DIRECT TO CONSUMERS
In Other News
As part of our ongoing coverage of shipping laws in the beverage alcohol industry , we ’ ll provide updates on recent news on the topic . For more coverage , visit EPGAcceleration . com / subscribe and subscribe to our magazines , e-newsletters and podcast .
“ WSWA is against the shipping of alcohol to consumers .”
– JO MOAK , SENIOR VICE PRESIDENT AND GENERAL COUNSEL FOR WINE & SPIRITS WHOLESALERS OF AMERICA
the [ three-tier ] system .” When investigating these kinds of ecommerce services , he recommends a similar course of action to Mahoney .
“ You need to take a deeper dive into how these out-ofstate shippers are set up ,” McGehee says . “ Are they really manufacturers [ rather than retailers ]?”
A NATIONWIDE ENFORCEMENT EFFORT Another significant action taken against illegal shipping comes from the National Liquor Law Enforcement Association . This non-profit organization has formed a nationwide workgroup that confronts the problem .
“ Once a month , 10 to 15 of us get together and go over all the issues involved , and talk about the suppliers , the platforms and the people involved ,” Mahoney says . “ We want to develop cooperation among the states . We can help other states by helping them not make the same mistakes that we made . I think this workgroup has been a major stepping stone .”
This regularly meeting workgroup is especially helpful because tackling this issue requires considerable financial and manpower resources . In Massachusetts , many of the investigators working these cases do so only part time during the week , splitting between different enforcement duties .
“ The workgroup is working on many fronts to enforce and bring into compliance those that are illegally shipping and delivering alcohol ,” says NLLEA Executive Director Carrie Christofes . “ Workgroup initiatives have allowed states to share their investigative tools and techniques involving illegal shipping investigations which has led to a more efficient means to investigate cases that cross state lines .”
As a group , the NLLEA is continually working to :
COURT RULES OUT-OF-STATE RETAILERS CANNOT SHIP WINE DTC IN OHIO
Judge Sarah D . Morrison of the U . S . District Court for the Southern District of Ohio Court Eastern Division ruled this past October that out-of-state wine retailers cannot ship wine directly to Ohio consumers . In doing so , Morrison upheld Ohio law that requires alcohol wholesalers and retailers to maintain a physical presence in the state . Any wine that they sell must first " come to rest " at one of their Ohio locations . This requirement for a physical presence allows the state " to efficiently collect excise taxes ," according to the ruling .
But out-of-state wine producers ( i . e ., wineries ) can still ship their alcohol products directly to Ohio consumers . The state even recently expanded its DTC market to larger direct wine shippers . In 2021 , Ohio eliminated a cap on permissible production levels , after previously cutting off DTC shipping for producers who made more than 250,000 gallons per year .
CONGRESSMAN , ALCOHOL INDUSTRY DISCUSS USPS SHIPPING EQUITY ACT
During September ’ s annual Public Policy Conference , co-hosted by the Distilled Spirits Council of the U . S . and the American Craft Spirits Association , members of both organizations discussed pertinent issues with U . S . Congressmen . This included Rep . Dan Newhouse ( R-WA ), member of the House Appropriations Committee , and cosponsor of the USPS Shipping Equity Act .
H . R . 3287 / S . 1663 is proposed , bipartisan legislation permitting the U . S . Postal Service to ship beverage alcohol where permissible by state and local law . Newhouse spoke on the bill ’ s “ importance to consumers , distilleries and the financial stability of USPS .”
The bill would give the USPS two years to develop regulations and implement the law . This aims to help the USPS prepare for the safe delivery of alcoholic beverages to adult consumers with appropriate identification checks in place .
“ In 2019 , California wineries shipped 275.6 million cases of wine , yet consumers and manufacturers are prohibited from using the U . S . Postal Service to ship or deliver these everyday products ,” says bill cosponsor , Rep . Jackie Speier ( D-CA ), in a press release . “ In most states , private carriers such as FedEx and UPS are already delivering alcoholic beverages . It makes no sense to create a competitive disadvantage for the USPS by barring them from these kinds of shipments , especially given the Postal Service ’ s dire financial condition . . . The time is long overdue for Congress to lift this Prohibition-era ban for the benefit of beverage manufacturers , consumers and our struggling postal service .”
NEW JERSEY ALLOWS HOME ALCOHOL DELIVERY
The New Jersey Division of Alcoholic Beverage Control ( ABC ) this past August altered its rules to allow local alcohol deliveries to consumers ’ doorsteps — including to-go cocktails — by services such as DoorDash , Uber Eats and Instacart .
“ This is a game changer for New Jersey ’ s alcoholic beverage industry and a tremendous opportunity for growth ,” says ABC Director James B . Graziano in a statement .
These new local delivery permits are only allowed for bars , restaurants and beverage alcohol retail stores . Breweries and distilleries remain ineligible .
Winter 2022 • Beverage Wholesaler 17