I think it looks great. If I was going to be super anal, the only thing I would mention is the lettering on the ribbon. I would try to get it to follow the flow of the ribbon a bit better. But really, that is a stretch. It really looks great.
I don't think it's the bird...can you rotate the bundle of grain counter-clockwise a bit? I think it's hooking in and creating the appearance of the bird being too close.
I'd also make the lettering on the banner/ribbon a little smaller - that way it'll feel less forced.
those two (small) points aside, this is a nice looking label!
It will fit. I am using 4x3 wine labels on Belgian bottles. the front fits nicely at 4x3 and the back label 3x4 it looks great! I have spent 2 months working on label and finally have brew in the bottles carbing up. I cant wait!