Top 5 Mistakes to Avoid When Getting Started with Direct-to-Consumer Beer Shipping
Written by Liz Watson (Sovos ShipCompliant)
More and more craft brewers and beer lovers alike are interested in the joys of direct-to-consumer (DtC) shipping, with favorite beverages shipped right from the brewery to the customer’s doorstep.
DtC shipping also happens to be yet another highly regulated aspect of the brewing industry. So if your brewery is considering getting started with DtC shipping, it’s essential to get compliance right to avoid the risk of warnings, fines or other penalties (even loss of licensure) that can come from making illegal shipments.
Here are the Top 5 mistakes to avoid.
Shipping where you shouldn’t
There are currently 11 states plus D.C. that permit DtC beer shipping:
- District of Columbia
- New Hampshire
- North Dakota
- Rhode Island
Note that some states may have dry communities or other restrictions; ensure that you’re only shipping to locations that allow it.
Not getting licensed
Getting the proper license is an essential first step for DtC beer shipping. But individual state licensing processes vary, with costs and renewal timelines differing. Furthermore, there can be distinct requirements for the documentation required. Keep in mind that your brewery’s production license likely does not cover DtC shipping permissions.
Skipping age verification
Age verification measures ensure that your brewery does not sell to anyone under the age of 21, which is illegal in every state, even if the sale happens accidentally. There are several possible steps to ensure that all DtC beer shipping sales are made legally, including online age affirmation gates, collecting purchaser/recipient birth dates, obtaining adult signature upon delivery, and using an automated age verification provider.
Not attending to the details
The devil is in the details when it comes to DtC beer shipping. Each state may have its own requirements in how products are shipped to consumers. For example, customer volume limits detail how much of a certain type of alcohol a single licensee can ship in a given period of time to any individual in a state.
Understanding brand ownership requirements is also key. “Not of own production” rules can restrict shipping alcohol that a licensee does not own (such as beer brewed at a second production facility). Brewers in contract brewing relationships specifically should ensure what they are legally allowed to ship.
Finally, all states require labeling on all DtC-shipped alcohol boxes to announce that they contain alcohol and must be signed for by someone 21+.
Collecting and remitting the wrong taxes
Tax determination and reporting are also important for DtC beer shippers, as they must recognize a state’s excise taxes, based on the volume of sales made, and a state’s sales taxes, based on the value of sales made.
While expanding into DtC beer shipping can seem daunting, not doing it alone can make compliance more seamless. A trusted partner can help you stay compliant, especially as regulations continue to evolve.
Liz Watson is Senior Enterprise Account Manager at Sovos ShipCompliant. She has worked in beverage alcohol since 2014, educating breweries, wineries, distilleries and importers, helping them understand the complex regulatory compliance landscape for both the direct-to-consumer and three-tier channels, and sharing how Sovos ShipCompliant’s beverage alcohol solutions can help them manage compliance. She has an MBA from San Francisco State University and a BA from Tufts University. She lives in Louisville, CO with her husband Bart, daughter Audrey and dog Scotch.