As regulatory frameworks shift throughout 2025, merchants of all sizes must prepare for still more change.
By Kelly Martin
Direct-to-consumer (DTC) alcohol sales have reshaped the alcoholic beverage industry, opening doors for more diverse sellers. Today’s online alcohol marketplace includes traditional players such as major retailers and small producers, but also new entrants including lifestyle brands and content creators who partner with licensed sellers. All these businesses now connect with consumers through ecommerce channels, creating more purchasing options nationwide.
This market expansion creates a complex web of new compliance considerations that vary by state. What’s more, the evolution isn’t done yet. As regulatory frameworks shift throughout 2025, merchants of all sizes must prepare for still more change.
While established producers often have resources to monitor these developments, smaller creators face particular challenges in maintaining compliance without overwhelming their operations. The most successful alcohol merchants recognize this reality and take a forward-looking approach. By implementing adaptable compliance frameworks, they position themselves to navigate an evolving regulatory landscape efficiently and effectively.
The Evolving Regulatory Landscape
Three key regulatory areas demand attention from alcohol merchants in 2025.
First, age verification requirements are evolving to incorporate new technologies. The emergence of biometric age verification technology presents new possibilities for streamlining the verification process at both physical and online points of sale.
Legislative proposals in states like New York and Washington would let businesses verify a customer’s age through biometric data rather than traditional ID checks. If properly implemented, these technologies could provide stronger compliance protection for retailers, which is especially relevant as the industry contemplates age restrictions for non-alcoholic beverages (sales of which have grown nearly 70% in the last year).
Second, alcohol delivery regulations continue to face potential reform. Recent proposals such as the USPS Equity Act would end a Prohibition-era ban and allow the postal service to deliver alcohol directly from producers and retailers to consumers. If passed, this legislation would create new shipping options alongside private carriers, potentially benefiting rural consumers. For craft producers that have historically struggled to secure traditional distribution channels, these expanded shipping pathways could provide vital access to previously unreachable markets.
Third, payment processing remains a critical compliance focus. When evaluating compliance for alcohol ecommerce transactions, regulators first examine who controls the money. Licensed entities must maintain complete control of all transaction funds. This becomes especially important when businesses partner with third-party marketers or platforms to sell alcohol products online. Proper documentation of financial flows provides essential protection in an increasingly complex digital marketplace.
Challenges and Solutions for Different Merchants
The regulatory landscape affects alcohol merchants differently based on their size and resources. Large retailers typically have dedicated legal teams, compliance officers and lobbyists who track regulatory developments and advocate for favorable policies. They can invest in sophisticated compliance technologies and absorb the costs of adapting to new requirements.
Small producers and independent retailers face steeper challenges. Mom-and-pop shops operating on thin margins may struggle to invest in third-party age verification services or implement new payment processing systems.
Technology offers a democratizing solution for businesses across the spectrum. Regulatory technology can automate compliance processes, from age verification to tax calculations, reducing risk and operational burden. These tools let smaller merchants achieve compliance standards comparable to their larger competitors without a massive investment of time and money.
Proactive Approach to Compliance
The beverage alcohol industry is shifting from reactive compliance management to front-end regulatory technology. Instead of processing documentation after transactions occur, forward-thinking businesses implement systems that ensure compliance during the sale, creating scalable business models that adapt as regulations evolve across different states.
The traditional three-tier system remains foundational to the industry, but it now coexists with an emerging “4th tier” framework. This model allows non-traditional alcohol merchants, such as lifestyle brands and online retailers, to market alcohol products while staying compliant with existing regulations.
Merchants can stay ahead of regulatory changes by:
- Joining industry associations that track compliance developments, such as the National Association of Licensing and Compliance Professionals (NALCP);
- Implementing flexible technology systems that adapt to regulatory shifts;
- Establishing clear documentation practices for transaction tracking;
- Connecting with licensed entities that understand compliance requirements; and
- Building technology bridges between marketing and fulfillment operations.
These steps reduce compliance risk, create new opportunities to reach consumers through multiple channels, and maintain regulatory integrity.
For creators and sellers of alcoholic beverages, change is happening more rapidly than at any time since the end of Prohibition. On the one hand, laws restricting the shipping of beverages could be relaxed. On the other hand, some states might start to regulate the sale of nonalcoholic beverages now, too. To survive and thrive, merchants need to be nimble and view understanding compliance as a competitive advantage.
Kelly Martin
Kelly Martin is Chief Compliance Officer at DRINKS. She’s a beverage alcohol industry veteran, with more than 20 years of experience spanning all three tiers of the industry, with an expertise on DTC. Prior to DRINKS, Martin served as VP, Compliance for Direct Wines (WSJ Wine & Laithwaites Wine), where she managed their DTC distribution model.
