This blog was last updated on September 27, 2021
Direct-to-consumer (DtC) alcohol shipping laws vary from state to state, and that fact holds true for importers looking to enter the DtC business. While importers can be treated similarly to other members of the “supplier” tier (e.g., wineries, breweries), they are often treated differently in federal and state regulations.
Because of how DtC shipping laws tend to be written, there are few options for alcohol importer DtC shipping. This is especially true for businesses licensed solely as importers (only holding an Importer’s Basic Permit from the TTB and that have no state-issued production/manufacturing licenses).
How can an importer conduct DtC alcohol shipping?
Only a small handful of states (Kentucky, Nevada, New Hampshire, West Virginia and Wyoming) explicitly permit importers to ship alcohol DtC. Along with these licensing restrictions, “not of own production” (NOOP) laws make it extremely difficult for importers to ship DtC.
For example, importers that do not qualify as either a “producer” or a “retailer” on their own are almost entirely excluded from states’ alcohol DtC shipping laws. However, many domestic wine producers also act as importers for wines from around the world. This approach works well within the context of the three-tier system, but faces challenges in DtC shipping. A U.S.-based winery can get licensed in most states to ship their own products, but then must then contend with various states’ wine production and DtC shipping laws when it comes to shipping the wine brands they serve as an importer for. These laws can vary from one state to another, meaning the importing winery will need to pay close attention to ensure that they remain compliant.
Another option is for importers to get a retail license in addition to their importer license in the state they operate in. From there, importers can ship DtC to other states that permit DtC shipping by retailers. However, most states do impose trade practice restrictions that would prohibit an importer from also holding a retail license. Even where allowed, many states require retailer licensees to also open a physical store and sell inventory to customers that visit the location, which can be an expensive and cumbersome requirement.
For importers’ DtC alcohol shipping prospects to improve, states will need to change their DtC shipping laws to either extend more explicit permissions for importers or to remove some of the restrictions that limit the ability to DtC ship imported products. There will need to be more direct allowance for importers to get the necessary DtC shipping license. For example, New Hampshire’s law could serve as an example for other states, as it permits “any person currently licensed in its state of domicile as a wine manufacturer, beverage manufacturer, importer, wholesaler, or retailer [may] apply for a direct shipper permit.” Removing NOOP restrictions could also expand the number of imported products that could be shipped DtC.
Even with limited options for DtC alcohol shipping, importers looking to expand their business into a new area should consult with legal counsel or their compliance software provider to ensure that all compliance regulations are followed.
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