The Uniform Law Commission, which writes model laws proposing more clarity in key areas of state law, recently adopted the Uniform Alcohol Direct-Shipping Compliance Act (Model Law), receiving quite a bit of attention within the alcoholic beverage industry.
While the Model law addresses numerous topics, it focuses mostly on the shipment, rather than the delivery, of alcoholic beverages. As you may know, most states already authorize direct-to-consumer (DTC) shipments of wine by certain permittees (e.g., wineries), while the vast majority of states do not authorize the same for beer and spirits. This evolving area of law has seen its fair share of litigation in recent years, and the Model Law now serves as one example of a regulatory scheme that state legislatures may consider when seeking to authorize and regulate these activities. Key provisions include:
- The Model Law defines “alcoholic beverages” broadly enough to include all types of alcoholic beverage products, such as wine, beer, and spirits.
- The Model Law defines “direct shipper” broadly enough to include all types of permittees, such as manufacturers, wholesalers, and retailers.
- The Model Law requires fulfillment providers, or companies that store and arrange for shipping on behalf of the direct shipper, to register with the state and comply with reporting and labeling obligations.
- The Model Law requires common carriers to confirm they are transporting alcoholic beverages on behalf of a licensed direct shipper or registered fulfillment provider.
- The Model Law authorizes a state that has issued a permit to a direct shipper to suspend, revoke, or deny renewal of the permit if the state finds that the direct shipper’s shipment of alcoholic beverages into another state violates the laws of the destination state.
- The Model Law allows for penalties against fulfillment providers, carriers, and direct shippers for violating the law.
While the summary above highlights the Model Law’s key provisions, a few gaps not addressed by the Model Law include:
- The Model Law mostly focuses on shipping, rather delivery. For example, the Model Law provides states an option to include or exclude from the definition of “consumer” someone that orders alcoholic beverages from a retailer within a certain time period and within a certain distance from the retailer’s premises. But the Model Law does not propose any additional regulatory requirements on, for example, third-party delivery services.
- The Model Law does not address whether in-state and out-of-state direct shippers should be treated differently when, for example, the consumer is capable of making the purchase in person on a licensed premises.
- The Model Law does not mention or impose any requirements related to age verification.
While state legislatures are not required to adopt or consider the Model Law, it remains to be seen how many states will embrace it. The Model Law serves as a powerful example for what comprehensive legislation in this area could look like. There is significant opportunity for states to legislate in this area, especially with respect to beer and spirits. If nothing else, the Model Law may serve as a catalyst to at least encourage conversations that may lead to more state legislation.