Alcohol Board Issues Cease and Desist to Online Booze Delivery Service Ultra
The D.C. Alcoholic Beverage Control Board is cracking down on a new online booze delivery service that launched in the last month. The liquor board issued a cease and desist letter to vendor Ultra yesterday for illegally selling alcoholic beverages in the District without a license. Ultra collects money directly from customers and then forwards part of the money to licensed partner liquor stores, which is not allowed.
Under D.C. law, liquor stores that have an alcohol licenses are allowed to do online sales and deliveries, but third party vendors without their own licenses are not. No license currently exists for such third party vendors, nor is there anything before ABRA or the D.C. Council to create such a license at this time, says ABRA spokesperson Jessie Cornelius.
“We strive to ensure full compliance with all applicable regulations that apply to our operations in all states and territories we operate in,” says Ultra founder and CEO Aniket Shah in an email. “We would like to work within the applicable rules and guidelines issued by ABRA in DC. We plan to respond to this order and seek clarification regarding how we can change our operations to fully comply with ABRA regulations. We will issue a full press release and clarify our position in next couple of days as we get more information from ABRA to resolve this matter. Until that happens, Ultra will stop all deliveries in DC.”
Cornelius says ABRA is also looking into another alcohol delivery operation called Klink, which launched about a week ago, as well as Instacart, a grocery delivery service that also lets you have alcohol brought to your door thanks to a partnership with Magruder’s. Cornelius could not comment further on those cases because the investigations are ongoing.
Klink CEO Jeffrey Nadel says his model is different enough from that of Ultra that he believes his business is operating legally. He says his lawyers spent more than a year structuring the company so that it would abide by the law, and they’ve had several recent conversations with ABRA. Unlike Ultra, which collects money directly from customers, Nadel says Klink has a proprietary system that’s set up so that customers are actually buying from the liquor licensees. “I can’t get into specifics because it’s a huge part of our competitive advantage,” Nadel says.
“From the customer’s point of view, it seems like we’re all doing similar things, but when you look at how things are structured, it couldn’t be more different,” Nadel says.