Alcohol

No Beer of the Month for You: Bewildering Restrictions on Booze by Mail

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NAWR

The U.S. Postal Service, desperate for income, is hoping Congress will repeal a 1909 law that bars it from delivering "spirituous, vinous, malted, fermented or other intoxicating liquors of any kind." But even if the USPS gets its wish, it still will have to contend, as FedEx and UPS do, with an array of state restrictions that frustrate and bewilder consumers across the country.

In the 2005 case Granholm v. Heald, the Supreme Court said states may not prohibit out-of-state wineries from shipping directly to consumers while allowing in-state wineries to do so, saying such laws are unconstitutional barriers to interstate commerce. Under that decision, states could not discriminate against out-of-state wineries, but they could ban all direct wine shipments. According to the latest tally by the Wine Institute, 10 states take that approach: Alabama, Arkansas, Delaware, Kentucky, Massachusetts, Montana, Oklahoma, Pennsylvania, South Dakota, and Utah.

The other 40 states allow consumers to order wine from wineries, subject to volume restrictions, licensing requirements, and local bans. But they do not necessarily allow consumers to buy wine from out-of-state retailers, which can make ordering wine online an iffy proposition. According to the National Association of Wine Retailers (NAWR, formerly the Specialty Wine Retailers Association), only 14 states (plus the District of Columbia) allow their residents to receive wine shipments from retailers in other states: California, Hawaii, Idaho, Louisiana, Missouri, Nebraska, Nevada, New Hampshire, New Mexico, North Dakota, Oregon, Virginia, West Virginia, and Wyoming. Nine of those states require retailers to obtain special licenses, two (California and Hawaii) allow shipments without licenses, and three allow retailer shipments only from states that also allow retailer shipments. If you live in any other state and have bought wine from an online retailer, that merchant broke the law, perhaps unwittingly. The NAWR says "the level of enforcement of the prohibition varies from state to state."

If discriminating against out-of-state wineries is unconstitutional, you may wonder, why isn't discriminating against out-of-state wine merchants? The NAWR wonders the same thing. The organization "seeks to change these arbitrary, archaic and protectionist laws through lobbying, media and lawmaker education and litigation where states blatantly violate the Commerce Clause in their bans on out-of-state retailer shipping." But at least two federal appeals courts have upheld bans on direct shipments by out-of-state retailers, deeming them valid attempts to maintain the integrity of the three-tier alcohol distribution system, a system that the Supreme Court in Granholm called (quoting an earlier case) "unquestionably legitimate."

In 2009 the U.S. Court of Appeals for the 2nd Circuit upheld New York regulations that discriminated against out-of-state retailers, and in 2010 the U.S. Court of Appeals for the 5th Circuit upheld similar rules in Texas. The 5th Circuit observed that states with three-tier systems have always allowed producers of alcoholic beverages (the first tier) to be located in other states or countries but generally require that wholesalers and retailers be located within the state they serve. That rule, the court concluded, serves legitimate regulatory purposes beyond protectionism. Not surprisingly, alcohol wholesalers, who have a lucrative lock on the second tier, agree. They are the principal lobby supporting bans like those maintained by New York and Texas.

To make things even more confusing, the rules that apply to wine do not necessarily apply to beer and liquor. Partly the disparity is due to bans on direct shipments by retailers. While boutique wineries usually are happy to ship you a case, direct shipments by brewers and distillers are much less common, which means someone searching for a rare gin or unusual beer generally has to rely on retailers. But even if producers were willing to send you beer or liquor, your state might not let them. According to the Texas Alcoholic Beverage Commission, for instance, "It is not legal for a person in Texas to order/purchase malt beverages or distilled spirits from an individual or entity outside of Texas and have it shipped into Texas." So even a beer-of-the-month club that was a joint project of brewers would be prohibited from signing up Texans.

Texas was so keen to maintain its precious three-tier system for beer that for years it prohibited brewers from telling consumers where their products could be purchased. That regulation, which required breweries to disable the retailer location features on their websites for computer users inside Texas, was supposedly aimed at preventing coordination between producers and retailers, which might in turn lead to the sort of vertical integration that allowed big breweries to dominate the market prior to Prohibition. But the restriction was anti-competitive in practice, since beers produced by small, out-of-state breweries are harder to find than beers produced by local companies or national giants like Anheuser-Busch. A federal judge overturned the rule on First Amendment grounds in 2011.

The Texas legislature recently weakened the three-tier system a bit more by loosening the rules for breweries, which heretofore were prohibited from selling beer directly to consumers, and brew pubs, which heretofore were prohibited from selling beer through distributors. (Wineries, by contrast, could do both.) Now breweries that offer tours can sell their beer to visitors (only by the glass) instead of merely giving away samples, and brew pubs that sell beer along with food for on-site consumption can bottle it and sell it through distributors. Brew pubs cannot sell directly to retailers, which helps explain why beer wholesalers, who opposed similar legislation in 2011, were on board this time around. Conversely, the political clout of these mandatory middlemen means beer-of-the-month clubs are not likely to be legal in Texas anytime soon. 

Addendum: As Vermont Beer points out, a new law that took effect on July 1 makes it legal for out-of-state breweries as well as wineries to ship their products directly to consumers in the Green Mountain State.

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  1. They hate us for our freedom.

    1. up to I saw the bank draft saying $6184, I have faith …that…my mom in-law woz like actualey receiving money parttime on their apple laptop.. there uncle haz done this for under thirteen months and resantly cleared the dept on there apartment and bourt a great new Lotus Esprit. go to,………….. WEP6.COM

  2. We’re making baby steps here in Texas. But the distributors here have so much power and clout, it is hard to take down that whole system.

    1. At least “Ale in Texas” is now a thing of the past.

    2. My wife’s cousin lives in NYC, and put up on facebook how he paid $5 for a can of a “premium Texas import” at some snooty restaurant there, and asked me if I’d ever had it and what my opinion was.

      It was Lonestar.

      1. So what was your opinion? Is it as bad as Rainier?

        1. Never had that. I assume it’s something local to you? It’s from a blue state, so it probably sucks. You know, liberals and all.

          1. Yes. I think I hate Rainier the most of all the shit beers, except for possibly Genesee Cream Ale.

            1. Hmm. If, god forbid, I’m ever up in your part of the world again, I’ll give it a shot, just to say I tried it. Do they sell it at SeaTac?

              1. Maybe; I would never order it so I don’t know if I’ve seen it in any of the SeaTac restaurants/bars.

            2. “We have Genny, Genny Light, and Genny Cream Ale.
              –beer distributor guy back in college when they ran out of everything else.

            3. Mmm. Genny Cream Ale. The beer that tastes like it has already been used as an ashtray from the moment you open it.

      2. A fool and his money.

      3. “Premium” is stretching it. A lot.

        1. If by “stretching it” we mean, “completely disregarding the plain meaning of that word as it is commonly used and substituting a new definition which is pretty much the opposite of the old one”.

          1. I was going to suggest Pearl should be advertised as the ultimate hipster premium beer and what do I find?

            In what would turn out later to be ironic, one company came very, very close to buying out the Pearl Brewing Company in the 1950s: Pabst Brewing Company. Ultimately, the sale to Pabst was defeated by Otto A. and the other shareholders. Pearl maintained its independence.

            Eventually, Pabst Brewing Company ended up buying Pearl. Though the name on the door may have changed, the beer that Texas has loved for nearly 125 years has stayed the same. Open a Pearl today, and you’ll see the same precious bubbles in every refreshing mug of Pearl Beer.

            1. HA! If only that had happened.

      4. “import”? Doesn’t that usually mean from a different country?

        I suppose that’s not too different from people thinking that Heineken or Fosters are interesting beers worth buying at a premium price.

        1. Most bars anymore “import” means “not one of the Big Three macros”.

          1. Well, that’s fucking dumb.

            1. It has to do with the pricing model most people became familiar with before the craft brew revolution of the last 20 years or so.

              For decades, there was the shitty domestic macros, and imports (for the most part; speaking in generalities here).

              So people were used to “domestic” equaling “cheap”, and “import” equaling “expensive”.

              Fast forward to today, when there’s a new craft brewery on every block. Prices aren’t just set by the bar; it’s also based on volume and what the brewer charges. Since the crafters tend to charge more for their product than the big macros, the crafts are naturally going to be more expensive.

              However, this doesn’t set well with people who were trained to believe that the only reason other beer was more expensive than Budweiser was due to shipping costs for being imported. So it was just easier to lump everything more expensive than piss water under “import” as a quickie way to say, “more expensive.”

              1. More and more places are changing this because of obnoxious people like me who demand craft beer during the “domestic” happy hour specials.

                Not that I go anyplace that does that kind of thing any more.

          2. 12 or 13 years ago, I was in Delaware with friends, and we were offered a “premium import” that the waiter couldn’t pronounce. The beer? Yuengling lager.

            1. What the shit? Delaware borders Pennsylvania.

              1. I know, right?

        2. To New Yorkers, anything west of the Hudson is a different country.

          1. Now you’ve done it. The NYers and former NYers will be pissy for the rest of the day.

            1. How could you tell?

  3. The new laws are a great start but we need to kill the three tier system.

  4. two (California and Hawaii) allow shipments without licenses

    Yay, something CA isn’t explicitly shitty about! Yy roommate belongs to a wine of the month club. Having nice wines show up on your doorstep regularly is a win for freedom!

    1. I would imagine that the reason CA is good on the wine shipping is the influence of the wine industry there.

      1. Yep. They arent that worried about shipments in, they want to set a standard for shipments out.

        1. No doubt, we have three distinct “wine countries” (Napa, Temecula and Santa Barbara), but I care less about the logic and more about the fact that I can come home to a crate of wine waiting on my porch.

          1. I’d have put Mendocino, or Santa Cruz Mtn’s/Monterey, way before Temecula, but that’s just me. The direct shipping thing is great in CA (Yay Navarro!)

            And another +1 for putting a bullet in the head of the 3-tier system.

  5. Next reason is going to want to allow them to deliver out of state wines directly to hobos under bridges.

    1. I’m confused why are there hobos under bridges, shouldn’t you have rounded them up and put them in an encampment on your factory or mine property for ease of use? Do you store your hobos under a bridge regularly to cut housing costs?

      1. They’re self-storing, you don’t need to house them.

      2. FoE puts his hobos in camps for orderly disposal, after branding them by laser scan.

        1. Hobos are of little utility to me. They’re old.

    2. I would much rather see that than have them emerge from under the bridges and jostle me at the store in search of thier bottle.

  6. Dont get me started on the 3-tier system.

    The problem is prohibition. Or more specifically the end of it. Section 2 of the 21nd amendment specifically. Section 1 was good, but they couldnt leave well enough alone.

    1. What is the point of part 2? Wasn’t that the case before prohibition? Seems like all it says is that you are prohibited from doing things that are prohibited.

      1. It turns fed control under the commerce clause to state control.

  7. The time someone asks me “what do DC, Maryland, California and Alaska have in common?” I’ll be able to answer them.

  8. Commerce Clause. For the government, it’s better than Santa Clause… because it’s the gift that keeps on taking.

    1. The funny thing is, this is a case where the commerce clause could actually be used properly, but its been overridden by the 21st amendment.

      1. This is true. IN the case where the states are doing the cock-blocking.

        I was just thinking of the Congressional law which bars the Post Office from delivering such stuff.

      2. As I read it, Section 2 allowed states to be dry if they so chose by allowing them to ban the importation of alcohol.

        Another example of how in any compromise with evil, evil always profits.

        1. The transportation or importation into any State, Territory, or possession of the United States for delivery or use therein of intoxicating liquors, in violation of the laws thereof, is hereby prohibited.

          “laws thereof” implies more than just dry status.

          Whether its a proper “originalist” argument or not, its been used to justify the totality of the 3-tier system. Which means if they dont want direct shipment to houses, it wont happen. As long as they stay within equal protection.

          If they had just stuck to Section 1, the commerce clause would be in play. This was the fucking purpose of the clause, to prevent states from playing bullshit games with out of state producers.

  9. As a craft beer enthusiast and a homebrewer, I share your frustration with the discriminatory rules that prevent me from having access to ales and lagers that aren’t available in my area. You may want to consider looking at and writing about the equally or more absurd regulations that apply to homebrewers, which include prohibitions on being able to transport your lawfully-made brew to a friend’s home or, worse, to a competition.

    1. Yeah, it’s silly I can’t find a shipper who will knowingly drive my brews to a friend’s house.

  10. So, when will I be able to 3-D print my own brew?

    1. If you want to call a fermenter a printer, then right now.

      1. I want beer to come from my 3-D printer, not some unitasker.

        1. Just install a hose for the alternate building block known as “beer”.

          1. Beer. . .from a hose? Is such a thing possible?

            1. Beer. . .from a hose? Is such a thing possible?

              Is there any other way to drink beer?

              1. You haven’t really drunk beer until you’ve been completely submerged in it.

                1. “Beer? You’re soaking in it.”

              2. I’d like to open a bar called either “It’s a Madhouse” or “Damned Dirty Apes,” which would feature bartenders either dressed as apes or that are actual apes, firing beer at patrons through fire hoses.

                1. I look forward to seeing your bar on Bar Rescue.

                  1. Are you kidding? It’ll be a monster success. The waitresses will all be Nova-quality and dressed.

                    1. Dressed waitresses? I expected so much more from you.

                    2. Well, they start off dressed. I mean, have you seen that outfit after a beerhosing?

                    3. You and your ape fetish. Don’t ask me to invest. This is not the evident sure thing that Mounty Python is.

                    4. What festish? That’s Naga, not me. I did say human waitresses.

                    5. Fetish. All the beer from a hose is making me slur my speech.

                    6. Sorry, I thought all the monkey’s on Urkobold were your doing.

                    7. Monkey Tuesday started at the beginning, and was Penn Jillette’s fault. The monkey porn is all because of Naga Sadow’s unclean lust. He’s a major investor, see.

                    8. I understand now. Still not investing. Sorry.

                    9. I wouldn’t recommend it, anyway. The Urkobold’s reverse dividend is not popular.

        2. It also makes wine!

  11. That rule, the court concluded, serves legitimate regulatory purposes beyond protectionism.

    Yeah, not so much.

  12. Sloopy can attest to this personally. A few years back he tried to mail me a six of something Cali local, and then emailed me a few days later talking about how he got a visit from the FedEx guy and a representative of California’s Finest.

    No animals were harmed to the best of my knowledge.

    1. Through FedEx? What am I missing here? What was the crime?

      1. Beats me, you’ll have to ask him.

      2. Trying to mail beer without a distributor license?

    2. Good thing for you, they were spiked with roofies.

      1. Wow, no wonder Sloopy and STEVE SMITH are buddies now.

        1. He pulled the same stunt with me. One day I am enjoying some wine sent to me by him, the next day I am in California with a signed marriage certificate in my hand.

          1. And so much is now explained.

          2. I lol’d.

          3. Now you have me rethinking my immediate future…

            1. “I won’t forget this–Dad!”

              “I will. I will.”

          4. So is the end goal to have Gojira added as part of a poly-marriage?

  13. Alcoholic beverages have been a source of societal problems throughout human history.

    1. They also kept Europeans alive due to contamination of ground water.

    2. Alcoholic beverages have been a source of societal problems throughout human history.

      This is true. When the stuff runs out, mayhem always ensues.

    3. A wiser man than me once said alcohol is the cause of and solution to all of life’s problems.

  14. This would be a slam dunk case except for the 21st Amendment. As a sop to the prohibitionists they included section 2 which states

    Section 2. The transportation or importation into any State, Territory, or possession of the United States for delivery or use therein of intoxicating liquors, in violation of the laws thereof, is hereby prohibited.

    It was drafted so that states could stay dry if they wanted to. But what does “laws thereof” mean? You can make a good argument that it means the states can regulate alcohol any way they see fit and do protectionist things that would never be allowed under the negative commerce clause in any other circumstances. It has made this area of law needlessly complex and allowed the states to get away with protectionist murder for 70 years now.

    1. “get away with protectionist murder”

      I don’t see the problem. I support murdering protectionist.

    2. Which is also why DC doesnt have 3-tier laws.

      If a retailer can get hold of beer, they can resell it. No mandated distributor.

  15. Somewhat OT:

    There’s been a lot of commotion over the FBI piercing the Tor network recently. Apparently they arrested the owner of Freedom Hosting for hosting kiddie porn but managed to place javascript tracking cookies on a multitude of Tor users at the same time. The assumption is that they will be going after the Silk Road next because, well, drugs and it could seriously harm the Bitcoin currency.

    http://www.wired.com/threatlev…..m-hosting/

    The malware showed up Sunday morning on multiple websites hosted by the anonymous hosting company Freedom Hosting. That would normally be considered a blatantly criminal “drive-by” hack attack, but nobody’s calling in the FBI this time. The FBI is the prime suspect.

    “It just sends identifying information to some IP in Reston, Virginia,” says reverse-engineer Vlad Tsyrklevich. “It’s pretty clear that it’s FBI or it’s some other law enforcement agency that’s U.S.-based.”

    1. The assumption is that they will be going after the Silk Road next because, well, drugs and it could seriously harm the Bitcoin currency.

      The way this sentence is consstructed… they’re going after Silk Road because Silk Road could harm the bitcoin currency, or they’re going after Silk Road in an attempt to harm the BitCoin currency?

      1. The way this sentence is consstructed… they’re going after Silk Road because Silk Road could harm the bitcoin currency, or they’re going after Silk Road in an attempt to harm the BitCoin currency?

        Obviously failed my writing seminars classes.

      2. Christ. Let me try again.

        The way this sentence is consstructed… they’re going after Silk Road because Silk Road could harm the bitcoin currency, or they’re going after Silk Road in an attempt to harm the BitCoin currency

      3. Christ. Let me try again.

        The way this sentence is consstructed… they’re going after Silk Road because Silk Road could harm the bitcoin currency, or they’re going after Silk Road in an attempt to harm the BitCoin currency

        1. I’m quitting now. Need more drugs.

        2. Naw. They are going after the silk road because it is going to put a massive kink in the drug war.

          1. I’m sure that provides a great cover story for them, but I’m certain they consider any damage to the growth of Bitcoin to be a bonus.

            1. Figure they aren’t really hitting bitcoin hard yet. Eventually they’ll try.

              One way would probably be to start walking back through transactions until you can tie one to an IP or person, and then go visit that person and ask what they were buying or where they got the bitcoins.

              Neat thing is, unless they were to buy up ASICMiner, or a few similar company’s entire stash of chips, it’s probably past where they could do a 51% attack. (a successful 51% attack would probably do serious damage even if they didn’t steal any significant amount of bitcoins.

    2. Another example of how the law is way behind technology. Sticking malware on your computer is no different than sticking a tracking device on your car. That is a mass infringement on people’s 4th Amendment rights. The Amendment says

      The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated

      Your computer is most certainly part of your papers and effects.

      1. Fuck you, that’s why, John.

    3. This was the first article I read on the topic, BoinBoing then seemed to be referencing this person’s opinions. So it may have just been this person’s speculations on what was up became part of the narrative as others wrote their news story.

    4. Tor says they’ve got a fix in to their browser bundle.

      So its all good.

      See, this is why open-source is the better option for security and privacy.

  16. Colorado is not a participant in the 3-tier system. Neither is California. TO my knowledge those are the only two that don’t participate. And I am not so sure about Colorado not allowing out-of-state beer from retailers as I myself and even the governor have participated in Beer of the Month clubs. I will perform some google foo and report back.

    1. Does CO have a franchise termination law that prevents producers from leaving a shitty distributor?

    2. CO and CA both have 3-tier laws.

      Theirs are looser than other states, but they still have them.

      DC doesnt participate, because they arent a state and the congress has never bothered to draft laws.

  17. Why do libertarians hate children? Do you really want a bunch of
    kids pooling together their money to order the latest out of state micro brew sensation, waiting several weeks for its arrival? You have to face the reality that kids today, unlike our generation, have no older brothers or sisters who can go up to the store and buy them a six pack for immediate consumption. To stop teenage drinking, just say no to out of state booze shipments.

    1. kids today, unlike our generation, have no older brothers or sisters

      Then the obvious solution is to get the sixteen year old with the biggest tits to put on all her warpaint and buy booze from the store with the 19 year old dude working the counter. Jesus, even today’s kids aren’t that stupid, are they?

  18. I did manage to get wine shipped to my MA apartment directly from the vineyard in Italy I visited, despite being technically illegal. Even though it did take about 6 weeks to arrive, that’s more than I can say about this article’s alt-text.

    1. There’s a Spanish liquor distributor that had no problem fudging shipping manifests to the US. I wonder if they’re still around or if I still have the link.

      1. Now that Customs is part of the DHS, I imagine that could get you a midnight no-knock.

        1. In my case, I think they were honest about the wine being shipped into the US, but then it got repackaged in Illinois and reshipped to me from there. So they weren’t deceiving the US, just MA.

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