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A Chance to Liberate Booze Delivery — if Government Allows It

A move by Uber signals an opportunity to permanently end Prohibition-rooted restrictions that prevent many Americans from getting their drinks the same way they get their groceries and takeout meals.

Amethyst Tymoch, with Checkerspot Brewing delivers beer to a customer's home on Federal Hill, in Baltimore. (Karl Merton Ferron/The Baltimore)
It is a story almost as old as America itself: technology advancing faster than government can keep up. Everything from the invention of rail travel to the development of drones has challenged governments to keep up with the pace of change. In the midst of the COVID-19 pandemic, it has become clear that alcohol delivery is the latest frontier to stress the always uneasy relationship between government and technology.

Uber's recent announcement of its $1.1 billion acquisition of the drinks delivery service Drizly is being hailed as a gamechanger that could "turbocharge" the growth of online-enabled alcohol delivery. While the deal will no doubt expand alcohol delivery options in many places, delivery of booze — bottles, cans and even pre-mixed cocktails — has already been experiencing exponential growth during the pandemic as more and more Americans are sheltered in place and ordering groceries, takeout meals and just about everything else to their door.

In fact, the online alcohol delivery marketplace grew by 80 percent in 2020, according to data from IWSR Research, an industry observer. A majority of states did their best to respond to the crisis by authorizing many forms of to-go and delivery alcohol during the pandemic.

But most of these reforms were only temporary emergency orders. The reality is that alcohol delivery is still subject to a host of restrictive laws and rules that will limit substantial growth unless more durable reforms are enacted. Eleven states still do not allow alcohol to be delivered from retailers such as grocery or liquor stores at all, while many other states do not allow third-party independent-contractor services such as DoorDash and Grubhub to facilitate these deliveries.

Long-distance alcohol shipping faces even more restrictions than local deliveries. More than 40 states allow wineries to ship their wines to out-of-state customers, but fewer than a dozen states allow these types of cross-state shipments for beer and liquor.

This web of burdensome laws and rules traces its roots to our country's prohibitionary heritage. While many Americans enjoy gathering on Dec. 5 to toast the repeal on that day in 1933 of the 18th Amendment, the legal infrastructure of Prohibition and its aftermath has never really gone away. In the years immediately following repeal, states and local governments still faced immense pressure from temperance forces to restrict and control Americans' access to alcohol.

As a result, many locales remained dry — and still do to this day — while others implemented strict rules about how alcohol can be purchased, consumed and transported. Over a dozen states maintain control systems in which the government itself is in charge of all wholesale or retail sales of alcohol. And nearly every state operates under what is known as a three-tier system of alcohol distribution, which requires brewers, distillers and vintners to work through a government-mandated middle tier of wholesalers rather than being able to sell directly to their customers.

The effect of this outdated legal infrastructure has been to largely sideline alcohol from the Internet-fueled 21st-century marketplace. Americans can order everything from pickle-flavor lip balm to pharmaceutical drugs online and have them delivered to their doors within a day or two, but many states still refuse to allow alcohol products to be treated like these other legitimate articles of commerce.

As noted, the move toward an online alcohol-shipping economy has shown some laudable progress during pandemic. Ohio and Iowa both passed laws permanently allowing restaurants to sell to-go and delivery cocktails and more states seem primed to follow suit, while Georgia passed a law allowing alcohol delivery from off-premise outlets such as groceries and liquor stores. And the bourbon mecca of Kentucky notably passed landmark legislation to permit interstate shipments of alcohol from all types of producers.

But there is still a long way to go. In the 2021 legislation season, which is just beginning, states have one of the best opportunities in a generation to enact more alcohol-delivery reforms. In the COVID-19 new normal, consumers want to have alcohol delivered to their doorsteps just like every other product under the sun. The technology is already available. Lawmakers and regulators just need to catch up.

Governing's opinion columns reflect the views of their authors and not necessarily those of Governing's editors or management.

Director of commercial freedom policy at the R Street Institute
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