Schumer pushing for legislation to end prohibition-era restriction

Dating back to the Prohibition era, there is laws which prevent the shipment of beer, wine and spirits to consumers by the United States Postal Service. By allowing alcohol to be shipped by USPS, over $220 million in revenue would be brought to the USPS which employs over 12,000 in Upstate New York.

U.S. Senator Charles Schumer has recently launched a plan to end the more than 100-year-old law putting the USPS at a disadvantage with FedEx and UPS, which are allowed to ship alcohol. This ban prevents the struggling agency from earning hundreds of millions of dollars in potential revenue and limits growth opportunities for local craft brewers and wine producers, including 22 wineries and breweries in Chautauqua and Cattaraugus counties.

Congress is expected to take up a Postal Reform bill in the near future.

Through that legislation Congress would have the opportunity to overturn the 1909 law that bans shipping any “spirituous, vinous, malted, fermented or other intoxicating liquors of any kind” by mail. Schumer noted that this new source of revenue for the USPS is particularly important, given that in 2012, the agency lost $16 billion and twice defaulted on payments owed to the federal government to pre-fund retiree health care benefits totaling $11 billion. The agency has also exhausted a $15 billion line of credit from the U.S. Treasury. The agency continues to deal with declines in the volume of first-class mail, the kind of mail most consumers use and its biggest revenue driver, as more Americans move to electronic billing and e-mailing.

Schumer argued the provision is a win-win-win for USPS, the fast growing Upstate wine, craft beer, and spirits industry, and for consumers far and wide. Schumer explained that many Upstate wineries, breweries and distilleries would benefit from the service, because it will provide a flat rate shipping option to send their products across New York and the country, either from those customers that visit their site or that want to order their product online. Whether these beverage producers already ship their products using FedEx or UPS, or would be shipping their product for the first time, USPS’s ability to do this flat rate shipping would add new options for businesses and create pricing competition for shipping. Schumer said the estimated $225 million in increased annual revenue for USPS would be massively beneficial to the agency and the 12,090 USPS jobs in Upstate New York which depend on the agency’s viability.

U.S. Postmaster General Patrick Donahoe has supported the provision as have Senators Carper and Coburn, who are respectively the Chairman and Ranking Member of the Senate Committee on Homeland Security and Governmental Affairs, which has jurisdiction over the Postal Service. Schumer said his push would not compel every producer to offer USPS delivery, but it would finally give them the option to offer potentially cheaper USPS shipping service if they have the demand and the staff to accommodate. Schumer also emphasized that like FedEx and UPS, USPS would enforce the National Minimum Age Drinking Act, and Schumer said he would work to ensure that strong regulations remain in place to prevent minors from accessing alcohol. Schumer noted that all the federal and State legal and regulatory frameworks for direct-to-consumer shipping are already in place, so would simply need to be applied to USPS rather than reinvented.

“Allowing the U.S. Postal Service to ship beer, wine and liquor from Upstate New York breweries and wineries, like other delivery firms already do, is a win-win. It will provide new business opportunity to this growing industry, all while helping to keep the U.S. Postal Service a viable agency, without cutting services,” said Schumer. “Not only does this level the playing field for USPS and provide a much-needed source of revenue for the struggling agency – and the Upstate New York facilities and thousands of employees that rely on it – this change also provides a new, flat-rate option for wine and beer producers to ship their product to customers in New York and the entire country. Whether it’s a business looking for a different shipping option than FedEx and UPS, or a smaller brewery or winery that wants to start getting their product into more customers’ homes, overhauling this outdated prohibition-era rule makes smart business sense and will boost New York businesses. I’ll fight for it to be part of any U.S. Postal Service bill in the coming months.”

Not only will the new bill help the USPS, the law will help wineries throughout the state. The President of the New York Wine and Grape Foundation Jim Trezise said most of the state’s 350 wineries are small and do not access to national distribution. He said it was not until 2005 that New York wineries even received coverage in national magazines since state wines were not available.

“Allowing the United States Postal Service to join FedEx, UPS and other common carriers would create healthy alternatives and price competition, give wineries another option, provide consumers with more choices, and generate new revenues for the USPS. We greatly appreciate Senator Schumer’s initiative in support of our industry,” Trezise said.

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