The Underage Predicament and liquor shipping, is this the real issue?

First, Happy Thanksgiving to every one out there. I hope you and your family enjoy your Thanksgiving. I am extremely grateful to live in the best country on this planet. I will eat well, reflect on this great country and its blessings, and watch the lowly Lions play the even lowlier Bears.

Lately, the DTC liquor shipping debate got a little hotter when Skiver Barton wrote an article supporting spirits direct shipping. This article led to a fiery response from Michelle Korsmo, the President and CEO of the Wine and Spirits Wholesalers of America (WSWA). WSWA went to great lengths and provided a marked-up version of Ms. Barton’s article.

Korsmo provided a laundry list of reasons why DTC should be rejected. She actually clothed these reasons as justifications of why, state legislatures recently rejected DTC shipping proposals. But as anyone who ever worked in a state liquor agency knows, it’s the wholesaler political funds and capital that leads to these bills not advancing and not the reasons she provided. The laundry list of reasons includes the following:

. Increases Underage Access

. Increases Access to Counterfeit/Illicit Product

. Loses State Tax Revenue

. Enables Bad Actors at the Expense of State Businesses

. Creates an Uneven Playing Field

Analyzing the position that DTC increases underage access

I want to discuss the “increases underage access” reason for why Korsmo believes DTC shipping should be rejected. Under this theory if DTC shipping is allowed, more underage kids will get their hands on alcohol.

Let’s go through the process of ordering alcohol online. To place an order a person is required to input identification and credit card information. Now a minor would be required to put in their parent’s credit card information. After the information is put in and the order is fulfilled, a common carrier will deliver a package to the customer, where the driver is required by the company to positively id someone and often times obtain an adult signature. The signature is electronically stored.

If DTC shipping was legalized a vast majority of shippers would use FedEx or UPS, as they are vastly less expense than other common carriers. UPS and FedEx require their drivers to positively ID recipients and often collect adult signatures.

Let’s compare this to ordering off Drizly, which WSWA owns an interest in. Drizly connects a person with a retailer and the retailer delivers the product to the customer. State law requires the retailer to Id recipients of alcohol.  In some states, Illinois for one off the top of my head, the retailer can utilize a third-party to deliver alcohol to a consumer. The third-party consultant is not required to obtain a signature. So, under several states’ delivery laws, an 18-year-old kid who could be stoned and listening to Mott The Hoople all night, could be delivering a retailer’s product. The 18 year-old does not need to provide evidence on whether someone was positively ided, and it does not need to collect an adult signature. And there is probably no electronic tracing of the product.

Hence, I pose this question, knowing the facts of these two scenarios, which one seems to safeguard more against underage drinking?

If you guessed DTC shipping versus retailer delivery you would be correct!

In spite of this, unlike DTC shipping bills, delivery bills are passing state legislatures and becoming law. WSWA supports local delivery,[1] yet is against DTC shipping.  If preventing underage access is a major concern for WSWA, we must ask why it prefers local delivery versus DTC shipping? Clearly, under the scenarios presented, there is a greater increase of underage kids getting their hands on alcohol, based on the less stringent requirements for delivery than for shipping.

Now, WSWA I am sure will counter that it is easier to prevent underage access, because the retailers are local and licensed versus the shippers that are not in the state. But this reason does not justify making DTC shipping illegal. If licensed, the DTC shipper can be held accountable by their license, and if their license is suspended or revoked, the license holder in many states needs to report this in renewals or obtaining a new license for an additional location. A licensed DTC shipper has the motivations necessary to follow the law to enjoy the privileges.

As for the local license holder, yes you can hold them accountable for breaking the law, but the odds are greater that underage access will increase under the retailer delivery model.

Again I will pose the question, who is more likely to safeguard against a minor receiving alcohol, a trained employee of a highly reputable publicly traded common carrier or an 18 year old kid with no training on these issues?

I think the answer is clear!

In concluding, I am all for retail delivery, it advances commerce and provides a convenience for customers. But let’s be serious here, when we dig below the surface, justifying denying DTC rights has more to do with keeping s system in place that supports industry interest, versus reducing underage access to alcohol.