Why Shipping From a Winery Shouldn’t Be a Felony

By Adam Borden, Executive Director, Marylanders for Better Beer & Wine Laws

Maryland wineries resemble other agricultural operations in so many ways: Many of them grow their own grapes; they are overseen by the Department of Agriculture; and like other small farms, they manufacture their product for sale to consumers rather than to industrial users. What sets Maryland wineries apart from other farms, however, is that it is a felony for them to ship any of their products directly to you. For all the times you might want to give a gift of Maryland wine or subscribe to a monthly delivery like with CSAs for other farms, Maryland makes it illegal. 

Direct wine shipping is very much an issue of small-scale agriculture because of the way the restrictions disproportionately affect small wineries. Most small wineries depend heavily on direct sales, either at the winery or via direct shipping. One recent report found that direct sales account for greater than 60 percent of total winery case volume at wineries producing less than 4,000 cases per year[1]. This number underscores how hard Maryland winemakers have to work in order to survive!  

Maryland’s ban on wine shipping dates to at least 1951 when the state codified the behavior as a misdemeanor. Within the last thirty years, most states have proactively gone about changing this antiquated system to keep pace with the modern era. In a day and age when Maryland citizens can legally order so many things delivered directly to their doors—even  ammunition, fireworks and pharmaceuticals, to name a few—the ban on wine shipping seems all the more obsolete. Thirty-seven states and the District of Columbia, comprising about 83 percent of the American public, now allow some form of direct shipping of wine. The National Conference of State Legislatures convened a wine task force in 1997 that endorsed the model legislation that so many of these states have adopted, the same language that has perpetually been introduced in Maryland without gaining much traction. 

Almost 300,000 people visit Maryland wineries annually[2], yet so few of them have regular access to those wineries’ products. Of the 36 Maryland wineries, only eight or so use distributors to sell their wines. As a result, most retailers do not regularly stock them, so most Maryland consumers cannot find them on store shelves. These small winemakers lose out time and time again to larger, better financed wineries that can afford large marketing budgets and generous trade spending. 

Maryland’s move away from tobacco has forced its farmers to find alternative, more profitable crops, and there is no other crop more economically valuable than wine grapes.  Yet, this crop continues to be treated disparately from others, relegated to second-hand status within the agricultural community rather than embraced for what it can become. In many other states, viticulture is a driving force in tourism: Think Napa and Sonoma Counties in California, for example, where the wineries are the destination and have become a lifestyle as much as an industry. Viticulture preserves open space while creating sustainable jobs on the farm and tourism jobs in the surrounding communities.  

Why then has this seemingly commonsensical innovation not been enacted in the Free State? More importantly, what can you do to help? The political reality is that the liquor wholesalers have a very strong lobby in Annapolis that frequently gets what it wants due to its political and financial muscle. Though direct shipping will likely account for no more than 1 percent of total wine sales in Maryland, as is the case in the other states, the wholesalers do not want to let go of even that small amount because they control virtually every other drop of alcohol sold here. 

Direct wine shipping has been around for a number of years in other states: New Hampshire, for example, passed it in 1998. The tide really turned, however, with the 2005 Supreme Court Case Granholm v. Heald, which ruled that a state could not allow in-state wineries to ship to its consumers while prohibiting out-of-state wineries from doing the same. This change required a number of states, notably Michigan and New York, the defendants, to either allow all shipping or none at all. This ruling was irrelevant for Maryland, which has never allowed shipping. Though the Supreme Court case dealt directly only with wineries, there is a movement to equalize treatment for retailers as well. Think about delivering a gift basket with a bottle of wine or purchasing an obscure vintage from one retailer that might have held onto it for years. Under winery-only shipping, these transactions could not take place. As a result, the proposed Maryland legislation would allow both wineries and retailers to ship directly to consumers. 

Although the Maryland General Assembly does not reconvene until January, your elected officials are now in their districts and able to listen to their constituents more easily. The direct wine shipping bills are heard first by both the House of Delegates’ Economic Matters Committee (ECM) and the Senate Education, Health & Environmental Affairs (EHEA) Committee, before going to the full floor for a vote.  

Alas, this legislation has never gotten out of committee in its twenty-eight years before the General Assembly. This issue is clearly not a new one in Annapolis. Counties with key legislators include Anne Arundel, Baltimore City and County, Harford, Prince George’s and Wicomico. Not living in those jurisdictions does not mean you cannot help, but legislators in those particular areas need to hear more from both consumers and businesses about why you want direct shipping in order to get the bills out of their respective committees.   

Despite the lack of new arguments from the opposition about this issue—for example, minors ordering cases of wine for their party in two weeks, and the inability of the Comptroller to collect sales tax are the two most frequent—the committees will then hold hearings about the bill. Unfortunately, it is the jobs of the retailers and wholesalers who oppose this legislation to show up to testify, so they have always outnumbered the consumers fighting to get this passed. 

Hopefully, this time will be different. We hope to overwhelm the testimony of those opposing the bill with the sheer number of consumers and other interested parties testifying in favor of the bills, and coordinate testimony to address all of their concerns up front (unfortunately, those in favor of the bill testify en masse first, while all those opposing finish up). The legislation hitting the floor, even with a number of co-sponsors, does not necessarily mean it will pass, so the full-court press is on until the session ends in mid-April. 

The wholesalers’ voices will continue to rule the roost until you let state elected officials know how tired you are of limited selection determined arbitrarily by a select few. Send your delegates and senators an email or give them a call to start putting pressure on them to listen to the majority rather than a well-financed minority. Then tell your friends to do the same. Not only do your wine choices depend on the passage of these bills, but also the livelihoods of so many farmers. 

Adam Borden is Executive Director of Marylanders for Better Beer & Wine Laws.