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House committee delays decision on HB 108, a bill to allow direct shipping of beer and spirits
Summary
The House Committee on Consumer Protection and Commerce deferred action on HB 108 to obtain more detail about reciprocity and tax/compliance safeguards for direct-to-consumer shipping of beer and distilled spirits. Supporters said the change would help small Hawaii producers; opponents warned of enforcement and tax-collection gaps.
The House Committee on Consumer Protection and Commerce on Jan. 29 deferred decision-making on House Bill 108, which would allow manufacturers to ship beer and distilled spirits directly to consumers in Hawaii.
Supporters from Hawaii breweries and distilleries told the committee HB 108 is needed to modernize rules and expand markets for local producers. Bob Gunter of Kōloa Rum Company said the craft-distilling sector has grown from a few dozen producers to thousands nationally and that "the laws governing our industry have yet to catch up with this explosive growth." Garrett, testifying for Maui Brewing Company, said the existing wine direct-shipment system shows safeguards work and that DTC shipping "has been handled this way for 24 years since wine's been allowed to ship." Naya Halani Breeland, president and co‑founder of Ola Brew, said permitting DTC shipping would expand export opportunities for Hawaii agricultural products and boost state tax receipts.
Opponents and some committee members focused questions on enforcement, collection of excise and sales taxes, and reciprocity with other states. Rick Collins, director of the Hawaii Alcohol Policy Alliance (a program of the Hawaii Public Health Institute), said liquor commissions have not done compliance checks on shipments and warned that county commissions could lack capacity to reconcile carrier reports and verify taxes. Collins cited a Vermont audit, saying it found reconciliation problems in that state's program.
Committee members pressed proponents on reciprocity — whether permitting mainland producers to ship here would automatically allow Hawaii producers to ship to those states — and on common-carrier reporting to allow tax and compliance reconciliation. Garrett of Maui Brewing said FedEx and UPS already provide monthly reports to liquor commissions in many cases, and proponents said amendments or clarifying language could be drafted. The chair said she was inclined to defer the measure one day to allow proponents to return with details on reciprocity and possible language requiring reciprocity as a condition of licensing.
Action: the committee postponed formal decision-making on HB 108 for one day, to the next agenda, to receive further information on reciprocity and compliance provisions.
What happens next: proponents and stakeholders were asked to provide details on existing reciprocity arrangements and on common-carrier reporting mechanisms before the committee reconvenes.
