More access to wine on the table

Lawmakers, lobbyists working on compromise

November 25, 2010|By Annie Linskey, The Baltimore Sun

Marylanders preparing for holiday parties can't order wine to be shipped to their homes, but key lawmakers are working toward making such wine-by-mail sales legal next year.

Sen. Joan Carter Conway, who chairs the Senate committee that oversees the delicate issue, said there will "probably" be a bill passed to let Marylanders receive shipments of wine. Her counterpart in the House, Del. Dereck E. Davis, pledged to do "the best I can" to persuade his committee and his chamber to pass a bill.

The lawmakers are responding in part to a chorus of wine-loving consumers who pressured the state's General Assembly to make the change last year. The efforts, headed by Marylanders for Better Beer and Wine Laws, failed after clashing with Maryland's powerful liquor lobby, which wants to protect the current highly regulated system of alcohol distribution. Opponents also argue that direct-shipment makes it easier to put wine in the hands of minors.

But this year lawmakers and even some industry lobbyists acknowledge that direct-ship is ready for movement. "This issue needs to be settled," said Davis, a Prince George's County Democrat. "It has been out there way too long. It has taken up too much General Assembly time." Conway, a Baltimore Democrat who has had concerns with the effort in the past and was widely blamed for bottling it up this year, even floated the idea of sponsoring a bill that would make the changes to the law.

All parties say they are awaiting a report from Comptroller Peter Franchot, expected next month that will summarize the myriad state laws on the topic — though Davis said he's moving full steam ahead regardless of what that report says.

And both sides also stressed another key piece of information expected in coming weeks: new committee assignments. Last year the measure was narrowly defeated in the House Economic Matters Committee, which Davis said could have at least eight new members this session.

The 2011 version of the bill will be introduced by Del. Jolene Ivey, a Prince George's County Democrat who is becoming the go-to House lawmaker on wine issues. She successfully shepherded legislation last year to make it easier for Maryland winemakers to sell at farmers' markets in Prince George's County. "I cut my teeth on that and I'm ready to take this one on," she said.

Thirty-seven states, including Virginia, as well as the District of Columbia, allow wine shipments to customers. The owners of small vineyards say the direct distribution system is vital for their business model because they produce only a few thousand cases a year and often sell to consumers who've trekked to the wineries. The standard alcohol distribution system is not nimble enough to put rare wines in the hands of customers who want to buy from a small vineyard they've stumbled upon.

In other states, the direct-ship rules have helped a burgeoning wine industry expand. Jennifer McCloud, the owner of Chrysalis Vineyards in Middleburg, Va., estimates that one-third of the bottles her winery produces are mailed directly to customers and guesses that 90 percent of all customers are in-state.

She says that she loses about 40 cents per bottle on wines that are sent to the market via wholesalers. "It is becoming a marketing expense to use a wholesaler," she said, explaining that the only reason to do it is to place wines on shelves so consumers might enjoy the label and start buying directly from the vineyard.

McCloud has amassed a wine club of about 1,000 customers who receive two bottles a month, and the revenue allows her business to remain profitable in winter months when snow deters potential customers from driving to the vineyard.

In contrast, the owners of Maryland's Black Ankle Vineyards in Mount Airy must persuade members of their wine club to drive out to their Western Maryland farm periodically and pick up cases. "For every one person who signs up for our come-and-get-it wine club, there are three or four who say, 'Can you send it?'" said Ed Boyce, who owns the vineyard.

"Consumers don't really understand that this is against the law," he said. "It is stunning to talk to people about it."

But lobbyists for the liquor industry have long argued that the direct shipment of wine will begin unraveling the three-quarters-of-a-century-old system of alcohol regulation. Under those rules, wineries sell to about two dozen Maryland licensed wholesalers who are the only group permitted to pass the product on to bars and stores.

Direct-ship circumvents that arrangement. "It is a slow undermining of the system," said J. Steven Wise, who represents Maryland's Licensed Beverage Association, a group of retailers. Next year, the advocates could come back asking for the direct shipment of specialty beers, he noted.

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