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Columbia Business Monthly

S.C. Attorney General Alan Wilson fights against online alcohol sales by targeting Facebook and eBay

Dec 09, 2019 11:37AM

By Dustin Waters

In 2018, South Carolina was home to 6,419 arrests for liquor law violations, including the manufacture, sale or distribution of alcoholic beverages. Now the state’s top cops have shifted their attention to unregulated exchanges occurring in the digital marketplace. 

In late October, S.C. Attorney General Alan Wilson joined more than 40 of his fellow attorneys general in a multistate coalition calling on Facebook, Craigslist and eBay to put an end to the illegal sale of alcohol on their platforms. In letters to Facebook founder Mark Zuckerberg, eBay interim CEO Scott Schenkel and Craigslist CEO Jim Buckmaster, the attorneys general write, “We are aware of the occurrence of unlicensed, unregulated and untaxed alcohol sales through digital platforms. Some of the products sold in this manner may be counterfeit, mislabeled or fraudulent. The consumer may not know that this method of alcohol sales is illegitimate or that these blackmarket products could pose health risks. Bad actors may exploit the anonymity of a digital platform to evade regulations, law enforcement, taxation and responsibility.”

In addition to proposing the formation of a working group of government and industry stakeholders, officials are calling on these sites to review the current content posted to the companies’ websites and remove illegal postings for the sales of alcohol products and develop programming to block users from violating state law by posting content for the distribution of alcohol products. While these laws vary from state to state, Attorney General Wilson looks to ensure all alcohol sales in South Carolina are by the book. 

“The Constitution gives each state broad authority to enforce its own laws concerning the sale of alcohol,” Wilson said in a statement. “Whether in person or online, the law is the law in South Carolina and will be enforced.”

Reached for comment on the attorneys general’s letter, an eBay spokesperson stated, “We restrict the sale of alcohol on eBay’s marketplace and only pre-approved and licensed wine sellers are allowed to sell alcohol in the U.S.…We have robust filters in place to prevent products from being listed that are outside of our policy.”

A spokesperson for Facebook responded, “We’ve received the letter and are reviewing it.” The spokesperson also pointed to the site’s regulated goods policies “which prohibit the sale of alcohol and tobacco products between private individuals on Facebook and Instagram,” as well as Facebook’s commerce policies “which prohibit the sale of alcohol in places like Marketplace.” Craigslist did not respond to a request for comment. 

But despite these policies currently in place, a quick search on these sites reveals a number of users apparently hoping to unload liquor to potential buyers—seemingly in clear violation of the regulations touted by Facebook and eBay. 

While some sellers on eBay hoped to bypass any filters by listing bottles of liquor as “empty”—often accompanying these statements with close-up images of unbroken seals on bottles—others made no such efforts. Multiple searches on eBay returned numerous listings for whisky, scotch and bourbon, including a listing for an entire crate of vintage Johnnie Walker Red Label. Facebook showed fewer cases of seemingly illegal alcohol sales compared to eBay and Craigslist, but the social media giant was not completely absent of such bad actors. For instance, one Facebook Marketplace user in Columbia is offering an unopened eight-bottle set of Game of Thrones limited edition scotch for $810.

On Craigslist, sellers located in Bluffton and Myrtle Beach listed multiple bottles of bourbon for sale. Seemingly in an attempt to sidestep any state or online regulations, one Craigslist dealer in the Greenville area offers a “red storage bag of Pappy Van Winkle” for $1,550. The listing includes a photo of an unopened bottle resting on the bag and the comment “This bag comes with a bottle of 2016 bottle year.” 

But what is the real harm of unregulated dealers attempting to unload a few bottles of alcohol online? For South Carolina’s alcohol wholesalers, the threat is very real. 

“Illegal online alcohol sales lead to a number of serious problems because those sales are made outside of the state’s current licensing system, and thus, do not enjoy important safeguards designed to protect our state and its residents,” says Elizabeth Herlong Brogdon, executive director of the Wine and Spirits Wholesalers Association of South Carolina. “These illegal sales pose a number of serious threats, including increased underage access, counterfeit and tainted alcohol sold to unsuspecting consumers, and tax evasion. Plus, illegal alcohol sales undercut licensed, legitimate South Carolina businesses that pay taxes and invest in our communities.”

In response to the proposed establishment of a private-public workgroup to better regulate alcohol sales online, Brogdon believes that such an organization would be helpful in identifying illegal sellers that undermine legitimate businesses, open the door to underage access, and potentially put consumers of all ages at risk. But she doesn’t believe oversight should stop there. 

“The working group with government and industry stakeholders is a great starting point for change,” says Brogdon. “Another critical component is the continued and improved enforcement by regulators to hold accountable these businesses that are illegally selling and shipping alcohol into our state. Without enforcement, this is an exercise in futility.”