On Monday, February 8, 2021, Tennessee Alcoholic Beverage Commission Director Russell Thomas released the below memorandum, titled Retail Operation Requirement for Retail Package Stores. The memo clarifies a bit of an open question faced by the TABC and industry members in 2020/2021, which is whether a industry member which purchases, stores, and sells beverage alcohol products online to individuals inside and outside of the state of Tennessee can do so with a TABC issued retail package store license while not operating an actual, traditional retail package store brick and mortar retail location. In its memo, Director Thomas explains how Tennessee law requires a retail package store to have a physical, brick and mortar retail location. He also provides a brief history of the state of the law in Tennessee pre and post Tennessee’s 2014 wine in grocery stores legislation (“WIGS”), as well as a brief summary of when and how retail package store licensees can deliver product to locations outside of the licensed retail liquor store premises.
One issue that is not addressed in Director Thomas’s memorandum, but is a question I am asked several times a year with increasing frequency, is whether Tennessee retail liquor stores can sell product online to out of state consumers provided that they do in fact operate a fully functioning storefront. Based upon my reading and interpretation of current Tennessee state law governing retail package liquor stores, I do not believe that Tennessee state law allows a retail liquor store to advertise, solicit orders from consumers in other states, and ship beverage alcohol products out of state. First, Tennessee law requires that the exchange of beverage alcohol from the retail liquor store to a consumer happen in a face to face transaction. The product order does not have to take place in a face to face transaction (orders can be placed through third-parties such as Drizly, DoorDash, or via phone or online), but the transfer of the product must take place in a face to face transaction with an ID check taking place at the time of transfer. In addition, beverage alcohol products can only be delivered to a consumer via a transaction taking place on the premises of the retail package store, or in cases of an online, third-party site, or phone order, by delivery to the consumer by an employee of the retail package store. To boot, retail package stores can only deliver products to consumers within a 100 mile radius of the store’s location.
Last modified: February 12, 2021