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What States let Distillers ship to consumers

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I posted a day ago, my screw up about distribution, although I learned a bunch about other states by a great chart. I want to know what states like New Mexico can ship from distillery to consumers. I have a Distillery in Key West and we can not in FLORIDA .Any help would be appreciated !

 

aloha 

Paul Menta

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To my knowledge It's not expressly forbidden from Hawaii

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Check this out:  https://www.clarionledger.com/story/news/2018/08/28/judge-dismisses-suit-over-alcohol-shipments-mississippi/1120385002/  It sets an interesting precident.  The premise is that the seller is acting as an agent for the purchaser and shipping on behalf of the purchaser.  It appears that the state will appeal.  Hopefully th state will lose again.  I beleive that you should be able to sell spirits on line and ship from any state to any state.

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We are allowed to ship direct to consumers in Arizona, but in our case fedex or UPS will not ship alcohol direct to consumers they will only ship to business addresses. So it it a bit of a catch 22.

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I believe that in Illinois, you could do a retail sale nominally on your premise, and deliver to customer, BUT, you are responsible for age verification both at time of purchase and delivery, and of course carries like UPS and FedEx won't deliver to alcohol non-licensees. So you are limited to delivery services that will take on the age verification task, and that can be expensive.

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 Re: the direct shipment laws of all the states, see:  http://www.ncsl.org/research/financial-services-and-commerce/direct-shipment-of-alcohol-state-statutes.aspx.  Since it expresses the opinion of state attorney generals, it is straight from the right end of the horse, not my end.  

Re the Mississippi case as precedent.  The article says "Rankin County Chancery Court Judge John S. Grant III dismissed the lawsuit Monday."  I'm not an attorney, but did work, for a time, as a hearing officer, and had to apply case law. Precedent is not straightforward.  There can be different precedents within the same legal system.  Here is how one website describes it:

 

Precedent is a legal principle, created by a court decision, which provides an example or authority for judges deciding similar issues later. Generally, decisions of higher courts (within a particular system of courts) are mandatory precedents on lower courts within that system. That means the principle announced by a higher court must be followed in later cases.  Decisions of lower courts are not binding on higher courts, although from time to time a higher court will adopt the reasoning and conclusion of a lower court. Decisions by courts of the same level (usually appellate courts) are considered a persuasive authority. That is, they should always be carefully considered by the later court but need not be followed.

 

I don't intend to emphasise or scream.  I just can't get rid of the bold text format. See the source at https://www.upcounsel.com/legal-def-precedent for more on this.

Now, you can argue that the argument that the seller is serving as the agent of the buyer may offer a promise of favorable decisions by other courts. In fact, one of the attorneys representing the defendants, national, in  this case, is optomisitc about that.  See https://www.beveragelaw.com/booze-rules/2018/8/28/mississippi-rising-a-victory-for-legal-retailer-to-consumer-sales-and-passage-of-title-under-the-uniform-commercial-code.  I receive the blog and you may wish to too if you want to follow significant legal developements in alcohol law.

In the meantime, you can find TTB's position on direct shipment and the underlying statutes and case law on which it bases it position at https://ttb.gov/publications/direct_shipping.shtml.  I have cut and pasted it for the convenience of  those who care. Those with more interest can follow the links TTB provides. 

I know of no instance in which TTB has taken action against a permittee for making shipments in violation of state law.   But my advice is simple.  Before you decide to make mail order sales, if you can find a way to get the merchandize to the buyer, talk with your lawyer about the risk and  hassle that might arise if the state takes exception and acts on its own, or if it asks TTB to intercede, on its  behalf, with an out-o-f state entity, i.e. you, that the state holds to be in violation of its laws.  If you have deep pockets, perhaps you can afford to be the lead case.  If you don't, you can't afford it.  Let someone else chart the course and assume the risks.  That would be my advice.

 

Direct Shipping

The Liquor Law Repeal and Enforcement Act, also referred to as the Webb-Kenyon Act, which the Alcohol and Tobacco Tax and Trade Bureau (TTB) administers, prohibits shipments of alcohol beverages from one State into another State in violation of any law of the receiving State. 27 U.S.C.§122.

The Federal Alcohol Administration Act (FAA Act) at 27 U.S.C.§203, requires a basic permit in order to engage in the business of importing distilled spirits, wine or malt beverages for non-industrial use into the United States. Likewise, a basic permit is required to engage in the business of distilling, rectifying, blending, bottling or warehousing and bottling distilled spirits or producing or blending wine for non-industrial use. Finally, a basic permit is required for persons who engage in the business of purchasing for resale at wholesale distilled spirits, wine, or malt beverages for non-industrial use. Retailers are not required to obtain basic permits under the FAA Act. The FAA Act also provides that basic permits are conditioned upon, among other things, compliance with the Twenty-first Amendment and Federal laws relating to its enforcement as well as all other Federal laws related to distilled spirits, wine, and malt beverages. 27 U.S.C.§204(d). Thus, TTB could, in appropriate circumstances, take administrative action against a basic permit holder for violations of the Webb-Kenyon Act.

In 2000, our predecessor agency, the Bureau of Alcohol, Tobacco and Firearms (ATF), issued ATF Ruling 2000-1 to announce its enforcement policy relating to violations of State law that result from shipments of alcohol made directly to consumers in one State from sellers located outside that State. This ruling remains in effect and reflects the policy of TTB today.

Also in 2000, Congress enacted the 21st Amendment Enforcement Act that provided the States with a specific tool to address interstate shipments and transportation of alcohol beverages in violation of State law. Thus, contemporaneous with our enforcement policy pronouncement, Congress indicated its support for States to act in this enforcement area because they likely are in a better position to interpret and defend their own laws.

In Granholm v. Heald, the U.S. Supreme Court (May 16, 2005 decision) declared unconstitutional State laws that prohibited direct shipment of wine to consumers within the State from out-of-state businesses but permitted direct shipment to those consumers from in-state businesses. This decision has led to the reexamination of laws in several States.

Many States are reviewing and amending their alcohol beverage rules in light of the decision, and litigation continues as suits have been brought by retailers and consumers in several States. As a result, the regulatory schemes in place in many States are in some degree of flux.

We want to remind industry members who engage in direct shipping that they are responsible for remaining in compliance with current State rules. Furthermore, industry members should remember that their Federal basic permits could be at risk if they fail to comply with State rules.

For up to date information on the rules in a given state, contact the appropriate State alcohol regulatory authority.

 

Page last reviewed/updated: 09/04/2012

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3 hours ago, bluestar said:

 UPS and FedEx won't deliver to alcohol non-licensees. So you are limited to delivery services that will take on the age verification task, and that can be expensive.

That's strange because I have purchased whiskey from venders in several different states and it all came Fed Ex.  I think that you are right about UPS though.  I don't think UPS does that but fed ex has been delivering whiskey to both my residential and business adresses with no issues for years.  I have to purchase online a lot because I am in such a rural area the liquor stores don't carry a lot of what I want.  The below is from uptown spirits.

Also there are hundreds if not thousands of business selling spirits online.  https://www.google.com/search?q=online+spirits&rlz=1C1ASUC_enUS662US662&oq=online+spirits&aqs=chrome..69i57j69i60l2.4647j0j8&sourceid=chrome&ie=UTF-8

SHIPPING ADDRESS

Paul Hall
694 Private Road 160-354
Doniphan, MO 63935

SHIPPING METHOD

Select a shipping method:
  •  FedEx Home Delivery: $23.32
  •  FedEx Express Saver: $40.85
  •  FedEx 2Day: $53.70
  •  FedEx Priority Overnight: $80.31

YOUR CART

Glenfiddich-18-Year-Old-Scotch-Whiskey-750ml.jpg
Glenfiddich 18 Year Old Scotch Whiskey 750ml × 1
$99.95
Buy-Aberlour-18-Year-Scotch-Smalt-Whiskey-Online.jpg
Aberlour 18 Year Scotch Smalt Whiskey 750ml × 1
$134.95
Subtotal $234.90
Shipping $23.32
Tax $0.00
Total $258.22

Mcafee Secure Checkout

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2 hours ago, dhdunbar said:

 

Re the Mississippi case as precedent.  The article says "Rankin County Chancery Court Judge John S. Grant III dismissed the lawsuit Monday."  I'm not an attorney, but did work, for a time, as a hearing officer, and had to apply case law. Precedent is not straightforward.  There can be different precedents within the same legal system.  Here is how one website describes it:

 

 

 

Page last reviewed/updated: 09/04/2012

i understand precedent.  Hopefully the state of MS will lose this case again and again and then the same kind of thing will happen in other states so that spirits can be sold on the internet and shipped without hassle.  I would think that most distillers would like to be able to sell online or at least sell to companies that sell online.  Sometimes things become so prevalent, like home brewing and wine making did, that the laws must change to keep up with what society wants.  

In my business practices I work very hard to know, understand and follow all of the laws and rules, especially the ones I don't agree with.  That being said today is a great day.  Hemp processing became legal in MO today.  The state of MO is the only state where hemp processors are not regulated by the state and are not required to have a permit to process hemp.  

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Here are Fed Ex's rules for shipping spirits. Every time they have delivered to me they checked my ID and I had to sign.  I don't think that they charge extra for that, but i could be wrong.

 

Alcohol Shipping

Before you process shipments containing alcohol, review the following information:

·        You must sign a FedEx Alcohol Shipping Agreement prior to shipping. Contact your FedEx account executive to start the enrollment process.

·        You must identify alcohol shipments in the description. This applies to all pieces in a multiple piece shipment and must be done for the first pieces in the shipment.

Note: If Alcohol special service is not specified for the first package in the shipment, but is specified for a subsequent package in the shipment, then the transaction will fail for all pieces.

·        Common carriers, such as FedEx Express® and FedEx Ground® must report alcohol shipping activity to state authorities on a regular basis. For this reason, shippers must notify FedEx of each shipment containing alcohol via their electronic FedEx shipping solution and by applying FedEx alcohol shipping labels and by attaching an extra Alcohol sticker (which will reflect the verbiage ’Alcohol’) to each package. You can get these stickers from your FedEx Sales Account Executive.

·        FedEx will assign the Adult Signature Required signature option to the package (ship, rate, and email return transactions).

·        State law, as well as FedEx policy, requires an adult signature at the time of delivery for every package containing alcohol. It is the shipper’s responsibility to ensure an adult is available to sign for the shipment at delivery. If a shipper fails to follow the procedures outlined herein, the shipment will be deemed undeliverable. Violations may result in suspension or termination of your FedEx account.

·        FedEx is managing and maintaining alcohol shipper information and FedEx carrier (OpCo) information to prevent the entry of unauthorized packages from approved alcohol shippers into the FedEx Express and Ground networks through Automation controls. This effort is designed to assist FedEx in meeting regulatory obligations and allow the company to respond more quickly to regulatory changes.

For more information about alcohol shipping, go to fedex.com/us/wine/gettingstarted.html.

FedEx accepts shipments of alcohol (beer, wine, and spirits) within the U.S. and for both U.S. import and export when the shipper and the recipient are licensed to import and/or export alcohol.

For more detailed information about the services offered by FedEx, see the electronic FedEx Service Guide.

 

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15 hours ago, Southernhighlander said:

FedEx accepts shipments of alcohol (beer, wine, and spirits) within the U.S. and for both U.S. import and export when the shipper and the recipient are licensed to import and/or export alcohol.

 

Above is the relevant statement, Paul, in your excerpt. While they DO accept shipments of spirits, BOTH the shipper and recipient have to be licensed for alcoholic spirits. And that must meet both federal and state requirements. In a state that allows shipment to final consumers, they MIGHT ship to the final consumer. It depends on the state. In my state, FedEx has determined that they will not allow me to ship to a consumer in my state or any other state. I can ship to someone with a license that allows them to import/export/sell alcohol. On the other hand, I know many people who have shipped spirits, even when not allowed by FedEx, but do so under the nominal aegis of sending wine. FedEx will ship wine to end consumers in most states. If FedEx doesn't check the package contents, how will they know? All they do is ask you what the contents are. So, sure, you might get shipments of spirit via FedEx without having a license, but that could be because the sender is doing so in violation of both law and FedEx policy, or it could be because your state and the source state allows it.

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You misunderstand the statement: "when the shipper and the recipient are licensed to import and export."  The import and export licensing requirement is of course for import and export licenses NOT shipments within the US.  That is very plain and strait forward.

  I am not required to have any kind of license to receive spirits that are shipped to me from any of the 5 or 6 companies that I have purchased from online over the years.  It's that simple.  Fed Ex knew what they were delivering alcohol and they knew that I am NOT required to have a license to receive it which is of course why the only license they asked for was my driver's license. Fed EX spirit shipping requirements for shipping spirits to consumers do not require the recipient to have any kind of import or export license.  It is true that some states allow shipments from anywhere in the US to consumers and some states only allow intrastate shipping.  Many times the online liquare stores will have warehouses and licenses in those states that only allow intrastate shipping. 

Florida is one of several states that allow spirits to be shipped directly to consumers from outside or inside the state however not to people in dry counties.  Your state of Michigan allows intrastate shipment to consumers as long as you have the proper licenses to do so.  

As far as it being legal for you or anyone else to sell spirits on line and ship them, don't take my word for it, you must check and verify. 

As far as your original statement that I corrected:  "of course carries like UPS and FedEx won't deliver to alcohol non-licensees"  It is incorrect information.  Fed EX delivers spirits everyday to non-licensees.

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Per the above site,   http://www.ncsl.org/research/financial-services-and-commerce/direct-shipment-of-alcohol-state-statutes.aspx, which I now see is the National Association of State Legislators, not the AGs.

  • Out of the 54 states, territories and commonwealths, three states—Alabama, Oklahoma and Utah—specifically prohibit the direct shipment of alcoholic beverages to consumers.
  • Mississippi, Guam, Puerto Rico and the U.S. Virgin Islands do not have statutes that specify that direct shipments are allowed.
  • Massachusetts and Pennsylvania have had statutes ruled unconstitutional by state courts in those states.
  • Delaware have statutory provisions that require orders to be processed and shipped through licensed wholesalers.
  • Arizona, Arkansas, Georgia, Kentucky and South Carolina have statutory provisions that allow wine to be shipped into the state when purchased by the customer on-site at the winery.
  • Rhode Island allows intoxicating beverages to be shipped when purchased on-site.
  • Five states—Arizona, Florida, Hawaii, Nebraska and New Hampshire—and the District of Columbia authorize the direct shipment of all spirits as specified.
  • Eight states allow the direct shipment of beer and wine as specified: Delaware, Massachusetts, Montana, North Dakota, Ohio, Oregon, Vermont and Virginia.
  • The remaining states only allow direct wine shipments.

It goes on to provide full text copies of what it deems to be the relevant statutes, if any, from all states.

It then warns in bold letters (from which I can't remove the formatting):

Please note the summaries should be used for general informational purposes and are not intended as a legal reference. NCSL is unable to provide assistance, give advice or answer questions regarding individual cases. If you have questions regarding the direct shipment of alcoholic beverages to consumers, please contact an attorney in your state or your state attorney general. 

I would assume that Fed EX policy is in place because as a shipper, Fed Ex wants to avoid the possibility of seizure of a truck by a state that takes exception to direct to consumers and decides to put an end to it but cutting off the delivery routes. 

Next, as is clear from the above NASL summary, while wine and spirits are both alcohol, they do not receive equivalent treastement in state law.  Ever since prohibition, state wine and spirits laws have usually been different, because of differences in (1) taxation and (2) public perception, which led to different "blue laws." 

Because of the number of wineries within some states, many states  acted in concert with other states to  grant reciprocity .   Then, the Supreme Court held that a state that allows intrastate direct delivery can't prohibit interstate direct delivery. Presumably, the court  would hold to that precedent with spirits.  But not nearly as many states allow intrastate direct delivery of spirits as they do wine, and given the strong tax incentive to prohibit interstate shipments, not to mention blue law perceptions,  I'd suspect the Court's wine decision might act as an anchor on approval of intrastate shipments, not as a facilitator.  . 

Next, I'd think any statement to Fed EX that a spirit is wine would trigger possible fraud statutes (those are my screaming capitals).  I'd talk to an attorney before going down that rabbit hole.

Finally, if I understand the Mississippi case, and I may not, it (1) relies on a finding that the purchaser is the shipper, not the dealer who acts as the purchaser's agent in arranging for the shipment, and (2) that finding likely rests on the sales provisions of the UCC, which, if what I read is correct, has been adopted by most states, .  So you have potentially battling laws and the prospect of court cases that determine which holds sway and which are likely to be appealed by the losing party. 

In short, we are all amateurs.  Going to court is for professionals.   Again, if you can afford to be the lead case, then you may want to go for it.  On the other hand, if you don't have those sorts of funds available, or just might have a better way to spend them to promote growth in pother ways,, you probably want to sit to the side and let the issue play out as it will.  For now, retailers, who have been charged and so are fighting back,  are at the forefront of this.  They have no federal permits that they put at risk and  no any real prospect of federal enforcement action because the federal  law that applies, the Webb-Kenyon Act, is a protective statute, intended to protect the ability of states to regulate shipments of alcohol into their states, and so has no penalty provisions.  However, as TTB points out, the Webb-Kenyon Act is a federal statute and basic permits are conditioned on compliance with federal law, even if that law does not contained a penalty provision.

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It would be nice if the ACSA would start working toward getting spirits the same status as wine...

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Equivalency. 

I think it is probably  easier to win a tax fight than a blue law fight.  As a long ago college student who ended up, let's just say, throwing more than caution to the wind out of a car window,  I can attest to the truth of getting just as drunk on beer as rum.  But rum carries the demon monicor, both in temperance cartoons and public perception.  Wine carefully cultivated the notion that it is food.  Wine  cultivated an image - people don't drink wine to get  drunk and if they do, then local governments will legislate against the sale of Mad Dog in areas where the homeless congregate.  But wine is otherwise refinement.  Jesus turned water to wine.  He didn't invent the whiskey sour.  And beer was the beverage of the country music songs, salons and frat parties,  beaches in summer and, well you get the idea, it was everybody's beverage, the stuff of good times. 

So, I think you are not doing battle with a reality; you are doing battle with perceptions and in  with  spirit's symbolic association with social  "depravity." 

Warning - Don't underestimate the power of symbols.  Think of the reaction to what is perceived as desecration of the flag.  I need say no more than that.

Misconceptions that get tangled with symbols do not give way to rationale argument.  You can argue that spirits should be equivalent to wine because ... going on to list a string of rational arguments the should bludgeon the lingering Pilgrim  ethos - I've got at least five lines back to the Mayflower so I'm taking one my own heritage  here - that we've not yet managed to shake.  You can argue as rationally as you can, but at some point you reach an impasse.   Logic be damned - in all likelihood your appeal will not make a dent in the attitude of those who are convinced otherwise by, well, their common sense.  Appeals to common sense are appeals to what Einstein called our prejudices at the age of 18.   I place no faith in my common sense.  It is what I have to challenge the most. 

Ask, "Why do spirits websites make me affirm I'm of legal age."  Ask, "Who's checking and what does that accomplish?"   Ask about voluntary bans on spirits ads on TV?  Ask, "Why did distillers, and other producers, seek to regulate the production and distribution of alcoholic beverages?"     Think about whether, coming out of prohibition, the alcohol industry sought regulation because bit loved it or it wanted cover?  Think SEC; think FDIC.  Do self and governmental regulation play symbolic rolls that make things possible or at least make more draconian rules less probable?.  

I think you will not get spirits the same legal status as wine until you deal with the socially innate perceptions.  I think your tasting rooms help with that.  I think the promotion of cocktails as an accompaniment to food helps with that.    I think locavore helps.  I think getting people to buy into what you are doing, to feel they are participating with you - what I've elsewhere called the "Cheers Factor" -  helps.  Familiarity does not necessarily breed contempt and I'm in water far over the head of any claim I can make to expertise. but i think the more people learn about your industry, the less  power symbolic notions of demon rumh old.  Symbols lose power when people become more familiar with the thing itself, in your case with your spirits. That tells me "breed familiarity" is a good way forward for you. But that's only common sense, right?

 

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