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Expanded Beer, Wine and Spirits Sale and Delivery Options in Michigan Now Include On-Line Purchases

March 9, 2018

If your on-line grocery list looks similar to my typical assortment of items, a snapshot would undoubtedly include eggs, pretzels, Twinkies (love those mysterious carb-filled creations!) and, if the list was generated post March 2017 in Michigan, a six pack or a 750 ml bottle of your favorite alcoholic beverage for the weekend. Yes, thanks to recent changes adopted by our legislative friends in Lansing in 2017, Michigan is presently part of the group of states that permit the sale and/or delivery of beer wine and/or spirits through alternative commercial means. Depending on the nature of the libation, as a Michigan consumer, the methods for the purchase and delivery of alcohol vary, and are no longer limited to that time-honored tradition of driving to the grocer or big box outlet, typically in the middle of the night, to satisfy one or more cravings.

As a retailer in Michigan, these regulatory changes provide an array of alternative options, ranging from traditional fill your own cart with payment at the register, to click list or other electronic order with curbside pickup to online ordering and electronic payment through a delivery service. Because of the rapid changes and the number of limitations and qualifications associated with each option, a summary of the present alternatives may be helpful.

The adoption of Public Act 520 of 2016 created several new options for retailers and direct wine shippers as well as brew pubs and smaller volume based microbreweries. Certain of these changes are more practical for smaller or boutique retail operators, while others, such as large grocers or retail box operators, will likely experience greater benefit from the regulations that expand the lawful use of the internet and/or third party facilitation services, which permit the use of e-consumer and logistic companies to place and fill orders of packaged alcohol for the Michigan consumer base. 

On the smaller end of the expanded spectrum of permitted services, operators of SDD (Michigan licensed packaged spirit sellers) and SDM (Michigan licensed packaged beer and/or wine sellers) retail establishments are permitted, with certain restrictions and under certain guidelines, to directly deliver beer, wine and/or spirits to the home or other location designated by a customer. The same options are now available to brew pubs and “qualified” microbreweries (whose annual sales are limited to 1,000 barrels). These suppliers may likewise deliver beer and or wine (that they lawfully produce in Michigan) directly to the home or other designated location of their craft-beer devoted cliental. The impact of these new methods may be tempered by the practical limitations imposed by the regulations: In all such instances, deliveries must be made by an employee of the retailer, brewpub or microbrewery, via store or employee-owned vehicles. In addition, adequate staffing must exist, as any employee making delivery of alcohol must be certified by one of the recognized alcohol awareness programs. Consequently, those transactions that contemplate the use of Uber or Lyft for alcohol delivery, sans the employee, are not permitted in Michigan.

If the sale is limited solely to wine (sorry, spirits and beer drinkers), other options are made available in Michigan under the aforesaid public act. Direct Shippers (defined generally as a party who is licensed to sell wine that it manufactures for sale or import in Michigan) may take orders by phone, internet or electronic device for direct shipment to the home or other location of a purchaser. Common carriers may also be engaged for the delivery of wine to the home of a retail customer. Each of these services are saddled by regulatory requirements that impose specific packaging labels, record keeping and protocols, all intended to assure that the person accepting delivery at the home is a minimum of 21 years of age and not a high school student prepping for a party while the parents are out of town.

The regulatory component with the greatest potential for changing the face of personal alcohol sales in Michigan involves the recognition of licensed third party facilitation services. These service companies have the lawful capacity to facilitate, place orders and make delivery of beer, wine, and spirits on behalf of retail suppliers, in the same manner that similar service companies have historically facilitated and delivered produce, meat and other sundry items to a customer who can avoid the “hassle” of directly contacting the store or even setting foot outside their home. There are some requirements imposed on these third party facilitation servicers which, at least temporarily, may slow their growth and implementation in Michigan. The third party facilitation service companies must first be investigated and licensed by the Michigan Liquor Control Commission. The companies cannot be owned or controlled by suppliers such as distilleries, wineries or brewers. There are ID validation requirements and reporting mandates. As of the date of this blog, the MLCC identifies only one third party facilitator service that is licensed by the State of Michigan. Others shall follow in kind as they work through the regulatory quagmire of the state laws and regulations. Yes, we have entered the era when anyone in robe and slippers with a smart phone or tablet can order and receive their favorite bottle of wine or spirits or pack of craft beer with an order of pizza and/or hot wings at their front door.

One can confidently predict that the lawful methods available for the sale and delivery of alcohol as part of the retail purchasing habits of the Michigan consumer will continue to evolve, to accommodate the appetite for consumer convenience. New regulations will make the food and alcohol sale and delivery process more efficient, convenient and streamlined. We, at Varnum, are keeping pace with these changes, and are available to discuss how we can help your retail operation remain current and relevant to your customer base. Yours truly or any other member of our Hospitality Law group can be available for a phone call, face-to-face meeting or Skype presentation. Just do not forget to first order those Twinkies. As always, I can be reached at [email protected] or (248) 567-7425.

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