Like other alcohol producers, sake brewers are increasingly interested in the direct-to-consumer (DtC) shipping market to better connect with their consumers. While the laws governing DtC shipping of sake are fairly straightforward, broadly following the rules for shipping other product types, it is complicated depending on how each state defines sake itself.
No state’s DtC shipping laws specifically mention sake, instead only referring to permission to ship wine, beer, or spirits. As such, in order to be shipped DtC, sake must fit into one of those allowable product types. This is similar to other alcoholic beverages, such as cider, that can straddle definitional lines, and applies to other laws beyond DtC shipping.
Generally, a state will treat sake like a beer or a wine, meaning that sake brewers will have to ship their products under DtC shipping laws for those products. When states permit DtC shipping of all alcohol, sake clearly may also be shipped. But if a state limits DtC shipping to wine only, then DtC sake shipping would be allowed only if the state considers sake to be a “wine.”
Sake is brewed from grains, which makes it look like beer, but it’s sold and consumed like wine. However, wine is often defined by states as limited to fruit-based beverages whereas beer often requires malt and hops to be used in its production process. So while sake shares many characteristics with wine and beer, it doesn’t quite fit neatly into either the beer or wine category, creating definitional trickiness.
This definitional limbo for sake is not unique. There are many other beverage alcohol products out there that straddle the lines between beer, wine, and spirits, such as ciders, meads, and RTDs. But it does require additional care and research when beginning the journey into shipping sake, to verify right from the beginning whether your product is allowable under existing DtC shipping laws.
Where can you ship sake?
Currently, 40 states and the District of Columbia permit DtC sake shipping under their wine shipping laws.
This can provide flexibility in how a sake producer works. For example, an organization could produce as a brewer but sell as a winery. On the other hand, this can create some regulatory confusion. Statutes alone are not always clear on what is permissible for DtC shipping in a state, and there is always the risk that regulators will change their minds on interpreting the definition within a law.
However, knowing the definitional clarity makes it easier to understand the permissions and limitations that exist for your product. It can also reduce the chance that a regulator may one day determine that what you’re doing is improper.
Overall, sake shippers should know that the following general list of DtC alcohol shipping rules will apply:
- Be licensed for DtC shipping by the destination state
- Use approved carriers who will check IDs and collect signatures
- Verify age of purchaser and recipient
- Label boxes with notice of alcohol contents
- Abide by per person volume limits
- Agree to remit all applicable sales and excise taxes to the destination state
- File regular reports detailing all shipments
- Only ship brand/labels that are produced or owned by the shipper
As you work to begin or expand your DtC sake shipping, make sure that you properly interpret how each state’s rules apply to your individual circumstances. Working with your legal counsel, compliance software provider or team, and speaking with another sake producer can all help you work toward proper sake shipping compliance.
Want to learn more about DtC sake shipping compliance? Check out our recent webinar on-demand.