Hawaii Senate Passes Bill Allowing Direct-To-Consumer Shipping Of Distilled Spirits

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On February 22, 2021, the Hawaii Senate passed SB No. 65, a measure allowing direct-to-consumer shipping of distilled spirits in original containers. The bill was passed in response to the legislature’s finding that the COVID-19 pandemic and the governmental responses to contain the spread of COVID-19 have disproportionately affected certain local liquor producers. With the frequent closure of bars, clubs, and in-person dining, local liquor producers have struggled to find alternative methods of serving their customers, resulting in drastic revenue losses.

Under SB No. 65, the holder of a direct liquor shipper permit may sell and annually ship liquor to any person twenty-one years of age or older in the county that issued the permit, for personal use only and not for resale. In an effort to encourage commerce, the legislature determined that the state must support reciprocity with all states for producers to ship their goods to, from, and within Hawaii.

Under existing Hawaiian state law, direct-to-consumer shipping of liquor is limited only to wineries shipping wine. Other liquor manufacturers do not have the option to directly ship liquor to consumers. Direct-to-consumer shipping would allow liquor manufacturers to serve their existing customers, while also allowing manufacturers to pursue additional markets and tap into a broader customer base. Direct-to-consumer shipping further assists smaller manufacturers that struggle to find wholesalers by giving those manufacturers direct access to their customers. The permit will be available to manufacturers within and without the state of Hawaii, a permit is required for each county where the producer wants to ship, and annual reports are required to be filed with each county where sales are made.

The bill passed First Reading in the House on February 23, 2021. It is currently pending in the House Economic Development Committee. If enacted, it will take effect on July 1, 2021.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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