Wine Freedom in Maryland: Just a Taste Won't Do

A blog posting on All Opinions Are Local via the Washington Post entitled Wine Freedom in Maryland: Just a Taste Won't Do that discusses direct wine shipment and why it should be legalized in MD.

By David White, Washington
Posted at 6:30 PM ET, 02/ 5/2011

In January, lawmakers in Maryland’s General Assembly introduced legislation to legalize the direct shipment of wine to consumers from out-of-state wineries and retailers. In the lower chamber, 83 of 141 representatives signed on as co-sponsors of the bill. In the upper chamber, 32 of 47 senators signed on.

Don’t pop the cork just yet. One of the nation’s most powerful lobbying forces will fight tooth and nail against this proposal. And lawmakers have already suggested that they’re willing to “compromise” with these lobbyists. Del. Dereck Davis (D-Prince George’s), who chairs the Economic Matters Committee, has suggested that one possible compromise would keep in place the Maryland laws that prohibit residents from ordering wine from Internet retailers, joining wine-of-the-month clubs and taking part in out-of-state wine auctions.

Such a compromise should be offensive to wine snobs and beer swillers alike. Maryland residents must fight for this bill as it’s written.

Maryland is one of just 13 states that forbid winery-to-consumer shipping. It’s one of 37 states that prohibit residents from ordering wine from out-of-state retailers.

State officials argue that online sales — from wineries and retailers — enable minors to buy booze. Teenagers are certainly resourceful when it comes to obtaining liquor, but it’s unlikely that they’d be willing to jump through all the hoops required to purchase wine online. For starters, they’d need a credit card and the ability to make it through the numerous age verification services used to thwart underage purchasing. They’d then need to be home when the wine is delivered while making sure their parents were not. They’d also have to sign for the wine, convincing a FedEx or UPS employee that they’re over 21.

Most important, they’d need money. Many California cult wines cost $50 or more a bottle. Auctioned wines are even more expensive.

State officials also contend that online sales enable retailers and wineries to “dodge state taxes.” This, too, is absurd. Maryland manages to collect sales taxes on just about every other retail product without the help of wholesalers.

The truth is that these laws have their roots in Prohibition, and they remain in place only because of well-financed special-interest groups.

When Prohibition was repealed in 1933, states were given the power to regulate booze within their borders. While some states decided to take over the sale and distribution of liquor completely, most created a “wholesale tier” to sit between producers and consumers. This middle tier — an artificial, state-mandated middleman — quickly became enormous.

The wholesaling industry is quite generous to politicians. Between 2000 and 2006, according to the Specialty Wine Retailers Association, which opposes restrictions on wine sales across state borders, wholesalers contributed nearly $50 million to state campaigns. These donations make perfect sense, since politicians keep the wholesalers in business by protecting the middle tier.

However, consumer support for the three-tier system began to evaporate in the 1990s, when Americans started developing a taste for small-production wines and could find them, thanks largely to the Internet. Across the country, people began to order wine directly from producers — only to discover that most states prohibited winery-to-consumer shipping.

In 2005, the Supreme Court stepped in, ruling that states could limit direct sales only if laws were applied consistently. Because Maryland lawmakers were willing to block their own wineries from shipping wine, they could prohibit direct shipping from out-of-state wineries. So they did.

Ever since, Maryland’s oenophiles have been pushing lawmakers to loosen restrictions on direct shipping and Web sales. Legislation was introduced in each of the past three legislative sessions. But all these proposals failed, foiled by wholesalers who want to remain a part of, and make money from, every liquor transaction.

In December, Maryland Comptroller Peter Franchot issued a much-anticipated report on wine shipping, endorsing direct shipping from out-of-state wineries. He stopped short, though, of backing direct shipments from out-of-state retailers. This didn’t make sense; there’s virtually no difference between the transactions.

Consider the budding oenophile in Towson who discovers that all her favorite small-production Oregon pinot noirs are available through a wine club in California. Or the Bethesda resident arranging her father’s 70th birthday party, who finds a bottle of 1941 Bordeaux at an online auction. Or the young Baltimore couple, planning a wedding on the Eastern Shore, who find an online bargain on their favorite champagne.

In Maryland today, all those transactions would be illegal.

Prohibition was repealed nearly 90 years ago. That’s why residents across the border in the District of Columbia can order from wineries, out-of-state retailers, auction houses, and the like. Maryland lawmakers must support the bill as it’s currently written so their constituents can enjoy these same freedoms.

David White is the founder and editor of the wine blog Terroirist.com.

Wineries with Permits

Wineries Able to Ship to MD

Here is a link to the Comptroller's website. Search for "DW-Direct Wine Shippers Permit" under permit type.

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