For anyone involved in the alcohol industry—whether distilling, brewing, winemaking, importing, or distribution—the Code of Federal Regulations (“CFR”) is an indispensable resource. The CFR outlines the specific federal rules that alcohol producers, importers, and distributors must follow to operate legally and safely in the U.S. Understanding these regulations is essential for navigating permits, maintaining compliance, and ensuring products meet federal standards.
This guide will explain what the CFR is, why it’s essential, and summarize the critical parts that govern alcohol production and distribution in the U.S.
What is the Code of Federal Regulations (“CFR”)?
The CFR is an organized collection of rules issued by federal agencies to provide clarity on how to implement laws passed by Congress. Think of the CFR as the detailed guide that translates broad legislative acts into specific, actionable requirements. The CFR covers nearly every industry in the U.S., including environmental safety, health standards, aviation, and alcohol production. Within the CFR are many different parts, all related to different industries and addressing a variety of regulations.
How the CFR Relates to Federal Law
When Congress enacts a law requiring regulatory oversight, the corresponding federal agency creates detailed rules to implement it. For alcohol, this responsibility falls under the Alcohol and Tobacco Tax and Trade Bureau (“TTB”), an agency within the Department of the Treasury. The TTB creates regulations for alcohol manufacturing, distribution, labeling, and taxation. These rules are then published in the Federal Register and, after finalization, integrated into the CFR.
How the CFR is Updated
The CFR is revised annually to reflect new or amended rules. As new laws are passed or changes in technology and industry practices occur, agencies like the TTB update the CFR, allowing it to evolve with industry advancements and legislative changes.
Key Parts of the CFR for Alcohol Production
If you’re producing, distributing, or researching alcohol regulations, Title 27 of the CFR is particularly important. Title 27 deals specifically with Alcohol, Tobacco, and Firearms, covering licensing, production standards, and recordkeeping. Below are some of the most relevant parts of Title 27 for anyone working with alcohol beverages.
Permits and Licensing Requirements: 27 CFR Part 1
A permit is required for any entity producing, importing, or distributing alcohol beverages. This includes wineries, distilleries, breweries, cideries, and meaderies. 27 CFR Part 1 (Permits and Licensing Requirements) explains the federal permit requirements in detail, covering who needs a permit, types of permits, and application requirements.
Key points include:
- Basic Permit Requirements: Anyone producing, importing, or wholesaling alcohol beverages must apply for a TTB permit. The application requires business details, including ownership structure, facility location, and production type.
- Application Process: Obtaining a TTB permit may take several months and requires documentation of production processes, facility layout, and security measures.
- State-Level Permits: Most states also require additional permits or licenses, making compliance with both federal and state regulations essential.
Advertising and Labeling: 27 CFR Parts 4, 5, and 6
Accurate labeling is crucial for consumer information and compliance. The CFR establishes standards of identity, defining each type of alcohol beverage by ingredients and production methods.
- Class/Type Statements and Standards of Identity: Each alcohol type has specific ingredient and production standards. For example, Bourbon Whiskey must be made from at least 51% corn and aged in new charred oak barrels (and can only be produced in the United States, among other requirements).
- Label Approval: Producers must submit labels to the TTB for a Certificate of Label Approval (COLA), verifying compliance with requirements on alcohol content, health warnings, and geographic origin.
For detailed requirements, see:
- 27 CFR Part 4 (Wine Labeling)
- 27 CFR Part 5 (Distilled Spirits Labeling)
- 27 CFR Part 7 (Labeling and Advertising of Malt Beverages)
Taxation and Recordkeeping: 27 CFR Parts 19, 24, and 25
Excise taxes apply to all alcohol produced in the U.S., with different tax rates for each product type.
- Excise Tax Calculations: Tax rates vary based on alcohol type and volume.
- Recordkeeping: The CFR requires producers to keep detailed records of raw materials, production output, and inventory.
- Monthly Reporting: Many producers submit regular reports, either monthly or quarterly, summarizing production, inventory, and sales.
For tax and recordkeeping requirements, see:
- 27 CFR Part 19 (Distilled Spirits Tax and Records)
- 27 CFR Part 24 (Wine Tax and Records)
- 27 CFR Part 25 (Beer Tax and Records)
Note: Not an exhaustive list. Other requirements may apply depending on the specific business model, state/locality, etc.
Facility and Equipment Requirements: 27 CFR Parts 19, 24, and 25
The CFR specifies facility requirements for alcohol production and storage to ensure safety and security.
- Security Standards: Certain facilities must prevent unauthorized entry and secure storage areas, especially for distilled spirits.
- Equipment Requirements: Specific standards apply to equipment for each production type, ensuring consistency and preventing potential production issues.
For facility standards, see:
- 27 CFR Part 19 (Distilled Spirits Plants)
- 27 CFR Part 24 (Wine Plants/Facilities)
- 27 CFR Part 25 (Beer Plants/Facilities)
Distribution and Trade Practices: 27 CFR Parts 4, 5, 6, and 7
CFR guidelines prevent unfair business practices and protect competition in alcohol distribution.
- Tied-House Restrictions: These rules prevent exclusive partnerships between producers and retailers.
- Advertising Standards: Truthful advertising is mandated to prevent false claims about product quality or health benefits.
For more on these guidelines, see:
- 27 CFR Part 4 (Labeling and Advertising of Wine)
- 27 CFR Part 5 (Labeling and Advertising of Distilled Spirits)
- 27 CFR Part 6 (Tied-House Rules)
- 27 CFR Part 7 (Labeling and Advertising of Malt Beverages)
Staying Compliant with Alcohol Production Regulations
Navigating the CFR is essential for alcohol producers, but staying compliant can be complex. For personalized support in meeting federal and state requirements, consider consulting with an experienced alcohol industry attorney. Our law firm focuses on guiding producers, importers, wholesalers, brand owners, and third parties through permitting, compliance, tax obligations, and more. Contact us to ensure your business is compliant and well-positioned for success in a highly regulated industry. Send us an email at info@zahnlawpc.com to schedule an introductory call.