– TED MAHONEY , CHIEF INVESTIGATOR OF THE MASSACHUSETTS ALCOHOLIC BEVERAGES CONTROL COMMISSION

happen . And the local governments are not going to deal with it . So it ’ s ours to own [ on the state level ]. And five years from now , I don ’ t want the people who come after me to say , ‘ Was he dumb or stupid to not see what was happening right in front of his eyes ?’”

For example , legally reported shipped wine sales increased in Massachusetts from $ 48.7 million annually in 2019 to $ 66.5 million and $ 66.3 million in 2020 and 2021 , respectively . The number of consumers in the state legally purchasing these products grew from 116,289 in 2019 , to 180,860 and 169,723 in the following two years of the pandemic .

These numbers do include the illegal market , as some of these packages come from direct wine shippers operating outside the parameters of their license . Unlicensed entities also ship unreported packages , Mahoney says . To address these issues , he and his team have taken several approaches .

STARTLING STATISTICS As in other states , Massachusetts regulators have bought product from these lawbreaking parties . “ We make these purchases because we want physical evidence on our persons ,” Mahoney explains . “ We need to develop solid cases with solid reports .”

This includes a series of compliance checks that followed packages , and tested their originating platforms . The results were startling :

96 % of the digital platforms accepted order and payment from a 15-year-old consumer .

43 % of the package deliveries did not obtain an adult signature . 26 % of these deliveries were simply left at a consumer ’ s door . 0 % of delivery personnel verified the age of the recipient . “ We sat down with the main express [ shipping ] companies , and they were shocked , because they do have training for this ,” Mahoney says . “ I think we ’ ll get a response from this .”

Ordering alcohol from these illegal shippers has helped shed light on the layers of their criminal organizations .

One bottle bought from California listed a California hotel as the return address . Another , ordered from Florida , used the address of a promotions firm that did not have an alcohol license , and arrived without any labels indicating alcohol inside .

It gets more complicated — and international .

GLOBAL GAME OF CAT AND MOUSE A large ecommerce platform in the U . K . operates next door to an alcohol retailer . Working together , they fill an order and ship the item overseas , with a receiving label for a New York company . But when the package arrives at JFK Airport , a nearby cargo company is paged .

The cargo company picks up the package and then affi xes a new receiving label , adding the buyer ’ s name and address in replacement of the New York company ’ s address . The cargo company then brings the package to a wholesaler with a shipping license , who sends the box through UPS .

The return address listed ? It ’ s the New York company , which switched from buyer to seller on the label without ever touching the package .

Another product purchased was fulfilled by an illegal shipping business operating out of the 7th floor of a residential apartment in New York . They took the order and dispatched it to a retailer in Kentucky . Someone from that Kentucky store traveled across state lines with the alcohol and shipped it from a UPS location in Ohio . On the shipping label , they listed the return address of the UPS store , using the shipping manager ’ s name .

As in other cases , all parties involved — at every level , in every state — operated without proper licenses , counting on the layers of the business to hide its illegality . Mahoney and his team have successfully dug into these layers . “ We started asking the carriers to provide us with the true name of the shipper and the point or origin ,” Mahoney says . “ My team has been great at it . I tell my associates , ‘ Just keep pulling it back . Keep looking deeper ’.”

Unfortunately , some packages arrive in areas that investigators cannot easily access .

“ Now we ’ re hearing that [ alcohol ] is being sent through university mailrooms , because nobody checks what ’ s going on in there ,” Mahoney says .

Another circumvention technique that Massachusetts regulators have identified is bottles of wine or other higher-proof alcohol shipped in boxes falsely labeled as containing lower-ABV , ready-to- drink beverages .

Once Mahoney and his team began probing these illegal online platforms , the companies reacted by attempting to work with licensed alcohol retailers .

“ They said , ‘ Hey , let ’ s make a deal , because now we can legally ship into the state ’,” Mahoney says . “ But at the end of the day , you have to ask : Who ’ s accepting the order and payment , is it a percentage play , and is their license being illegally used elsewhere

Winter 2022 • Beverage Wholesaler 15