Md.'s wine shipment laws create smuggling routes from D.C. and Va.
By Ann E. Marimow,
To find that rare California cabernet or New York Riesling, wine aficionados in the Maryland suburbs of Washington are routinely, and in many cases unknowingly, breaking state law to get around rules that restrict residents from having wine shipped to their homes.
Lawyers, government consultants, high-tech workers and even members of the General Assembly - all typically law-abiding residents - have developed an indirect route for smuggling their favorite vino. They have wine delivered to offices in the District or to the homes of friends in Virginia - two of the 38 jurisdictions nationwide that allow vineyards to ship wine directly to consumers.
When Maryland wine connoisseurs drive their cases back across the Free State border, however, they are technically committing a crime - a misdemeanor that carries a fine of up to $10,000 and prison sentence of up to five years. State officials say no residents in recent memory have been prosecuted.
"We know we could be on the border of Washington or Virginia to watch people purchase and bring it into Maryland," said Jeffrey A. Kelly, head of enforcement in the state comptroller's office that is responsible for collecting the alcohol tax. "But that's not our interest. We don't have enough people to do it."
After years of failed efforts, momentum is building among lawmakers in Annapolis for legislation that would change the Prohibition-era rules before the General Assembly session ends in April. Past measures have faced strong opposition from the alcohol industry, which is threatened by the prospect of cutting out the middlemen in what is a heavily regulated system of wholesalers, distributors and retailers.
The effort is popular with oenophiles, who pressed their case with lawmakers during last year's election season. For serious wine drinkers, it's a matter of having access to limited-production wines and being able to join wine-of-the-month clubs. Buying wine, they say, is like buying art.
"It's almost offensive because it's controlling what I can and cannot buy and bring into my own home. It's not harming anyone or anything," said Barbara, a Montgomery County resident who has wine she has tasted during visits to Napa delivered to her husband's office in the District.
In one case, a Howard County resident described having a hard-to-find red blend she discovered at a Maryland vineyard shipped to her nonprofit office in the District, only to drive it home to Maryland.
"It's especially ridiculous to have to have it shipped to another state to support a local business," said Brigitte, who like others interviewed for this report agreed to talk only on a first-name basis because of the potential legal liability.
The politics of the debate appear to have changed, though. In the past three years, lobbyists for the alcohol industry have successfully argued that direct shipment of wine would make it easier for minors to access alcohol. But a report issued in December by state Comptroller Peter Franchot that studied laws in other states found no significant increase in underage drinking in part because " 'wine' is not the drink of choice for youth."
Maryland wine lovers have also become more organized in lobbying legislators. Membership in the grass-roots group Marylanders for Better Beer and Wine Laws, for instance, has grown from about 1,200 in 2008 to more than 20,000.
"Consumers are finally starting to assert themselves," said Adam Borden, president of the group that last session raised awareness among legislators through e-mails and phone calls.
Lawmakers appear eager to embrace the consumer-friendly bill that would allow residents to receive up to 12 cases of wine per year on their doorsteps. In a tough budget year, supporters are also pitching the potential tax benefit. In Virginia, which has had a program in place since 2003, direct shipments represented about 3 percent of all wine sales in the state in fiscal 2010 and generated an estimated $3 million in tax revenue, according to an analysis by the Wine Institute, which backs direct wine shipment.
One version of the measure introduced last week has support from a bipartisan majority of members of the Senate and the House, including Speaker Michael A. Busch (D-Anne Arundel) and Del. Dereck E. Davis (D-Prince George's), chairman of the House committee that will review the bill.
"The majority view has shifted to the point where it's going to become a reality," said Senate President Thomas V. Mike Miller Jr. (D-Calvert), who grew up working at his family's grocery and liquor store in Clinton. "I'm all for open borders if it means Maryland wineries can grow and prosper and other wineries can have access to Maryland consumers."
But some lawmakers, including Miller and Busch, expressed concern about the potential harm to local stores if the bill allows consumers to have wine shipped from out-of-state retailers.
"How do we protect them?" asked Sen. Joan Carter Conway (D-Baltimore), who chairs the Senate committee that will review the legislation.
That is the biggest sticking point for the alcohol industry. Bruce Bereano, a lobbyist for wholesalers, said allowing the sales would "harm in-state liquor stores that are family-owned and part of the fabric of communities."
Industry representatives note that only 12 of the 38 jurisdictions with direct shipment laws on the books allow residents to order from out-of-state retailers. In the long term, the industry worries that such a bill would open the door to shipments from small breweries, cutting into the beer business.
The industry also points to the comptroller's report, which suggests in-state stores would suffer if residents are allowed to order from out-of-state retailers in part because consumers shopping at such outfits are "primarily motivated by 'price.' "
There are signs that the industry is willing to compromise after years of opposition. J. Steven Wise, who represents retailers, said the industry is willing to back another planned version of the legislation that would allow shipments from wineries but not from out-of-state retailers.
"That's a big concession from our end," Wise said.
But Sen. Jamie B. Raskin (D-Montgomery), one of the sponsors, said removing the retail provision would limit the creation of "a real free market for wine consumers."
Del. Tom Hucker (D-Montgomery), who is also planning legislation, said "opponents have been less effective in explaining why consumers in Maryland should be denied a choice that consumers in 37 other states already have."
State officials said they have no way of tracking how many residents are shopping for wine online and finding creative ways of taking it home to Maryland. Anecdotally, though, there seem to be scores - and they're doing it for different reasons.
After moving from California's wine country to Maryland, Dorian said he was disappointed by the limited selection at Montgomery restaurants and liquor stores. He has turned to the Internet for great deals from small wineries that offer free shipping to his wife's office in the District.
"I can't tell you the last time I was at a wine or liquor store in Maryland," he said.
But for Eric, a graphic designer in Montgomery, the "wine-of-the-month" club shipment to his wife's D.C. office has not stopped him from patronizing local stores.
"These are nicer bottles of wine from a winery that I know and love," he said. "I still spend plenty of money at the Montgomery County liquor stores. I don't think it's a matter of economics; it's a matter of convenience."