SCHUMER FIGHTS FOR END OF PROHIBITION-ERA RESTRICTION ON SHIPPING BEER, WINE, SPIRITS VIA U.S. POSTAL SERVICE PLAN WOULD ADD ESTIMATED $225 MILLION IN NEW ANNUAL REVENUE FOR STRUGGLING USPS PROVIDE ECONOMIC BOOST FOR UPSTATE NY BEVERAGE BUSINESSES

Today, U.S. Senator Charles E. Schumer launched his plan to end the prohibitionera law that prevents the United States Postal Service (USPS) from delivering beer, wine and spirits to consumers, which puts them at a disadvantage with FedEx and UPS. 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.  Schumer will fight to undo the outofdate restriction currently imposed on USPS via postal reform legislation expected to be considered in the coming months. Schumer argued that the provision is a winwinwin for USPS, the fastgrowing Upstate wine, craft beer, and spiritsindustry, 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 flatrate 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 flatrate shipping would add new options for businesses and create pricing competition for shipping. Schumer said that 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. 

On the call, joined by the President of the New York Wine & Grape Foundation Jim Trezise, Schumer broke down regional data on the number of postal employees and the breweries and wineries that stand to benefit from this provision. U.S. Postmaster General Patrick Donahoe has supported such a 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 that 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.

 

"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 winwin: 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 Senator Schumer. "Not only does this level the playing field for USPS and provide a muchneeded 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, flatrate 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 prohibitionera 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."

 

"Shipping wines directly to consumers is important for the New York wine industry, since most of the State's 350 wineries are relatively small and without national distribution," said President of the New York Wine & Grape Foundation Jim Trezise. "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.  Directtoconsumer wine shipping has another major benefit for New York wineries: attracting attention from national wine media.  Until 2005 when direct shipment was allowed, national wine magazines didn't cover New York wines because most of their readers couldn't get them, but the situation has now changed, with greater availability leading to greater press coverage.  We greatly appreciate Senator Schumer's initiative in support of our industry."

 

Schumer today launched his support of a provision in any upcoming Postal Reform bill to allow the Postal Service to make it legal to use the mail to ship beer, wine and liquor - which competitors such as FedEx and UPS are already able to do. Schumer said that this is critical to level the playing field for the United States Postal Service, given that their competitors can already ship beer, wine and liquor from licensed sellers to customers. Schumer noted that this change in law would be a classic winwin change: it would be beneficial to the U.S. Postal Service by creating a new source of revenue and helping to create job security for the thousands of postal workers in Upstate New York, and would help boost business for craft brewers, wine producers and distilleries that could take advantage of the USPS option, which is expected to offer flatrate shipping across New York and the country. This would be competitive with, if not less expensive than shipping options via FedEx and UPS, and would create additional shipping competition that could subsequently lower prices. Schumer noted that all the federal and State legal and regulatory frameworks for directtoconsumer shipping are already in place, so would simply need to be applied to USPS rather than reinvented. 

 

Congress is expected to take up a Postal Reform bill in the near future, and through that legislation Congress would have the opportunity to overturn law created in 1909 that bans shipping any "spirituous, vinous, malted, fermented or other intoxicating liquors of any kind" by mail. Schumer said that the U.S. Postal Service anticipates this change would bring in an estimated annual revenue of as much as $225 million. Schumer noted that this new source of revenue is particularly important, given that in 2012, the agency lost $16 billion and twice defaulted on payments owed to the federal government to prefund 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 firstclass mail - the kind of mail most consumers use and its biggest revenue driver - as more Americans move to electronic billing and emailing.

 

While none of the logistical details have been finalized, given that a change in this law is far from final, USPS said it plans to make special boxes for the shipping of these beverages, and would offer both a flatrate option for anywhere in the country and a weightbased option for both Priority Mail and Priority Mail Express. Schumer emphasized that this would not change current law on shipping alcohol consumer to consumer - that is still prohibited, to ensure that minors are not able to access alcohol. To ship alcohol to consumers, the Postal Service would have to enter an official arrangement with participating wineries, breweries or distilleries and promulgate rules to ensure those under age 21 are barred from receiving such shipments. This is similar to the system FedEx and UPS have in place today. Postal Service officials have said the agency would  require an adult signature for shipments of alcohol and proof of identification upon delivery. Schumer noted that this new federal law would only permit shipping of alcohol, beer and wine in states that allow alcohol to be shipped in the mail. It is not permitted in several states, and many other states have restrictions on the type and amount of alcohol that can be shipped.  Forty states currently allow direct wine shipments, including New York.  

Schumer noted that postal unions, like the NALC and the APWU, have expressed support for this and any other provisions that will help USPS bring in new revenue. The Boulder, Colo.based Brewers Association, which represents 1,797 U.S. craft and larger beer makers is supportive and notes that small brewers in particular may benefit from this option.

Over the years, Senator Schumer has been a staunch advocate for the approximately 12,090 postal workers in Upstate New Yorker, and for maintaining reliable mail service for local residents. In 2012, Schumer introduced successful legislation to preserve doortodoor mail delivery service for the U.S. Postal Service, as well as legislation that put a two year moratorium on rural post office closings. He also opposed the USPS plan to eliminate  Saturday mail delivery. Previously, Schumer has also personally urged the Postmaster General to reverse course on closure of the Buffalo William's St. Processing facility, and urged him to avoid, or at least delay, downsizing local mail processing and distribution services in Binghamton, Utica and Watertown by consolidating the three facilities into one regional facility in Syracuse. 

Schumer released a countybycounty report of the number of federal postal workers in Upstate New York that would benefit from increased revenue for their employing agency, given that Upstate New York postal sites have been consistently at risk of shutting down in recent years. He also released a report of the number of beer and wine producers that could stand to benefit from cheaper product shipments via USPS, should they choose to participate.

·                     In the  Capital Region, there are 1,770 USPS employees, 15 wineries, and 5 breweries

·                     In  Western New York, there are 1,960 USPS employees, 21 wineries, and 4 breweries

·                     In the  RochesterFinger Lakes Region, there are1,960 USPS employees, 29 wineries, and 7 breweries

·                     In the  Southern Tier, there are 1,510 USPS employees, 137 wineries, and 15 breweries

·                     In  Central New York, there are 2,350 USPS employees, 37 wineries, and 11 breweries

·                     In the  Hudson Valley, there are 1,510 USPS employees, 41 wineries, and 7 breweries

·                     In the  North Country, there are 1,030 USPS employees, 29 wineries, and 7 breweries

A copy of Schumer's letter to Carper and Coburn appears below:

 

Dear Chairman Carper and Ranking Member Coburn:

 

I write to you in support of a provision included in your recently proposed postal reform legislation, S.1486, which would permit the U.S. Postal Service (USPS) to begin shipping beer, wine, and spirits.  Like you, I believe that this provision would benefit the Postal Service by creating a new source of revenue at a time when they are facing serious financial challenges.  According to estimates from the U.S. Postal Service, permitting the shipment of beer, wine, and spirits by USPS could bring in as much as $225 million in additional annual revenue.

 

Further, passing such a provision would be a boon for wineries, craft breweries, and distilleries in New York State and throughout the country who seek new ways to reach their customers.  The USPS has discussed developing specialized packaging for wine and beer shipments, and proposed charging a flatrate for such service nationwide.  I support these proposals because they will provide a standardized, efficient, and pricecompetitive service.  The U.S. Postal Service can and should be another option for breweries, wineries and distilleries to ship their products; it would provide these businesses more opportunities to distribute throughout New York and the U.S. at a predictable cost. In addition, adding another major, nationwide shipper as an option will increase competition between carriers and help drive down costs.  Consumers and business know and trust the U.S. Postal Service and stand to benefit by utilizing its experience and infrastructure.

 

With the U.S. Postal Service facing record losses and looking for innovative ways to add additional revenue streams funds, lifting the restriction on the shipment of beer, wine, and spirits makes sense.  It will put USPS on an even playing field with its primary competitors, UPS and FedEx, who are currently permitted to ship alcohol and have been operating without competition from USPS in that specific market.  Postal reform legislation currently pending in the House does not contain a similar provision, and I applaud your inclusion of this important measure in your bill.  I will work tirelessly with my colleagues in Congress and with USPS to ensure that this provision, if implemented, will uphold the intent of the Minimum Drinking Age Act and that all appropriate measures - like requiring adult signatures - are instituted to ensure the delivery of beer, wine, and spirits via USPS are made only to persons over 21 years of age.

 

I believe this provision will be a step in the right direction towards a more fiscally solvent U.S. Postal Service, help safeguard goodpaying USPS jobs, and foster a more competitive shipping market for small businesses producing beer, wine, and spirits.  I look forward to working together with you on this crucial issue.

 

Sincerely,

 

Charles E. Schumer

United States Senator