The Latest on Retailer Direct-to-Consumer (DtC) Shipping

Lizzy Connolly
October 15, 2021

Retailer direct-to-consumer (DtC) shipping still has a way to go in terms of being as widely accepted as DtC wine shipping. However, there has been continued interest in making that a reality. 

Sovos ShipCompliant keeps a close watch on the latest updates in the beverage alcohol industry, and we’ve gathered a few of the top recent headlines related to DtC retailer shipping. 

Court case updates from NAWR

Tom Wark, executive director at the National Association of Wine Retailers (NAWR) provided a rundown of current federal court cases debating the effort to open more states for interstate wine retailer-to-consumer shipments

The Granholm v. Heald Supreme Court case made clear that a state’s alcohol laws may not pursue legitimate state interests through discrimination against out-of-state economic interests without demonstrating with concrete evidence that no alternative, non-discriminatory options exist. The Tennessee Wine v. Thomas decision confirmed that this principle applies to retailers in addition to producers. 

In nearly every instance when these lawsuits are filed in federal court, the state’s wholesalers petition the court to “intervene” in the case, making them defendants along with the state. This means those challenging the law find themselves up against the state and the state’s wholesalers. 

 

Wark noted that while it is not illegal in any state for consumers to purchase wine from an out-of-state retailer, it can be illegal for a buyer to have legally purchased wine shipped to them. There are currently eight states with lawsuits challenging the DtC retailer wine laws. 

Read Wark’s full breakdown here

The cost of shipping wine

Free shipping is no longer just a “nice to have” for consumers — it’s become an expectation. However, DtC wine shipping costs continue to creep upward. But why?

Larry Cormier, Sovos ShipCompliant vice president and general manager, spoke with Pix Wine about what alcohol producers and retailers are facing. It’s largely driven by the complicated compliance environment, pushing forward high out-of-pocket costs to pay for permits, licensing fees and paperwork.

Wine still accounts for about $500 million a year in revenue for FedEx and UPS, which means that those organizations are willing to continue managing the attendant paperwork, bureaucracy and regulation. 

Read the full Pix Wine article here

The ups and downs for retailers shipping DtC

Alex Koral, Regulatory General Counsel at Sovos ShipCompliant, provided further detail on recent changes for retailers shipping DtC in a contribution for Wine Industry Advisor. For starters, Idaho and Nevada altered previous stances on residents receiving wine shipments from out-of-state retailers. 

“These reversals in law come as retailers and advocates continue to fight in court, with limited success, to gain the right for DtC shipping in more states,” Koral wrote. “At the same time, retailers across the country have had to shut down shipping programs at the behest of carriers, who themselves face scrutiny for any and all improper shipments state regulators hear rumors of.”

Koral explains how the Supreme Court case Granholm v. Heald started to pave the way for DtC wine shipping, “as long as the wineries would agree to get licensed by the destination state and abide by a variety of regulatory requirements.” But does that apply to retailers? What can retailers do to also legally ship wine to consumers? 

While of course it would be a great boon to have the Supreme Court eviscerate discriminatory state laws regarding DtC shipping by retailers, it will not be sufficient in itself.

 

Check out the full Wine Industry Advisor article here

As always, stay tuned to Sovos ShipCompliant for the most up-to-date information on DtC alcohol shipping.

Take Action

Learn more about managing your DtC alcohol shipping compliance.

Sign up for Email Updates

Stay up to date with the latest tax and compliance updates that may impact your business.

Author

Lizzy Connolly

Share This Post
Share on facebook
Share on twitter
Share on linkedin
Share on email

North America Sales & Use Tax
May 24, 2022
3 Reasons for Automated Sales Tax Compliance

At this point, knowing that increasingly complex sales tax requirements exist is not the issue. Organizations know that they’re facing more complicated rules and regulations, but it’s more a matter of taking the time to invest in the necessary tools to properly face those challenges. With an automated sales tax compliance solution, businesses can better […]

North America Tax Information Reporting
May 24, 2022
Insurance Statutory Reporting Due Dates

Insurance statutory reporting filing due dates for the National Association of Insurance Commissioners (NAIC) are spread across the calendar year causing a jumble of different deadlines that apply to certain insurers. The quarterly and annual filings can be easier to remember, but the additional filings certain insurers are required to submit can be tricky to […]

EMEA VAT & Fiscal Reporting
May 24, 2022
Common Triggers of a VAT Audit

Since many audits seem to occur at random, it’s not always possible to identify the reason why a tax office would decide to initiate one. We’ve previously spoken about an increased interest in audits from the EU and audits for e-commerce. This article covers the most common reasons behind a VAT audit to help businesses […]

E-Invoicing Compliance EMEA
May 20, 2022
What Businesses Need to Know About the Romanian E-Transport System

Romania is introducing a mandatory e-transport system from 1 July 2022 to monitor the transport of certain goods in the national territory, an initiative that will operate in parallel with the newly launched continuous transaction controls (CTCs) system for e-invoicing. This means that in a little over a month’s time, the issuance of an e-transport document […]

North America ShipCompliant
May 18, 2022
Marketing Strategy 2022: Key Elements for Successful Wine e-Commerce

By Chloe Cristallini, Marketing Manager for Bloom Studio Recently, one of our webinar attendees asked, “What advice would you give someone who is first starting to sell alcohol DtC, or who wants to grow their DtC channel?” Buying a bottle of wine should be as easy for people as buying a pair of shoes. Other […]