When the California Department of Alcohol Beverage Control (ABC) issued an advisory on “unlicensed third-party service providers” back in June 2009, it killed a lot of deals that were pending at the time. It’s considered a key reason Amazon.com’s foray into the wine space ended before it really began. It sent a chill out to operators of third-party websites used in marketing wine. ABC said it was concerned because “unlicensed third parties" were "exercising privileges which only extend to retail licensees.”
Since then ABC has a new leader and industry working groups have been meeting to discuss the issue.
I was expecting this thing to drag out longer - the wheels of the ABC turn slowly - but the ABC is making a big announcement today, coinciding with the NCSLA conference in San Francisco.
Will Amazon get back into the game now?
A list of principles to guide third-party providers and wineries will be helpful because when you’re a licensee and do something that’s not within the boundaries of statute and regulation, you’re potentially susceptible to a fine. Third-party providers will have more clarity on what they can do and wineries will be on the hook if the rules aren't followed.
The order is expected to say that third-party marketers may accept consumer credit card information and may debit the card subject to the licensees acceptance of the order as long as funds are deposited to an account the licensee controls.
It could cause folks to scramble because it’s not going to be easy to comply with. Licensees will need to control payment, compensation and fulfillment.