generally attributed to the product,
and bottled at not less than 80[deg] proof.'' ``Pisco'' is a term
recognized by both the governments of Peru and Chile as a designation
for a distilled spirits product made from grapes. Generally, Pisco is
classified as brandy under the terms of TTB's current labeling
regulations. However, Pisco is not currently listed as a type of brandy
in Class 4. Rather, ``Pisco brandy'' has been included in Class 11, at
Sec. 5.22(k)(3), as an example of a geographical name that is not a
name for a distinctive type of distilled spirits, and that has not
become generic.
International Agreements
Pursuant to the United States-Peru Trade Promotion Agreement, the
United States recognized Pisco Per[uacute] as a distinctive product of
Peru (Article 2.12(2) of the Agreement). Accordingly, the United States
agreed not to permit the sale of any product as Pisco Per[uacute]
unless it has been manufactured in Peru in accordance with the laws and
regulations of Peru governing Pisco.
In addition, pursuant to the United States-Chile Free Trade
Agreement, the United States recognized Pisco Chileno (Chilean Pisco)
as a distinctive product of Chile (Article 3.15(2) of the Agreement).
Accordingly, the United States agreed not to permit the sale of any
product as Pisco Chileno (Chilean Pisco) unless it has been
manufactured in Chile in accordance with the laws and regulations of
Chile governing the manufacture of Pisco.
In like manner, Peru and Chile agreed, respectively, to recognize
Bourbon Whiskey and Tennessee Whiskey (which is defined in both
Agreements as a straight Bourbon Whiskey authorized to be produced only
in the State of Tennessee), as distinctive products of the United
States, and not to permit the sale of any product as Bourbon Whiskey or
Tennessee Whiskey unless it has been manufactured in the United States
in accordance with the laws and regulations of the United States
governing the manufacture of Bourbon Whiskey and Tennessee Whiskey.
(TTB notes that there are alternative spellings for the same term--
``whisky'' in the TTB regulations in 27 CFR part 5 and ``whiskey'' in
the Agreements with Peru and Chile.)
[[Page 28740]]
Pisco Production
``The Oxford Companion to Wine'' (Jancis Robinson, ed., Oxford
University Press, 2d ed., 2001, p. 536) reports that Spanish colonists
began producing aguardiente (grape spirits) in both Peru and Chile in
the sixteenth century, and it describes such spirits as being produced
near the town of Pisco, Peru. Further, ``The Oxford Companion to Wine''
says ````Pisco'' is an aromatic brandy made in Peru, Chile, and
Bolivia, mainly from Moscatel (muscat) grapes.'' According to ``Alexis
Lichine's Encyclopedia of Wines and Spirits'' (Alexis Lichine, ed., 5th
ed., Alfred A. Knopf, Inc., 1987), ``Pisco brandy'' is brandy distilled
from Muscat wine in Peru, Chile, Argentina, and Bolivia. Peru and Chile
have promulgated standards for the production of Pisco.
Notice of Proposed Rulemaking
On March 27, 2012, TTB published Notice No. 126 in the Federal
Register (77 FR 18146) proposing to amend Sec. 5.22 to clarify the
status of Pisco under the standards of identity. Specifically, TTB
proposed amending Sec. 5.22(d), which lays out the standard of
identity for brandy. In Notice No. 126, TTB stated that it believes
that Pisco generally meets the U.S. standard for brandy and should be
classified as a type of brandy. TTB also asserted that evidence
suggests that the generally recognized geographical limits of the
Pisco-producing areas do not extend beyond the boundaries of Chile and
Peru. The wine and spirits authorities cited above indicate that Pisco
production is not associated with any areas outside of South America.
As stated in Notice No. 126, COLAs naming ``Pisco'' as the brand
name or fanciful name of a distilled spirits product are almost
exclusively for products from Chile and Peru. TTB could not locate any
COLAs naming ``Pisco'' as the brand name or fanciful name for any
products from Argentina, or from any other country in South America
other than Peru, Chile, and Bolivia. COLAs for products from Bolivia
that name ``Pisco'' as the brand name or fanciful name also use the
term ``Singani.'' ``The Oxford Companion to Wine'' defines ``Singani''
as an ``aromatic grape-based spirit rather like pisco in that it is
high in terpenes and made under a strictly controlled regime,
principally from Muscat of Alexandria grapes'' that is a specialty of
Bolivia (Robinson, p. 638). Bolivia maintains standards for Singani
production in Bolivia, but does not have standards for Pisco
production.
In Notice No. 126, TTB specifically proposed to amend the standard
of identity in Sec. 5.22(d) to add Pisco as a type of brandy that is
manufactured in Peru or Chile in compliance with the laws of the
country of production regulating the manufacture of Pisco. The proposed
amendment would also recognize the phrases ``Pisco Per[uacute]'' (with
or without the diacritic mark, i.e., ``Pisco Per[uacute]'' or ``Pisco
Peru''), ``Pisco Chileno,'' and ``Chilean Pisco,'' as equivalent class
and type names of the product, to reflect the provisions of the trade
agreements. TTB clarified that if Pisco is recognized as a type of
brandy, persons who distribute it in the United States will be entitled
to label the product according to its type designation ``Pisco''
without the term ``brandy'' on the label, in the same way that a
product labeled with the type designation ``Cognac'' is not required to
also bear the class designation ``brandy.''
TTB noted that the Peruvian standard allows products designated as
Pisco to have an alcohol content ranging from 38 to 48 percent alcohol
by volume, and the Chilean standard allows products designated as Pisco
to have an alcohol content as low as 30 percent alcohol by volume. TTB
further clarified that since the standard proposed in Notice No. 126
would identify Pisco as a type of brandy, and the U.S. standard
requires that brandy must be bottled at not less than 40 percent
alcohol by volume, or 80[deg] proof, any ``Pisco'' imported into the
United States would have to conform to this minimum bottling proof
requirement. A product that is bottled at below 40 percent alcohol by
volume would fall outside the class and type designation. TTB stated
that under the proposed regulations, depending on the way that such a
product is manufactured, it could be labeled as a ``diluted Pisco'' or
as a distilled spirits specialty product bearing a statement of
composition.
Finally, TTB proposed to remove both ``Pisco brandy'' and
``Cognac'' from Sec. 5.22(k)(3), where they are listed as examples of
geographical names that are not names for distinctive types of
distilled spirits, and that have not become generic. TTB proposed this
amendment for two reasons. First, Pisco will appear in new Sec.
5.22(d)(9), where it will be a type of brandy defined as grape brandy
manufactured in Peru or Chile in accordance with the laws and
regulations of the country of manufacture governing the manufacture of
Pisco. Second, Cognac currently appears in Sec. 5.22(d)(2), where it
is a type of brandy defined as ``grape brandy distilled in the Cognac
region of France, which is entitled to be so designated by the laws and
regulations of the French Government.'' The inclusion of ``Cognac'' in
the list of examples of geographical names that are not names for
distinctive types of distilled spirits, and that have not become
generic, in Sec. 5.22(k)(3) is duplicative and confusing. Accordingly,
TTB proposed to remove the reference to Cognac in Sec. 5.22(k)(3) as a
technical correction to the regulations.
Effect on Currently Approved Labels
In Notice No. 126, TTB stated that the proposed change to the
regulations would revoke by operation of regulation any COLAs that
specify ``Pisco'' as the class and type or, brand name, or fanciful
name of distilled spirits products that are not products of Peru or
Chile. TTB also noted that it had searched its COLA database, and
believes that this rulemaking will affect only a small number of
labels.
Comments Received and TTB Response
TTB received eleven comments in response to Notice No. 126. All
comments appear on ``Regulations.gov,'' the Federal Rulemaking portal,
at https://www.regulations.gov, in Docket No. TTB-2012-0001. The
Distilled Spirits Council of the United States (DISCUS) (Comment 5)
wrote ``in strong support of the proposed amendments.'' Another
commenter identifying his organization as Campo de Encanto Pisco
(Comment 4) wrote that Pisco's ``history, tradition and current
resurgence in the U.S. should be respected and its status as a unique
category of distillate should be labeled and promoted accordingly.''
The Regulatory Council to Guarantee the Origin and Quality of Pisco,
which is a non-profit organization subject to the laws and courts of
the Republic of Peru and which represents the beneficiaries of the
Pisco denomination of origin submitted an informative comment (Comment
7) detailing the Pisco production process. The comment did not state a
position on TTB's proposal. TTB did not receive any comments concerning
any COLAs that would be revoked by operation of regulation were the
proposed rule to be adopted as a final rule.
Comments Concerning Aging in Wood/Oak Containers
One individual's comment (Comment 2) stated, ``[t]he technical
premise for this proposed rule, at least in the case of Peruvian Pisco,
is erroneous. Pisco is a distilled spirit, NOT a brandy because it is
not stored in wood casks.''
[Emphasis in original.] Another commenter, Chile's Agricultural and
[[Page 28741]]
Livestock Service (SAG), (Comment 11) also argued that classifying
Pisco as a type of brandy ``is not appropriate because it does not take
into account international definitions such as the OIV [(International
Organization of Vine and Wine)],'' which define Pisco as a ``spirit
product'' and provide that brandy must be aged in oak containers.
TTB Response
TTB disagrees with the two commenters who assert that Pisco is not
a brandy because it might not be aged or stored in wood/oak containers.
TTB and its predecessor agencies have long considered Pisco to be a
brandy, as evidenced by its listing in Sec. 5.22(k)(3) as ``Pisco
brandy'' since 1936. The relevant definition is the definition of
brandy in Sec. 5.22(d), rather than definitions of brandy in other
jurisdictions, and this regulation does not specify that brandy must be
stored or aged in oak containers. TTB notes that Sec. 5.22(d)(1)
generally provides that grape brandy that has been stored in oak
containers for less than two years must be labeled with the word
``immature,'' but also lists several types of brandy (specifically
neutral brandy, pomace brandy, marc brandy, and grappa, as well as any
fruit brandy that is not derived from grapes) that are exempt from this
requirement. To recognize that Peruvian and Chilean Pisco production
practices do not generally require that Pisco be stored or aged in oak
containers, in the final rule text, TTB is amending Sec. 5.22(d)(1) to
clarify that Pisco not stored in oak containers for at least 2 years is
also exempt from any requirement that it be labeled with the word
``immature.''
Comments Concerning the 40 Percent ABV Requirement
Six commenters expressed concerns about the proposed 40 percent
alcohol by volume minimum alcohol content for Pisco. One individual
commenter (Comment 1) stated, ``To ensure that the integrity of the
Pisco brandy * * * is not compromised, the requirement . . . [for]
Pisco brandy to be consumed in the United States [should] not require
40% alcohol by volume.'' Another individual (Comment 3) stated that,
``TTB should reconsider the classification of Pisco as a brandy so that
the regulation recognizes all Piscos that are manufactured in
compliance with the laws'' of their respective countries of origin. A
third individual (Comment 6) proposed that TTB adopt an exception for
Pisco to the requirement that brandy be bottled at not less than 40
percent alcohol by volume. The commenter also argued that requiring
Pisco bottled at less than 40 percent alcohol by volume to be labeled
differently would confuse consumers.
The Pisco Producers Association of Chile (Comment 9), the
Directorate-General for International Economic Relations of Chile's
Ministry of Foreign Affairs (Comment 10), and Chile's Agricultural and
Livestock Service (SAG) (Comment 11) also expressed concerns about the
proposed 40 percent alcohol by volume minimum alcohol content for
Pisco. These commenters pointed out that Chilean law permits production
of Pisco with an alcohol content by volume of as low as 30 percent, and
requested that TTB take this into consideration.
TTB Response
TTB notes that the U.S. standards of identity for distilled spirits
require that all of the major classes of distilled spirits (neutral
spirits (including vodka), whisky, gin, brandy, rum, and tequila) be
bottled at not less than 80[deg] proof (which is equivalent to 40
percent alcohol by volume). TTB believes it is appropriate to apply
this 80[deg] proof standard to like products of foreign countries so
that the same standard applies to domestic producers and foreign
producers. There is precedent for applying this 80[deg] proof standard
to distinctive products of other countries. The standard of identity
for Tequila in Sec. 5.22(g), which states that ``Tequila is a
distinctive product of Mexico, manufactured in Mexico in compliance
with the laws of Mexico regulating the manufacture of Tequila for
consumption in that country,'' applies the 80[deg] proof minimum
despite the fact that Mexican regulations allow Tequila to be bottled
at 35 percent alcohol by volume (70[deg] proof).
As noted above, products that are manufactured in Peru or Chile in
accordance with the laws and regulations governing the manufacture of
Pisco in those countries and that contain less than 40 percent alcohol
by volume could be imported into the United States labeled as a
``diluted Pisco'' or as distilled spirits specialty products bearing a
statement of composition. This is not a new requirement; under TTB's
current practice and that of its predecessor agencies, ``Pisco''
products imported into the United States from Chile or Peru containing
less than 40 percent alcohol by volume must be labeled as ``diluted
Pisco'' or as a distilled spirits specialty product bearing a statement
of composition. This final rule does not change that requirement.
Finally, TTB believes that maintaining this consistent and long-
standing 80[deg] proof minimum for the major classes of distilled
spirits would prevent consumer confusion rather than create it.
Comment From the Government of Peru
The Government of Peru submitted a comment concerning several
different issues (Comment 8). The comment included a history of the
name ``Pisco'' and a description of the production process for Peruvian
Pisco. The Government of Peru also suggested that the current
regulations prevent the import and trade of products with the name
``Pisco'' that ``do not come from the place of origin of `Pisco'
(Peru).'' Second, the Government of Peru requests that we confirm its
understanding that 27 CFR 5.51 and 5.55, which require a COLA before
imported and domestic products are removed from bond, will apply to
``imported and domestic commercialization''.
Finally, the Government of Peru argued that Pisco produced in Peru
is very different from other grape or wine brandies, and proposed that
TTB, instead of creating one type designation in Class 4 for ``Pisco''
that would include both Peruvian and Chilean Pisco, create a Class 4
type designation for Peruvian Pisco to include the terms ``Pisco Peru''
and ``Pisco''. The Government of Peru, in its comment, leaves to the
consideration of United States authorities what standard of identity
should be created for the ``grape/wine brandy'' manufactured in Chile.
TTB Response
TTB believes that evidence suggests that the generally recognized
geographical limits of the Pisco-producing areas do not extend beyond
the boundaries of Peru and Chile. TTB believes this rulemaking is
necessary to prevent confusion on this issue. Furthermore, TTB confirms
that the standard of identity for Pisco will apply to the universe of
distilled spirits removed either from U.S. Customs custody or from the
bonded premises of a domestic distilled spirits plant.
TTB considered the alternate proposal from the Government of Peru,
and found that it would give rise to several unintended consequences.
Currently, pursuant to Sec. 5.22(k)(3), TTB allows the terms ``Pisco''
and ``Pisco brandy'' to be used on labels for products manufactured in
either Peru or Chile. If TTB amended its regulations to remove ``Pisco
brandy'' from Sec. 5.22(k)(3) and provide type designations for
``Pisco Per[uacute]'' and ``Pisco Chileno (Chilean Pisco)'' but not a
type designation for ``Pisco,'' all of the existing COLAs using
``Pisco'' or ``Pisco brandy'' as the class
[[Page 28742]]
and type designation--estimated at approximately 100 COLAs-- would be
revoked by operation of regulation. The existing COLAs using ``Pisco''
or ``Pisco brandy'' would not fit into either the ``Pisco Per[uacute]''
or the ``Pisco Chileno (Chilean Pisco)'' type designation, and these
COLAs would not comply with TTB's regulations without the broader,
overall type designation for ``Pisco.'' TTB does not believe that such
a disruption to the trade is warranted. TTB also notes that consumers
will easily be able to identify the country of origin of any Pisco
product because under 27 CFR 5.32(b)(2), imported distilled spirits
product labels must include the country of origin.
Clarification of the Regulatory Language
DISCUS, in response to Notice No. 127, which proposed a standard of
identity for Cacha[ccedil]a, questioned the wording of that proposed
standard of identity. In Notice No. 127, TTB proposed to define
Cacha[ccedil]a as ``a type of rum that is a distinctive product of
Brazil, manufactured in Brazil in compliance with the laws of Brazil
regulating the manufacture of Cacha[ccedil]a for consumption in that
country'' (emphasis added). DISCUS commented that the highlighted
language could inadvertently cause confusion as to whether a product
that is produced in full conformity with Brazil's regulations governing
the manufacture of Cacha[ccedil]a for consumption in Brazil and bottled
at less than 40 percent alcohol by volume could be labeled and sold in
the United States as ``Cacha[ccedil]a.'' DISCUS also noted that
deleting this language would be consistent with TTB Notice No. 126,
Standards of Identity for Pisco and Cognac.
TTB believes that including the phrase ``for consumption in that
country'' is appropriate for both Cacha[ccedil]a and Pisco because the
wording clarifies that the laws of the country of manufacture cannot
provide standards that are different for products being exported than
for products to be consumed within the country of manufacture. TTB
inadvertently omitted this phrase in its proposed standard of identity
for Pisco in Notice No. 126, and believes, for clarity, that the phrase
should be included in the final rule text. However, such a requirement
does not override the current practice, described above, that ``Pisco''
products imported into the United States from Chile or Peru containing
less than 40 percent alcohol by volume must be labeled as ``diluted
Pisco'' or as a distilled spirits specialty product bearing a statement
of composition.
TTB Finding
After careful review of the comments discussed above, and after
consideration of the obligations incurred in the international
agreements, TTB has determined that it is appropriate to adopt the
proposed regulatory amendments contained in Notice No. 126, with the
two modifications (the clarification that Pisco need not be aged in oak
containers, and the addition of the phrases ``for consumption in the
country of manufacture'' and ``for consumption in that country,'') as
discussed above. TTB notes that these regulatory changes will revoke by
operation of regulation any COLAs that specify ``Pisco'' as the class
and type or, brand name, or fanciful name of distilled spirits products
that are not products of Peru or Chile.
Regulatory Flexibility Act
Pursuant to the requirements of the Regulatory Flexibility Act (5
U.S.C. chapter 6), TTB certifies that this final rule will not have a
significant economic impact on a substantial number of small entities.
These amendments clarify the status of Pisco under the standards of
identity for distilled spirits and do not impose, or otherwise cause, a
significant increase in reporting, recordkeeping, or other compliance
burdens on a substantial number of small entities. Accordingly, a
regulatory flexibility analysis is not required.
Executive Order 12866
This final rule is not a significant regulatory action as defined
by Executive Order 12866. Therefore, it requires no regulatory
assessment.
Drafting Information
Karen E. Welch of the Regulations and Rulings Division, Alcohol and
Tobacco Tax and Trade Bureau, drafted this document.
List of Subjects in 27 CFR Part 5
Advertising, Consumer protection, Customs duties and inspection,
Imports, Labeling, Liquors, and Packaging and containers.
Amendment to the Regulations
For the reasons discussed in the preamble, TTB amends 27 CFR part 5
as follows:
PART 5--LABELING AND ADVERTISING OF DISTILLED SPIRITS
0
1. The authority citation for part 5 continues to read as follows:
Authority: 26 U.S.C. 5301, 7805, 27 U.S.C. 205.
0
2. Section 5.22 is amended by:
0
a. In paragraph (d) introductory text, removing the words ``paragraphs
(d)(1) through (8)'' and adding, in their place, the words ``paragraphs
(d)(1) through (9)'';
0
b. In paragraph (d)(1), in the third sentence, revising the
parenthetical phrase to read ``(other than neutral brandy, pomace
brandy, marc brandy, grappa brandy, Pisco, Pisco Per[uacute], or Pisco
Chileno)'';
0
c. In paragraph (k)(3), by removing the words ``Cognac,'' and ``Pisco
brandy,''; and
0
d. Adding new paragraph (d)(9) to read as follows:
Sec. 5.22 The standards of identity.
* * * * *
(d) * * *
(9) ``Pisco'' is grape brandy manufactured in Peru or Chile in
accordance with the laws and regulations of the country of manufacture
governing the manufacture of Pisco for consumption in the country of
manufacture.
(i) ``Pisco Per[uacute]'' (or ``Pisco Peru'') is Pisco manufactured
in Peru in accordance with the laws and regulations of Peru governing
the manufacture of Pisco for consumption in that country.
(ii) ``Pisco Chileno'' (or ``Chilean Pisco'') is Pisco manufactured
in Chile in accordance with the laws and regulations of Chile governing
the manufacture of Pisco for consumption in that country.
* * * * *
Signed: February 7, 2013.
John J. Manfreda,
Administrator.
Approved: March 5, 2013.
Timothy E. Skud,
Deputy Assistant Secretary (Tax, Trade, and Tariff Policy).
[FR Doc. 2013-11705 Filed 5-15-13; 8:45 am]
BILLING CODE 4810-31-P