Free the wineries

February 12, 2006

Maryland's byzantine liquor laws took another turn for the convoluted worse last week. Maryland Comptroller William Donald Schaefer has decided that last year's Supreme Court ruling in Granholm v. Heald means Maryland wineries can no longer sell directly to retailers, chiefly restaurants and hotels. That's a disaster for the local wineries, relatively few of which sell through wholesalers. That's because the economics of such trade don't work - not only would it raise the cost of Maryland wine, but the local brands would likely get lost in the shuffle of the average wholesaler's inventory.

Unfortunately, Mr. Schaefer's interpretation of the law appears to be correct. Maryland was recently sued in federal court by a Pennsylvania winery over the law that has for decades allowed only in-state wineries to make limited direct sales. The high court's ruling spoke chiefly to direct-to-consumer sales, but the constitutional principle is the same: A state can't have one set of rules for its native wines and a second for those coming from other states.

Lawmakers are scrambling to rescue local wineries with legislation that would let them sell to these retailers by allowing their out-of-state counterparts to do the same. That's a fine idea, but it doesn't go nearly far enough. The wineries deserve better - and so do Maryland consumers, who are stuck with higher prices and less selection because of the so-called three-tier liquor law that forces most alcoholic beverages to go from maker to middleman to retailer before the consumer gets a crack at them.

What the General Assembly also needs to do is open up the market and allow wineries to sell (in limited quantity) to anyone - with the protections other states employ to make sure taxes are collected and buyers aren't minors. It's not hard, and it's the best thing the state can do to develop a more robust wine industry. The only people hurt are the wholesalers and retailers who, unfortunately, have considerable political clout in Annapolis.

Wine isn't a California-only phenomenon; it's made in all 50 states. And the number of U.S. wineries has grown from 600 in 1975 to more than 3,700 today. Neighboring Pennsylvania and Virginia are far ahead of Maryland in developing small wineries. But Maryland can't expect companies to invest in vineyards and facilities unless the state's Prohibition-era liquor laws are reformed.

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