Brand label registration is an essential part of the process of selling alcohol. And while many suppliers are aware of these requirements for three-tier distribution, they can often overlook them when it comes to direct-to-consumer (DtC) shipping.
Alcohol labels, whether on a bottle, can or keg, have lots of information that is highly regulated, both at the federal level and within the individual states. There are rules about what information is required both on a label, such as the brand name and identification of the supplier, and information that is prohibited, such as specific health claims. In order to monitor whether an alcoholic beverage’s label is proper, state and federal regulations require each label to be approved and registered with the relevant regulatory agency for it to be sold.
Remember that DtC shipments are still a sale of alcohol, meaning that it is a type of sale that falls under the brand label registration requirements. Whether you are entering into DtC shipping for the first time or are expanding into new states, ensure that you abide by all applicable brand label registration requirements.
We’ve compiled the basics of brand label registration to help you understand how to best maintain compliance as you work in the DtC shipping world.
The TTB and brand label registration
The Alcohol and Tobacco Tax and Trade Bureau (TTB) is the primary organization that polices beverage alcohol brand labels. The TTB designates what must be on a label and what cannot be on a label. With some notable exceptions, the TTB reviews every beverage alcohol label prior to their sale.
Certificate of Label Approvals (COLAs) ensure that suppliers and producers comply with federal regulations when marketing and designing alcohol labels. Under the Federal law, most alcoholic products being distributed across state borders must first be registered with the TTB and receive a COLA before they can be sold.
There are some exceptions to COLA requirements. Wine products with an ABV of 7% or less are excluded entirely from the COLA process, and beers that are sold only in the states where they are produced are not required to get a COLA. However, since DtC shipments often are made into other states, that makes them subject to the COLA requirement. As such, it is important for DtC shippers to make sure they have all necessary COLAs for their products before they begin shipping.
State brand label registration requirements
Most states also have their own brand label registrations, which are often required for three-tier distribution, so suppliers should be generally aware of such processes. State brand label registrations typically require providing a COLA (except of course when a COLA is unavailable) and paying a fee.
Often an existing registration for three-tier distribution will count for a DtC registration — no need to double up on them. However, not every state imposes their brand label registration requirements on DtC sales, even if they exist for three-tier distribution. It is important for DtC shippers to understand each state’s specific rules for DtC shipping.
Brand label registration exceptions
Retailers should note that they are generally exempted as they lack the proper ownership or authorization needed to register brand labels. However, there are some states that require retailers to have written authorization from the brand owner to ship a product direct-to-consumer. Retailers shipping alcohol DtC should be aware of states that require them to get authorization from brand owners to conduct DtC shipping in that state. For example, Virginia requires retailers to have permission from brand owners to sell in Virginia.
There are also two states where it is prohibited to have a product registered for both DtC shipping and three-tier distribution. In Louisiana, wineries are required to register their brand labels prior to sale in the state but they can only register a brand label for three-tier distribution or DtC — but they cannot do both. The other state is Wyoming, where if a wine is listed for sale by the Wyoming Liquor Division (WLD), then it cannot also be sold DtC. However, that is specified down to the individual label. If a 1 liter version of a wine has been listed for distribution with the WLD, it could still be sold DtC at the 750 milliliter size.
Beverage alcohol suppliers should already be aware of federal and state brand label registration requirements as they are a key compliance requirement for selling alcoholic products in the U.S.. Even so, many suppliers may overlook these requirements when it comes to their DtC shipments. Brand label registration requirements are just one more thing for a business to recognize and research into as they expand their DtC shipping presence.
Take your DtC shipping to the next level. See how ShipCompliant Direct can help with your DtC compliance processes, from license management to real-time compliance checks – including brand label registration – and tax determination and reporting.