Is blocking DTC shipping really the solution?

[Erik Owens]

By the Irish Liquor Lawyer: https://irishliquorlawyer.com/liquor-industry-insights/is-blocking-dtc-shipping-really-the-solution/

There must be a New York shipping bill floating around the horizon, because there are letters coming out against direct-to-consumer (DTC) shipping in full force. Robert’s Kent, who was General Counsel of the White House Office of National Drug Control Policy under Joe Biden, wrote a piece about the dangers of DTC manufacturing shipping. What we don’t know, since it is not disclosed, is if he wrote this as a concerned disinterested third-party, or is hired by someone. But since he has written on addiction issues before and served in government roles on important issues related to substance abuse, I think he is sincerely in the right place.

I want to address some of his points he makes, because I believe his editorial piece in the Times Union, may have missed the mark.

Mr. Kent claims that direct shipping is a dangerous idea and poses a threat to public health and breaks down protections to prevent underage drinking.

The truth is out-of-state wine manufacturers have shipped into New York for nearly twenty years and there is no evidence to support these claims on the dangers of alcohol shipping.

He goes onto state that because 1 in 6 persons report excessive alcohol use, we should not expand access to alcohol in New York. Does this mean he believes we should maintain a moratorium on brick-and-mortar licenses and not open businesses serving alcohol in New York, or does he believe only DTC shipping alone creates this problem? Remember it is easier to access readily available alcohol at bars, restaurants, and grocery stores, instead of waiting numerous days for your alcohol shipment to arrive.

Mr. Kent goes onto claim that shipping alcohol creates an unregulated and unsupervised channel for more alcohol. The opposite is true, wineries shipping into New York require a permit to ship and are required to provide the State of New York with monthly reports on wine shipments. If distiller shipping is legalized, they would follow the same process. Not legalizing DTC shipping will create more of a black market, legalizing it will create less of a black market. That is true for about anything in life.

Next, Mr. Kent claims that a Massachusetts study supports the position that shipping alcohol makes it easier for minors to obtain alcohol.  In this study 40% of the time there was no adult signature obtained and there were zero request for age verification. What is not mentioned is that none of the individuals whom product was delivered to were minors and a majority were over thirty-five years old.

Studies show that minors aren’t purchasing alcohol online, according to the VinoShipper study only .15% of all attempted purchases were made by minors. Why, because to purchase, they would need to use their parents’ credit card, hope their parents don’t notice, and then hope they are home at shipping time and hope the driver doesn’t ask for id. There are many easier ways to get alcohol.

Finally, Mr. Kent provides the soft alternative of local delivery and under his viewpoint, local delivery negates the need for DTC shipping and is a safer alternative.

He does not recognize why people engage in DTC with manufacturers. The reason being is because they can’t get the product through the three-tier system in their own state. If a New York resident visits a small batch winery or distillery in a far-off state chances are that product is not available in the New York three-tier system. So, Mr. Kent’s alternative option argument fails to satisfy consumer demand.

As for local delivery, what are the safeguards against underage access, do the retailers need to provide records and proof to the state that they positively age verified someone? I would believe the record keeping and reporting requirements are less stringent for local delivery than shipping and hence lead to more risk of the type which concerns Mr. Kent.

In concluding, since Granholm the New York market has been open to winery shipping, the truth is wine shipping is safe and great for the marketplace. What has worked for the marketplace should be expanded and not restricted. Distillers should have the right to expand their marketplace and consumers should have the right to greater access.

Mr. Kent’s heart maybe in the right place, I just disagree with his conclusions and how he gets there.

Let’s reform the alcohol space by eliminating the bad and expanding the good, if we all can agree on that, we will have a blessed and happy new year!