Michigan Legislation to Relax Labeling Burdens on Direct-Shipping Wineries

Alex Koral
December 28, 2016

On December 14, the Michigan legislature passed SB 1088, which will be submitted to Governor Rick Snyder for his signature soon. This bill includes a provision to change Michigan’s current Direct to Consumer (DtC) law, relieving an onerous labeling rule that has recently been a focus of contention for wineries selling into the state.

Under SB 1088, wineries will no longer need to include on their packages a label listing their direct shipper license number, the order number, and the registration number of approval of the wines being shipped.

Registration numbers will also no longer need to be included on a shipping invoice. (However, wineries selling DtC must still register their wine with the Michigan Liquor Control Commission and receive a registration number before they can sell those products in the state.)

Many wineries, and their third party fulfillment partners, have found these labeling requirements to be very difficult to comply with–leading to a recent spike in enforcement actions by Michigan–and so should find a great deal of relief with SB 1088.

Other labeling requirements, such as listing the name and address of the purchaser and of the recipient, if different than the purchaser, and a sticker indicating that the package contains alcohol, are still in place.

While the rules affecting wineries selling DtC signal a marked improvement for wineries selling to Michigan, there is more to SB 1088. The bill also amends current rules dealing with in-state retailers receiving orders from Michigan residents through phone or Internet orders, by permitting their use of common carriers to deliver these shipments. SB 1088 will impose many compliance rules familiar to wineries selling DtC, including age verification, labeling requirements, and mandatory reporting.

SB 1088 will also create permit and compliance rules for third party providers facilitating retailer sales. Seemingly, these new provisions are designed to establish rules for relatively new industry entrants like Drizly and Saucy. These entities will need to get licenses and be held to Michigan’s standard beverage alcohol laws.

Once Governor Snyder receives SB 1088, which is expected to be soon, he has until the end of the year to act on the bill. If signed into law, it will then take 90 days for it to become effective.

[Update: 1/12/2017]: On January 9, 2017, Governor Snyder approved SB 1088 with his signature. SB 1088 will be added to the Michigan code, and its provisions, as described above, will be effective law for sales made in Michigan in April (90 days after SB 1088 was submitted to the governor).

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Author

Alex Koral

Alex Koral is Senior Regulatory Counsel for Sovos ShipCompliant in the company’s Boulder, Colorado office. He actively researches beverage alcohol regulations and market developments to inform development of Sovos’ ShipCompliant product and help educate the industry on compliance issues. Alex has been in the beverage alcohol arena since 2015, after receiving his J.D. from the University of Colorado Law School.
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