THE GIST
For roughly 85 years, the United States Postal Service (USPS) has not been permitted to ship alcohol, a historic precedent that could be overturned if currently proposed legislation—the USPS Shipping Equity Act—is enacted by Congress. Nearly identical bills were introduced in 2015, 2017, and 2019, and failed to pass, but proponents of the current legislation say economic conditions and public opinion are more favorable now.
After more than a decade of deficits and tight budgeting, the USPS could use the money. The Congressional Budget Office estimates the USPS could net $50 million a year by shipping alcohol, while a letter to members of Congress signed by various trade groups in support of the move puts the figure at $150 million, when adjusted for more states that have recently legalized the practice, and more businesses that are taking part.
Simultaneously, a change in public attitudes toward shipping alcohol has bolstered the cause. The COVID-19 pandemic’s boon to e-commerce and the 2020 presidential election’s increased public attention to the Postal Service make the issue more popular, proponents say. But even those in favor of allowing USPS to ship alcohol admit they are up against formidable opponents: beer, wine, and spirits distributors who don’t want to see an expansion of direct-to-consumer (DTC) sales, and a Congress with a long list of other priorities. GovTrack, an independent publisher of the status of federal legislation, puts the bills’ current chances of being enacted into law at 1% (Senate bill) and 4% (House bill).
Despite the odds, the stakes have never been higher for the USPS Shipping Equity Act. It could potentially transform the way millions of Americans purchase alcohol, and could put huge sums of money in the pockets of the Postal Service. According to the American Postal Workers Union, private carriers such as UPS and FedEx earned more than $3 billion from DTC deliveries for wineries, breweries, and other producers in 2018. What happens next could be a lifeline for the Postal Service—which needs money—and small businesses looking to ship products to more people in cost-efficient ways.
WHY IT MATTERS
The iron may never be hotter to finally get this kind of bill passed. The issue is big enough that it’s gained mainstream media attention from USA Today and NBC News.
“There’s both the [financial] crisis within the post office, and greater interest in delivery alcohol creating much more awareness and interest in the story,” says Alex Koral, senior regulatory counsel for Sovos ShipCompliant, which operates beverage alcohol compliance software. “That’s been the big difference.”
According to marketing and consultancy group McKinsey, 2020 condensed a decade of e-commerce growth into several months. Interest in alcohol shipping specifically has grown among both drinkers and producers. (The USPS Shipping Equity Act would allow producers to ship directly to consumers, not for consumers to ship alcohol to each other.)
Sovos ShipCompliant and the Brewers Association (BA) in March released a Direct-to-Consumer Beer Shipping Report that included a Harris Poll consumer survey conducted in the first quarter of 2021: It found that 84% of self-identified “regular craft beer drinkers” say they want to be able to legally purchase beer via DTC shipping to their home. On the supplier side, 70% of responding breweries said they would consider using DTC shipping if it were legal in their state. This tracks for spirits, too: In a 2017 survey cited by VinePair, 95% of distillery members of the American Craft Spirits Association said they would benefit from DTC shipping.
Currently, producers can ship alcohol through third-party carriers like UPS and FedEx, but introducing a Postal Service option would increase competition and potentially lower prices, proponents say. Additionally, Katie Marisic, director of federal affairs for the BA calls the USPS the carrier “of last resort” for rural Americans who aren’t served by third-party carriers, recalling anecdotes of her family picking up mail from the post office in Mount Gretna, Pennsylvania, the small town (population 270) where she grew up. Marisic says the BA is “involved in and supportive of” the USPS Shipping Equity Act.
“Opening another avenue of shipping allows for increased competition and makes it more attractive for some of those breweries who might live in more rural areas or might be reaching consumers in areas that private carriers are not equipped to ship to,” Marisic says. “The BA saw the demand from members and consumers for this [legislation].”
All this begs the question: Why can’t the Postal Service ship alcohol? The rule dates back to a 1909 regulation against it, which was probably necessary at the time.
“Direct-to-consumer shipping is a big reason why temperists and Prohibitionists felt that they had to create a national restriction on alcohol,” Koral says. “In the 19th century, there were several states that did have Prohibition for a few years but they were all subverted by interstate sales and shipping.”
Today, though, those in support of the USPS Shipping Equity Act say such thinking is outdated. (Similar arguments for modernizing alcohol laws to meet the current moment helped legalize cocktails to-go in more than 25 states.) FedEx, UPS, and other third-party carriers have delivered alcohol to legal-age consumers for decades, and the Postal Service should have the same opportunity, its supporters argue argue.
But opponents of that change contend that allowing the Postal Service to ship alcohol would be a threat to public safety, and would potentially create a conflict between states and the federal government, of which the Postal Service is an agency.
“Legislation to allow the USPS to ship beverage alcohol undermines nearly 90 years of well-established state alcohol regulatory authority while threatening the public health and safety benefits fundamental to the current alcohol regulatory structure,” says a policy statement from the National Beer Wholesalers Association. Distributors generally oppose DTC sales, which undermine their position in the alcohol marketplace; the Wine and Spirits Wholesalers of America also opposes the USPS Shipping Equity Act.
Proponents of the bill say USPS would follow the same rules for verifying legal-age consumers that third-party carriers do. Marisic notes that the legislation allows for a two-year waiting period after it is passed but before it takes effect to allow the Postal Service to train its carriers on this important issue.
And according to the BA, parents are on board with the proposed legislation: The poll it conducted in partnership with Sovos ShipCompliant earlier this year showed stronger support among parents than non-parents (all respondents identified as regular craft beer drinkers) for alcohol shipping through USPS.
But who could step in if postal carriers fail to verify IDs is also a source of contention. When it comes to private, third-party carriers, states can require strict tracking and documentation from companies to make sure they’re only selling licensed products to legal-aged adults. But could a state do the same for the USPS?
“What if the USPS fails to check IDs—could a state sanction the federal USPS as it does any liquor licensee? If not, what recourse do states have to address problems and protect public safety?” writes Pam Erickson, the founder and editor of the Campaign for a Healthy Alcohol Marketplace, and the former executive director of the Oregon Liquor Control Commission, in an op-ed for Salem, Oregon’s Statesman Journal.
Marisic says the current bill addresses this clearly: It would not give the federal government any additional privileges that would supersede states’ established ability to regulate alcohol within their borders. Plus, she says, there are already ways that states have pushed back against the USPS when they deem it necessary; last year, more than 20 states sued the Postal Service over issues related to the 2020 elections.
“There’s nothing in [the bill] that would say, ‘Open a shipping free-for-all,’ it just allows the Postal Service the same ability to compete with private carriers to ship alcohol where states are already allowing alcohol shipping to happen,” she says.
The USPS Shipping Equity Act has so far been introduced in both the House and the Senate with bipartisan sponsorship and support. But even with that cross-party backing and mainstream media attention, Marisic says it’s no guarantee Congress will consider the legislation this session.
“There’s always a chance that even with a focus on postal reform, something might just not make it on the priority calendar for leadership,” she says. She notes that the Craft Beverage Modernization and Tax Reform Act, which had bipartisan support from more than half of Congress for a few years in row, still took years of lobbying before it was finally signed into law.
“Sometimes it is a little bit of hard work and a little bit of luck.”
Words by Kate Bernot