The alcoholic beverage industry is known for its ability to create new, innovative beverages that do not always fit neatly into the traditional categories of beer, wine, and spirits. Hard seltzer is one example of a new, innovative beverage that has gained significant popularity in recent years. From a regulatory compliance perspective, it is challenging to determine what requirements apply to new, innovative beverages, such as hard seltzer, because they are not always clearly defined in federal or state laws. Thus, staying abreast of the views shared by regulators through both formal and informal guidance is important. At a recent Craft Brewers conference, representatives of the Alcohol and Tobacco Tax and Trade Bureau (TTB) made a presentation about how it regulates hard seltzers, which should be of interest to anyone currently selling, or interested in selling, hard seltzers.

As a basic starting point, TTB acknowledged that its regulations do not define hard seltzer or other potentially analogous terms like alcoholic seltzer, spiked seltzer, or hard sparkling water. Generally, hard seltzer is understood to be a low-calorie beverage made from fermented sugar or malted barley containing carbonated water, flavor, and alcohol, with an alcohol content by volume in the 4%-6% range. With this in mind, TTB provided the guidance below.

• TTB stated that if hard seltzers are made with both malted barley and hops, they are classified as “beer” under the Internal Revenue Code and “malt beverages” under the Federal Alcohol Administration Act. TTB explained that these products would:

  • Need labels that include the brand name, type of product, name and address of the bottler, net contents, alcohol content, and declaration of certain ingredients (like coloring);

  • Require a Certificate of Label Approval/Exemption (COLA) from TTB; and

  • Need to be labeled with a government health warning statement.

• TTB stated that if, on the other hand, hard seltzers are not made with both malted barley and hops, they are classified as “beer” that are not “malt beverages” (e.g., beverages made from fermented sugar or malted barley, but not hops). TTB explained that these products would not require a COLA from TTB, but they would:

  • Need labels that include the brewer’s name or trade name, net contents, type of product, and place of production;

  • Need to be labeled with a government health warning statement; and

  • Be subject to FDA food labeling regulations.

• TTB acknowledged that most hard seltzers would require formula approval if they contain flavoring or coloring materials.

Unlike the federal regulatory landscape where industry members can look to a limited number of regulatory agencies, such as TTB and FDA, for guidance, the state regulatory landscape multiplies the number of agencies that provide guidance. For example, the Oregon Liquor Control Commission has issued guidance, stating that hard seltzers only qualify as “malt beverages” if they otherwise meet a revised definition of that term in the state statute. As another example, the District of Columbia Alcoholic Beverage Regulation Administration has issued guidance, stating that hard seltzer is classified as a beer if it is derived from malt or a malt substitute, but it is a wine if it is derived from fruit, sugar, or other agricultural products.

Thus, for hard seltzers, and other new beverages, a healthy regulatory compliance program should take into account federal requirements and include a state-by-state approach for state requirements because each state may regulate such beverages in a different manner.