DTC technology puts government regulators at ease in four areas
As jurisdictions consider the expansion of policies related to Direct to Consumer (DTC) shipping of alcoholic beverages, such as Senate Bill 620 by Senator Ben Allen currently pending in California, policymakers are focusing on four primary areas: 1. Age Verification 2. Licensing and Compliance 3. Tax Calculation and Collection 4. Auditability, having a system that tracks delivery from start to finish and creates a complete audit trail. Think of the four areas as ALTA.
While safe and responsible consumption should rightfully be at the top of everyone’s mind, there are plenty of examples to show how DTC provides the safest way for delivering alcohol to consumers.
Moreover, it is vital to keep our markets thriving, open and fair to help small producers compete against large corporations and give consumers more brand names to consider in the marketplace.
A capable e-commerce, compliance, and tax platform, such as ours at Vinoshipper, validates the use of technology and reassures policymakers that the beverage industry can accurately oversee activity and safely serve the public.
Consider the following points:
- Age Verification: Electronic, pre-purchase age verification has proven to be highly effective in preventing underage consumers from buying alcohol. The director of the CA ABC recently noted that compliance with DTC was better than retail operations.
- Licensing and Compliance: For more than 15 years, compliance companies have helped wine producers and other handlers of alcohol meet rigorous licensing requirements to comply with state and federal laws. Over the years, the industry has matured to meet evolving requirements and demonstrated a proven track record of success.
- Tax Calculation and Collection: Dating back to the 21st Amendment, the proper calculation and collection of taxes is paramount to government regulators. Modern software makes data collection and reporting routine for companies and easier for regulators to combat the underground economy.
- Auditability and Tracking: Large delivery companies, such as FedEx and UPS, have modernized with the DTC industry and provide accurate tracking of products throughout the process, as they are delivered, returned, damaged, or lost. They have developed a sophisticated labeling system and provide extra transparency to help companies comply with regulations within and across state lines.
As consumer habits change, the debate over DTC expansion has given e-commerce platforms such as ours an opportunity to demonstrate how technology will help us serve people more safely while giving government regulators better tools for effective oversight and allowing small producers to survive and thrive.