Obama considers huge shakeup in alcohol law, eliminating TTB

US alcohol law could be on the verge of a huge shakeup. The Obama administration is considering eliminating the TTB, the agency currently in charge, and divvying up its duties between the IRS and the FDA.

The implications are huge, and the wine industry is afraid -- although it might be a good move for consumers. But I might be wrong, as the FDA doesn't do a good job of regulating food. And one wine industry spokesman described the move as a "power grab" by the FDA. The IRS would collect taxes; the FDA would be in charge of everything else.

A few things that might result: Ingredient listings on wine labels ("Honey, this wine has fish bladders in it.") Calorie counts. Wilder wine label designs with no-holds-barred graphic images (I'd give "Living Dead Red" a shot.)

And here's one I'd like to see: More accurate labeling of alcohol percentage.

The nix-the-TTB suggestion was in a memo last year from the Office of Management and Budget to the Treasury Department. Next week, when the new federal budget proposal is delivered, we'll see if the White House is planning to go forward.

To discuss what the move might mean, I called Michael Kaiser, director of communications for Wine America, which represents wineries in dealing with Congress.


"We are very much supportive in keeping the current regulatory aspect for the wine industry, and for spirits and beer," Kaiser said. "We worry about the FDA taking over, that it would be reactive. That is our concern, that it may be a power grab by the FDA to take over a topic they don't really know anything about. Our argument is that the TTB does know the industry better than any other agency does. We're afraid that the FDA might overreach."

Kaiser says the Wine Institute and Distilled Spirits Council are also deadset against the move. The TTB is the devil you know.

This is ironic, because the TTB has never been a huge hit with wineries before. Its label approval process, which every wine must go through before being sold, takes too long. Current reports have backups of more than a month, and rulings are seen as capricious. Wineries are pleased to give off-the-record examples of submitting the exact same label at different times and getting different results.

But Kaiser says wineries fear the FDA's system of fining afterward instead of denying approval beforehand. They like the certainty of knowing that once their label has been approved by the TTB, they can't really get in trouble for it.

As a consumer, I don't like label approval for one reason: wineries often say the alcohol percentage on their label is inaccurate because they don't want to change it every year. If the FDA were to scrap label approval and lower the tolerance to 0.5% as it is in Germany, and levy a fine or two on wineries that didn't follow the new guidelines, I'm sorry wine industry, but that would be great for consumers.

The issue is complicated, because some states also have their own label approval processes. But accurate alcohol percentage isn't being taken seriously now, and maybe the FDA would change that.

The wine industry also doesn't want to see calorie counts and portion sizes, the standardized food labels, on wine bottles.

"Aesthetically, that would take away a lot of the aesthetic appeal of a wine label," Kaiser said. "A lot of wine is sold on look. We think it would put a giant panel on the back and would infringe on the ability of the winery to advertise. Also from a winery perspective, they would have to test every wine they sell for calorie content. That's a huge expense for a small winery."

Even as a consumer advocate, I agree about this. People don't buy wine for the vitamins.

But let's get to a topic where the industry and consumers completely diverge: ingredient labeling.

I'd like to see it. Wineries don't want to do it. I won't stop drinking sparkling wine if it has "grapes, sugar, cultured yeast, ammonium phosphate, copper sulfate, etc., etc." (you'd be shocked) on the label. But it would level a playing field between small wineries trying to work as low-impact as possible and giant wineries that use economies of scale and chemical techniques to "fix" inferior grapes. It wouldn't put the latter out of business; people still buy plenty of Cheez Whiz when organic cheddar is available. But it would put an end to many false "green" claims.

The politics of this potential elimination of the TTB are fascinating, and ultimately why I don't think it will happen even if Obama wants it.

It's an election year. In this climate where government austerity is seen by many as a good thing, Obama could gain some chips by trying to eliminate a federal agency. The TTB is not as big as the Department of Education, but it's something.

However, the Republicans in the House seem dead-set on preventing him from achieving anything at all, and that will only intensify leading up to November. I think they'll reflexively oppose it.

But what a conflict it poses philosophically for Republicans. Deregulation is a party tenet -- but how would social conservatives react to restrictions being taken off of Demon Rum? I can already see the PAC-funded ads about how President Obama wants more drunk drivers on the road.

Kaiser says, "We believe the way that the system's set up now, it's not perfect obviously. But the TTB knows the issue better than the FDA does. The way the FDA works, we think there would be more onerous regulations on the wine industry. Maybe there would be skull and crossbones on wine labels."

Did I mention that I would buy Living Dead Red?

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