COVID has brought us masks, cabin fever — and plenty of renewed talk about direct to consumer shipping for alcohol beverages. In the July 2020 issue of Craft Spirits magazine, Art DeCelle lays out a path forward, to expand opportunities for direct to consumer shipments of distilled spirits. The article appears at page 42.
The current legal structure has been completely undermined by the advent of digital commerce. Any consumer can go online and order beer, wine and spirits from hundreds of locations outside his or her state of residence. Searchers are likely to be besieged for weeks by pop-up ads and emails from illicit online vendors, often offering prices that undercut legal businesses. … Unlicensed businesses (or businesses licensed in other states) have devised all manner of digital subterfuge to make illegal shipments to consumers and to evade detection by state regulators. For example, legal disclaimers and terms of service attempt to place compliance burdens on consumers, who rarely read fine print. These operations are often able to avoid state license fees, excise and sales taxes, placing legitimate industry members at a disadvantage. A basic drawback of a 50-state regulatory system is that state ABCs and law enforcement agencies must invest enormous effort just to initiate an enforcement action against a single illegal online retailer. States often lack jurisdiction to investigate businesses in other states.
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