New law allows California distilleries to once again ship directly to consumers

When the COVID-19 pandemic shut down operation of tasting rooms across California, a pandemic emergency order allowing distilleries to ship their spirits directly to consumers' doorsteps acted as a critical lifeline for many business owners.

For Cris Steller, owner of Amador & Dry Diggings Distillery in El Dorado, the ability to ship spirits to his customers during the pandemic helped him keep employees who would have otherwise been laid off and maintain a revenue stream when his tasting room shut down. Without that emergency order, Steller told The Center Square that his business would have been "really short of being able to make payroll."

While the emergency order was only a temporary measure that expired at the end of March, a new California law signed by the governor this week will allow distillers to begin shipping spirits to their customers once again.

Gov. Gavin Newsom signed Assembly Bill 920 on Thursday, a measure allowing licensed craft distillers to ship spirits directly to consumers starting immediately through Jan. 1, 2024. The bill limits distilleries to shipping 2.25 liters of spirits per customer daily.

For distillers whose customers relied on the shipping, the last six months since the emergency order expired have resulted in a significant drop in revenue. Alex Villicana, owner of Re:Find Distillery in Paso Robles, told The Center Square he lost about 30% of his revenue year over year due to losing the ability to ship.

"It's had a pretty dramatic effect," Villicana said. "If we hadn't been able to get this back, we probably would have had to lay somebody off just because it would have been a drastic hit to our overall yearly revenue."

Villicana added that surviving the height of the pandemic and now dealing with inflation has been like going from "crisis to crisis," adding that his business recovery has "stalled." He's hopeful that having the option to once again ship spirits to customers will allow his business to "push forward" and "weather this storm."

Distillers across the state are hoping to make a legislative push next session to permanently allow spirits to be shipped directly to customers. A bill that stalled in the Legislature in June would have enacted this permanent statute, but it faced mounting opposition from larger distillers who would have been left out of the bill's scope.

Adam Smith, the senior vice president of government relations at the Distilled Spirits Council of the United States, told The Center Square in a statement, "ensuring consumers can access products from all distilleries equally is our top priority."

"Direct-to-consumer shipping from distillers large and small helps support the industry as a whole and gives consumers enhanced convenience when it comes to purchasing their favorite products," Smith said. "There is no reason spirits consumers should be prohibited from enjoying the same direct-to-consumer shipping privileges wine consumers have taken part in for more than three decades in the state, and that is our focus moving into the next legislative session."