Michigan Cracking Down on Direct-to-Consumer Sales

Daniel Kostrzewa
June 16, 2016

Last year, we published a notice on complaints coming from the Michigan Liquor Control Commission (MLCC) involving compliance failures in the sale of Direct-to-Consumer (DtC) wine to the state. It has recently come to our attention that the MLCC is continuing to issue complaints, and even citations, involving these same issues–we feel that a reminder is due.

Our original post provides the guidelines on how DtC wine can be sold compliantly in Michigan, and we encourage you to carefully review it. In addition to the rules listed there, a winery must ensure that each wine shipment is accompanied by an invoice, manifest, or other shipping document (i.e. a packing slip in the box, example below) listing the quantity of bottled wine, and indicating the brand name and an MLCC registration number of approval of each wine.

The registration number of approval is the code assigned by the MLCC when a winery registers the wines it intends to sell in Michigan. Remember that before wine can be sold in Michigan, either DtC or through a local wholesaler, it must be registered with the MLCC.

The current complaints largely focus on failures to include the winery’s license number on the package label or the registration number of approval on the packing slip. The MLCC has also been reviewing age verification procedures to ensure that wineries are complying; this post explains how to improve your age verification process, including specifics on using IDology or LexisNexis, both approved by the MLCC.

We recommend that you take efforts to stay in compliance with these rules either by updating your labeling systems, or contacting any third-party fulfillment center you work with to ensure they are including this information when shipping to Michigan.

From your ShipCompliant account, you can download invoices and packing slips to use with shipments going to Michigan. They will include the license and product registration numbers that the state requires. However, it is necessary that you have entered this information into your account. We highly recommend that you review your account information for Michigan, and input the product registration numbers for all wines you sell DtC into Michigan. This is done in the Label Registration panel in your account. If you have questions on how to do this, please review this Knowledge Base article or contact Support.

As there are more developments on this ongoing issue, we will be sure to keep you informed. If you haven’t already, subscribe to our weekly newsletter full of updates.

Example Packing Slip: Screen Shot 2016-06-16 at 10.02.19 AM

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Author

Daniel Kostrzewa

Daniel Kostrzewa is a Regulatory Counsel at Sovos. Within Sovos’ Regulatory Analysis function, Daniel focuses on domestic sales tax issues. Prior to joining Sovos in 2018, he worked as an attorney in Boston. Daniel received his B.A. in Economics from Boston College and J.D. from Boston College Law School. He is a member of the Massachusetts Bar.
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