The Discussion to Define Alcohol DTC in 2021

Posted by Tom Wark on Dec 7, 2020

Repeal Day, a commemoration of the day in 1933 when President Franklin Roosevelt signed the 21st Amendment ending the prohibition of alcohol sale and consumption in the United States, was celebrated on December 5th—last Saturday. It’s an inconspicuous day on the calendar the doesn’t get as much attention as National Taco Day or National Vacuum Cleaner Day.

I celebrated Repeal Day with the gentlemen from The Wine Makers podcast, where we discussed the state of consumer access to alcohol. It’s a good podcast you should listen to.

But perhaps an even more important discussion happens this Wednesday when representatives of the Distilled Spirits Council of the United States, the Brewers Association and the National Association of Wine Retailers will come together for a webinar hosted by compliance company Avalara. The topic will be: The Direct To Consumer Landscape Going into 2021. I’ll be representing the National Association of Wine Retailers.

CLICK HERE TO SIGN UP FOR THE FREE WEBINAR

What particularly notable about this webinar is the inclusion of representatives from the Distilled Spirits Council and the Brewers Association. For most of the past 20 years the focus of direct shipping discussion, legislation and litigation have been wine and the legal means for getting it into the hands of consumers wherever they are. Retailers have spent a good deal of time attempting to pry open the lanes of commerce, but distillers and brewers have barely addressed the issue. This is changing and will change even more going forward.

The focus of the coming webinar is what will occur in 2021. This in turn means what will happen along DTC lines in the wake of and what will surely be in the midst of the COVID-19 pandemic? Anyone who does not recognize that the impact of the pandemic influences every bit of the politics of DTC sales and shipping just isn’t paying attention.

Important considerations for the fate of any DTC legislative efforts include the dire conditions of many states’ budgets, which have been clipped severely as a result of lower sales and tax revenues during the pandemic and the increased costs necessary to address the pandemic. Moreover, producers have been incredibly hard hit due to shutdowns and lack of visitors and the highly diminished state of the on-premise market. Both these situations will conspire to make DTC enhancement more likely in 2021.

Some cynics will claim that lobbying for enhanced DTC rights is a matter of taking advantage of a dire health emergency. You know the refrain: never let a good emergency go to waste. But the fact is that the fiscal and market access dilemmas that resulted for producers from the pandemic highlight the numerous deficiencies of the regulatory structure of alcohol that existed long before we realized that Corona meant something different than a refreshing quaff.

All this is likely to be discussed at the Webinar this Wednesday. I’ll be talking outlook for retail DTC. Perhaps the most notable thing to keep in mind from the retail perspective is that it implicates imported wines and spirits. While the focus is often on domestic producers and their ability to ship wine to customers far and wide, it should be remembered that retailers are the primary sales outlet for imported products. The degree to which retailers may ship products interstate defines the extent to which imported products are shipped to consumers interstate.

Again, you can CLICK HERE TO SIGN UP FOR THE UPCOMING DTC SEMINAR sponsored by Avalara on Wednesday.