If you look closer at the Sweet label, you'll notice a very thin red outline.
Obviously this cannot be done by hand. Well, at least certainly not by my hand. :-) The trick how to create this effect I learned from Sue Wilson (Creative Expressions). In short - you die cut two identical labels in different colors (red and white in my case) Cut the one that goes under in the middle, just with scissors, in a straight vertical line. See? There, on the very top of the label? The red one is split under there!
A tiny little bit that you would not even notice unless you look for it. The halves of the red label are shifted to the sides to look out a little from under the white one.