Lobbyists put cork in bill that would let collectors sell cellar

THE BALTIMORE SUN

Imagine that you're a collector of rare books and you want to sell some of them.

Perhaps you need some money to pay taxes. Perhaps you are retiring and moving to smaller quarters. Perhaps a health problem has sapped your resources. Whatever the reason, you'd probably take your books to a dealer or to an auctioneer and sell them for their fair value.

For books you can substitute virtually anything people collect, be it paintings, baseball cards, antique furniture or weapons.

But not wine.

In Maryland, as in all but a few enlightened states, you can't sell your wine at auction or sell it back to a dealer, because under state law the seller must have a liquor license. If you die, your heirs are stuck with your wine unless they take it out of state or sell it illegally, which saves on taxes but depresses the price.

Paul R. Cooper recently tried to change that.

Mr. Cooper, vice president of Alex Cooper Auctioneers in Towson, asked the Maryland General Assembly to pass a law allowing collectors to sell their wines to licensed dealers or put them up for auction. The proposal was based on a similar law in New York State. He persuaded Dels. James Rosapepe, D-Prince George's, and John Donahue, D-Washington, to introduce a bill this year. He went down to Annapolis to testify.

But there Mr. Cooper's proposal ran into a brick wall of opposition -- the liquors wholesalers' lobby, the liquor retailers' lobby, the tavern-keepers' lobby, even the tax collectors' lobby (sometimes known as the comptroller's office). All testified against the bill, terrified that it could change the comfortable status quo.

Mr. Cooper's bill was not killed on the spot, but it was issued a one-way ticket to oblivion. For the next year at least, Maryland collectors will sell their wines as they have for decades -- through informal networks or out of sympathetic retailers' back rooms.

Mr. Cooper isn't bitter about the setback, however. He admitted he was politically naive and his bill could have been better drafted. He said he's learned he needs to build a consensus. And he said the comptroller's office and the same lobbyists who sank his bill offered to sit down after the Assembly session and talk over his idea.

Let's hope they give the idea serious consideration, because it makes good sense.

Here's how it would work:

Let's say you have a sizable collection of old Bordeaux but your doctor has just told you a medical condition means your wine-slurping days are over. So you get in touch with a licensed wine retailer or wholesaler, who inspects your collection and determines its value and how well it was stored. Only reds more than 10 years old and whites more than 5 years old would be eligible for resale.

The distributor then would have a choice. If it were a small lot of modest value, a retailer might sell the wines from the sales floor and pass the money to the owner, deducting his percentage and taxes. To protect the consumer, such wines would have to carry a label stating that they came from a private collection.

If your collection is larger and more valuable, the store owner or wholesaler would likely call an auction house, which would break it down into lots and include it in the next scheduled wine auction.

So, with a little luck, that case of 1982 Chateau Mouton-Rothschild for which you paid $500 in 1983 sells for $2,400.

Now you're happy because you've made a tidy, legal profit that you can apply to your medical bills. The auctioneer and distributor are happy because they get a cut of the sale price.

The buyer is so happy to find the rare wine that he doesn't mind paying $120 in state sales tax on that case alone. Our venerable comptroller is happy because he's filled the state's coffers with money that once was lost to the back room dealing. The mayor and county executives are happy because they get a cut of the income tax the sellers pay on their profits.

Wait, there's more.

Restaurateurs and innkeepers are happy because guests have come all the way from North Carolina and Ohio for the auction, a dignified event held in a hotel ballroom. Waiters and waitresses are happy because they get generous tips from expansive bidders.

So why would a measure that brings such happiness fail?

Mostly it's because the state's liquor industry is frightened of anything that would disturb the sanctity of the "three-tier system" -- which essentially ensures that each alcoholic beverage is passed along from producer to wholesaler to retailer (or tavern-keeper or restaurateur), with none poaching on the other's turf.

Regardless of one's views of the system, it's hard to see how Mr. Cooper's proposal could do it much harm. "I'm not trying to knock down the wall," Mr. Cooper said. "I said I'm trying to put a door in that wall."

In fact, a sensible exception is more likely to strengthen the system by making it more rational and easier to defend against carping critics such as myself. And as Mr. Cooper points out, licensed dealers would be the "gatekeepers" of his "door."

If they look at Mr. Cooper's proposal objectively, the lobbies that so vigorously opposed it should be able to see that it does them no harm and might do them good.

Retailers who are knowledgeable about wine should be able to gain some additional revenues. Other retailers wouldn't be affected.

Wholesalers that deal in fine wine should benefit because collectors would be more likely to collect if they were assured of a legal resale market. Other wholesalers wouldn't be affected.

It's hard to see what interest the saloon-keepers have in all this. The clientele that attends wine auctions is hardly being lured away from their bar stools.

It would be pleasant to think that common sense could prevail when Mr. Cooper tries again next year, but we're talking Annapolis, the graveyard of good ideas.

My cynical guess is that Mr. Cooper will get stonewalled again.

Maybe I'll be proven wrong. Maybe the state's liquor interests and tax officials will sit down with Mr. Cooper and hammer out a bill they can support next year. If that happens, I'll be glad to stand up in front of the state's assembled liquor lobbyists and toast each tier of the three-tier system with a glass of Thunderbird.

I do believe my palate is safe.

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