Some Texas officials are calling for for new legislation or permitting requirements for “digital-based companies” to head off what some view as a burgeoning public safety issue – the delivery of alcohol to underage drinkers.
By Bob Sechler
March 30, 2018
Underage drinkers using app-based delivery services saw more success in getting alcohol than at bars, stores.
Officials: Some digital-based companies have taken customer payment despite lacking alcohol sales permits.
The convenience of ordering a cold six-pack for home delivery with just a few swipes on a smartphone might be proving particularly satisfying for one demographic group – underage drinkers.
In a handful of sting operations conducted by Texas regulators, people younger than the legal drinking age of 21 were able to obtain alcohol using app-based delivery services at more than twice the rate generally found in similar sting operations conducted in bars and liquor stores.
The findings, combined with a proliferation of such delivery apps and anecdotal reports of violations from alcohol industry representatives, are spurring calls for new legislation or permitting requirements for “digital-based companies” to head off what some view as a burgeoning public safety issue.
Alcohol delivery through digital ordering “is a new growth industry, and we want to make sure that if (companies) are going to do it, they do it responsibly,” said Lance Lively, executive director of the Texas Package Stores Association, which counts Spec’s Wines, Spirits and Finer Foods, Twin Liquors and other alcohol retailers among its members.
A number of app-based services, including Postmates, Instacart, Minibar and Drizly, legally advertise alcohol delivery in Austin and elsewhere in Texas. In many cases, the services merely provide digital interfaces that link customers with local alcohol retailers – with the retailers actually taking payment and making delivery – because they lack state permits to handle alcohol.
But the rapid rise of the so-called “convenience economy” – and the rush to capitalize on consumer desire to have beer, wine or whiskey just a few finger taps away – is increasingly running afoul of the state’s alcohol laws.
“There are some (companies) that just go out and do it themselves” without obtaining the necessary permits or partnering with existing permit holders, said Chris Porter, a Texas Alcoholic Beverage Commission spokesman. “This is an issue we are concerned about and we are starting to see in heavier numbers.”
Sting operations conducted by the agency found that people not yet of legal drinking age in Texas were able to obtain alcohol using digital services in two out of nine tries. While the sample size is small, Porter said the success rate of over 20 percent more than doubled the average 10 percent rate that the Texas Alcoholic Beverage Commission normally finds during routine weekend stings that it conducts at bars and liquor stores across the state.
Porter declined to name the delivery companies involved in the sale to underage buyers, saying they didn’t receive citations and the delivery drivers – who didn’t check IDs as required by law before dropping off the alcohol – were given warnings.
“This was just a test case,” Porter said. “We recognize that the delivery economy is becoming more and more of a trend, and we want to get ahead of the problem and have statutory guidance before it becomes a serious public safety issue.”
The commission also has found that some digital-based companies have taken payment from customers despite lacking alcohol sales permits, in addition to other violations.
A potential solution that the agency is proposing to an oversight board charged with crafting legislation for 2019 to help it run more effectively involves the creation of a so-called “digital processing carrier permit” that could be obtained by app-based delivery services. Porter said such a permit would help the agency better regulate the new companies, as well as make the state’s myriad alcohol rules clear to them.
Lively, of the package stores association, said he isn’t familiar with the agency’s proposal but said something must be done to address a growing problem. Among other violations, Lively said he’s been getting reports of out-of-state companies delivering alcohol to Texas addresses without proper permits – and in some cases “ringing the doorbell and walking off.”
“The laws need to be tightened, and we’re going to work on that next session” of the Legislature in 2019, Lively said.
Drizly, a Boston-based company that partners with some Austin retailers to facilitate alcohol delivery through its digital interface, said in a written statement that “safeguarding against providing adult beverages to anyone under legal drinking age is very important to us,” and it noted that it provides licensed liquor stores with a secure technology platform to do so.
Still, the company also made clear that verifying the age of customers ultimately is the job of the retailers.
“It remains the responsibility of the liquor store, the party licensed to deliver, to verify the age of their customers who purchase and accept delivery, and to determine whether the delivery is otherwise lawful, safe and appropriate,” it said.
A number of other companies that have developed apps for alcohol delivery didn’t respond to requests for comment.