I Want My Beer Direct-to-Consumer

Many years ago, long before I joined ShipCompliant and entered the wild world of alcohol beverage regulation, I had the pleasure of attending the Great American Beer Fest in Denver. At this wonderful event, hundreds of breweries from across the country–and the world–come to showcase their beer. As a lifelong Coloradan, raised under the belief that our beer excels among all others, this was a fantastic chance to experience exciting new tastes and varieties–and to be disabused of the notion that great beer was limited to a few breweries in only a few states besides Colorado.

One brewery in particular, from northern Michigan (I won’t name it, to avoid accusations of product placement), sparked an intense curiosity, even a craving, for more. So I asked the vendor, where in Colorado can I get more of this exotic beer? Sorry, was the answer, we don’t distribute wholesale in Colorado. But, I then inquired, how about ordering it directly from the brewery? Surely if I can order pretty much anything I want online, I could do the same for beer from Michigan? Sorry, again was the answer, not only do they not have that kind of ordering system set up, they weren’t even permitted to, even if they wanted. And so I had to content myself with another ounce-sized taster, and several lingering questions.

Now, years later and with tons more exposure to the nitty gritty of alcohol beverage compliance, I much better appreciate the restrictions that exist on beer distribution and understand why this Michigan beer stays mostly in Michigan. The simple answer is that beverage alcohol laws are largely (but not universally) not set up to allow direct shipments of beer. As we all know, alcohol beverage is highly regulated and almost every step in its production, marketing, and distribution has to comply with a myriad of rules–if the rules don’t positively permit something, then it simply cannot happen (that is, if you want to be compliant with the law). But there is also a much longer, more complex answer to why direct shipping of beer, for the most part, doesn’t occur.

In this post, I’ll attempt to provide clarity to this situation, discussing the current state of direct beer shipping laws and how they compare to the huge market for direct wine shipping, what could be done to change this reality, and what lingering impediments there are that prevent me from buying directly a six-pack of that wonderful Michigan beer.

What We Talk About When We Talk About Direct Shipping of Beer

Beer botleFirst, it will probably help to briefly go over what direct shipping of beer means. For our purposes, this means when a beer manufacturer or supplier receives an order directly from a consumer over the phone or Internet, and then fulfills that order by having the beer sent directly to that consumer’s residence–especially when this occurs across state borders. Alcohol is normally sold by a supplier to distributors who then sell it to retailers who then sell it to consumers (or in the control states, a governmental body will stand in for the distributor, and occasionally for the retailer too). Direct shipping seeks to work around this three-tier system by putting consumers and suppliers in direct contact with each other. Because entering the wholesale market is complicated and expensive, smaller producers especially can benefit greatly by dealing directly with their end consumers.

Direct shipping has over the last few decades become a key part of the wine industry–particularly after the U.S. Supreme Court decided Granholm v. Heald in 2005 (more on that later). But for reasons that will (hopefully) be made clear soon, that hasn’t happened with the beer industry. Instead, beer largely operates within the three-tier system, consigning consumers to the marketing decisions of suppliers and wholesalers.

Direct Shipping of Beer–the Law as it Stands Today

The Twenty-First Amendment to the U.S. Constitution repealed prohibition. But it also consigned the regulation of alcohol beverage to the individual states and their interests–section 2 states that the production, distribution, and sale of alcohol within a state must comply with that state’s laws. With this power, the states have set up licensing schemes, making it a crime to produce, distribute, or sell alcohol without the proper authorization from the state. Thus, simply, the reason why direct sales of beer is still restricted is that most states have just not set up a system that would authorize it. Only licensed wholesalers may distribute beer, and only licensed retailers can sell it to consumers. Direct shipping of beer remains illegal without a process for permitting the shipment of beer directly from the producers/suppliers to the consumers.

I do say most states, though, because it is not all states. There are in fact seven states (and one federal district) that permit breweries to sell directly to their residents. They are:

  • Nebraska,
  • New Hampshire,
  • North Dakota,
  • Ohio,
  • Oregon*,
  • Vermont,
  • Virginia, and
  • D.C.

Each of these states has set up a special license that permits beer manufacturers to sell directly to their residents. And under the dictates of the Constitution, this permission is extended to all breweries across the country, not just those located in these states (*except, Oregon only permits direct shipments of beer from states that give Oregon breweries the reciprocal privilege of making direct shipments of beer–so only from the other six states.)

If you want to begin making direct sales of your beer in these states, it is necessary to be aware of the unique provisions that each of these states impose on direct shippers. For instance, along with licensing rules, there are laws on how packages should be labeled, how and by whom a delivery can be made, reporting requirements, and special tax rules. Along with these general provisions, there are special wrinkles in certain states–for example, in New Hampshire, unless the beer is otherwise not available in the state (i.e. sold wholesale), you may not sell more than 60 containers (each less than one liter) of any one beer annually.

These states don’t make special provisions for beer, but instead have added beer products to their existing rules permitting direct shipments of wine (and in Nebraska, North Dakota, and New Hampshire, spirits). Direct shipping of wine has had a long and complex history of illegality, semi-legality, and finally approval.

How it Works For Wine

Currently 43 states allow wineries to receive and fulfill orders directly from their residents. The last ten years have seen an extensive shakeup of direct wine shipping, with more and more states establishing licensing arrangements and bringing this market out of the shadows where it previously lived. But the effort to make direct wine shipping a legitimate and widespread practice has been a decades-long process, picking up greatly after the 1976 Judgement of Paris, when American wines finally began receiving their deserved reputation for excellence. Americans all over the country became increasingly aware that there was high-quality wine made in this country, and began actively seeking it out.

vineyardHowever, much of it was unavailable outside of California (where the vast majority of American wine is produced), as distributors in other states weren’t necessarily selling the wines that people now knew they wanted. Undeterred, these would-be consumers began making orders directly to wineries, who, in turn, began fulfilling these orders. However, the regulatory landscape had not yet developed to support this practice, so most of these wineries operated in a legal limbo. This began to change with industry and consumer organizations like Wine Institute and Free the Grapes! working to amend state rules to permit direct shipping of wine. Through the 80s and 90s, this work picked up steam, and states began opening up to direct shipping of wine.

States saw direct shipping as a positive, in that they could help foster their native wineries and vineyards by giving them wider access to the market, in that they wouldn’t need to rely on wholesalers picking up their products. However, many states discriminated in favor of their local wineries by, for instance, only permitting local wineries to get permits, or requiring out-of-state wineries to establish a business location in the state. This changed with the Granholm decision, when the Supreme Court found that these discriminatory practices violated the Commerce Clause of the Constitution. Despite the 21st Amendment’s provision that states could set up their alcohol rules however they saw fit, that did not permit them to violate other parts of the Constitution that prohibit discriminating against out-of-state businesses. If these states were going to allow direct shipping of wine, they had to give that permission to wineries across the country.

Unfortunately for beer lovers, these actions, which have led to a $2 billion industry in direct wine shipping, largely did not include beer.

Why Not Beer?

There are any number of reasons why beer hasn’t matched wine as a product for direct shipping. But for the most part, they all revolve around key differences between the wine and beer industries, how it’s produced, how it’s sold, and how it’s consumed.

In developing this article, one of the most interesting explanations I came across was the geographic spread of beer production versus wine. The vast majority of wine in America is produced along the lower 48’s Pacific coast–with most of that production occurring in California alone. This centralizes the industry in a way that the beer industry isn’t.

This, in turn, has two effects for wine. First, it is much easier to create unified industry action groups, like Wine Institute, which has been more than instrumental in affecting the spread of direct wine shipping rules. Second, there is little elasticity in a wine consumer’s purchases. When a Texan or Minnesotan wants a bottle of wine, it’s likely coming from California, and there aren’t a great number of local wines to substitute. With most of American wine coming from California, all the action gets focussed on a single source, which both commands the attention of its consumer base and can unify in its policy positions.

beer-milk-barrels2Beer, however, is a different beast. In past decades, beer was dominated by large producers, like Coors and Anheuser-Busch, which were universally available, obviating any need for direct sales. However, even the welcome rise of the craft beer industry hasn’t spurred a drive for direct sales. This can partly be ascribed to the widespread of craft beer. Every state has its own small breweries, so if that same Texan or Minnesotan wants a good beer, she’ll have a wide variety of local options to choose from–she doesn’t need to look across the country for something nice to purchase.

This widespread of beer producers also makes it harder to create a unified front, which might fight for direct shipping. Instead, beer producers are more focussed on their local concerns–though that is not to discount these local concerns, which can severely limit the ability to sell of beer. Issues like franchise laws and product registration rules, which affect a brewery’s ability to sell its product at wholesale, currently demand a lot of attention in the beer industry. It is these issue that command the focus of beer industry group. This focus may be perfectly valid, but direct shipping does then get much less attention.

One might think, then, that, just as direct wine shipping has largely worked in helping small wineries avoid the vagaries of the wholesale market, the beer industry could similarly benefit. However, the costs of shipping and the nature of selling beer have tended to not support this view. This is largely because beer has a much lower price-point than wine. Whereas a case of wine may cost hundreds of dollars, a case of beer is unlikely to be more than $30 (true, a case of wine holds more volume than a case of beer, but the point is still valid: wine costs more than beer). As such, it may cost as much to ship the beer as the beer itself costs–adding ten or twenty dollars for shipping wine that costs $250 is much more justifiable. Ultimately, shipping beer across the country just doesn’t make as much economic sense as it does for wine. While I might have a burning desire for certain Michigan beer, and could be willing to pay a premium on it, this has very limited application and doesn’t spur the kind of industry-wide, nationwide efforts that would be required to drive the development of direct beer shipping.

Could Direct Beer Shipping Ever be a Thing?

Ultimately, all that is lacking in making direct beer shipping a real and widespread industry is a lack of will–a lack of industry will, political will, and consumer will. We’ve seen how popular and effective direct wine shipping has become, and there’s no real reason why it couldn’t happen for beer as well (except, again, those economic concerns). The same rules that permit wine shipping can easily be adapted to include beer; and the Constitutional principles of Granholm, which require states that permit direct wine shipping to accept wine from all other states, would apply to beer. However, I don’t want to sound blithe about the efforts that were required to make direct wine shipping big. It took years–even decades–of profound effort: getting industry members together, establishing relationships with legislators across the country, litigating against discriminatory rules in court, and ultimately passing statutes that could satisfy the needs of all parties, from wineries to distributors to consumers to regulators concerned with the possibility of abuse in the system.

While much of this groundwork is laid out for anyone seeking to expand direct beer shipping, it would still require years and years of lobbying efforts, working bills through state legislatures, mollifying industry members whose business operations could be upset (i.e. wholesalers), and fighting the inevitable lawsuits that would arise. And then there would still be the economic challenges involved with shipping heavy beer (in terms of weight, not ABV) across the country. This is not to say the efforts would be impossible, or even not worth it (for instance, the market for unique and limited release products in bomber form could be huge and more economically viable), but it will be a struggle.

But Wait, Plenty of People Already Ship Beer Direct . . .

As a final word, I think it’s necessary to quickly talk about where direct beer shipping of beer does
currently occur. A quick Internet search will lead you to numerous beer clubs and other marketers offering to deliver beer directly to your door. Direct beer shipping seems to be a common practice here, and so, we are often asked, why don’t you support direct beer shipping?

The short answer is that, frankly, we do not have a perfect understanding of their business models. Certainly there are shipments going into the six permissible states, which are perfectly valid. In addition, fourteen states permit out-of-state retailers to sell to their residents. Some businesses may be operating in compliance under their retail license. Further, there are ways to fulfill sales directly to customers that effectively, if not actually, work through the three-tier system. However, these kinds of operations can be very complex and involve a lot of moving parts. Perhaps this could evolve into a broader conversation on our Beverage Alcohol Community board, with breweries and retailers discussing their business models and how they comply with the laws.

We at ShipCompliant, however, are focussed on ensuring that compliance with the rules governing the sale and distribution of alcohol occurs. Unless we completely understand how a business does operate in compliance with the law, we can’t advise others on how to do it. As laws develop, we would be happy to support a new area of the alcohol beverage industry–and, on a personal level, would be happy to enjoy the privilege of buying beer direct. Until then, however, this will remain in the legal hinterlands, and my dreams of buying that elusive Michigan beer directly will have to remain just that, a dream.

Want to learn more about out solutions for breweries? Check out our brewery page. We can’t help you ship directly, but we can help your brewery stay compliant and grow!

25 Comments

  1. Ted Marks

    Very interesting. Being a winery the rules are very onerous, and just not fun.

    Be careful what your askng for beer folks, not sure it’s really worth it!

    Reply
  2. Brian Baker

    Well written. A great primer on the topic and one I get asked about a lot as well. Is there an equivalent Advocacy/PR association like FTG working on behalf of the craft beer producers?

    Reply
    • Rachel Bush - Brand Manager

      Hi, Brian! Thanks for the question. Currently, no, there isn’t really any national advocacy organization like Free the Grapes for beer. The Brewers Association exists to promote and protect American craft brewers, their beers and the community of brewing enthusiasts but most of the advocacy occurs within state groups, who are largely concerned right now with franchise and other distribution rules.

      Reply
  3. Jessica H Green

    Thank you, Alex, for this fascinating and well-researched article!

    Reply
  4. Wineguy

    Remember who got in front of winery direct shipping all those years ago? Big Beer and it’s big distributors that’s who. They feared this “little” beer gang going around their empire. They are the ones who trot out the fantasy of kids ordering cabernet on the net as a reason to kill DTC wine shipping. Every time. And they are the ones who drop all the cash on state elected officials as well. So good luck with all of this. They key is to somehow get consumers ticked off at paying more and being denied choice in adult beverages. Until that happens, this will stay screwed up. Right now too many feel that all this control is “mandated” by God. Wrong. It’s just a protected monopoly. And those are never given up easily.

    Reply
  5. Lea Fainer

    Great Article!! Thanks for this thoughtful summary and perspective. Why is California not on the list of states that allow beer manufacturers to ship direct? The CA ABC has informed me that DTC shipments to CA consumers are permitted with a Type 23 (small beer manufacturer) license.

    Reply
    • Alex Koral - Compliance Law Research Associate

      Hi Lea, thanks for your comment! And thanks to everyone else who’s commented so far–there’s a lot of really positive feedback, which is extremely gratifying. As to your question about California, one answer is that a type 23 license is (as you note) only for small beer manufacturers (i.e. brewpubs and microbreweries) who are located in California. This would exclude a large portion of the beer manufacturing industry, and would not affect interstate commerce, which is a big part of the DtC market–and so wasn’t exactly the type of entity I was talking about. There are certainly many ways out there to delivery alcohol within a state–it gets much trickier when going across borders. But another answer is that, frankly, I was not aware of all of the privileges that a type 23 license can provide. There’s nothing that I could find in the rules or descriptions of a type 23 license that would immediately indicate they could deliver directly to the customers. Finding that out requires exactly the kind of investigation that you carried out–actually calling the state and asking. My purpose here, again, was to look at interstate shipping, so I may easily have missed some nuisances of sales purely within a state. If you, or anyone else, knows of other situations where beer manufacturers are permitted to make DtC sales, we’d love to hear about them here.

      Reply
  6. Ian

    Excellent piece

    Reply
  7. Patrick Rue

    Great article, Alex! I’ve brainstormed with some brewer friends on creating a group to organize towards DTC of beer, and our findings haven’t been especially promising. For many of the small brewers focusing on barrel aged, large format bottled beer, we have a lot to gain from DTC of beer. I agree it’ll take years, likely decades, and a lot effort and cash to make it happen.

    Reply
  8. Eugene Pak

    The DTC of beer is allowed within CA (CA brewery direct to CA consumer), that has been ABC policy/interpretation.

    Reply
  9. Eugene Pak

    I didn’t see the prior comment and reply on CA. Yes, it’s not that explicit in the CA Business & Professions Code, but the CA ABC policy is that a Type 23 (small beer manufacturer which means 60,000 barrels or less) can make direct to consumer shipments, within California. The US Postal Service, however, doesn’t ship, but some private carriers do.

    Reply
  10. Doug McKinley

    There is a lot published on Winery DtC; however hard to find laws/regulations in different states regarding either Winery or Brewery direct sales to Retail/Restaurant. Which states require that all sales to retailers go through a distributor/state control board?

    Reply
    • Alex Koral - Compliance Law Research Associate

      Hi Doug, fantastic question! Unfortunately I can’t say exactly all the states and conditions under which a winery or brewery can self-distribute to retailers. I can say that there are some–but definitely not all–states that allow this. Generally there are production caps, product limitations, and special license types that you should be aware of. A few states that I can think up initially that allow some kind of self-distribution are: Montana, Wyoming, Ohio, New Hampshire, and Illinois. But I’m pretty sure there are more out there. I can say for certain that you’ve really piqued my interest, and I’m now planning to put out a longer post on self-distribution rules soon that will get more into the details your asking after. Hope this helps for now.

      Reply
  11. Vlad

    Nice essay, Alex, however the reasons are much simpler. Consumers in US consume times and times much more beer than any other alcohol. Profits for giants of industry are unbelievable, so is excise tax. No state or giant corporations will allow brewery to sell and ship directly to consumer, as excise tax will go to the receiver’s state or may be not paid at all. On the other end, due to lack of proper competition, wholesale distributors dictate prices to retailers, so retailers dealing with the highest in industry competition have to sell beer almost at the cost. Shipment from brick and mortar retail store to consumer is not direct shipment, legal between any states and protected by Interstate Commerce Clause, however, low price of beers, high shipping cost, packing complicity and barriers built by UPS and FedEx policies prevent liquor stores to even look at this type of business.

    Reply
    • Alex Koral - Product Compliance Manager

      Hi Vlad,

      Thanks for the comment. I agree that perhaps the biggest barrier to DtC beer is market forces–as we’ve seen with DtC wine, when there’s motivation in the industry to become politically involved, it can happen. The low cost of beer and the high cost of shipping reduces the value that breweries would get from these sales. While some small producers, particularly those focusing on exotic beers and bombers, could make the numbers work out, much of their current interest is in expanding their access to retail locations. There’s also the point that local beer is available almost everywhere–which is different than the wine market. Almost all wine in the U.S. is produced in California, so if I want to get a bottle from a small winery without wide distribution, I have to have it shipped to me (or travel to California); whereas even if I miss some beers in other states, I can generally satisfy my taste with local selections.

      I do want to caution, though, shipping from a retail location to consumers in a different state is decidedly not legal between all states. The sale of alcohol to local residents is strictly controlled by each state (as the 21st Amendment allows), and limited to only parties that receive a valid license from that state. Only 10 states currently have a license for out of state retailers, while another 4 have reciprocal provisions, allowing direct sales from retailers only in states that themselves allow DtC sales from out of state retailers. This restriction has been litigated. In 2008 the 5th Circuit ruled that Granholm’s application of the Dormant Commerce Clause does not extend to retailers looking to sell directly to Texas residents. Recently, two suite were filed in Illinois and Missouri challenging their restrictions on out of state retailers selling DtC. If successful, this could create a circuit split. If that happens, then perhaps the Supreme Court would weigh in. But until then, states are able to restrict the shipment of alcohol from retailers to only in-state licensees. Because FedEx and UPS could face criminal charges if they knowingly facilitate violating these restrictions, they maintain their perfectly valid policy. Any party or business selling alcohol across state borders without a valid license permitting that sale in the recipient state does so at their own risk.

      Reply
  12. Doug

    What if I started a business selling a 6 pack of mixed beers from various small breweries? Similar to these craft beer clubs. What kind of license would you need since i’m not wholesale or a brewery? I guess it would be strictly retail? Help!!!

    Reply
    • Alex Koral - Product Compliance Manager

      Hi Doug,

      Thanks for the questions. In order to operate in the beverage alcohol industry, you have to be licensed as either a supplier (e.g. a brewer), a distributor, or a retailer. As you say, you’re not a wholesaler or a brewery, therefore you’re right that you’d fit into the retailer category. Depending on the state you live in, you will likely need some sort of off-sale liquor license (like for a liquor store). This may require having a physical store you sell out of. It will also require figuring out supply lines so you can get the beer you want to sell (in some states it could be possible to get it directly from the brewery, but most likely you’ll need to work through a distributor). Then, it will also vary whether you have permission in your state to deliver your beer directly to consumers, whether through a common carrier or by your own vehicles. Your ability to sell to customers in other states depend on the rules of those other states (see here for more information). As we say, some of these beer clubs seem to be operating in a legal limbo; they likely have some sort of license, but then stretch the boundaries of those licenses when they begin deliveries. We would recommend following up with a local expert on your state’s alcohol regulations to better understand how exactly you can legally set up the business you want.

      Reply
  13. Christian Olsen

    Alex – thank you very much for this article! I found it extremely informative and enjoyable to read. I have a few questions that I’d love to hear your opinions on:

    1) How do wholesalers distribute beer across state lines? Are there specific guidelines they follow within the 3-tier system?

    2) Is it possible for wholesale distributors to deliver DtC? Is there a scenario where that is advantageous for them given the amount of work, time an money required?

    Thank you very much!

    Reply
    • Alex Koral - Product Compliance Manager

      Hi Christian,

      Thanks so much for your appreciation! I’ll try to answer your questions as well. 1) In a word, yes, there are specific guidelines for how cross-state distributions work in the 3-tier system, however it is not the wholesalers who are making those distributions. Interstate 3-tier sales always depend on the rules of the destination state. Almost universally there are requirements to get a license in order to bring in products to a state, as well as product registration and reporting requirements. Often there are restrictions on who can bring in or register a product in a state, typically it’s the “brand owner” or “primary american supply,” though others can be authorized to act as sellers. Generally, it is only a member of the first-tier who has these privileges, a brewery or an importer. They will have to sell to an in-state distributor/wholesaler, who will send it along to in-state retailers. Wholesalers are, in theory, supposed to be in-state businesses, with a close connection to that state; so generally, wholesalers will not be the party actually distributing beer across state lines, they’ll only be on the receiving end. Though wholesalers can cause products to be brought into their state by contracting with a supplier out of state, which often requires contact to be made through a broker or other registered salesperson. 2) I am not aware of any DtC provision that allows a wholesale distributor to deliver DtC. DtC rules for the most part only allow manufacturers/producers to get a DtC license, though about 10 states allow retailers to get licenses as well. Wholesalers are designed to serve as middlemen between suppliers and retailers, and have no direct connection to consumers. While there could be some cost advantages for a wholesaler to make a DtC delivery, it would likely undermine their position if they ever actually did get DtC privileges. After all, wholesalers often complain about the DtC market that it degrades the 3-tier system; if they also benefited from DtC sales, then they would really be admitting that the 3-tier system is not sacrosanct.

      Reply
  14. Cory

    In the three tiered system as it regards imports, importers are essentially on the same tier as the brewery / manufacturer. Does anybody know if there is a case where the importer can ship directly to a customer imported beer from abroad? Since, naturally, a foreign manufacturer is not a US brewery. Are the direct beer shipping rules ONLY in effect for domestic breweries located in the states above, and ONLY the breweries can go direct? Or, would it be possible for an importer located in one of the direct shipping states to import beer and ship directly to customers in one of those states?

    Reply
    • Alex Koral - Industry Relations Advisor

      Hi Cory,

      Thanks for the question. You’re certainly right that importers are considered on the same tier as manufacturers. Unfortunately, as most states have their DtC laws set up, the necessary license is only available to “manufacturers” or “producers” — businesses with actual production facilities, not those who just handle products, like importers. I believe that New Hampshire is the only state that both allows beer DtC, and will give a DtC license to an importer — though you should confirm that with the NHLC. Importers have largely been left out of DtC laws, as they’ve developed over the last decades; giving them greater permission will require amending those laws.

      Reply
  15. Joe

    Interesting article! I am a small brewery owner in Massachusetts and would like to sell my beer at a farmers market in nearby New York I visit there frequently) Is that allowed? I’m guessing hell no. Thanks! Joe C

    Reply
    • Alex Koral - Industry Relations Advisor

      Hi Joe,

      Thanks for your question! While selling at farmers markets is not something we work with all that often, I’ll try and provide an answer. New York does permit sales of beer, wine, cider, and spirits at farmers markets. However, in order to do so, you first need a permit issued by the SLA. But unfortunately, it looks like such special farmers market permits are only available to local producers — those licensed to produce beverage alcohol in the state of New York (this pamphlet has some good information). And then, even if you could get a license to sell your beer at a farmers market, because it would be coming from an out-of-state location, you’d need to still operate within New York’s three-tier system. This would require first selling your beer to a New York distributor, who would register your labels with the SLA and pay excise taxes, and then buying it back from the distributor for you to sell as a retailer. Unfortunately, the provisions that allow an in-state New York brewery to self-distribute their products wouldn’t apply to you based in Massachusetts. If you do have any more questions on this, I would recommend reaching out directly to the SLA or your personal counsel, who can provide more specific advice relating to your situation.

      Reply
  16. Connor

    Loved the article, Alex! Thank you for sharing. I was wondering if you had any additional insight regarding DtC with contract brewing in California. Assuming the brewery operates as a small manufacturer, would the contracting company partnering with that brewery be able to sell DtC under Type 23 within CA?

    Reply
    • Alex Koral - Industry Relations Advisor

      Hi Connor,

      Thanks for the compliment and your question! Unfortunately, that’s not something I can speak about definitively. California breweries shipping DtC within California is a rather informal process, which operates more under a wink-and-nod agreement with the CA ABC rather than any specific, regulated arrangement. The rules of how this works are not really written down, but come from conferring with state regulators. Whether they would require the actual license holder to make the sales and do the shipping, or if they would permit a third-party to have some part in that process, I can’t say (though from what I have heard, holders of a Type 1 or Type 23 license would be the parties that the CA ABC would allow to make DtC sales of beer to California residents). If you have specific questions about what you can and can’t do, I would recommend directly contacting the CA ABC and asking them; they’re largely very friendly people, and you can speak hypothetically without revealing what you may or may not be doing currently.

      Reply

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