The next few steps are critical to the success of the project. We're going to split the image up, apply colours and adjust transparency.
Make sure your rulers are visible (VIEW...Rulers) and drag in four horizontal guides - one just beneath the bottle top (A), one at the top-half of where the label will go (B), one where the bottom of the label will go (C) and a final one where shown (D).
Now really zoom in and adjust these guides so they exactly intersect a 'point' where you changed the Pen Tools direction (shown as a tiny red square, above - you will have to click on the line to see this). Now select the Scissors Tool and click exactly at this point. This will 'cut' your line. Repeat this process at all four guides so your 'half bottle' should be split into five segments. (The Scissors Tool is hidden within the Eraser Tool )