USE OF CARBON DIOXIDE FOR DISPENSING
WINE FROM ORIGINAL CONTAINERS
BY LIQUOR DEALERS
To proprietors of bonded wineries, bonded wine
cellars, taxpaid wine bottling houses; wholesale liquor
dealers, retail liquor dealers, importers; and others
concerned:
PURPOSE: The purpose of this circular is to
notify industry members of ATF Ruling 85-9 which will be
published in the 1985 (Volume 3), Alcohol, Tobacco and
Firearms Quarterly Bulletin. This ruling refers to the
provisions of 27 CFR 194.293, which prohibits retail
liquor dealers from mixing or compounding any liquors,
including wine, in advance of sale, except for immediate
consumption on the premises.
The ruling permits the use of carbon dioxide as a
dispensing mechanism for original wine containers under
certain conditions.
The prohibition on the use of carbon dioxide when
dispensing wine from other than original containers, as
stated in ATF Ruling 73-21 (ATF C.B. 1973, 77-78), remains
in effect.
TEXT OF RULING. The ruling will read as follows:
ATF Ruling 85-9
The Bureau of Alcohol, Tobacco and Firearms (ATF)
has been asked whether carbon dioxide can be used in
dispensing wine from original containers where containers
are used for other than immediate consumption. These
original containers are larger than standard size bottles
and require a dispensing mechanism which will release the
wine into a glass rapidly and efficiently. The dispensing
mechanism in question would allow carbon dioxide to be
added only to the headspace of a large container to exert
a constant pressure on the surface area of the liquid and
cause the liquid to be forced more rapidly from the
container. The carbon dioxide would only be used to force
the liquid from the container. These containers are
designed so that the carbon dioxide does not actually
enter the liquid, or increase the carbon dioxide level of
the wine being dispensed.
Section 5041(b) of the Internal Revenue Code
imposes a tax on still wine containing not more than
14 percent alcohol by volume at a rate of $.17 per wine
gallon, and a tax of $2.40 per wine gallon for
artificially carbonated wine. Still wine is defined in
section 5041(a) to include wines containing not more than
0.392 gram of carbon dioxide per 100 milliliters of wine.
Any addition of carbon dioxide to wine is considered a
cellar treatment of wine, and such an activity can only be
conducted on a bonded wine cellar premises established
under section 5351 of the Code.
27 CFR § 194.293 prohibits retail liquor dealers
from mixing or compounding any alcoholic liquors in
advance of sale except for immediate consumption on the
premises. The term "Liquors" is defined in 27 CFR
§ 194.11 to include wine. Therefore, a retail dealer is
prohibited from mixing or compounding wine with carbon
dioxide, except for immediate consumption of the wine on
the premises.
In ATF Ruling 73-21, the Bureau ruled that
retailers could use gravity, air pressure, or nitrogen gas
in dispensing wine from other than original containers,
but that the use of carbon dioxide was prohibited. The
basis of that ruling was that the use of carbon dioxide
under these circumstances, with the technology available,
would likely mix with the wine and constitute an
unauthorized cellar treatment of the wine. ATF Ruling
73-21 did not address the use of carbon dioxide in
dispensing wine from original containers. When that
ruling was issued, original wine containers were only
available in consumer size bottles. Due to advances in
container technology, today there is a wide range of sizes
of original containers available to the wine industry.
Many of the containers are equipped with dispensing
devices which allow carbon dioxide to be added only to the
headspace of a large container which would not result in a
potential jeopardy to the Federal revenue or an
unauthorized cellar treatment of the wine.
While carbon dioxide can under certain conditions
be used as a dispensing mechanism for original wine
containers, this is based on the technology available for
original containers which insures that the carbon dioxide
is not injected into the wine. Carbon dioxide is still
not allowed to be used to dispense wine from other than
original containers. Furthermore, retailers are cautioned
that any use of carbon dioxide as a dispensing mechanism
for wine stored in large containers which results in an
increase in the level of carbon dioxide in the wine is an
unauthorized cellar treatment and also, may result in an
increase in tax liability.
Held, the use of carbon dioxide in dispensing wine
for other than immediate consumption from large original
containers is permissible if the carbon dioxide is not
injected or sparged into the wine and the carbon dioxide
level of the wine is not increased. Furthermore, the
prohibition on the use of carbon dioxide when dispensing
wine from other than original containers, as stated in ATF
Ruling 73-21, remains unchanged.
INQUIRIES. Inquiries concerning this circular
should refer to its number and be addressed to the
Associate Director (Compliance Operations), Bureau of
Alcohol, Tobacco and Firearms, 1200 Pennsylvania Avenue,
N.W., Washington, DC 20226.
Director |