There are many reasons, intentional or otherwise, for wine bottles to come off the bottling line as shiners—bottles without labels. Wine may be left unlabeled due to a delay in the production or approval of the winery's desired label. The winery may plan an extended period of bottle aging that would be hard on a fancy label. Or, frequently, the winery may plan to sell the wine to an undetermined winery or private label customer
But no matter what reason dictated the labeling delay, shiners need extra compliance care and attention to avoid regulatory violations. The penalty for slipping can be unusually painful—a shiner containing Alexander Valley Cabernet could be demoted to non-vintage Red Table Wine before it reaches store shelves!
This undignified destiny can be avoided if wineries carefully observe the following regulatory requirements
Every bottle of wine must be covered by a valid certificate of label approval at the time of bottling. The approved label need not be applied to the wine during bottling. Moreover, the winery is free to later use a different label on that later. Nevertheless, regulations require that every bottle of wine must be covered by an approved COLA at the time of bottling, whose label could legally be used on the wine
Every winery can always be assured of meeting this requirement if it obtains a few "generic" label approvals. We recommend having on hand an approved COLA for at least a red table wine and a white table wine. In addition, if your wines sometimes finish over 14%, get another pair of labels in that tax class using 15% alcohol (which covers over 14% wines up to 16% alcohol). These generic labels need only the minimum mandatory information; you don't have to specify a vintage or an appellation. Of course, if you produce sparkling wine or rosé, get generic labels for those wine types as well
In the event an BATF inspector ever asks to see the label approval covering any bottle of wine, the winery can legitimately point to a generic label approval—even if the bottle is still unlabeled (or is already labeled with a different, but as yet unapproved, label.)
Sure, the actual label applied to that shiner will eventually need to be approved, but the winery is not legally obliged to have that approval until the wine is removed from bond—as long as the bottling of the wine was covered by another, approved label
Wine is required to be labeled with an approved label at the time of tax determination. If wine is removed from bond WITHOUT a label, it is deemed to be mislabeled and could be subject to seizure.
BATF considers it a serious violation to remove unlabeled wine from bond. This is because BATF loses jurisdiction over the wine when it leaves in-bond status, and therefore BATF cannot fulfill its duty of insuring that the wine is truthfully and legally labeled
Also note: Although federal label approval is not required on wine bottled for export, which is exempt from Part 4 of Federal Regulations (the wine labeling regulations), BATF also considers it a violation to export unlabeled wine. Each bottle exported must bear at least a small strip label indicating wine type, alcohol content, approved trade name and address of the bottler, brand name (if different from the winery name), and net contents.
Of course, mistakes happen. If you discover that you have taxpaid unlabeled wine, or have received unlabeled, taxpaid wine from another winery, steps should be taken to correct the situation.
First, if you received the unlabeled wine already taxpaid, call the shipper to confirm the status of the wine. The transfer documents may simply contain a typographical error which can be corrected with amended transfer documents.
However, if you confirm that you have actual taxpaid wine on your hands, your task is a little more complicated. There are several possible solutions: you can send the wine back to the consignor for them to correct the problem; you can return the wine to bond as unmerchantable; or you might be permitted to label the wine in a taxpaid area if your facilities allow that.
Although Section 24.295 allows unmerchantable wine to be returned to bond as a routine matter with the simple filing of a claim form, taxpaid unlabeled wine is not considered routine! A letter application to your local ATF area office should be prepared, outlining the circumstances and your desired action. These situations are handled on a case-by-case basis and, rarely, an inspection could be required.
If you end up handling the wine as unmerchantable, don' t forget to keep the records required by Section 24.312. These include
All wineries are aware of their obligation to maintain a complete audit trail, from grape to bottle, supporting all labeling claims—including vintage, varietal, appellation, vineyard source, producer, and any other pertinent information—on wine they bottle. But that obligation doesn't end at the end of the bottling line. Did you know that, according to Section 24.314, the audit trail must remain unbroken all the way to the ultimate taxable removal of the wine? For this reason you should also make it your standard practice to ensure that all essential information travels with your wine if it leaves your premises unlabeled.
A good rule of thumb is, include the same level of detail (percentages, etc.) on your transfer documents for unlabeled wine, as you would for wine in bulk. Also, since the bottling winery remains responsible for the audit trail, even after the shiners leave its premises, it is in your best interests to instruct any recipients of unlabeled wine to pass the same level of information along if they transfer the wine again before it is labeled. This practice protects not just your winery, but also all the others who may handle that wine in the future. According to ATF' s Industry Memorandum W-95-09: "The responsibility for transferring accurate label information is not that of the producer alone, but is the responsibility of all holders of the wine from time it is produced until it is removed from bond …"
In addition, the bins, pallets, cases, or other containers of unlabeled wine should be marked to show the kind of wine, the alcohol content, and the registry number of the bottling winery, in accordance with Section 24.256
Even if another winery or BWC may finally affix labels to the shiners, the original bottling winery is forever responsible for obtaining label approval. No matter how far that wine travels, who holds title, or who puts on the label, the bottler remains responsible proper labeling.
When unlabeled wine is transferred in bond, a copy of the certificate of label approval under which the wine was bottled should be included with the transfer documents. (Here again, your generic label comes in handy.) Of course, the label shown on that approval will in many cases not be the label that is ultimately used. Before the wine is labeled differently, the bottling winery must obtain approval for the label actually used, including adding to its basic permit the trade name shown on the label.
Share the wealth
As you have seen, transferring unlabeled wine to another winery is like delegating part of your recordkeeping responsibility to people over whom you have no control. Protect yourself, and do them a favor, by sharing your compliance know-how about unlabeled wine. An easy and very effective way to do that is to send the following statement, or something similar, along with any shipment of unlabeled wine that leaves your winery:
"TO THE RECIPIENT OF UNLABELED WINE:
A copy of the federal label approval under which this wine was bottled is attached. If any other label is desired, [insert your winery name] as the bottling winery must obtain the approval before the label is used. The label must reflect that this wine was bottled in [insert the bottling location] and the trade name must be on [insert your winery name]'s basic permit.
Any label used for this wine must conform to the applicable percentages shown on the transfer documents included with this wine.
If this wine is transferred to another wine cellar in bond before it is labeled, please provide a copy of this statement, the percentages pertaining to labeling claims, and the federal label approval with the shipping documents.
Do NOT remove this wine from bond until it has been properly labeled."
Keep this article handy as a reference for the next time your winery bottles shiners. That way, you'll be assured of keeping your compliance track record shining!