On Friday, August 26, the Division of Alcoholic Beverage Control (ABC) announced a special ruling that would allow for third-party delivery services of alcoholic beverages to customers. The special ruling authorizes a Third-Party Delivery Permit, which is the functional equivalent of a transportation license, would allow the permit holders to enter into agreements with restaurants, bars, and liquor stores to make deliveries using their own personal vehicles. Permit carriers would not be allowed to leave any alcohol delivery unattended or deliver to individuals who are underage or intoxicated. They are also forbidden to deliver to college campuses. The new third-party delivery service permit will be issued by the ABC and become available on October 1, 2022, at an annual fee of $2,000.
The regulations define “Third-Party Delivery Service” as an entity that arranges for delivery of alcoholic beverages in original containers (and cocktails-to-go in “closed and sealed containers” as long as allowed by statute) to customers’ residences on behalf of retail consumption licensees or retail distribution licensees.
To qualify for the permit, applicants must comply with application and operation processes, including :
- Initial and recurring background checks of delivery workers, including criminal history and driving record.
- Alcohol-compliance training and certification to delivery workers who are eligible to deliver alcoholic beverages.
- Verification that receiving customers are of legal age and not visibly intoxicated.
- Refusing delivery and returning alcoholic beverages to retail licensee when necessary, such as when a customer is underage or intoxicated, refuses to sign for the delivery, or there is reason to suspect the customer is accepting delivery on behalf of an underage person.
- Submit a formal written agreement with a retail licensee and sample formal agreement with delivery worker before any deliveries are made.
- Require to retain delivery related information for three years and make it available upon request to the ABC for the purpose of investigating and enforcing liquor license laws.
The application to ABC requires a description of specific method of operations; a sample agreement between the permit applicant and merchant that includes certain minimums; proof of general liability insurance with liquor liability endorsement; and detailed description of forms of compensation from merchants and receiving customers, including routing or remitting payments.
Under current regulations, the ABC only permits licensed retailers and transporters to deliver alcoholic beverages. The current regulations also prohibit manufacturing license holders from delivering their products because they do not have statutory delivery privileges.
While the consumer may see a single combined purchase on their credit card statement, any sale for liquor that is delivered must be separate and distinct transactions. In addition, a third-party delivery permittee cannot charge a commission or receive a percentage of the proceeds of the sale. However, the third-party delivery permittee may charge a fixed fee to retail licensees and/or customers for delivering alcoholic beverages.
In addition, the following conditions and restricts will be in place:
1. Permittee cannot charge a commission or receive a percentage of the proceeds from the sale of alcoholic beverages. However, a “marketplace facilitator” permittee must collect and remit sales taxes for the purchase and delivery of alcoholic beverages unless the marketplace facilitator and marketplace seller enter into an agreement concerning the collection and remittance of sales tax.
2. Permittee cannot arrange for the delivery of alcoholic beverages without a valid written agreement with a merchant and delivery driver(s).
3. Permittee is authorized to operate only on the days, and during the hours the merchant is authorized to sell alcoholic beverages.
4. Permittee is prohibited from selling or reselling alcoholic beverages or collecting payment on delivery.
5. Permittee is prohibited from setting the prices of alcoholic beverages or determining which beverages are available for delivery.
6. Permittee is responsible for ensuring that its delivery workers comply with its approved method of operation and the conditions and restrictions on its permit.
7. Each package of alcoholic beverages must be clearly marked, “ALCOHOLIC BEVERAGES.”
8. Employees of licensed alcoholic beverage manufacturers and wholesalers are ineligible to deliver alcoholic beverages for permittees.
9. Delivery workers must have received alcohol-compliance training and certification prior to delivering alcoholic beverages.
10. Delivery workers must have a copy of the permit in their possession during deliveries.
11. Delivery workers must have the following information (electronic or paper form) in their possession during deliveries: invoice or bill of sale stating the name and address of receiving customer; type, brand, and quantity of each alcoholic beverage being delivered.
12. Delivery workers must verify receiving customers are of legal age to purchase and consume alcoholic beverages in conformity with Third-Party Delivery Permittee’s approved method of operation.
13. Delivery workers must obtain the signature (electronic or paper form) of the receiving customer before handing alcoholic beverage delivery.
14. Delivery workers are prohibited from leaving alcoholic beverages unattended or storing alcoholic beverages overnight.
15. Delivery workers are prohibited from engaging in no-contact deliveries without face-to-face interaction with the receiving customer.
16. Delivery workers must refuse delivery and return alcoholic beverages to the merchant in conformity with the Third-Party Delivery Permittee’s method of operation and this Special Ruling.
17. Delivery workers are prohibited from subcontracting or delegating to another person the delivery of alcoholic beverages.
18. Delivery workers are prohibited from delivering alcoholic beverages to a non-residence (e.g., hotel room, offices, BYOB restaurant, etc.).
19. Delivery workers are prohibited from delivering alcoholic beverages to customers who are actually or apparently intoxicated.
20. No delivery of alcoholic beverages shall be made to the campus of any college or university.
21. Permittee shall terminate its agreement with any delivery worker who violates any condition or restriction in this Special Ruling.
Contact: Andrew LaFevre, Legislative Analyst, email@example.com, 609-695-3481, x116.