Winemakers to TTB: Fix Lagging Approval on Winemaking Products
August 18, 2021
Wholesaler consolidation and market power, retailer consolidation, direct shipping barriers that hurt small wineries and importers, labelling, taxation, and Neo-prohibitionism top the list of issues being floated as the Alcohol and Tobacco Tax and Trade Bureau seeks input for an upcoming report on barriers to competition in the alcoholic beverage sector. There are plenty of barriers.
Another less talked about competitive issue has emerged as a recurring theme in comments on TTB’s Request for Information on Promoting Competition in the Beer, Wine, and Spirits Markets - the time it takes for new winemaking products to be approved for commercial use.
Because it can take up to five years to get new products approved and there are separate approval lists for domestic and export use, wineries that are exporting may not use a product that has been only approved for domestic use as they don’t want to have to separate wine into wines made for the domestic market and wines made for export. This makes US wineries less competitive because they can’t use new products that may improve quality and reduce costs.
TTB Scrambling, Stakeholders Seek Extensions
Last month, the Biden Administration instructed the Treasury Department to submit a report to the White House on the status of competition in beer, wine, and spirits and whether there are barriers that “hinder smaller and independent businesses or new entrants from distributing their products,” within 120 days. The executive order instructed TTB to provide input on “rescinding or revising any regulations of the beer, wine, and spirits industries that may unnecessarily inhibit competition.”
TTB issued a “Request for Information” with a deadline of August 18.
Napa Valley Vintners asked TTB take additional time to consider feedback and to engage as well, but at the same time cited specific concerns about the use of American Viticultural Areas (AVAs) on wine labels.
WSWA hasn't submitted comments yet but can’t be happy that wholesaler business practices are being examined.
As of Tuesday evening, 160 comments on the request for information posted - see comments - lots of them about wholesalers.
Thomas Hogue, Director of the Office of Congressional and Public Affairs at TTB said TTB is trying to gather as much information as possible but that there won’t be an official extension in this case because it involves a “request for information” - not a “rulemaking” and that TTB’s timeline is driven by the Administration’s 120 day deadline. Hogue said TTB will still accept comments, though, keeping the docket open after the deadline. “The idea here was to try to get as much stakeholder input as possible to help inform that report, but the report itself is still going to be due when it's due,” Hogue said.
Industry sources said TTB is scrambling, partly because higher-ups at Treasury didn’t communicate that a new report was going to be needed prior to the executive order being issued and that August 18 is being looked at as an artificial deadline. One source said Deputy Assistant Secretary for Tax, Trade and Tariff Policy Tim Skud may have played a role advising the White House about what to ask for concerning wine, beer and spirits.
Comments About Getting Winemaking Products Approved
- “As a winery, we are constantly adapting our winemaking practices to meet our customers’ evolving preferences, to become more sustainable, and to become more efficient. There are many winemaking products used worldwide that could help us achieve our aims, but we cannot use these products due to US regulatory status,” Please speed up the approval process for winemaking materials so that we can be competitive both within the U.S. and in the global market.”
- Pine Ridge.
- “There are a number of enological products I would like to use that are legal in other parts of the world, but are not legal for unrestricted use in the US. My company is thus forbidden from using such products, even if the wine is to be sold in the US market. Whereas imported wines can use these products without restriction. I have submitted formal requests through the TTB to use some of these products, but the process is still ongoing more than 18 months later. This is maddening. These products include pea protein fining agents instead of animal fining agents and chitosan for microbial stability rather than lysozyme.”
- Union Wine Company
- “It is really frustrating to be prevented from using effective tools that are a huge improvement over what is currently available. Wineries around the world use these tools and they export wines with these products in them into the US market. However, we do not have the same reciprocal opportunity. This clearly puts the US at a competitive disadvantage. “Please move everything from 24.250 to 24.246 so that all of the wineries in the USA have the same competitive advantage as wineries around the world.”
- "The US wine industry would be stronger both on the domestic front and on the international front if TTB moved faster with the regulation of new wine treating materials. Products that are not fully approved include Mannoproteins, Carboxymethyl Cellulose, Potato Protein, Pea Protein, and Chitosan. Most of these materials are more natural or non-allergenic to improve consumer experiences."
- Cara Morrison
- “New wine treating materials are administratively approved for domestic use under TTB authority 27 CFR 24.250, and then undergo a Rulemaking (scientific analysis, public comment, etc.) to achieve placement on 27 CFR 24.246, the list of ‘Wine Treating Materials’. This rulemaking has not happened for over ten years, leaving many new and innovative products languishing on the Administrative Approval list. There was a Notice of Proposed Rulemaking published in 2016 to address the then-current list that is still not completed!” “Mannoproteins, Carboxymethyl Cellulose, Potato Protein, and Chitosan are some of the many treating materials that are affected.”
- As a winemaker with a large California winery that exports more than 1,000,000 gallons of bulk wine to the EU, my winery is at a competitive disadvantage against global competitors, like Australia, because they are able to use fining agents, such as Potassium Polyaspartate, which allows them to have wines ready for market sooner than us American suppliers. “This is due to our current trade agreement with the EU, which specifies that we can only use items found on the 24.246 list of approved additives. This disqualifies all items found on the 24.250 list of additives approved for continual use, despite the fact that the additives found on the 24.250 list are legal to use in the EU and are commonly used in winemaking globally. We, as an industry, would benefit by updating our 24.246 list with the items found on the 24.250 list.”
- “New wine treating materials are administratively approved for domestic use under TTB authority 27 CFR 24.250, and then undergo a Rulemaking (scientific analysis, public comment, etc.) to achieve placement on 27 CFR 24.246, the list of ‘Wine Treating Materials.' This rulemaking has not happened for over ten years, leaving many new and innovative products languishing on the Administrative Approval list. There was a Notice of Proposed Rulemaking published in 2016 to address the then-current list that is still not completed!"
"Wineries are free to use these treating materials on wines made for domestic consumption, but these treating materials potentially may not be used for wines made for export to the EU. If wineries wish to export wine to the EU, there is a Trade Agreement that states all treating materials used should have undergone full regulatory approval, and thus be on 27 CFR 24.246."
- Shaun Richardson, Laffort USA, Inc.