TTB COLA UPDATE

What is TTB doing and how will the changes impact industry and state regulators?

ANGELA JEFFRIES

D e pu t y D i re ct or R e g u l at i ons and R u l i ng s D i v i s i on A l cohol and Tobacco Tax and Trade B ure au

March 11, 2014

“STATE OF THE BUREAU”

WHAT IS TODAY’S COLA OUTLOOK?

Alcohol and Tobacco Tax and Trade Bureau 2

Number of COLAs Received

133,428 124,966 132,602 145,307 152,741 140,324 FY 2008 FY 2009 FY 2010 E-filed FY 2011 Paper FY 2012 FY 2008 to FY 2013: 5% increase FY 2012 to FY 2013: 8% decrease FY 2013 Alcohol and Tobacco Tax and Trade Bureau 3

Average Turnaround for COLAs

30 27 25 22 15 14 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 Avg. days to receive a response from TTB Alcohol and Tobacco Tax and Trade Bureau 4

What Factors Impact Processing Times?

    Industry Growth Industry Processes Other Governmental Entity Requirements TTB Internal Processes Alcohol and Tobacco Tax and Trade Bureau 5

Number of Breweries

3 704 1 844 1 932 2 106 2 369 2 960 FY 2008 FY 2009 FY 2010 FY 2011 100% increase Alcohol and Tobacco Tax and Trade Bureau FY 2012 FY 2013 6

Number of Wineries

6 264 6 907 7 585 8 160 8 784 9 505 FY 2008 FY 2009 FY 2010 FY 2011 52% increase Alcohol and Tobacco Tax and Trade Bureau FY 2012 FY 2013 7

Number of Distilleries

1 501 1 168 629 727 414 492 FY 2008 FY 2010 FY 2011 FY 2009 270% increase FY 2012 Alcohol and Tobacco Tax and Trade Bureau FY 2013 8

Number of Alcohol Importers

9 318 9 909 10 544 11 237 12 099 12 887 FY 2008 FY 2009 FY 2011 FY 2010 38% increase FY 2012 Alcohol and Tobacco Tax and Trade Bureau FY 2013 9

Industry Processes

 Multiple Label Submissions For Single Products  Industry Awareness of TTB Rules and Policy  Utilize the (28) allowable revisions that require no label re submission for existing approved COLAs  Avoid the “Needs Correction” Labels Alcohol and Tobacco Tax and Trade Bureau 10

Other Governmental Requirements

Many State Law Requirements Sometimes Impact Label Submissions Example: California State Law Sonoma County Conjunctive Labeling Law Alcohol and Tobacco Tax and Trade Bureau 11

TTB Internal Streamlining

 Implemented changes in our expectations for image related issues  Eliminated the Expedite and Informal Label Review Process  Expanded the list of qualifications in order to reduce numbers of “needs correction” and rejected labels.

 Updated COLA form to allow additional changes that may be made to labels without TTB approval  Established a virtual file room to process paper applications electronically Alcohol and Tobacco Tax and Trade Bureau 12

How May TTB Address COLAs For the Future?



I M P R O V E D G U I D A N C E , E D U C A T I O N A N D T A R G E T E D O U T R E A C H



A U T O M A T I O N



M A R K E T P L A C E R E V I E W S

Alcohol and Tobacco Tax and Trade Bureau 13

Provide Current and Clear Guidance

Modernize and clarify existing regulations

•Review beverage alcohol labeling regulations. •What needs to be added, deleted, changed?

Alcohol and Tobacco Tax and Trade Bureau 14

Provide Current and Clear Guidance

Evaluate and consolidate all previously issued guidance •Newsletters, Announcements, Rulings, Industry Circulars and FAQs.

Alcohol and Tobacco Tax and Trade Bureau 15

Create an Automated Label Approval System Simplified COLA Approval vs. Traditional COLA Approval

 Labels with lowest risk for noncompliance could be automatically approved   products that have a standard of identity No claims  Higher risk labels would receive traditional review Alcohol and Tobacco Tax and Trade Bureau 16

Robust Marketplace Sampling Program

 The Alcohol Beverage Sampling Program = Targeted Enforcement  Many approved labels never end up in the marketplace  TTB resources would be better spent on labels and products that are actually in the marketplace.

 The ABSP takes a statistical sample of products that are in the marketplace, for compliance Alcohol and Tobacco Tax and Trade Bureau 17

More Change Is Coming

     Further Expand List of Allowable Revisions Continued COLAs Online Enhancements Continued Coordination Between States and Other Federal Agencies through our Industry Liaison and others.

Consider joint efforts to analyze Federal and State requirements to determine if they are necessary; still serve a valid purpose, and how we can align, simplify, and make for a seamless process with governmental partners.

Continue to study ABSP trends to address recurrent non-compliances Alcohol and Tobacco Tax and Trade Bureau 18

What’s Next?

Continue The Dialogue Toward Solutions!

Alcohol and Tobacco Tax and Trade Bureau

Thank you

ANGELA JEFFRIES D E P U T Y D I R E C T O R R E G U L A T I O N S A N D R U L I N G S D I V I S I O N A N G E L A . J E F F R I E S @ T T B . G O V ( 2 0 2 ) 4 5 3 - 2 0 8 4

Alcohol and Tobacco Tax and Trade Bureau 20