R Street Institute Letter of Support for Delaware SB 166, Third-Party Delivery of Alcohol from Restaurants and Bars

July 25th, 2024

The Honorable John C. Carney Jr.
Governor of Delaware
Tatnall Building
150 Martin Luther King Jr Blvd South
Dover, DE 19901

RE: R Street Institute Support for Delaware Senate Bill 166

Governor Carney:

I am writing to you on behalf of the R Street Institute to express our support for Senate Bill 166, a bill that authorizes the delivery of alcoholic beverages from restaurants, taverns and other establishments by third-party delivery services. The R Street Institute is a nonprofit, non-partisan public policy research organization. Our mission is to engage in policy research and outreach to promote free markets and limited, effective government in many areas. Our work includes researching and promoting sensible alcohol policies that considers consumer choice, free enterprise, and public safety.

Currently, 33 states permit third-party services to deliver alcohol from retail establishments.^[1]  Adopting a legal framework to allow third party delivery platforms to transport alcoholic beverages from licensees including restaurants, brewpubs, and other on-premise retail establishments in Delaware will provide a range of benefits. It could alleviate issues related to understaffing at these businesses, enable them to expand their businesses to meet consumer preferences, and even reduce opportunities for drunk driving—all without increasing underage drinking.

Employers in Delaware are facing challenges with filling staff vacancies.^[2] These staffing issues make it difficult for small businesses, such as restaurants, to secure on-site delivery staff that could assist with expansion of their operation. Permitting these firms to collaborate with third-party delivery services to sell alcohol directly to consumers can augment their income streams. In fact, research has found that restaurants and bars can experience up to a 30 percent increase in their bottom-line when they work with third-party delivery firms.^[3] So, it should come as no surprise that surveys reveal that 9 out of 10 restaurant operators plan to continue to offer alcohol with carryout orders in states that sanction such sales.^[4]

In addition, consumer surveys have shown overwhelmingly support among cocktail, beer and wine drinkers, with between 74-79 percent selecting dining establishments for delivery based on their ability to order alcoholic beverages.^[5] Allowing restaurants and taverns to utilize third-party delivery companies will greatly improve customer choice in Delaware.

When examining reforms to laws for regulated products like alcohol, one shouldn’t limit the considerations to merely economic outcomes and consumer sentiments, as public safety factors should also be reviewed. At the R Street Institute, we have analyzed alcohol delivery reforms and its potential correlation with externalities such as alcohol consumption rates, drunk driving, and underage access. We found that almost every state that permitted delivery and to-go alcohol during COVID-19 witnessed a decrease in youth drinking rates.^[6] Also, states that permitted the delivery of alcohol saw a smaller rise in their overall drinking rates compared to those that prohibited delivery.^[7] With regards to drunk driving, states that sanctioned alcohol delivery experienced smaller increases in drunk driving deaths during the pandemic—which rationally makes sense, given that home-delivery of alcohol allows consumers to avoid driving back from the bar after numerous drinks.^[8] These trends do not indicate causation, but they do help emphasize that alcohol delivery does not correlate with increased underage access, more drinking, or more drunk driving.

Further analysis from other entities likewise suggests that allowing third-party delivery platforms to transport alcohol from retailers to customer’s doorsteps could help reduce drunk driving in states like Delaware.^[9] By permitting alcohol delivery from on-premise retailers, the state can ensure that adults who may have already been drinking will have other safer alternatives to obtain an alcoholic beverage rather than driving a vehicle and risking lives. This view is also held by four out of five Americans who believe that alcohol delivery services may help mitigate drunk driving.^[10]

As you consider SB 166, we hope you will evaluate all these important facts. This legislation will allow adult consumers to have more choices for obtaining alcohol from restaurants and taverns, and will allow these establishments to reach more customers in the face of ongoing labor shortages. In addition, it will help these businesses have the opportunity to increase their revenues. Most importantly, data shows that it likely won’t result in an increase in negative consequences such as drunk driving or underage drinking, and in fact could actually facilitate a reduction in drunk driving in the state. For these reasons, I respectfully request that you sign SB 166 into law.

Sincerely,

Robert Melvin
Senior Manager, Government Affairs for the Northeast Region
R Street Institute
rmelvin@rstreet.org 

CC:  Jonathan Starkey, Chief of Staff, Office of Governor John Carney

        Danielle Gibbs, Chief Legal Counsel, Office of Governor John Carney

        Jon Sheehan, Chief of Policy and Senior Advisor to the Governor, Office of Governor John Carney

[1] Austin Jenkins, Pluribus News, “Raising the bar: States serve up permanent to-go alcohol laws,” July 24, 2024: https://pluribusnews.com/news-and-events/raising-the-bar-states-serve-up-permanent-to-go-alcohol-laws/?utm_medium=email&utm_campaign=AM 72424&utm_content=AM72424+CID_02de9ab30507b8053d2606123e9000aa&utm_source=Email marketing software&utm_term=Pluribus News

[2] Johnny Perez-Gonzalez, WHYY PBS Affiliate, “Delaware economy faces challenge with more job openings than workers seeking employment,” April 8, 2024: https://whyy.org/articles/delaware-employment-job-openings-workers-economy-challenges/

[3] Diana Donovan, DoorDash, “Alcohol Pickup & Delivery Consumer Trends for 2023,” May 23, 2023: https://get.doordash.com/en-us/blog/top-alcohol-trends-post-covid 

[4] National Restaurant Association, “On The Menu: Trends in On- and Off-Premises Beverage Alcohol,” June 7, 2023: https://go.restaurant.org/rs/078-ZLA-461/images/National-Restaurant-Association-Alcohol-Trends.pdf

[5] National Restaurant Association, “Alcohol beverage services overflowing with potential to draw customers, drive sales,” June 7, 2023: https://restaurant.org/education-and-resources/resource-library/alcohol-beverage-services-overflowing-with-potential-to-draw-customers-drive-sales/ 

[6] C. Jarrett Dieterle, R Street Institute, “Alcohol Delivery and Underage Drinking: A COVID-19 Case Study,” July 2023: https://www.rstreet.org/wp-content/uploads/2023/07/policy-short-no-128-R5-1.pdf 

[7] C. Jarrett Dieterle, R Street Institute, “The Data Is In: Alcohol Delivery and Consumption During COVID-19,” Apr. 2023: https://www.rstreet.org/wp-content/uploads/2023/04/policy-short-no-127-R3-1.pdf 

[8] C. Jarrett Dieterle, R Street Institute, “The Facts About To-Go Alcohol and Drunk Driving: The COVID-19 Experience,” June 2022. https://www.rstreet.org/wp-content/uploads/2022/06/ULTIMATE_policy-short-no-114-REVD.pdf

[9] Monitech Ignition Interlock Systems, “Drizly App May Reduce Drunk Driving,” June 20, 2014: https://monitechnc.com/drizly-app-reduce-drunk-driving/ 

[10] Heather Reinblatt, Circuit, “American’s shared their experiences with alcohol delivery services,” April 28, 2022: https://getcircuit.com/route-planner/blog/alcohol-deliveries-pros-and-cons