Policy Studies Competition Policy

How to Regulate Alcohol Delivery

by C. Jarrett Dieterle

Feb 13, 2024

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Authors

C. Jarrett Dieterle

Resident Senior Fellow, Competition Policy

Key Points

Alcohol delivery took off with the advent of the COVID-19 pandemic, with the majority of states passing rules that allow restaurants and other retailers to deliver alcohol directly to consumers.

Despite the rapid expansion and popularity of alcohol delivery, there are still those who oppose it or want it to be regulated with a punitive hand. While opponents of delivery have yet to succeed in repealing any alcohol delivery laws that came about during and after COVID-19, delivery can still be severely handicapped and even made non-viable if it is forced to labor under burdensome regulatory models that create more harm than good.

Debates continue around topics like delivery permits, insurance, and driver training when it comes to alcohol delivery. This paper develops a set of Best Practices for each of these issues and more, laying the groundwork for a regulatory system that can protect public health and safety while encouraging innovation.

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Executive Summary

Alcohol delivery took off with the advent of the COVID-19 pandemic. The majority of states passed rules that allowed restaurants and other retailers to deliver alcohol directly to consumers. These rules came first in the form of emergency orders, then via legislation. Now that delivery alcohol is firmly entrenched across the country, state lawmakers and regulators are continuing to assess potential options for how to best regulate the delivery of these beverages.

While alcohol has long been regulated at the state and local level, the on- demand delivery of alcoholic beverages—often known as the “fourth tier” in the alcohol-distribution system—does not have established regulatory practices. As with any new technology or legal change, finding the right mix of governing principles can be the difference between a flourishing marketplace and one bogged down in unnecessary and counterproductive red tape.

This paper reviews the most salient topics in this regulatory arena— including delivery licenses and permits, ID verification, overserving, driver training and qualifications, insurance, and hours of sale—to provide a set of recommendations for how best to regulate alcohol delivery. These governing principles can provide a framework for industry growth, while protecting public health and safety—goals that need not be mutually exclusive.

Read the rest of the report here.