Alcohol & Tobacco Tax & Trade Bureau proposed amending the Standards of Fill rules to add 10 additional sizes to the 12 currently allowed for wine and to add four to the current 11 for spirits. In the alternative, TTB also proposed eliminating all individual standards of fill for wine and spirits except for a minimum for 50 ml wine and spirits and a maximum of 3.785 liters.
The proposal is intended to resolve an issue that has kicked around TTB, and its predecessor, the Alcohol, Tobacco & Firearms Bureau for decades, Robert Tobiassen, president, National Association of Beverage Importers and former general counsel of TTB told us.
In the notice, TTB gave or implied five reasons for the proposal:
- TTB continues to receive numerous requests for new sizes
- The trade agreement of October 7, 2019, between Japan and the United States requires the U.S. to propose adding certain sizes of standards of fill for wine and spirits
- The recent Treasury Department Competition Report required by the Executive Order on Promoting Competition raises the question of whether a delimited number of sizes acts as a barrier to entry or reduces competition and innovation. From the perspective of importers, the question is whether this is a “non-tariff trade barrier”
- Standards of fill are not needed today for determining the accurate excise tax liability under the “All-in-Bond System” as they were when the system was adopted in 1979
- During a supply chain meltdown, bottlers may be unable to obtain certain bottle sizes and need the flexibility to use any size bottle that is available. This is implied in the “Supplementary Information” section of the Federal Register notice.
The core question, Tobiassen says, is whether 22 sizes for wine and 15 for spirits commercially manageable or whether standards of fill should simply be eliminated.