Hawaii’s Liquor Laws: A Retailer’s Explanation

At SWAM, a very common question customers ask “Can you bring in this wine or this beer?”  If I’m unfamiliar with the brand, then I would answer, “Did you find it in Hawaii?”  Normally, their answer is no.  Why can’t retailers buy direct from the winery/brewery/distillery?  If it’s a guaranteed sale and there is a consumer demand, then why not?  The answer is Hawaii follows the Three Tier System of Alcohol Distribution.   All businesses that have a Hawaii State Liquor License must abide by the law that requires  purchasing alcohol through a distributor in state.  And the distributor cannot sell directly to a consumer.

Cherry picking favorites from a brand’s portfolio is convenient for the consumer but not for the industry.  One example is many customers ask for Fat Tire Beer.  Fat Tire is one out of the 31 beers New Belgium Brewery produces.   In a business perspective, New Belgium is not going to send the distributor just the Fat Tire to sell, it’s the other beers that come with the package.   Same with wine,  a distributor commits to the winery on how many different varietals to carry and secures business placements to support the brand.  Hawaii’s geographical situation is a consideration towards cost.  Shipping product to Hawaii is expensive when factoring in the fuel surcharge, cost of refrigerated containers, and labor.  A distributor decides if it’s worth it.

There are exceptions to the law for example, wineries are allowed to sell their wines directly to the consumer.  However, don’t expect to buy the wines from the winery at a wholesale price.  A winery/brewery/distillery will create a private label for retailers and restaurants but the product still needs to be cleared through a distributor.  Why is it that only certain wineries ship to individuals in Hawaii?  In 2006, the state passed a bill regulating Direct Shipment of Wine by Wineries.  In a nutshell, if a winery wants to sell to an individual, they are required to obtain an annual permit and pay Hawaii’s General Excise Tax.  Thus, there are wineries that don’t want to pay for a permit and Hawaii’s taxes.  The winery decides if it’s worth it.

Regardless of all these laws and regulations, it’s in place to protect businesses and insure that taxes are being paid to the State of Hawaii.  It may frustrate the consumer but if having that wine or that beer is a must, there’s always an internet store or space in a visiting relative’s luggage.

 

Category : Blog Posted on July 20, 2011

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