WASHINGTON, D.C., August 20, 2024 – This week, New York Gov. Kathleen Hochul signed Senate Bill 2852A/Assembly Bill 3132A into law, authorizing the direct-to-consumer (DTC) shipment of alcoholic beverages into and out of the state of New York.
The new law permits the shipment of up to 36 cases per year from specific spirits licensees, including:
- Micro Distillers License (75,000-gallon limit)
- Micro Rectifiers License (75,000-gallon limit)
- Fruit Brandy Distillery
- Farm Distillery License (75,000-gallon limit, requiring 75% New York state ingredients in its products)
Meanwhile, local Wine & Spirits Wholesalers of America (WSWA) wholesaler companies and retailers across the state urged lawmakers to consider the damaging impact of the DTC market on state tax revenues, counterfeit and illicit sales, and the likelihood of increased underage access to directly shipped alcohol.
In October 2023, Thomas Graham, executive director of the Texas Alcoholic Beverage Commission (TABC), presented data at a National Conference of State Liquor Administrators (NCSLA) gathering, showcasing significant issues Texas is encountering within its DTC shipping marketplace, including an estimated total loss of tax revenue ranging from $15 million to $20 million per year.
In February 2024, the Vermont Department of Liquor and Lottery (VT DLL) released a compliance report shedding light on significant hazards and regulatory shortcomings within Vermont’s DTC market. The report found that during a sting operation, investigators attempted 116 online purchases of alcohol, of which 40 shipments were delivered. Among those deliveries:
- No purchase was delivered completely lawfully.
- Age verification was conducted only 20% of the time upon delivery by a common carrier, compared to 85% to 90% of in-store purchases.
- Two deliveries were made to a minor without the common carrier asking for identification.
- Only 50% of the products delivered were shipped by a winery holding a proper Vermont Direct Shipper license. Of those, 80% failed to submit the required report to the DLL.
“Allowing every New Yorker to ship up to 432 bottles, or the equivalent of more than 85 gallons, of spirits to their home defies common sense,” said WSWA President and CEO Francis Creighton. “Despite clear evidence of negative economic impacts and serious public health concerns, New York state legislators chose the market route they believed best suited New Yorkers, as is their right under the 21st Amendment. WSWA urges the legislature to closely monitor this law's impact and consider WSWA as a resource to better understand regulatory and enforcement measures needed to address the known and expected negative consequences of DTC.”
About WSWA
Wine & Spirits Wholesalers of America (WSWA) is the national trade association representing the distribution tier of the wine and spirits industry, dedicated to advancing the interests and independence of distributors and brokers of wine and spirits. Founded in 1943, WSWA has more than 380 member companies across 50 states and the District of Columbia, and its members distribute more than 80 percent of all wine and spirits sold at wholesale in the United States. To learn more, please visit www.wswa.org or connect with us on Facebook or Twitter.