Post Office Rules Might Change -- Beer Traders Yawn

Eno Sarris, November 05, 2013

Beer laws have been in a tangle ever since prohibition. But there's some noise that one rule -- that the United States Postal Service would not allow alcohol to be sent through the mail -- might change soon. That might mean something for distribution for smaller breweries, but it does still leave consumer-to-consumer shipping out in the cold.

Because of concern that breweries would return to pre-prohibition tactics, a "three-tier" system was put in place that required separation between producers, distributors and retailers. That decision alone may only sound like an excercise in trust-busting, but the practical results have been more complicated. Some states, like Washington, have almost complete exceptions from the system. Other states, like Pennsylvania, have dominated one or two of the tiers themselves.

The resulting seperation of production and distribution can be complicated and has created fractured distribution maps. If you consider big beer, it makes sense that they would be frustrated that they can't manage their distribution line like most big companies in other industries. If you consider small beer, the difficulty might lie in having to make seperate relationships with smaller distributors, and perhaps learning the specific rules in each state.

Further complicating matters is that small breweries haven't been allowed to use the United States Postal Service in any part of this process. Removing that big of a player from the competition for shipping liquor may have contributed to higher prices for the service, and Chuck Schumer wants his consitituents -- wineries in upstate New York -- to have one more option at their disposal. He's proposing to remove the ban on using the USPS to ship directly to consumers.

“Shipping wines directly to consumers is important for the New York wine industry, since most of the State’s 350 wineries are relatively small and without national distribution,” said President of the New York Wine & Grape Foundation Jim Trezise. “Allowing the United States Postal Service to join FedEx, UPS, and other common carriers would create healthy alternatives and price competition, give wineries another option, provide consumers with more choices, and generate new revenues for the USPS."

This may serve to help smaller breweries improve their distribution even if it grays the area between a producer and a distributor and a retailer.

But the internet has always been good at blurring such lines. Just look at the consumption heat map for Heady Topper, a beer that is only sold in Vermont.

Those dots represent people drinking Heady Topper, and they probably didn't drive all the way to Vermont. And even if Chuck Schumer manages to change the rules for breweries and wineries, this part won't change.

Schumer emphasized that this would not change current law on shipping alcohol consumer to consumer – that is still prohibited, to ensure that minors are not able to access alcohol. To ship alcohol to consumers, the Postal Service would have to enter an official arrangement with participating wineries, breweries or distilleries and promulgate rules to ensure those under age 21 are barred from receiving such shipments.

There's a vibrant trading community out there, forced into a legal gray area by this sort of thinking. Does it make sense? Why would someone ship beer to get beer to an underage drinker? You could stand outside a store and ask someone to buy inside, and that's done often. The age requirement is enforced at the point of sale, and this underaged straw man could live down the street, or he could live in Orlando. The method of transport seems irrelevant.

So, as much as things may change with this law, things will stay the same. Maybe brewers like The Bruery -- who opened up sales for Black Tuesday online, but only shipped to California residents -- will be able to ship further. Maybe that will open up some markets for those willing to pay the shipping and handling.

But two consenting adults shipping rare beers to each other will still have to find their way without the benefit of the USPS.