Measure provides critical revenue for distilleries, convenience for consumers
Today, the California Senate Committee on Governmental Organization passed SB 620, which would permanently allow California distillers to ship their spirits products directly to consumers just as wineries have done for more than three decades in the state. The bill now heads to the California Committee on Appropriations.
The California Artisanal Distillers Guild (CADG) and the Distilled Spirits Council of the United States (DISCUS) testified before the committee.
“As both a winemaker and distiller, the unequal treatment of wine and spirits products is even more clear to me,” said Alex Villicana, owner of Re:Find Distillery and Villicana Winery, and member of the CADG. “Being able to ship one of my products but not the other makes no sense. Wine DTC shipping allowed that sector to grow drastically. Jobs skyrocketed for vintners, wholesalers and retailers. We simply want the same ability to safely ship our great spirits products to consumers – growing our sector and our brand, all while reaching our customers where they are.”
Since 2005, the number of retail employees at liquor stores in California has increased more than 30 percent. Employment in the wine and spirits wholesaler segment has grown from 50,000 in 2001 to around 87,000 today.
“Direct-to-consumer spirits shipping helped save many California businesses and jobs during the pandemic,” said Chris Swonger, president and CEO of DISCUS. “Stripping distillers of a responsible and critical revenue stream, and consumers of increased convenience, simply doesn’t make sense in the modern marketplace. We are committed to working with Senator Allen and members of the committee in their efforts to find common ground between interested parties. Wine has been shipped directly to consumers for more than three decades in the state, and it is well past time spirits DTC was made permanent as well.”
The CADG, DISCUS, the American Craft Spirits Association (ACSA) and the American Distilling Institute (ADI) sent a joint letter to Governor Gavin Newsom last month urging him to approve SB 620.
“With continued modernization of alcohol regulations, distilleries around the country have demonstrated that spirits can be shipped safely, with traceable transactions,” said Margie A.S. Lehrman, CEO of the ACSA. “Direct-to-consumer shipping is a critical step to grow these U.S. small business manufacturers. Plus, as these small businesses grow, states receive more tax dollars, and jobs are created throughout multiple sectors that touch our distilleries. Farmers, hospitality workers, label designers, and all other workers within a wide variety of occupations, those who toil day in and day out to support our grain to glass industry, benefit with job growth.”
In the letter, the groups pointed to a survey conducted in March 2021 by IWSR Drinks Market Analysis, which found that more than 75 percent of Californians surveyed agreed they should be able to order spirits directly from distillers and that distillers should have the same privileges as wineries to ship directly to consumers.
“Californians deserve the right to buy directly from the beverage alcohol producer of their choice, be it beer, wine or spirits,” said Erik Owens, president of ADI. “Wine DTC shipping has been happening for more than 30 years in California with tremendous success, creating an increase in jobs and no negative impacts for distributors or retailers. There is no reason distillers should be prohibited from doing the same”
In March 2020, the California ABC granted craft distilleries temporary direct shipping authority to support them as they faced the harsh economic impacts of COVID-19. This measure was recently extended to March 31, 2022, at which point, distillers and consumers will no longer be able to enjoy DTC shipping for distilled spirits products.