Wine-by-mail coming to Maryland?

Survey released as lawmakers say direct shipment more likely

December 21, 2010|By Scott Calvert, The Baltimore Sun

Comptroller Peter Franchot released Tuesday a long-awaited report that wine enthusiasts hope will clear the way for legislation allowing wine-by-mail sales in Maryland.

The report, ordered by state legislators, offered a detailed look at how 37 states and the District of Columbia have drafted and implemented laws permitting direct shipment of alcoholic beverages. It contains no overall policy recommendation, and Franchot emphasized that it was "a starting point for legislative debate."

But direct-shipment supporters pointed to its main findings as bolstering their case.

Mike Hyatt, owner of Wells Discount Liquors on York Road, said he would welcome the change, scoffing at the notion that it would cut into his wine sales.

"Anything that promotes the wine business has got to be a very good thing long term for everyone," Hyatt said. "I think the amount of business done that way will be very small, and I think it will be with boutique wineries that are not currently represented by a wholesaler."

Del. Tom Hucker, who has sponsored direct-shipment bills and plans to do so again, said the report should advance the cause of greater consumer choice.

"The comptroller's report pushes the process forward by raising visibility, and my understanding is it demolishes a lot of myths the industry has been spreading against direct-ship bills for many years," said Hucker, a Montgomery County Democrat.

For example, the report disputes the liquor industry's contention that direct shipment would make it easier for minors to obtain wine. "There is no evidence that underage drinking has increased or decreased as a result of direct wine shipment," it concludes.

And the report suggests that Maryland liquor wholesalers and retailers would see little economic pinch if state residents could have wine shipped directly to their homes.

"Direct wine shipment by out-of-state wineries to Maryland consumers would not have an overall negative effect on in-state licensees," the report states, "because purchases from wineries are primarily motivated by 'availability.'"

The report addresses both in-state and out-of-state wineries but pays particular attention to those outside Maryland because they aren't known to state tax officials.

Liquor industry lobbyist J. Steven Wise said his members remain opposed to such legislation, but he added that they had not had a chance to review Franchot's report or to speak with elected officials.

"We'll be doing all that," said Wise, who represents Maryland's Licensed Beverage Association, a group of retailers. "I would say our position will evolve between now and during the legislative session, based on this new information and the political landscape."

Franchot's report comes amid growing signs that key lawmakers are working toward making direct wine sales legal in Maryland and ending years of debate over the issue.

State Sen. Joan Carter Conway, who chairs the Senate committee that oversees the issue, has said that legislation allowing Marylanders to receive shipments of wine at home would likely pass. Her counterpart in the House, Del. Dereck E. Davis, says he hopes to persuade colleagues to pass a bill in the session that begins next month.

Davis, a Prince George's County Democrat, said he was not surprised by the report's broad findings and that he was confident of crafting an "effective compromise that allows this issue to move forward."

Hucker said direct shipment would not harm wine retailers and wholesalers because consumers would largely use it to buy wines not available in stores. "None of us go online and pay shipping costs to order a product at a premium cost that you can buy around the corner," he said.

Last year, wine-by-mail supporters came up short at the General Assembly. A group called Marylanders for Better Beer and Wine Laws led the push for a change in state law. It bumped up against the state's powerful liquor lobby, which has sought to protect the highly regulated system of alcohol distribution.

Wise saw some positive aspects of the report, including a suggestion to limit each adult to a dozen 9-liter cases per year. "Would that lessen the impact? Yes," Wise said.

Wise also appreciated that the report frowned on the idea of letting out-of-state retailers — as opposed to wineries — ship wine directly to consumers.

The report says shipments from wineries would be considered "exceptions" to Maryland's alcoholic beverage regulatory system. But because shipments by out-of-state retailers would be "integral" to that three-tier system — producer, wholesaler and retailer — it says "allowing direct wine shipment from out-of-state retailers is incompatible with existing alcoholic beverage laws in Maryland."

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