Michigan Beer Laws: Online Purchases Explained

Buying alcohol online is largely regulated at the state level, and while some states forbid the direct shipment of alcohol, others allow it under certain conditions. Michigan is one of the largest control markets in the United States, and its alcohol system is regulated by the Michigan Liquor Control Commission (MLCC). So, can you buy beer over the internet in Michigan?

Michigan's three-tier alcohol distribution system

The three tiers are:

• Importers or producers: This tier includes brewers, winemakers, distillers, and importers. They sell their products to wholesale distributors.
• Distributors: They purchase products from importers or producers and then sell them to retailers.
• Retailers: These are the only entities allowed to sell alcohol to consumers. They buy from distributors and sell to consumers through on-premise or off-premise channels.

Michigan's system is slightly different from other states, as it is an alcoholic beverage control state. This means that while the three-tier system is in place, the state government controls the distribution tier for distilled beverages. The state has a monopoly on the wholesale sales of spirits and sets a minimum price for all alcohol sales.

The three-tier system in Michigan offers several benefits. It helps small craft breweries and wineries access retailers, ensuring their products are available to consumers. It also prevents large multinational brewers from monopolizing the market, allowing innovative craft brewers to thrive. Additionally, the system provides safeguards against alcohol abuse, drunk driving, underage drinking, and binge drinking. It ensures product freshness and helps maintain product quality and safety.

The state's alcohol industry has a significant economic impact, generating over $15 billion annually and employing nearly 5,000 people in good-paying jobs.

Alcohol shipping regulations

Michigan is a control state, meaning that the Michigan Liquor Control Commission (MLCC) regulates its alcohol system, balancing tradition with modern market demands. The MLCC oversees sales, which exceeded $2.4 billion in 2023, and Michigan has a population of 7.5 million legal drinking-age residents.

The state controls spirits on a wholesale level but allows authorised distribution agents (ADAs) to handle beer and wine to retailers. Beer and wine can be purchased online and delivered to consumers' homes, but only by retailers with a specially designated merchant (SDM) license. These retailers may use their own employees, common carriers, or third-party delivery services to deliver beer and wine. However, direct-to-consumer shipping is only permitted for wine, and the seller must have a DTC permit.

There are strict regulations surrounding the sale of alcohol in Michigan. For example, it is forbidden to sell alcohol to people under 21 or intoxicated individuals, and retailers cannot sponsor contests that involve alcohol or offer it as a prize. Additionally, the state has a monopoly on the wholesale sales of distilled spirits, and there is a minimum price mandate for all alcohol sales.

When it comes to shipping alcohol, Michigan has specific rules in place. The MLCC requires that manufacturers and wholesalers file a schedule of cash prices to the retail licensee for all brands of case and keg beer in their market area. For wine, mixed wine drinks, and mixed spirit drinks, manufacturers and wholesalers must submit a schedule of net cash prices to retail licensees, with any price changes filed before the effective date. These prices must be maintained for two weeks after the effective date.

It is important to note that producers of spirits are not allowed to ship directly to consumers. Small distillers with an annual production cap of 60,000 gallons may sell brands manufactured on their licensed premises for off-premises consumption at a posted price. They can also sell for off-premises consumption at locations other than their licensed premises, but only in limited situations coinciding with a tasting.

For wine, direct shippers with the appropriate license can sell, deliver, or import up to 1,500 9-liter cases or 13,500 liters total to Michigan consumers annually. These direct shippers must comply with various requirements, including verifying the age of the individual placing the order, stamping the outside of the shipping container with a "Contains Alcohol" label, and placing a label with the name and address of the individual placing the order on the shipping container's top panel.

Overall, Michigan has a complex system of alcohol regulations, and it is important for businesses and consumers to be aware of these rules to ensure compliance with the law.

Michigan's alcohol excise tax

Michigan enforces a strict excise tax on alcohol. The state has a monopoly on the wholesale sales of distilled spirits, dictating the market price, and no additional tax is charged. However, the state does levy excise taxes on beer and wine.

The beer excise tax in Michigan is $0.20 per gallon, which is the 29th highest rate in the country. The state's wine excise tax is $0.51 per gallon, the 35th highest in the US. Michigan also taxes champagne at a rate of $0.51 per gallon, the 37th highest in the nation.

In contrast, the state's excise tax on distilled spirits is $11.95 per gallon, making it the 10th highest in the country. This disparity has been criticised for disproportionately affecting small local distilleries, which struggle to compete with national brands that can offset higher costs in Michigan with greater profits in other states.

Alcohol sales hours and locations

Michigan has a thriving and distinctive beverage alcohol market, with a unique blend of Midwestern hospitality and industrial grit. The state has a mix of local craft producers and national brands, offering an impressive array of choices.

In Michigan, alcohol can be purchased on-premise and off-premise from 7 am to 2 am, Monday to Saturday, and from noon to 2 am on Sundays. Retailers can obtain a special license to sell alcohol from 7 am on Sundays.

Off-premise alcohol is sold at grocery stores, convenience stores, and gas stations with the appropriate licenses. On-premise alcohol is sold at restaurants, bars, clubs, and hotels.

Michigan is a control state, meaning it controls spirits on a wholesale level, but allows authorized distribution agents (ADAs) to handle beer and wine distribution to retailers. The state does not own any retail outlets.

The state has numerous licensed distillers, bottlers, breweries, and wineries. Alcohol sales are overseen by the Michigan Liquor Control Commission (MLCC), which also regulates the labeling and pricing of alcoholic beverages.

Michigan allows direct-to-consumer shipping only for wine, and that too with a DTC permit. The state prohibits the sale of alcohol after 9 pm on December 24 and all of December 25. On January 1, on-premise alcohol sales are allowed until 4 am.

Grocery and convenience stores, including Walmart, Target, and CVS, can sell beer and wine during legal hours. Gas stations can also sell beer, wine, and liquor with an alcohol sales permit.

Alcohol sales to minors

In Michigan, it is illegal to sell or furnish alcohol to a minor. The state's liquor laws forbid the sale of alcohol to anyone under the age of 21, and violations are treated as misdemeanours. The law applies to both licensed sellers and non-licensed individuals. Those found guilty may be subject to fines, imprisonment, or both.

Retail licensees and their clerks, agents, or employees who violate this law may be ordered to pay a civil fine of up to $100. For a first violation, a person who is not a retail licensee or employee may face imprisonment for up to 60 days and/or a fine of up to $2,500. Subsequent violations may result in imprisonment of up to 90 days, a fine of up to $2,500, and community service.

To prevent the sale of alcohol to minors, Michigan law requires sellers to make a diligent inquiry into the age of the buyer. This includes examining official identification documents, such as a driver's license or military ID, or using a secure identity verification device. Sellers are advised to err on the side of caution and refrain from making a sale if they are not convinced that the buyer is 21 or older.

Additionally, Michigan law prohibits retailers from sponsoring contests that involve alcohol or offering it as a prize. Alcohol cannot be sold after 9 PM on December 24 and all of December 25. On January 1, on-premise alcohol sales are permitted until 4 AM.

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