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Why Maryland consumers can't buy wine online

By Dave McIntyre
Wednesday, January 20, 2010; E05

Anna Bradford wanted to buy her husband a wine club membership for his 40th birthday. But when she clicked on the shipping information on the Wine of the Month Club's Web site, the Brookeville resident was dismayed to see Maryland listed as one of several states labeled "Prohibited." She had no luck with other online clubs, either.

If Bradford lived in Virginia, she and her husband, Ken, might soon be sampling the club's monthly selections. But Maryland is one of 17 states that do not allow shipment of wines directly to consumers.

"Banning it seems rather draconian," Bradford said. "The club would have been a nice way for us to explore new wines."

She might be able to join soon. Hopes are high that the Maryland legislature will pass a law this session allowing consumers to buy wine from out-of-state wineries and retailers and have it shipped directly to their homes.

Today, 33 states and the District of Columbia allow direct shipping in some form. Wineries and stores must navigate a hodgepodge of laws and paperwork, but the situation for wine lovers has improved in recent years. Maryland, however, has remained a holdout, its lawmakers repeatedly failing to approve legislation that would loosen state restrictions.

Advocates of direct shipping plan to introduce legislation again this week to allow any winery or retailer to ship up to 24 cases of wine a year to any adult Maryland resident. An adult's signature would be required for delivery, and the sale would include the state's 6 percent sales tax.

"I'm optimistic it will pass this year," said Adam Borden, executive director of Marylanders for Better Beer and Wine Laws. Last year, 75 of 141 members of the state House of Delegates signed on to the bill as co-sponsors. The bill never made it out of committee. This year, Borden says he believes that support in the committee is firmer and expects more than 100 lawmakers to sign on as co-sponsors. The proposal has been endorsed by editorials in The Washington Post and in the Baltimore Sun.

Who will benefit from direct shipping? Maryland residents who visit wine country in California or New York will be able to ship home their finds. Collectors will be able to buy small-production wines that don't make it to Maryland through the normal channels. Maryland's wineries would be able to ship to other states, such as New York, that demand reciprocity for their wineries (see sidebar). Retailers and restaurants will gain access to more wines, and sales could actually increase: States such as New Hampshire that opened up to direct shipping have seen sales through the traditional system increase rather than fall.

Maryland did try to accommodate demand for direct shipping in 2003 with an unwieldy system requiring the winery to ship to a Maryland-licensed wholesaler, which would deliver the product to a retailer of the customer's choosing. In the six years since, Maryland residents have used the system to buy 66 cases of wine (less than one case a month for the entire state) and the state has collected $150 in excise taxes, Borden said. In contrast, New Hampshire last year collected $520,000 in permit fees and excise taxes under its direct-shipping program.

Direct shipping will not be the end of the traditional three-tier system of winery-wholesaler-retailer. Consumers will still buy most of their wine in stores, where they can taste a sample before investing, benefit from the advice of a trusted retailer and return the occasional off bottle. But direct shipping will allow consumers access to the variety of wines available. It will benefit consumers. It will benefit the Maryland wine industry. And it will benefit Maryland. It's time to pass this law.

(Marylanders for Better Beer and Wine Laws is also following two initiatives specific to individual counties. One would let Maryland wineries participate in farmers markets in Montgomery County, as they can in Calvert County. The second would allow diners at restaurants in Frederick County to bring their own wine and would allow imposition of a corkage fee for opening and serving it. Corkage is illegal in Maryland.)

McIntyre can be reached at food@washpost.com.

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