An Important Note about Kombucha Products
Monday, June 28, 2010
TTB Guidance
Kombucha Products Containing at Least 0.5 Percent
Alcohol by Volume are Alcohol Beverages
The Alcohol and Tobacco Tax and Trade Bureau (TTB) has received inquiries about "kombucha" products from the states of Maine, Minnesota, Arizona, and Vermont and a large distributor. Kombucha is a fermented tea that is typically marketed as a non-alcoholic beverage, which means that it may contain a trace amount of alcohol, as long as the overall
alcohol content is less than 0.5 percent alcohol by volume. In some cases these products have alcohol contents that significantly exceed 0.5 percent. At this point, TTB does not know how many brands might be affected by this issue.
Producers, importers, and wholesalers of alcohol beverage products may be subject to the permit, labeling, and advertising requirements of the Federal Alcohol Administration Act (FAA Act), depending on the classification of the alcohol beverage product. See 27 U.S.C. 201, et seq. Furthermore, the container of any alcohol beverage product sold or distributed in the United States with an alcohol content of 0.5 percent or more must bear the health warning statement required by the Alcoholic Beverage Labeling Act. See 27 U.S.C. 215. This requirement applies regardless of whether the product is subject to the labeling requirements of the FAA Act. These labeling mandates would ensure that the consumer is advised that the product is an alcohol beverage.
In addition, the production of alcohol beverages is subject to strict regulation under the Internal Revenue Code of 1986, as amended (IRC). Under Chapter 51 of the IRC, persons who produce distilled spirits, wines, or beers must qualify as producers, file bonds, pay Federal excise taxes, file returns, maintain records, and mark containers, as required. In general, subject to certain exceptions not relevant here, a product that contains at least 0.5 percent alcohol by volume and is suitable for beverage purposes will be subject to these requirements. Anyone who produces alcohol beverages without payment of tax in violation of the IRC is subject to liability for tax, penalties, and interest. Such non-taxpaid products may be seized and forfeited. Finally, persons who violate these provisions of the IRC may be subject to other civil and criminal liabilities.
TTB has been advised that a major chain of grocery stores has removed a number of kombucha products from its shelves because of concerns about elevated alcohol content levels. The distribution of an alcohol beverage product that is not labeled as such misleads consumers and could cause potentially serious consequences for consumers, especially pregnant women, children, and individuals who should avoid alcohol for medical reasons. Accordingly, TTB encourages producers and distributors of kombucha products that are alcohol beverages to take immediate steps to ensure that their products comply with applicable Federal, State, and local laws regarding alcohol beverages.
As a result of the inquiries received on this issue, TTB is coordinating with the Food and Drug Administration (FDA) to ensure that kombucha products that are currently on the market comply with Federal laws. Right now, our primary concern is to ensure that consumers are not misled about the nature of alcohol beverage products that might be marketed as non alcohol beverages. At this point in time, we do not know how extensive the problem is.
TTB plans to take samples of kombucha products from the marketplace and test their alcohol content in order to determine if the products are labeled in compliance with Federal law. If TTB finds alcohol beverages that are not labeled in accordance with Federal law, we will take appropriate steps to bring them into compliance. TTB will consult with FDA to ensure that the affected products comply with applicable Federal laws. If the testing results from this labeling initiative indicate potential violations of the IRC, they will be referred to the appropriate office within TTB for further investigation, as necessary. If you have any questions about this guidance, please contact Jeff Salisbury of the Advertising, Labeling, and Formulation Division, at 513-684-5902.
TTB G 2010‐3
OPR: ALFD
June 23, 2010
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