If you’re a small distiller wondering whether you can ship spirits directly to customers, here’s the shortest answer: probably not. However, because of the usual state-by-state patchwork of liquor laws, there’s an awful lot of complexity packed into “probably.” There are also signs that restrictions may ease—if gradually—in the years to come.
A quick disclaimer: We can’t offer you legal advice—be sure to talk to a lawyer, who can be more specific about your local situation; also check in with other distillers in your state. However, we can broadly describe the current situation for direct-to-consumer (DTC) shipping as we know it in the United States and Canada, so that you can at least determine whether this is a path that may be open to your business.
One of the first things to understand is that many customers clearly want to be able to order spirits directly to their homes. Sovos ShipCompliant—a company that provides online tools to help beverage producers navigate the complexities of state shipping laws—recently commissioned a survey of American spirits drinkers for its 2023 Direct to Consumer Spirits Shipping Report, released in late October. Conducted by Harris Poll in cooperation with the American Craft Spirits Association, the survey found that 87 percent of regular spirits drinkers say they want to legally order craft spirits for delivery to their homes. That’s up from 80 percent the year before.
Among the regular drinkers who say they would order DTC craft spirits, 81 percent say they would do so at least once per month, while 82 percent say the laws should be updated to allow DTC spirits shipping in more states. So, the market is there, even when the laws are not—but that may be changing, gradually.
“We are at a crucial moment for the DTC spirits market, with both the industry and consumers looking to expand the map of states that allow spirits to be shipped,” says Alex Koral, the regulatory general counsel at Sovos ShipCompliant. Given the demand, he says, it’s been “heartening to see the tremendous amount of effort put in over the last few years to change laws to grant distillers permission to DTC ship in more states. So far, only a few such laws have passed, but the trend is clear that both distillers and consumers want greater availability of DTC spirits shipping.”
The Current Lay of the Land
At last count, only eight states plus Washington, D.C., allow DTC shipping of spirits. However, there are 47 states (plus D.C.) that allow the shipping of wine—and the wine industry’s lobbying effort to make that happen has been a model for those who produce other alcoholic beverages. In short: Call your local lawmakers and support your state guilds.
“The example of wine DTC shipping makes it clear that change is possible,” Koral says. “Distillers can help change the laws by working with their local guilds and engaging with consumers to spur their legislators into action.”
Besides D.C., the states that currently allow DTC shipping of spirits are Alaska, Arizona, Kentucky, Nebraska, New Hampshire, North Dakota, Rhode Island, and Vermont. Broadly, virtually every place requires proof of age upon delivery of alcohol. Beyond that, however, there are plenty of the usual quirks that can be found in state laws (and particularly in liquor regulations):
- Alaska has been largely unregulated in this area until now, but in 2024 the state begins requiring a license for DTC shipping that will be available only to distillers making 50,000 proof gallons (190,000 liters) or less annually. Retailers will no longer be able to ship spirits directly to customers.
- Arizona limits DTC shipping of spirits to craft distillers, defined as producing fewer than 20,000 gallons (76,000 liters) per year.
- Most states require a license of some kind, but D.C. is an exception; shippers do not need to get a license there or pay D.C. taxes to send spirits to customers there.
- Rhode Island allows only distillers to ship directly to customers, but not via online sales; the customer must be physically present at the distillery to place the order.
- In Vermont, legal DTC shipping of spirits is limited to ready-to-drink (RTD) cocktails, no higher than 12 percent ABV, and in containers no larger than 24 fluid ounces.
Among the other 42 states, there are a few asterisks. California—with a pandemic-era measure that is still evolving—currently allows DTC shipping of spirits, but only from in-state distillers and only to customers within the state. That is set to expire in 2025, but the legislature may extend or broaden it in 2024. According to Sovos ShipCompliant, meanwhile, Hawaii, New York, and Texas are among the states considering bills that would allow DTC shipping of alcohol.
Inevitably, such proposals in any state face opposition from anti-alcohol groups. That’s why the American Craft Spirits Association as well as companies such as Sovos ShipCompliant urge distillers to make sure their concerns as local businesses and employers are also heard at their own state capitols.
Canada, meanwhile, has a similar legal patchwork. Only a few provinces—Manitoba, Prince Edward Island, and Saskatchewan—currently allow DTC shipment of spirits. Two others—British Columbia and Nova Scotia—allow shipments of wine (but not spirits) if ordered directly from the winery, while Alberta’s laws are unclear—they may allow only personally transported alcohol, but not shipped. The remaining provinces, including Ontario and Quebec, do not currently allow any DTC shipments of alcohol.
“Doing It Right”
Anyone who makes, sells, or serves alcoholic beverages knows better than most just how complicated the regulatory environment can get. Yet getting a clear grasp on it is a critical part of doing business.
Even besides consulting with legal counsel and fellow distillers, Koral at Sovos ShipCompliant urges craft distillers who are seeking to tap into DTC demand to be wary of services “that are frankly too good to be true.”
“It is unfortunate, but there are many companies out there that are less concerned about ensuring that distillers are shipping legally than they are about getting money from distilleries for their services,” Koral says. “While that is not to say that all such companies are problematic; a distiller needs to do their due diligence to understand how those services are operating, how they are complying with state laws, and—importantly—how the distiller may be liable for what those services are doing on their behalf. Read their terms and conditions thoroughly, ask lots of direct questions, and recognize the basic laws that govern how spirits can be DTC-shipped across the country.”
Any liquor sales that flout the law—even unknowingly—are counterproductive to the wider effort to lobby and to demonstrate that sending spirits directly to your customers’ homes can be done both legally and safely.
“There is so much potential opportunity in the DTC spirits–shipping market,” Koral says, “but we can only grow the map by demonstrating an industry-wide commitment to doing it right.”