New York Prepares for Spirit Shipping

You’d think New York state is full of grownups, but the state government has been slow to allow its residents to order alcohol directly from producers. A bill on Governor Kathy Hochul’s desk would allow residents to order the Big Apple – cider, that is, along with whiskey and other spirits.

The bill, AB 3132, passed both the House and the Senate, and requires only the governor’s signature to become law. It would allow distillers and cider makers in New York and six other states to ship their products directly to New York residents.

Six other states isn’t a lot, and several are fairly useless for spirits (Alaska, Nebraska, North Dakota). However, the big name in American spirits production is Kentucky, and the good news for Bourbon fans in the Empire State is that Kentucky producers would be allowed to ship directly to New York under the new law.

Why only six states? The bill is based on an outdated concept of “reciprocity” that the US Supreme Court has already signaled is unconstitutional. If a state allows New York distillers to ship to its residents, New York will allow that state’s distillers the same courtesy. (No surprise that Kentucky wants whiskey DTC legalized wherever possible.) So Texas distillers won’t be able to ship their surprisingly good whiskey to New York because New York’s Hudson Whiskey can’t ship its drams to Austin.

Moreover, it’s asking a lot to expect New York’s legislature to keep up with SCOTUS rulings regarding commerce. Let’s just be glad, and a little stunned, that New York will be ahead of most of the country in allowing direct shipments of spirits.

In 2005, the landmark US Supreme Court case Granholm v. Heald opened the country to direct shipping by wineries. New York was one of the defendants in that case, along with Michigan. Both states had laws that allowed in-state wineries to ship to local residents, but not out-of-state wineries.

The two states went in different directions after the ruling. Michigan immediately outlawed all wine direct shipping and tried several times to enact a similar law protecting its in-state wineries, but could never craft one. Today wineries (but not distillers) can ship into Michigan. New York, which has a much larger wine industry than Michigan, allowed wineries to ship while also trying to figure out a legal way to favor its own, an ultimately unsuccessful effort. Today, only five states prohibit wineries from shipping directly to customers; the largest is Utah.

But spirits are another matter. After having no craft distilleries 25 years ago, New York suddenly has a burgeoning spirits scene. There are now more than 160 craft distilleries, the second most of any state, with at least five inside New York City. All that locally-produced gin needs a market, though, and until Gov. Hochul signs the DTC bill, people who visit, say, Hudson Valley and like the local liquor cannot simply order more.

A survey in April of members of the state Distillers Guild showed that only half of them were confident they would be in business at the end of 2025 without this regulatory change.

James Skoufis, who sponsored the bill in the New York Senate, said: “New York’s cideries and distilleries sit at the intersection of tourism, agriculture, and small business, and were hit particularly hard by the pandemic. The direct-to-consumer bill offers support for these entrepreneurs – and the thousands of New Yorkers they employ and serve. Despite pushback, I am thrilled truth and rationality won the day. A major boost is coming to these intrepid producers and their customers.”

Many retailers are opposed to DTC shipping because it’s competition, but Daniel Posner, owner of Grapes the Wine Company in White Plains, said: “We promote an open market.”

“So long as all local laws are followed, including adult signature required, there is absolutely no reason not to allow New York consumers to purchase wine, spirits or ciders from merchants, distilleries, or wineries from outside the state of New York,” Posner told Wine-Searcher.

However, if you are a New York resident hoping to order wine or spirits from a retail store outside the state, you are still out of luck, as several bills introduced to make that legal have stalled in the legislature over the last few years.

Just be glad that, governor willing, you can soon order Kentucky’s finest.