Maryland lawmakers uncork changes to alcohol laws

Direct shipment of wine, increase in alcohol sales tax among ideas advancing

March 24, 2011|By Julie Bykowicz and Jessica Anderson, The Baltimore Sun

Wineries across the state — and country — soon might be permitted to ship bottles directly to Maryland homes. Shoppers could pick up local wines at more farmers' markets. And diners might one day be able to bring their favorite vintage to an already licensed restaurant.

After years of shooting down changes to the state's alcohol laws, lawmakers are showing signs this year that they're ready to embrace some measures long sought by consumers.

But for enthusiasts, there may be a price to pay: On Thursday, a Senate committee agreed to raise the sales tax on alcohol from 6 percent to 9 percent. If the increase survives the budget process, it would be the first tax hike on alcohol in four decades.

Maryland wine aficionados are cheering the policy developments. While many are not happy about the potential tax increase, several predicted that it would have minimal impact on sales.

John Richardson was picking up a selection of white wines Thursday afternoon at Beltway Fine Wine & Spirits in Baltimore County. The Towson man said he liked the idea of being able to get California wines shipped to his home.

"It was tantalizing because I get those advertisements for this absolutely wonderful wine you can't get," he said as he wrestled a box of bottles into his trunk. "It's been a long time coming."

At the Chesapeake Wine Co. in Canton, Kristen Edwards said she, too, is glad to have the option to order wine from other states — especially bottles from her family's own vineyard, Damiano, in upstate New York.

"They've been tremendously successful there," she said. "It's sad they can't have that here."

The Baltimore woman said she doesn't like taxes, "but it's like cigarettes. They will find a way to pay it. It is a luxury for people."

Maryland has some of the tightest alcohol controls in the nation, including a three-tier system that demands separation of wholesalers, distributors and retailers. Liquor lobbyists and legislators say it is essential to preserve the system so the state can maximize taxes on the goods while encouraging temperance.

But in recent years — thanks in part to a growing interest in wine — Marylanders have been stepping forward to fight for changes.

"Consumers have realized that their legislators control what they drink," said Adam Borden, an advocate for relaxing the restrictions. The Baltimore man credited the years-long fight over direct shipping with "fundamentally changing how Annapolis deals with alcohol issues."

After long focusing on the desires of the alcohol industry, he said, "finally the General Assembly has started to appreciate that without consumers, the industry doesn't exist."

Industry lobbyists acknowledge a growing interest in the liquor laws.

"The sessions get increasingly more active each year with alcohol legislation," said Bruce Bereano, a lobbyist for the wholesalers. He said Maryland's wineries are becoming more involved and aggressive, and farmers' markets, too, are seeking to become part of the retail sale of alcohol.

Baltimore, Frederick and Carroll counties want wineries to be able to sell their goods at farmers' markets in those jurisdictions, an idea that has won support in the House of Delegates and the Senate.

Bereano said the alcohol industry is trying to work "with responsible and reasonable people." He said industry support this year of direct shipment from wineries — a concept the industry long and vocally opposed — stands as an example.

Both the Senate and House of Delegates are scheduled to debate the direct-shipping proposal Friday. Passage would make Maryland the 38th state (plus the District of Columbia) to allow such business.

The legislation would enable a resident to receive up to 18 cases per year from wineries across the country. The wineries would pay an annual $200 fee for a permit to ship.

Consumer advocates said they were happy with the bill's progress but that it remains too limited. Many also want retailers to be allowed to ship alcohol to their homes. Just 12 of the 37 states that permit direct shipping extend that to retailers.

Some have noted that the proposed $200 fee for wineries is greater than those of other states, raising the question of whether smaller, out-of-state vineyards will seek permits to send their goods to Marylanders.

"For our business, it's great," said Sarah O'Herron, who co-owns Frederick County's Black Ankle Vineyard with her husband. "We have a high-end product, which means we have to draw from audience of fairly wide geography."

She expected a significant increase in their wine club, which includes about 250 people — all of whom have to drive to the rural vineyard to pick up their bottles.

"It's quite flattering that people will do that, but we have many more people who want to be part of the club but can't commit to the drive."

Still, O'Herron said, the $200 annual fee could keep Marylanders from enjoying Black Ankle-like vineyards in other states.

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