Hero Image - Title
American Moms Know DTC Spirits Shipping Is Dangerous
WSWA Responds to R Street's Continued Promotion of a DTC Utopia for Spirits

WSWA strongly opposes the interstate direct-to-consumer (DTC) shipment of alcohol. The current three-tier system of alcohol distribution – whereby alcohol producers can only sell to wholesalers, retailers can only buy from wholesalers, and consumers can only buy from retailers—has created a regulatory structure that supports enforcement, accountability, and safety. Because of the three-tier system, the U.S. alcohol marketplace is the safest and most diverse in the world.

 

DTC shipments of alcohol cause widespread and well-known enforcement, public health, and public safety issues and leads to more bureaucracy, more enforcement actions, and more spending of taxpayer funds.  

 

Continue reading to learn why legislators and consumers alike understand the dangers of enacting spirits DTC legislation.  

DTC Shipping: Myth vs. Fact

Myth: DTC works with the current three-tier system.

Fact: DTC is not three-tier compliant. By operating outside of the three-tier system, DTC shipments bypass local wholesalers and retailers leading to a higher risk of minors obtaining alcohol, missed state tax revenue, and a disrupted chain of custody leaving opportunity for counterfeit product to make its way into the market.

Myth: Craft brands cannot grow their business without DTC.

Fact: A craft brand cannot survive by only shipping its product. Wholesalers help craft producers to access local, regional, and national retailers and help retailers of all sizes provide a wider variety of products at competitive prices. Accessing such a wide variety of retailers would be cost prohibitive for craft producers on their own. Many wholesalers have dedicated craft sales teams to cater to craft producers' specific needs. Shipping spirits is only legal in 5 states and D.C. so craft distillers can only use DTC to access a fraction of the U.S. population—not nearly enough of a market share to grow a brand.  

Myth: Minors are unlikely to use DTC shipping to obtain alcohol.

Fact: DTC increases the risk of underage access. Common carriers transporting alcohol shipments are shown to be less likely to perform ID checks than a local retailer. In a study published in the Journal of Pediatrics and Adolescent Medicine, only 12 percent of online alcohol orders placed by underage purchasers were rejected at the point of order as a result of an age verification processes. Without local ties to the community, out-of-state shippers feel less responsibility for selling alcohol to a minor and have less liability than a locally licensed retailer. 

Myth: DTC is the only alcohol e-commerce option for consumer convenience.

Fact: Local, licensed delivery is the most convenient and safest e-commerce alcohol model.  While DTC takes at least a few days, under a local delivery model, alcohol orders are delivered within hours from locally licensed retailers via their employees or a licensed third party who are trained/experienced in age verification to ensure deliveries are made to consumers 21 years of age or older, while still maintaining compliance within the three-tier system. 

Myth: DTC shipments are a significant source of additional revenue for state governments. 

Fact: DTC cost states revenue and negatively impacts state budgets. DTC alcohol shipping opens the door to widespread tax evasion because illegal shippers do not self-report their illegal shipments to the state and remit taxes. States have had to allocate significant resources to act against illegal shipments and, at the same time, lose millions in unpaid excise taxes. For example, Illinois estimated $20 million per year in tax loss while Virginia ABC estimated a loss of more than $60,000 in unpaid excise taxes in a 4-month period in 2018. By remitting state excises taxes, wholesalers play a crucial role in ensuring that state and local governments receive tax revenue from alcohol. The added efficiency of collecting tax revenue – going towards public programs, law enforcement, and education – is a valuable part of the alcohol distribution model that DTC fails to provide. 

Myth: Counterfeit alcohol is not a concern with DTC shipping.

Fact: DTC opens the door to counterfeit or adulterated products entering the stream of commerce. When it comes to the online marketplace where DTC orders are placed, the U.S. Government Accountability Office has found that 43% of items purchased from online retailers were counterfeit. Though alcohol was not included in this study, purchasing alcohol products online increase the likelihood that consumers will be sold counterfeit and adulterated products or become victim of a scam. The almost century old three-tier system has protected U.S. consumers from counterfeit products because they are strictly tracked throughout the U.S. supply chain. However, DTC shipment lack transparency and are hidden from effective oversight which increases the difficulty for regulators to ensure safe and legitimate products are entering their borders.

American Moms Know DTC Is Dangerous

New Study Finds Moms Concerned About Potential for Increased Underage Access, DUIs, and Dangerous Product Associated With DTC Spirits Shipping LEARN MORE

91%
of U.S. moms agree that preventing underage drinking is important for lawmakers to consider when making new alcohol laws and regulations.
72%
of U.S. moms are concerned that DTC spirits shipping will increase underage access to alcohol.
3X
U.S. moms are three times more likely to say that the current three-tier system is working well than not.
61%
of U.S. moms are concerned that DTC spirits shipping across state lines will increase access to dangerous counterfeit products.
72%
U.S. moms are concerned that DTC spirits shipping will increase underage access to alcohol.

DTC Shipping State-of-Play

WSWA tracks DTC alcohol shipping legislation across the country. Find out if your state is considering DTC and how much it will cost to enforce:

 

Industry Response: DTC In The News

View All

Sep 28, 2022

American Moms Know DTC Spirits Shipping Is Dangerous

New Study Finds Moms Concerned About Potential for Increased Underage Access, DUIs, and Dangerous Product Associated With DTC Spirits Shipping

American Moms Know that the Health and Safety of Their Children and the Public Should Be at the Forefront of Any Discussion Surrounding the Laws and Regulations of the Alcohol Marketplace

Read More

WSWA

Sep 28, 2022

New WSWA Study Finds U.S. Mothers Concerned That Direct-To-Consumer Spirits Shipping Endangers Children

WSWA Educational Foundation Releases Study Conducted by Morning Consult That Finds American Moms Are Concerned DTC Spirits Shipping Will Increase Underage Access, DUIs

Read More

WSWA

Sep 23, 2022

34 State Wine & Spirits Wholesaler and Broker Associations Join Coalition Letter Opposing USPS Shipment of Beverage Alcohol

Industry Coalition Letter Circulates Congress Opposing USPS Shipment of Beverage Alcohol over Public Health and Safety Concerns, Weakened Enforcement, and 85 Years of Existing State Authority and Regulatory Oversight

Read More

WSWA

Jun 06, 2022

Myth vs. Fact: Direct-To-Consumer Alcohol Shipping

Wine & Spirits Wholesalers of America Responds to Wine Industry Advisor Op-Ed

Read More

WSWA

Mar 09, 2022

WSWA Submits Letter in Opposition of Direct-To-Consumer Spirits Shipping in Iowa

Increased Underage Access and State Tax Revenue At Risk

Read More

Mar 08, 2022

American Beverage Licensees Sends Letter in Opposition of DTC Spirits Shipping in Vermont

"Direct-to-consumer supplier shipping of alcohol upends that playing field, throwing dissimilarly licensed operators into the same pool, and giving out-of-state alcohol companies – operating far beyond the arm of Vermont law enforcement – a ticket to anticompetitively sell products at a lower price than local agency retailers whose products are required to go through the Vermont alcohol regulatory system."

Read More

Mar 07, 2022

WSWA Submits Letter in Opposition of Direct-To-Consumer Spirits Shipping in Vermont

Increased Underage Access and $1.1 Million In State Tax Revenue At Risk

Read More

Jan 10, 2022

WSWA Access Brand Representative Kat Hantas from 21Seeds Tequila Champions Three-Tier Alcohol Distribution in California

“The existing routes to market in California help new brands to compete. Importantly, these regulations promote stability in the marketplace that allows craft brands like mine to invest in future growth with confidence.” – Kat Hantas, CEO and Founder 21Seeds Tequila

Read More

Jan 10, 2022

CA Teamsters Strongly Oppose Direct-To-Consumer Distilled Spirits Shipping in New Op-Ed

“Big, out-of-state companies are alarmed by recent consumer trends toward smaller, locally distilled beverage offerings.”

Read More

Jan 06, 2022

Wine & Spirits Wholesalers of California Launches New Microsite To Fight Direct-To-Consumer Spirits Shipping And Protect Californian Businesses

California Senate Bill 620 Puts Californians at Risk, Endangers High Quality, Living Wage Jobs, Consumer Choice and Competition

Read More

Jan 05, 2022

Project Twenty-One Fights Direct-to-Consumer (DTC) Legislation in California

California Residents Take Action to Fight for Safe, Responsible Alcohol Legislation

Read More

Nov 16, 2021

WSWA Responds to One-Sided, Inaccurate Daily Beast Article on Direct-To-Consumer Shipping of Spirits

WSWA Sheds Light on Inaccuracies and Provides Facts to Counter Article Written by Susannah Skiver Barton

Read More

WSWA

Nov 09, 2021

U.S. Alcohol Market Blocks Monopolies, Encourages Competition

The Michigan Beer & Wine Wholesalers Association responds to a recent column in The Hill.

Read More

Michigan Beer & Wine Wholesalers Association

Nov 09, 2021

Three-Tier System Creates Level Playing Field

Chair & Vice-Chair for the Michigan House Regulatory Reform Committee Reps. Roger Hauck (R-Union Township) and Kevin Hartel (D-St. Clair Shores) respond to a recent column in The Hill.

Read More

Michigan State Flag

Nov 05, 2021

Washington Post Covers Illegal DTC Sales by Law Enforcement

The Illegal Selling and Shipping of Alcohol by Washington D.C.’s Fraternal Order of Police Lodge

Read More

Jul 30, 2021

DTC Principles for Alcohol Shipping Fail to Gain the Recommendation of ALEC

State Legislators Recognize the Danger of Direct-To-Consumer (DTC) Alcohol Shipping at Annual American Legislative Exchange Council (ALEC) Conference

One hundred percent of state legislatures that faced new interstate spirits shipping bills have chosen NOT to enact DTC spirits laws in 2021.

Read More

Jul 06, 2020

WSWA Issues Guidance for Smart and Responsible Alcohol Delivery Regulation

“WSWA advocates for local delivery from beverage alcohol licensees, with delivery executed by their employee or a licensed third-party delivery company”

Read More

Resources To Fight Against DTC

How A Bottle Gets To You
The Value Of The Three-Tier System
The Responsible E-Commerce Choice
DTC Shipping vs. Local, Licensed Delivery
DTC Enforcement Tool
Fulfillment Center Licensing & Reporting
DTC Enforcement Tool
Common Carrier Reporting Findings & Enforcement Actions

Contacts 

Questions about DTC Alcohol Shipping? Contact the following WSWA Staff members: 

USPS Shipping of Alcohol

Dawson Hobbs

EVP, Government Affairs

dawson.hobbs@wswa.org

DTC Shipping of Alcohol

Chelsea Crucitti

Sr. Director, State Affairs

chelsea.crucitti@wswa.org

DTC Shipping of Alcohol

Audrey Ramsden

Manager, State Affairs

audrey.ramsden@wswa.org

DTC Shipping of Alcohol

Colin Phillips

Manager, State Affairs

colin.phillips@wswa.org

DTC Shipping of Alcohol

Willis Reid

Manager, State Affairs

willis.reid@wswa.org

DTC Shipping of Alcohol

Tyler Daul

Coordinator, State Affairs

tyler.daul@wswa.org