California becomes ground zero for alcohol by mail – again – Orange County Register

The Golden State looks set to once again play an outsized role in the future of alcohol in America. More than three decades ago, California was at the forefront of allowing cross-country wine shipments to thirsty wine lovers. Now it could do the same for liquor and beer, as the legislature plans to make recently expired pandemic shipping exemptions permanent.

The California Senate Government Organizing Committee recently held a audience on a bill that would allow distilleries and breweries, both in and out of state, to ship directly to consumers’ doors. Senate Bill 620 passed the committee by one vote, but the final fate of the legislation could determine when and if America as a whole is ready to unleash its overregulated liquor markets.

Direct-to-consumer (DtC) shipping allows alcohol producers to ship their products directly to our door by mail. The online delivery economy may be old news in almost every other industry in America, but antiquated rules have largely prevented alcohol from joining the 21st century. While Americans are familiar with DtC wine shipping, as nearly every state in the country allows wine to be shipped directly from vineyards, only a few states allow liquor and beer to be shipped directly to consumers.

During the pandemic, some states, including California, have temporarily allowed in-state distilleries and breweries to ship to consumers, but only a tiny handful of states are allowing shipments in and out of state. status permanently. Through our analysis, only seven states plus the District of Columbia allow interstate shipments of DtC alcohol, while only nine states plus DC allow interstate shipments of beer.

Despite these grim numbers, hope for a more robust alcohol delivery economy may be on the horizon. Amid the COVID-19 pandemic, Kentucky passed a trend-setting DtC reform bill that puts breweries and distilleries on a level playing field with wineries by allowing them to ship to consumers in Kentucky. Given America’s 50-state republic, however, other states will need to follow suit to create a truly national liquor delivery economy.

Just at the right time, the reform push now seems to be spreading to the “big four” markets of California, Florida, New York and Texas. If DtC bills can get through Kentucky – the epicenter of America’s bourbon economy – and a few of those larger markets, it would put the country on a faster path to a modern, streamlined market for bourbon. alcohol.

Unfortunately, the opposition in California has been fierce. State liquor wholesalers have a government-mandated middleman role where liquor producers must first sell their products to wholesalers, who then turn around and resell them to retailers. Finally, retailers, such as grocery stores and liquor stores, are then allowed to sell to consumers.

DtC shipments act as a circumvention of this complicated system by allowing producers to sell directly to their customers. California wholesalers, as well as the Teamsters union, are resisting efforts to exclude them from the sales process, even though a government-mandated level of wholesale is virtually unheard of in any industry outside of liquor.

Resistance from wholesalers is also misplaced since wholesalers and retailers often don’t even carry most of the products made by breweries and distilleries across the country. If a Californian wants an obscure IPA from Vermont, chances are it won’t be carried by the local grocery store, but DtC shipping might allow them to order a few cases directly from the brewery. For this reason, DtC alcohol shipments are extremely popular among consumers, with 75% of Californians in favor.

The opposition in California is particularly ironic given the state’s fundamental role in ushering in the robust DtC wine shipping market that America currently enjoys. After the famous 1976 Judgment of Paris wine competition, in which Californian wines took first place over French wines – surprisingly, the event was even predominantly judged by French judges – the American wine industry experienced a unprecedented growth. American consumers began to look to California for their wine supply, rather than to Europe.

As agritourism took off in places like Napa Valley, foreign visitors increasingly began to clamor for the ability to order their favorite California cabbies and merlots from home. In 1986, California became the first state to pass legislation allowing DtC wine shipments. The rest, as they say, is history: California’s wine industry has exploded into a global powerhouse, and American consumers from Idaho to Maine now enjoy a phenomenal selection of California wines right on their doorstep.

Now, more than 35 years later, it makes little sense to resist the arbitrary expansion of DtC shipping to breweries and distilleries. California has already led the way in liquor shipping, and now it can do it again.

C. Jarrett Dieterle is Resident Senior Fellow at the R Street Institute and author of Give me freedom and give me a drink!

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