Study: Wine Home Delivery Would Help MD Vineyards

An article in the Maryland Gazette entitled Study: Wine Home Delivery Would Help MD Vineyards that summarizes the recently published comptrollers report and its reccomendations.

Lengthy report makes policy recommendations for lawmakers

By Elisha Sauers
Maryland Gazette, Staff Writer
Published 12/25/10

If the state were to legalize the shipping of wine to residents, it's unlikely that teenagers would use it as a free ticket to booze when their parents are away.


After all, how many kids would wait days or even weeks for a package to arrive from, say, Napa Valley, hundreds of dollars by the bottle, just to get their drink on at a house party?

At least that's the logic some Maryland comptroller officials are using to assess the effects a new wine delivery law would have if next year's General Assembly chooses to pass it.

After six months of studying how other states oversee shipments from out-of-state sellers to their residents, the researchers released a 257-page report yesterday on the issue, including their recommendations on how lawmakers could shape future policy.

Jeff Kelly, director of field enforcement for the comptroller's office, said they would propose a law that would allow in-state and out-of-state wineries - but not out-of-state retailers - to participate.

Under the current Prohibition-era law, wine can neither be shipped from outside the state, nor within it. In order to transport wine for sale, there's a three-tiered model, using a state-licensed wholesaler as a middleman between the retailer and the consumer. The wholesaler drops the delivery off at a liquor store, and the customer usually pays the store extra fees for the handling.

Comptroller Peter Franchot said by limiting the permits to wine makers, they could eliminate some of the competitive drawbacks for in-state businesses.

Their research found that when customers from the 37 wine-shipping states order from vineyards and wineries, they want specialty varieties aren't readily available to them. They don't want to comparison shop.

"It's crucial for the passage of this bill that we not open up all of our wonderful Maryland retail establishments to incredibly aggressive marketing by out-of-state retailers that are undercutting our retailers on price," Franchot said.

The study recommends permits rather than licenses at a fee of $100 and $100 per year to renew. The quantities could be limited to 12 cases of wine per legal-age person per year. To keep such a law in line with existing jurisdictions' codes, the researchers suggest prohibiting Sunday deliveries.

So that shipping would be profitable for state coffers, the research proposes requiring wine-shipping businesses and deliverers file quarterly tax returns. The state could also make direct wine shippers obtain a minimum $1,000 tax bond, subject to adjustment.

But while the state might derive a small revenue boost from direct wine-shipping, Franchot estimates the most significant gain would be for Maryland wineries that currently can't ship varieties.

Kevin Atticks, the Maryland Wineries Association executive director, said local wineries have wanted the state to repeal the law for 30 years.

"The ability to direct ship gives customers a much wider access to wines not available in Maryland, so it's great news for wine lovers, and wonderful news for our wineries, who have also always desired this ability," Atticks said.

Wine-shipping bills have failed in previous General Assembly sessions, but some believe this time around will be different. Opponents often have voiced concerns that making home delivery legal will give greater access to underage consumers.

The comptroller's study provided recommendations to tighten enforcement. The state could require common carriers to have permits to transport alcohol, and direct shippers would need to make labels indicating that the packages contained alcohol. The deliverers could be required to check signatures against personal IDs.

Franchot, a supporter of direct wine-shipping legislation, said he doesn't think kids will be able to take advantage of the system easily.

"We'll keep our guard up, but I don't think that's something that would be a major concern," he said.

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.

Search for wineries

 

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