NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A10448
SPONSOR: Rules (Gunther)
TITLE OF BILL:
An act to amend the alcoholic beverage control law, in relation to
authorizing the direct intrastate and interstate shipment of liquor
PURPOSE OR GENERAL IDEA OF BILL:
The purpose of this bill is to allow direct to consumer interstate ship-
ping of distilled spirits from New York distillers direct to consumers
of legal drinking age outside of NY State to States with reciprocal
The outbreak of COVID-19 has not only harmed the health of New Yorkers
but has fractured our nation's economy and exposed weaknesses in our
critical supply chains. During this time of crisis, New York distillers
have pivoted from their core business of making beverage spirits to
producing and providing critically needed alcohol-based hand sanitizers
using local supply chains.
However, our New York craft spirits sector has been hit incredibly hard
economically. Most of our craft distillers rely entirely on direct to
consumer sales driven by tourism in their tasting rooms and farmers
markets. Many do not have distribution in New York State. Almost all
tasting rooms are now and for the foreseeable future crippled by neces-
sary social distancing measures. More established distillers, who have a
more balanced amount of sales between tasting rooms and traditional
distribution channels have also been devastated as restaurants and bars
have been closed. Sales outside of New York State have diminished as
Covid is impacting all states.
Unfortunately, unlike New York wine producers, spirits producers are not
allowed to ship their product directly to consumers via third party
carriers outside of New York State. There is a clear and simple solution
to this problem that has proven to be safe and effective - as wine
producers have demonstrated for a number of years: direct to consumer
sales outside of New York State fulfilled through third party providers.
Providing for direct to consumer sales for craft spirit producers would
simultaneously solve many timely and compelling issues: by minimizing
person to person contact and exercising social distancing, it maximizes
the public health and safety benefit; by allowing producers to exercise
their right to sell to consumers without an in-person visit we can stim-
ulate the economic recovery within the craft spirits sector; by utiliz-
ing third party fulfillment companies we increase economic activity in
the broader economy and ensure age verification and control; and direct
to consumer sales outside of New York State will allow smaller brands to
reach consumers organically and help to grow their brands.
Recent executive orders New York State have provided temporary regulato-
ry relief that has allowed for consumers to order online with orders
being fulfilled through third party carriers. Many of our craft distil-
lers are reporting critical sales that have allowed them to keep their
businesses open as a result of direct to consumer shipment.
The passing of direct to consumer shipping outside of NY State will
allow distillers to begin to revive their core businesses in the safest
way possible, while still contributing to the health, welfare, and econ-
omy of our states and communities.
PRIOR LEGISLATIVE HISTORY:
Potential increased tax revenue
This act shall take effect on the ninetieth day after it shall have
become a law.