Under pressure, departing treasury secretary Rubin says BATF will review wine labels

Modern Brewery Age, May 24, 1999

Associated Press - Before he announced his resignation, Treasury Secretary Robert Rubin struck a deal with Sen. Strom Thurmond to consider tougher health labels on wine bottles. ln exchange, the senator stopped blocking confirmation of three top Treasury appointees.

It was the latest development in a battle that has been waged since the Agriculture Department issued its Dietary Guidelines for Americans in 1996, which said moderate drinking has been associated with reduced heart disease risk.

The Treasury Department announced in February that it had approved two statements for wine labels that included references to some of the health effects of drinking wine. The approval was not an endorsement but only a reflection of the agency's finding that the statements were neither false nor misleading, the department said.

One statement read: "The proud people who made this wine encourage you to consult your family doctor about the health effects of wine consumption." The other said: "To learn the health effects of wine consumption, send for the federal government's Dietary Guidelines for Americans," and provides a mailing address and a Web site.

The labels approved in February were criticized by several groups, including the American Medical Association and the American Heart Association, on grounds they could promote drinking.

Thurmond, who lost a daughter to a drunken driving accident, immediately denounced the decision as "irresponsible."

"If the secretary of the Treasury ... or anyone else in either government or industry thought I would not react to this decision, they made a losing bet," Thurmond R-S.C., said at the time.

The senator placed holds on three Treasury Department appointees Timothy F. Geithner, Gary Gensler and Edwin M. Truman, essentially blocking their appointments from coming up before the Senate, said Thurmond spokesman John DeCrosta.

"I think the secretary was painfully aware of our disappointment with how this issue was handled and the need to revisit this," DeCrosta said. "We made our displeasure as clear as possible."

Rubin responded by sending a letter dated April 21 to Thurmond saying, "I regret that we did not consult with you more closely prior to the approval of two wine labels containing health-related statements."

He said the Treasury Department's Bureau of Alcohol, Tobacco and Firearms would open the issue for public comment.

"The notice will also ask whether the negative health consequences of alcohol consumption or abuse disqualify these products entirely from entitlement to any health-related state-merits," Rubin wrote. "Assuming the appropriate factual and constitutional predicates, ATF would then have the authority to prohibit directional health statements such as those on the recently approved labels."

The three appointments were confirmed the day Rubin wrote the letter.

"This is about making sure public policy remains above reproach," DeCrosta said. "This has nothing to do with promoting health and everything to do with promoting a product, marketing it and insulating it from lawsuits."

John De Luca, president of the Wine Institute, said the forums and process being discussed "if devoid of politics and polemics, may provide a terrific opportunity to educate . . . about scientific research findings related to wine consumption."

Two California wineries have already begun using the labels.