Page 30 - Grapevine May-June 2020
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In The Winery
Are More Audits Coming For the
Direct-to-Consumer Market?
By: Alex Koral, J.D., Senior Regulatory Counsel with Sovos ShipCompliant
L ast fall, the state of Texas began the pro- all permit holders to ensure they are in compliance
cess of auditing all of their direct-to-con-
with the state’s laws.
sumer (DtC) wine shipping licensees, the
biggest such audit in the history of this market. At the heart of this heightened regulatory scrutiny
by Texas is the dramatic rise in popularity of the
While all states reserve the right to audit their DtC channel in recent years. Many wine drinkers
licensees, the scope of this mass audit surprised have come to appreciate the DtC wine shipping
many. More than 1,600 wineries possess permits market for bringing a direct connection to their
to ship directly to Texas customers. Many have favorite brands and greater access to wine clubs
already received a notice from the Texas Alcoholic and highly-allocated labels, creating a $3 billion
Beverage Commission (TABC) requesting to review national market.
their records. This time-consuming process began
in September 2019, when the first round of notices The beverage alcohol industry has long been one
were sent, and will continue as the TABC reviews of the most regulated enterprises in the country, so
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