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Massachusetts Curbs Online Alcohol Sales

December 22, 2004
The state of Massachusetts is cracking down on underage alcohol purchases over the Internet, bringing three out-of-state alcohol retailers to heel after the businesses were nailed in a sting operation. Attorney General Tom Reilly says the three firms have agreed no longer accept illegal orders from Massachusetts consumers, including minors, under the terms of three separate consent judgments.

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The settlements resolve allegations outlined in lawsuits Reilly filed in June. The three online retailers named in the consent judgments are Sherry-Lehmann Wines and Spirits of New York City, which operates www.sherrylehmann.com, Wineglobe of San Mateo, California, which operates www.wineglobe.com, and Clubs of America of Lakemoor, Illinois, which operates www.greatclubs.com.

"Buyers can use the Internet to circumvent state laws that protect against underage drinking, and these alcohol retailers took no meaningful steps to check identification of their online customers' identification," Reilly said. "These judgments close that loophole and demand compliance with our state's alcohol licensing statutes."

The judgments prohibit these companies from selling alcohol to Massachusetts consumers unless they first obtain licenses from the ABCC, as required by the Liquor Control Act. The companies also must place a notice on their website indicating that they do not sell or ship to Massachusetts, and must employ a mechanism to automatically reject orders from Massachusetts.

Each of the three companies also will pay a $5,000 civil penalty to the Commonwealth under the Consumer Protection Act.

These cases grew out of a joint investigation by Reilly and the ABCC into online alcohol sales in Massachusetts. The stings, conducted in 2002 and 2004, found that seven companies sold alcohol to underage buyers via the Internet and three shipping companies delivered shipments to underage buyers in violation of state law. Reilly referred three of the Internet sellers that shipped alcohol to individuals under the age of 21 and three shipping companies, all of which held a Massachusetts retailer or transporter license, to the ABCC. The ABCC handled those matters by administrative enforcement.

Reilly and the ABCC said they initiated an investigation into online alcohol to address the pervasive problem of underage drinking. All parties engaged in the alcohol distribution business in Massachusetts must be licensed by the ABCC as either a manufacturer, wholesaler, or retailer. In addition to selling to students under 21 years old, all four online sellers named in Reilly's lawsuits were accused of selling alcohol in Massachusetts without a license from the ABCC, a violation of the Massachusetts Liquor Control Act.

Reilly is continuing to pursue a lawsuit against a fourth online seller, Queen Anne Wine and Spirits Emporium of Teaneck, New Jersey, which operates www.queenannewine.com.

The U.S. Supreme Court recently heard oral arguments in a case challenging the liquor laws of Michigan and New York, concerning whether those laws unconstitutionally discriminate against out-of-state sellers. Unless Massachusetts liquor laws were to be altered by the Massachusetts Legislature or the Supreme Court, however, Massachusetts law plainly prohibits unlicensed sellers, whether out-of-state or in-state, from selling alcohol to Massachusetts consumers. All states prohibit alcohol sales to persons under the age of 21.

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September 7 2008

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