Direct-to-consumer or DTC is when a brand or manufacturer ships their products directly to consumers rather than through a distributor or store.
For wineries, DTC shipping could mean higher profit margins, better brand control and easier inventory management, along with many other benefits.
However, there are several rules that wineries must abide by if they want to ship directly to consumers. If you own a winery and want to explore this business strategy, here is some important information you need to know.
State-by-state regulations
Each state has its own laws regarding DTC wine shipments. Currently, most states allow some form of DTC shipping. Only Utah and Mississippi prohibit it entirely.
The Wine Insitute is a resource if you want to see if your state allows DTC shipping. In Florida, it has been legal to ship wine to consumers since 2006. However, direct wine shipments are not allowed in two dry counties: Lafayette and Liberty.
Licensing requirements
Most states require out-of-state wineries to obtain a special license or permit for DTC shipping. Some states may require an in-state presence or a distributor relationship.
Florida wineries do not need a permit for DTC shipping, but compliance with other DTC rules is still a must.
Volume limitations
Many states impose annual limits on how much wine a business can ship to an individual consumer or household. These limits typically range from a few cases to several dozen cases per year.
However, there is currently no volume limit for Florida.
Product and packaging requirements
While there are no volume limitations for Florida wine businesses, you need to follow certain rules for containers:
- A container must not exceed one gallon, but;
- You can ship individual glass containers holding 4.5, 6, 9, 12 and 15 liters.
Furthermore, packages need to have a clear label indicating their alcohol contents. An adult (21 and older) must sign for the shipment upon receiving it. Signature requirements of FedEx, UPS and other shipping companies apply.
Taxes
Generally, out-of-state wineries must collect and remit sales and excise taxes to the destination state. Alcohol, sales, use, remit and other types of taxes vary depending on the state.
Failure to collect or remit the correct amount of taxes can result in penalties and interest charges.
Stay compliant and avoid legal headaches
Shipping directly to consumers can give your business an edge against competitors. However, you need to follow the rules carefully if you want to avoid penalties.
Keep in mind that these rules and regulations can change frequently. That said, consider working with an experienced attorney who can help you stay compliant.