Black Market Online Beer Sales Rise in NYC

Years ago, beer drinkers seeking a more refined experience were fairly limited in their choices. 

Today, however, the popularity of craft breweries has meant that the options of ales and lagers and the like are seemingly endless. In some cases, though, that’s only true if you’re willing to pay top dollar Black Market Online Beer Sales.

That’s because in many areas of the country, some of the most popular brews can’t be legally shipped from state-to-state. That has prompted consumers to troll sites such as Craigslist looking for the opportunity to buy it in bulk, only to turn around and sell it – for a hefty profit.

Of course, such online sales open the brewery and the seller to sanctions under federal business statutes and state liquor laws, as it amounts to a virtual illegal store. Federal law bars the sale of alcohol online without a license.

Some of what is happening is characterized as “trading” among avid beer enthusiasts. That is, when there is a rare release of a certain kind of top-rated brew, buyers will snap it up in bulk and then turn around and ship the beer to others, sometimes for little to no cost. However, in other cases, these third parties sometimes mark up the price by  300 to 400 percent or more.

For example, the operator of a brewing company in Northern California reported that its most popular brew sells for $5 per bottle. Online, its being sold for anywhere from $15 to $50 per bottle. A discontinued, special edition brew sold online  for $25 a bottle. It’s been spotted selling at an online auction for $700.

“People are running beer stores on eBay,” the operator was quoted as saying, noting that the sellers of such products may not ensure the quality of the product if it was improperly stored or shipped – something that could significantly diminish the brand’s reputation.

Among the steps that these online sellers are skipping:

  • Acquiring a liquor license;
  • Acquiring a business license;
  • Paying taxes on sales and property;
  • Quality control measures to ensure responsible selling practices (such as avoiding sales to minors).

There is also concern that these kind Online Beer Sales may open brewers to the possibility of liability for DRAM shop law violations, should someone suffer injury as a result of a person driving drunk after consuming their product, purchased illegally online through a third-party seller.

When eBay was contacted by industry insiders about the practices, the online auctioneer promised it would be committed to ending such sales where feasible. The website operator notes that its long-standing policy bars the sale or trade of alcohol, even in cases where it is considered a collectible item.

In New York, there is perhaps less of a reason to engage in these type of practices than in other states. That’s because earlier this year, New York state legislators amended an old law that barred direct sales by microbreweries, requiring that any samples be free. Now, small brewers can sell up to 5,000 barrels at their in-house bars and beer gardens.

Plus, brew pubs, which previously used to be restricted to sales only at the brew pub, are now allowed to sell to distributors.

For this reason, start-up costs were astronomical because production levels had to hit a certain level before microbreweries could truly begin to see a profit. Not anymore.

The change in the law has meant the fruit of these microbrews can be more widely experienced by a larger number of people, meaning they are less likely to go online in search of a more enriching  beer experience.

Still, more microbrew offerings may mean that more opportunists will seek the chance to make a few bucks when there are limited edition sales.

The Wright Law Firm is a business law firm located in Midtown Manhattan. Call (212) 619-1500 for a confidential consultation.

Additional Resources:

Craze for Coveted Craft Brews Creates Black Market of Beer, Dec. 6, 2013, By Lisa Rathke, Associated Press

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