Liquor Laws Change in Response to Demand for Delivery During Pandemic

by | Jun 30, 2020 | Wine & Spirits

Reading Time: 4 minutes

Despite rising COVID-19 cases, most of the governors in the United States have lifted stay-at-home orders. But some states such as Texas have now banned bars from serving alcohol to keep the infectious virus at bay.

The unprecedented stay-at-home orders and whiplash of phased reopening starting and pausing have left customers craving their favorite cocktail, and disgruntled brands looking for new revenue streams.

In response, some state legislatures are working to change their laws to allow alcohol delivery.

Many states forbid shipping wine and spirits, halting the growth of delivery giants such as Drizly and hampering direct-to-consumer efforts from wineries and distilleries.

During the pandemic, residents tried to stay home, but the demand grew for happy hours at home and delivery.

Drizly, an online service that partners with liquor stores to deliver alcohol to customers, has lobbied local and state legislators to quickly pass bills, change the laws, and serve customers a drink. If these laws are passed, the wine and spirits industry has a new revenue channel to pursue.

“There’s probably five or six states that are actively reaching out right now saying, ‘How do we get up to the status quo of some of the other states who have done this?'” Drizly CEO Cory Rellas told The Hill. “I actually think this is something that is going to be a much longer-term shift, so we need to set this up correctly.”

States such as California suspended their restrictions on free alcohol delivery back in April, to allow restaurants to bring drinks to customers.

“It is estimated that the 93,000 businesses the California ABC (Alcoholic Beverage Control ) licenses employ over a million Californians,” California Department of ABC director Jacob Appelsmith told The Mercury News. “Those industry employees need paychecks to support themselves, their families, and loved ones. Many Californians have filed for unemployment recently, and this temporary regulatory relief could ease some of the state’s economic stress.”

A very happy hour in Michigan for brands and customers

The Michigan legislature reviewed and passed a bill in May that would allow alcohol delivery within the state, as well as permit customers to purchase to-go cocktails from restaurants. The law is still pending in the House legislature.

Michigan law previously allowed customers to purchase unopened wine or beer to-go, but not hard liquor. This potential law is excellent news for customers who may be missing their gin and tonics or Bloody Marys, but it is even better news for brands and restaurants struggling to make a profit.

“We’ve seen statistics where a vast number of these bars and restaurant owners are likely to be out of business … if we don’t act,” State Senator and bill sponsor Aric Nesbitt, R-Lawton, told “The goal of this bill overall is to increase flexibility and opportunities for them to recover from this shutdown that they’ve endured.”

Under the bill, each town or city can create “social districts” where anyone older than 21 could purchase drinks to-go from nearby bars and drink them off-premises in a designated area.

A new frontier for brands

A change in liquor laws to allow delivery would help smaller, family-owned brands and larger brands open a new revenue stream in states that previously prohibited it.

Alcohol delivery during the pandemic, and even after, allows brands to engage customers no matter if they can go to the store or not.

During the peak of the first wave of the pandemic so far, online alcoholic beverage sales increased 387% for the week ending April 11, according to CNN. The week prior, sales were up a staggering 441%. For states where alcohol delivery was illegal, brands missed out on this revenue surge.

For brands that want to be able to expand liquor delivery, start by partnering with delivery services such as Drizly, as well as other companies. Then, together, work with and approach state legislators.

Data and analytics can help make your case by showing the tax revenue from other states that do allow delivery.

Meredith Galante

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