Senate committee advances bill to allow some breweries, distilleries to ship directly to consumers

The Hawaii Senate Committee on Commerce and Consumer Protection on Thursday moved HB 108 HD2, a measure that would allow certain licensees to ship beer and distilled spirits directly to consumers and require county liquor commissions to adopt implementing rules.

Supporters — mostly small breweries and distilleries — told the committee the change would help the state’s smallest producers expand sales, ship limited-edition products to visitors and mainland customers, and keep specialty, small-batch items moving when wholesalers will not carry them. “HB 108 will actually benefit our smallest and most fragile producers in the state the most,” a representative from Lanikai Brewing told the committee, saying many in-state producers do not have wholesale agreements. Sam DeWitt, State Government Affairs Director for the Brewers Association, said direct-to-consumer shipping “is an idea whose time has come” and that it would supplement, not replace, the three-tier wholesale system.

Several distillers gave examples of lost sales because they cannot ship to customers whose luggage is full or who live off-island. A representative from Koloa Rum Company described limited-edition releases tied to Iolani Palace and University of Hawaii athletics that drew mainland interest but could not be shipped under current law. Pohana Rum/Manulele Distillers and other producers testified that the change would help island farm-to-bottle operations reach neighbor-island and mainland customers.

Opponents included the Hawaii Food Industry Association and the Hawaii Liquor Wholesalers Association, which warned the measure could increase access to alcohol by minors and cut into wholesaler jobs and tax collection. Kenneth Fu, secretary of the Hawaii Liquor Wholesalers Association, testified that allowing out-of-state manufacturers to ship directly to Hawaii households “is gonna create all kinds of problems with minor access” and “problems with tax revenue.” Supporters disputed the claims, citing age-verification procedures used by common carriers and experience with wine direct-to-consumer shipping for decades.

Committee members asked supporters about enforcement, tax reporting, and whether the economics would permit mainland manufacturers to undercut local retailers. Testimony noted common carriers’ age-verification systems and existing county reporting forms for direct-shipment wine as models for compliance and tax collection. Several testifiers said the measure would primarily support higher-priced, limited-run products rather than cheap six-packs delivered to doorsteps.

The committee recommended passing the bill with amendments that defer the effective date to July 1, 2050. The recorded votes in committee discussion included the chair voting aye, Senators McKelvey and Richards recorded as yes, and Senator DeBonge recorded as no; the vice chair registered reservations on the record. The measure was adopted by the committee and will move forward with the stated amendment.

Supporters said the bill is intended to preserve the three-tier system while providing an alternate sales channel for small producers that currently lack wholesale distribution. Opponents said the state should address enforcement, tax collection, and the potential for out-of-state shipments before changing the law.

The committee heard more than a dozen live testifiers and received written testimony from dozens of organizations and individuals on both sides of the measure. No formal amendments to the bill text beyond the effective-date deferral were recorded at the committee decision.

Looking ahead, if the bill becomes law it will require county liquor commissions to adopt rules to implement direct-shipping, and produce-level and carrier-level controls for age verification and tax remittance will be key to enforcement. The committee noted written testimony and said it expects implementing rulemaking to flesh out operational details.