Government, Law, and Retail

Data shows one-third of alcohol is shipped illegally

Michigan Beer and Wine Wholesalers Association estimates about 130,000 bottles of wine arrived in state unlawfully.

September 6, 2019
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Illegal Wine
Unlicensed out-of-state retailers illegally shipping alcohol into Michigan are robbing the state of tax revenue, according to the MBWWA. Courtesy iStock

Nearly one-third of every bottle of alcohol shipped into Michigan between January and March of this year was shipped illegally, according to data compiled by the Michigan Beer and Wine Wholesalers Association.

In total, 408,397 bottles of alcohol were shipped into Michigan during the first quarter of 2019. Of that number, the MBWWA estimated nearly 130,000 bottles of wine were illegally shipped into the state during the same period.

“The latest quarterly shipping report shows no signs of the disturbing trend of retailers skirting state law and shipping wine illegally into Michigan letting up,” said Spencer Nevins, president of the Michigan Beer and Wine Wholesalers Association. “When unlicensed out-of-state retailers illegally ship alcohol into Michigan, they are robbing our state of much-needed tax revenue and thumbing their nose at the mom-and-pop retailers that support our local communities.”

Last year, the MBWWA began compiling data on illegal wine shipments flowing into Michigan. Data from the first and third quarters were unavailable, but data from the second and fourth quarters showed more than a million bottles of alcohol were shipped into Michigan in just six months, and at least 300,000 of those bottles were wine illegally shipped from out-of-state retailers.

The MBWWA counted 496,376 bottles of alcohol that were shipped into Michigan from April 1, 2018-June 30, 2018. Of those, 245,289 were bottles of wine shipped by licensed direct shippers, and an estimated 150,000 were illegal wine shipments costing the state approximately $25,000 in taxes, an earlier Business Journal report noted.

“As more and more data become available each quarter, one thing is clear: Out-of-state retailers show no regard for Michigan law,” Nevins said. “We encourage the Michigan Liquor Control Commission to investigate each and every complaint, and continue cracking down on these bad actors.”

According to last year’s MBWWA report, e-commerce presents an avenue by which out-of-state distributors often subvert the state’s liquor laws. 

The International Wines and Spirits Record’s 2018 e-commerce report revealed wine purchases comprise between 60%-70% of online alcoholic beverage transactions.

MBWWA data was compiled using reports from the Michigan Liquor Control Commission and excise tax data from the state of Michigan.

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