Business Corporate Update - Direct-to-Consumer Alcohol Sales in Nebraska

Over the past decade, the explosion of online shopping has had a massive impact on the sale of consumer goods. Beer, wine, and spirits are no different; producers and retailers across the country are finding that shipping their products directly to consumers presents an exciting opportunity to expand their businesses. Though demand is apparent, the legal framework for online alcohol sales among states is inconsistent. For example, while most states permit wineries to ship their wines directly to consumers, few allow distilleries the same luxury.

Luckily, Nebraska’s direct-to-consumer alcohol shipping statutes are robust. Direct Shipper Licenses offer wineries, breweries, distilleries, and retailers an opportunity to break into a new market and provide Nebraska consumers with convenient access to diverse products. (See Neb. Rev. Stat. § 53-123.15)

Selling and Shipping Alcohol in Nebraska

The Nebraska Liquor Control Commission (“Commission”) has established the Class S1 License, which enables producers and retailers to ship their products directly to Nebraska consumers. In order to apply for this license, the Commission directs all applicants to submit Form 142 along with a fee of $500. Each year after license approval, licensees must submit Form 35-7140 and accompanying sales and tax information for the Commission to review. Promptly filing Form 35-7140 each year will ensure continued good standing with the Commission.

Before products are actually shipped to Nebraska, statutes require that each consumer pay for the products and verify their age. (See Neb. Admin. Code § 019.01P2, page 39) The licensee may then ship the alcohol through a Commission-approved common carrier, being sure to affix a conspicuous notice on the package warning of its alcoholic contents. Once delivered, the recipient must again verify their age and sign for the package. Nebraska prohibits the shipment of more than 9 liters of liquor per month to any person in Nebraska to whom alcohol may be legally sold. (See Neb. Rev. Stat. § 53-123.15(8)(e-f))

The Future of Direct-to-Consumer Alcohol Sales

As demand for convenient direct-to-consumer shipment grows, other states will likely establish comprehensive licensure procedures similar to those in place in Nebraska. It will remain important for producers and retailers alike to closely monitor emerging legislation in these states to establish compliance early and take advantage of these emerging direct-to-consumer markets.

 

Also read the related article: A Quick Guide to Obtaining a Liquor License in Nebraska

Authors: Robert W. Futhey & Jonathon H. Latka

Robert W. Futhey

Robert W. Futhey

Partner

(402) 978-5267
rfuthey@fraserstryker.com

Jonathon H. Latka

Jonathon H. Latka

Associate

(402) 978-5329
jlatka@fraserstryker.com

This article has been prepared for general information purposes and (1) does not create or constitute an attorney-client relationship, (2) is not intended as a solicitation, (3) is not intended to convey or constitute legal advice, and (4) is not a substitute for obtaining legal advice from a qualified attorney. Always seek professional counsel prior to taking action.