Panel corks bill on buying wine via Internet

The Baltimore Sun

A House of Delegates committee yesterday rejected a bill that would let Maryland consumers buy wine directly from Internet merchants and wineries, as is permitted in at least 35 other states.

The bill was also debated yesterday in the Senate, though its chance of passage appears slim.

Wine lovers and Maryland wineries have been battling the state's liquor distributors for several years over the issue. Under current law, online direct-to-consumer sales of alcohol are largely prohibited because they circumvent the "three tier" regulatory system in place that requires producers to sell to wholesalers, who distribute cases of wine to retail stores.

Sen. Jamie B. Raskin, the Montgomery County Democrat sponsoring the bill, yesterday railed against "antiquated economic protectionism" that benefits liquor distributors and merchants. Though a self-described "teetotaler," Raskin exhorted his colleagues to "create a free market in wine. ... Free the grapes!"

Bruce C. Bereano, a lobbyist representing the Licensed Beverage Distributors of Maryland, argued that Raskin's bill would hurt Maryland wineries, reduce distribution-related jobs in the state, hamper tax collection and make it easier for minors to obtain alcohol.

"If you make it so profoundly easy for national wine brands to get their product directly to consumers, they're going to take out Maryland wineries," Bereano said.

The association representing state wineries disagrees.

"The ability to ship wine to a consumer is one of many methods provided by law in other states to encourage the growth and prosperity of small wineries," said Maryland Wineries Association executive director Kevin M. Atticks in his written testimony. Maryland's current laws are "frustrating for consumers and almost impossible to explain to customers," he said.

Under the proposed bill, licensed "direct wine shippers," including wineries, could sell bottles directly to consumers. A legislative policy analysis predicted that direct-to-consumer sales could increase state tax revenue but would likely "result in a decline in sales for all retailers and wholesalers of alcoholic beverages in the state."

Those businesses could recoup their losses if they also became direct wine shippers, analysts said.

Raskin testified that "tens of thousands" of Marylanders currently evade the law by having Internet wine purchases delivered to Washington or Virginia, costing the state potential sales tax revenue.

Comptroller Peter Franchot provided written testimony in support of the bill.

Thomas Minkin, the chairman of the Baltimore County Board of Liquor License Commissioners, said in his written testimony that he worried the comptroller's office was ill-equipped to ensure that direct wine shippers could monitor sales to underage drinkers.

Not all retailers are opposed to deregulating the flow of wine in Maryland. Arian Jakob, owner of DiWine Spirits Wine Shoppe in Pikesville, said he supported the bill because his specialty-wine customers are in favor of it.

"They complain about it on a daily basis," Jakob said. "They cannot obtain everything in my store." He said he also would like to sell wine over the Internet.

Because of current law, Maryland consumers are prevented from gaining access to "more than 90 percent" of the wine produced in the United States, according to Raskin.

But he acknowledged before yesterday's hearing that his bill would be a hard sell in the General Assembly. "It's always a tough fight when a majority of people stand up for the common good against entrenched special interests."

gadi.dechter@baltsun.com

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