Wine bill compromise struck

Proposal allows most vineyards to sell to retailers

General Assembly


Almost all Maryland wineries will retain the ability to sell directly to retailers and restaurants under a compromise reached with liquor wholesalers, averting what winemakers feared could have been a death knell for their fledgling industry.

Under the new proposal, which has the support of leaders in the General Assembly and Gov. Robert L. Ehrlich Jr., wineries that produce less than 27,500 gallons annually will be eligible for a limited wholesaler's license. That would enable them to avoid contracting with a third-party wholesaler, which winemakers said is cost prohibitive for small operations.

The legislation is the result of a U.S. Supreme Court ruling last year that said a state could not exempt its wineries from a three-tier system of regulation without extending the same privilege to out-of-state winemakers.

Owners of Maryland wineries gathered with legislators, Ehrlich, Lt. Gov. Michael S. Steele and others to offer a toast of thanks yesterday morning.

"Thank you all, from the governor to the legislature to everyone who supported us," Rob DeFord, owner of Boordy Vineyards in Baltimore County, said while raising a glass of Maryland wine. "Cheers!"

The 27,500 gallon cutoff allows 19 of Maryland's 22 wineries to continue selling as they were able to before the Supreme Court decision. The three larger wineries all use wholesalers already.

DeFord said the issue is affecting wineries around the country, and 27,500 gallons is emerging as a consensus for the point at which it makes economic sense for wineries to use a wholesaler.

"Your station wagon just gets to be too small," DeFord said.

Bruce Bereano, the lobbyist for the liquor wholesalers, said the compromise preserves the integrity of Maryland's three-tier system of regulation, which he said ensures the proper and orderly sale and taxation of alcohol.

Under the proposal, wineries will have to obtain a limited wholesaler's license and will be subject to the same rules as independent wholesalers, Bereano said.

"It's the same playing field," he said.

Ehrlich, who has long supported the Maryland wine business, said he was pleased to see agreement between two established but conflicting economic interests.

"It was just incumbent on everyone to come to a reasonable compromise that allows all sides to prosper," he said.

Dennis Castleman, the head of tourism at the state Department of Business and Economic Development, said Maryland's wine industry is a major draw for visitors to the state.

"Agro-tourism has become really important to this state," Castleman said. "We're finding out from visitors when they come here they're visiting wineries, they're visiting working farms, they're going to corn mazes."

Lynne and Bert Basignani, owners of Basignani Winery in Sparks, said the new proposal will enable them to grow their business. At their present size, they couldn't afford to use a wholesaler, they said.

"We didn't want to either raise our price on the shelf drastically or reduce drastically what we're taking for ourselves because every dollar is going back into the business right now," Bert Basignani said. "We want to be able to build a business to pass on to the next generation."

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