The New York State Legislature recently passed legislation allowing the direct shipment of liquor and beer to customers on June 7, 2024. Gov. Kathy Hochul is reviewing the bill and has not yet signed it into law.
The law would permit New York residents to buy alcohol products directly from distillers and have it shipped to their homes by carriers such as FedEx or UPS.
The alcohol could also be shipped to about a dozen other states that have agreements in place with New York that allow reciprocal sales and delivery to their residents.
The bill was strongly and actively opposed by the state’s liquor distributors and retailers, because they believed it would reduce their sales and profits because consumers will be able to buy directly from the manufacturers.
“Our lawmakers did something amazing. They sided with small business, and they sided with logic,” said Brian Facquet, president of the state Distillers Guild, an approximately 100-member group that includes small craft distilleries and farm-based cideries or distilleries.
New York wineries have been allowed to ship directly for decades, and some of them say that it has helped them stay in business and survive during difficult times such as COVID.
During COVID, New York’s distillers were allowed to ship directly to consumers, but that authority ended when the temporary pandemic restrictions ended.
Many distillers believe that they will not be in business at the end of 2025, unless there are some regulatory or economic changes in the industry. They say that the ability to sell directly to consumers is one of the most important things they would like to see change in order for them to survive and prosper.
This is particularly true because of the increasing importance of online purchases. “If products are not available in local stores, the public has come to expect an online option, just like they enjoy with wine purchases,” said Donna Lupardo, the Binghamton Assembly member who along with fellow Democrat Sen. James Skoufis from the Hudson Valley sponsored the direct-to-consumer bill.
Many of New York’s small distillers are in rural or tourist areas where visitors step into their tasting rooms. If they like the product, they can make an immediate purchase. But for someone visiting the Catskills or Adirondacks from out of state, this may be a problem because they would have to pack it on their flight home or put it in their car. At a winery, though, they could just have it shipped home to them.
Because of these issues, the New York Farm Bureau also supported the direct-to-consumer bill. “This legislation would help further elevate New York state’s farm beverage industry by allowing direct shipment to customers,” the organization wrote in a memo regarding the legislation.
Liquor stores and large distributors though, have long opposed the direct-to-consumer bill.
Groups like the Metropolitan Package Association, which represents New York City liquor stores, and the state Liquor Store Association had opposed the measure as well as large distributors. These opponents put up a heated last-minute lobbying campaign against it.
One of their arguments was that it would hurt existing liquor stores, causing them to potentially lay off employees, with some possibly going out of business.
If you or someone you know needs help with a liquor license renewal or would like to talk about a different liquor license issue in New York, please reach out to me at 631-624-9007, or at david@sydangroup.com.