Merle Haggard famously sang “I Think I’ll Just Stay Here and Drink.” For decades, Alabama’s dated alcohol rules made that easier said than done in the Yellowhammer State, as alcohol delivery was prohibited and wine shipments from out of state were severely limited. But two changes to alcohol distribution rules in the past year appear poised to dramatically and importantly change both the way Alabamians obtain alcohol and the way alcohol manufacturers and distributors view the Alabama market. And although both pieces of legislation relate to the delivery of alcohol to consumers, they operate in a number of different and important ways. We examine those laws and those differences below.
Home Delivery of Beer, Wine, and Spirits
In a momentous shift, SB126 allows ABC Board-licensed businesses in the state to deliver wine, beer and spirits to customers’ homes. The law allows licensees to use either their employees or third-party contractors to deliver alcohol to customers. There are limits to the amount of alcohol that can be sold per customer in any one day. For canned or bottled beer, the maximum is 120 12-ounce containers. For draft beer, the maximum is 288 ounces. For wine and spirits, it’s 9,000 milliliters or about 12 750-milliliter bottles.
Businesses with on-premises retail liquor licenses, such as restaurants, cannot exceed 375 milliliters of alcoholic beverages per customer, and the delivery must also be accompanied by a meal.
Delivery employees are subject to criminal background checks and must be trained and certified through the licensees’ pre-approved training program to help with identifying underage or intoxicated individuals and fake or altered IDs. Drivers must ensure payment has been processed before removing the alcohol from the premises. To confirm customers are age 21 or older, they are required to provide a signature and government-issued ID that drivers then verify using ID scanning software. If the recipient cannot prove his or her age, fails to provide a signature, or appears intoxicated, the delivery person must return the alcoholic beverage delivery to the retailer.
Alcohol cannot be delivered to a location more than 75 miles from the retail business where the order was received. Delivery is not allowed in dry counties, but delivery vehicles can travel through dry counties. The law also prohibits delivery to any residence hall of a college or university.
Direct-to-Consumer Wine Shipments
In addition to local alcohol delivery, the Alabama Legislature recently allowed wineries anywhere in the country to ship limited quantities of wine directly to Alabama consumers. HB437 allows a licensed manufacturer of wine, in the state or outside of Alabama, to ship wine to buyers in Alabama. Customers are able to buy up to 12 9-liter cases of wine a year from a winery.
Similar to the alcohol delivery law, there are safeguards for direct wine shipment. Wine cannot be shipped to a school, dormitory, prison, healthcare facility, locker, mailbox, storage facility, or any premises licensed by the board. Only wineries, not retailers, can ship wine to consumers in Alabama. A fulfillment center cannot mask itself as a retailer, but Alabama wineries may utilize fulfillment servicers that have obtained a wine fulfillment center license from the ABC Board. Alabama is only the third state to require the licensing, reporting, and oversight of fulfillment centers.
Wine sold and shipped directly to consumers in Alabama must be packaged in containers conspicuously labeled to indicate alcoholic contents. The signature of a person 21 years of age or older is required for delivery.
Licensees under both measures must pay licensing fees, keep detailed records of purchases, and file reports with the ABC Board and Alabama Department of Revenue.
It is too soon for definitive numbers about alcohol delivery and shipments since these laws took affect in October. But there is every reason to believe that the laws together will represent a seismic shift in the ways Alabamians choose, obtain, and consume alcohol in the coming years.
First, a number of alcohol delivery services have begun operating in Alabama, have announced that they intend to do so, or have taken steps to become operational soon. Some of these services specialize in alcohol delivery (e.g., Drizly and Saucey) and others are well-known delivery services such as DoorDash, Uber Eats, and the like. These services already have much of the necessary infrastructure in place and should be able to implement alcohol delivery in relatively short order.
The direct-to-consumer wine shipment law is likely to impact fewer Alabamians than the alcohol delivery law, but it is a sea change for wine enthusiasts. For years, oenophiles in Alabama were frustrated by the lack of access to wines that they could not buy at their local grocery store or wine store. And even though it was permissible to ship wine from out of state to an ABC store (where a customer would pick it up and pay a small amount of tax), many wineries viewed Alabama as a “no ship” state and refused to ship wine to Alabama. The direct-to-consumer law should remove that impediment and open the Alabama market to a much larger array of wine.
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Bradley's Food, Beverage and Hospitality team understands the unique challenges and needs of these dynamic and competitive industries. From national restaurant chains to craft breweries and from wine and beer distributors to hotel, resort, and club properties, our multidisciplinary team counsels food, beverage and hospitality industry clients on all aspects of the hospitality industry.