FOR IMMEDIATE RELEASE: July 8, 2011

SCHUMER: FEDS ARE TAKING FAR TOO LONG TO APPROVE NY WINE BOTTLE LABELS, PUTTING A CORK IN FINGER LAKES WINERIES’ BUSINESS – SENATOR PUSHES TO STREAMLINE THE SYSTEM AND HELP GET UPSTATE NY WINE FLOWING


Anthony Road, Fulkerson, And Billsboro Wineries Are Losing Out Thanks To Huge Backlog In Wine Label Approvals

Schumer Pushes Alcohol, Tobacco, Tax and Trade Bureau To Work With NY Wineries And Develop Faster Approval Process To Help Wineries Get Wine On Shelves More Quickly, Boost Their Business

Schumer: Wine Labeling Bureaucracy Is Keeping NY-Made Wine Off Shelves

 

Today, U.S. Senator Charles E. Schumer announced that he is calling on the federal government to work with Upstate New York’s wineries to correct delays in the process of approving new labels for wine bottles, which is hindering their business. The Alcohol and Tobacco Tax and Trade Bureau (TTB) must approve labels that will cover bottles of wine produced at over 300 wineries throughout New York State, before those bottles are shipped out and sold. Over the last two years, wineries like Anthony Road Winery say the backlog is making it significantly harder for wineries to get their product on store shelves. The TTB has sent back labels asking wineries to fix one issue, and then after that problem is fixed they have asked for additional changes, creating a back and forth that results in weeks of backlogs and causes production schedule problems for wineries. Schumer believes that the TTB and wine industry can work together to create a number of fixes to allow greater flexibility in the label approval process. By streamlining the process for submitting certain types of labels, having the TTB clearly identify all of the issues that need to be addressed on the first rejection of approval letters, and utilizing other methods, Schumer believes that industry stakeholders and the TTB can reduce the average amount of time required to approve labels. This would bring greater stability to wineries’ business, and help them better plan production cycles.


"This wine labeling backlog has far too many New York wineries over a barrel,” said Schumer. “These wineries are ready to get their delicious wines out the door and onto the shelves, but that wine release date is pushed back for months and months as they wait for label approvals. For an industry that is so important to New York, now is not the time to hinder the growth of such important businesses to the state’s economy. I am urging the TTB to work with New York wineries to streamline the label approval process so that NY-made wines can get off the shelves as soon as possible.”

The wine-producing industry is expanding rapidly in New York, with over 307 wineries and hundreds of employees. The number of new labels submitted to TTB for approval has increased in recent years as wineries expand their product line or offer custom label designs for special events such as weddings, birthdays and other special occasions. The approval and processing of these wine labels is done through the Alcohol Tobacco Tax and Trade Bureau’s (TTB) Certificate of Label Approval (COLA). A label must be approved by TTB before it can be sold on the shelves in New York.

 

According to U.S. wine industry experts, as recently as ten months ago approval of a new label took as little as one day if electronically-filed and as little as one week if filed by paper application. However, New York wineries have recently reported that it can take at least one month to receive approval of an electronically-filed COLA application and two to three months for a paper application. Often, when wineries finally do receive feedback, it is with a rejected label and the necessary corrections, and at that point labels must be resubmitted and the COLA process must begin again.


Schumer states that this lengthy label approval process creates delays that are hindering winery businesses across New York state, and subsequently harming what could be a rapidly expanding economic force on the New York economy. Local wineries report a variety of negative results on their business operations due to the label backlog, including difficulty in establishing a smooth production schedule, as well as limited retail and wholesale sales and delayed wine releases. What is more, there are many New York wineries just opening for business that have a whole host of labels in line for approval. In these cases, new wineries report to Schumer’s office that the delayed label approvals nearly pushed back their openings by an entire season. Schumer notes that every day that a label is delayed costs the winery in delayed or lost sales and thus reduces the amount of federal excise tax collected on those wine sales.

Schumer notes that a variety of wineries in the Rochester- Finger Lakes region are experiencing delays and negative results to their business operations due to this backlog. Billsboro Winery recently received a few COLA's after 70 days for a paper filing, while it took half the time last year. Fulkerson Winery has had delays in receiving TTB approval of labels since the beginning of this year, which has cut its ability to make quick print runs of labels, and made meeting NYS wine pricing deadlines more difficult. And finally, Lakewood Vineyards recently sent in 2 labels which took over 2 months to be approved, which created problems in their production schedule.

In a personal letter to TTB Administrator Manfreda, Schumer urges that the Bureau work with the wine industry to identify ways to streamline the COLA process and avoid unnecessary delays, so that label approvals can keep pace with the ever-growing wine industry in New York. In particular, Schumer notes that an area for improvement is in the label correction phase. Many Central New York wineries have received back rejected labels from TTB with a request to correct one issue, only to make that change and receive notification of a new correction. This creates a back and forth or ping-pong effect that can result in weeks of backlogs and headaches for these wineries, and prevents bottles from hitting the shelves. Schumer asks that the TTB clearly identify all of the issues that need to be addressed on the first rejection of approval. 

In the case of customs personalized labels, Schumer also urges that TTB work with industry to speed approval of custom labels.  In the past, TTB permitted wineries to simply apply once for approval of a custom label template to ensure it contained the required regulatory and safety warnings, after which the winery could customize and personalize the artwork on the front of the labels to suit the specific event.  TTB now requires individual approval of labels when changes were made to graphics and label components apart of the regulatory and safety warnings.  By working with industry stakeholders to find ways to streamline approval of these custom labels TTB could, in turn, help ease the current backlog of COLA applications.  Schumer notes that TTB recently adopted a policy concerning the label’s type size requirements that could be a model for streamlining custom label review.  Rather than reject labels outright if only the type size is incorrect, TTB currently approves the COLA application and simply directs the winery to ensure the final labels meet type size requirements.  In this way the COLA process is streamlined to avoid unnecessary delays while compliance with label requirements may still be assured through periodic audits.  

 

New York is one of the top states impacted by this labeling backlog, and the industry is suffering as a result.  The wine-producing industry is fast expanding, and in New York State alone there are 307 wineries with 47 satellite retail stores in 49 counties that employ hundreds of workers and are major economic drivers for tourism and agriculture. And while the industry growth has fueled a growth in the number of labels sent to the TTB in the first place, it is important to streamline the approval process to remove unnecessary delays and allow TTB to focus more of its efforts on leveling the playing field by ensuring federal laws and regulations are maintained industry-wide. Since wineries cannot sell their product without first securing a label approval, it is critical to minimize delays within the COLA process that threaten to curb the growth of this industry.  

TTB oversees labeling and permitting and collects Federal excise taxes on alcohol products. In this role, TTB promotes consumer protection and helps level the playing field for companies by ensuring federal laws and regulations are upheld industry-wide. 

 

A copy of Senator Schumer’s letter to TTB Administrator Manfreda appears below:

 

Dear Administrator Manfreda,

 

I write on behalf of wineries across New York from Long Island to Niagara County who are struggling to bring their wine to market in face of increasing delays in the approval and processing of wine labels through the Alcohol Tobacco Tax and Trade Bureau’s (TTB) Certificate of Label Approval (COLA) process.  I ask that you work with the wine industry to identify ways to streamline the COLA process and avoid unnecessary delays especially in the process for approving custom and commemorative labels.  Every day that a label is delayed costs the winery in delayed or lost sales and thus reduces the amount of federal excise tax collected on those wine sales.  Increasingly it is not atypical for hundreds of cases of wine to sit in winery warehouses waiting to be labeled and sold.

 

According to U.S. wine industry experts, as recently as ten months ago it typically took one day to get an electronically-filed COLA application approved and one week to get a paper application approved.  Now New York wineries are reporting it can take at least one month to receive approval of an electronically-filed COLA application and two months for a paper application. It takes even longer in the event TTB rejects a label and it must be corrected and resubmitted to re-start the COLA process. 

 

Several Finger Lakes wineries reported to my office that these delays are jeopardizing their businesses.  One winery reported waiting two months for approvals of two labels which created difficulties in their production schedule while another explained how label approval delays this year have limited the winery’s retail and wholesale sales and forced them to delay wine releases.  For new wineries just opening for business, the effect can be devastating as one winery reported waiting almost a year for label approvals which nearly kept them from opening for business this year.  In another instance a winery corrected a rejected label only to have it rejected a second time for a different issue creating a back and forth that compounded delays.

 

In New York State alone there are 307 wineries with 47 satellite retail stores in 49 counties that employ hundreds of workers and are major economic drivers for tourism and agriculture.  Since wineries cannot sell their product without first securing a label approval, it is critical to minimize delays within the COLA process that threaten to curb the growth of this industry. 

 

For example, repeated delays can be avoided by ensuring that all label aspects in need of correction are initially disclosed.  Additionally one area of particular concern is the approval of custom wine labels. Wine industry experts estimate that as much as 10% of the labels waiting in the application process are custom labels produced to commemorate special events like weddings and birthdays.  In the past, TTB permitted wineries to simply apply once for approval of a custom label template to ensure it contained the required regulatory and safety warnings, after which the winery could customize and personalize the artwork on the front of the labels to suit the specific event.  TTB now requires individual approval of labels when changes were made to graphics and label components apart of the regulatory and safety warnings.  By working with industry stakeholders to find ways to streamline approval of these custom labels TTB could, in turn, help ease the current backlog of COLA applications.  TTB recently adopted a policy concerning the label’s type size requirements that could be a model for streamlining custom label review.  Rather than reject labels outright if only the type size is incorrect, TTB currently approves the COLA application and simply directs the winery to ensure the final labels meet type size requirements.  In this way the COLA process is streamlined to avoid unnecessary delays while compliance with label requirements may still be assured through periodic audits.  

 

While outside forces such as the recent growth in the wine and malt beverage industry and a need to reallocate TTB staff and resources to other enforcement priorities have contributed to creating the present backlog, I ask that you review the current COLA process, especially for custom labels, and work with industry stakeholders on strategies to avoid unnecessary delays.  Reducing delays will be a win-win to reduce the amount of lost excise tax while enabling wineries to get their product to market in time.

 Sincerely,

 

Charles E. Schumer

United States Senator

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