Measuring the Coming Shaft That is Maryland’s Direct Shipping Bill

Shaft In this blog post you will learn:

1. How Money Can Create Visions

2. Why Marylanders are likely to no direct shipping access to any foreign wines

3. Why the coming Maryland Wine Shipping law may be unconstitutional

4. An estimate of the size of the shaft being prepared to be inserted into Maryland Wine Lovers bottoms.

The recent introduction of a direct wine shipping bill in Maryland that many wine lovers have been waiting for and anticipating for many years can only mean one thing: Maryland wine lovers are about to get screwed.

As things are shaping up in Annapolis after the introduction of Senate Bill 248 and its companion bill in the House of Delegates, HB 234, it appears that Maryland wine lovers will finally get what they want: the legal right to buy and have wine shipped to them from wineries and wine stores located inside or outside the state. This, at least, is what the MD direct shipping bills currently would allow.

What's critical is that Marylanders would have access to both out of state wineries and out of state wine stores.

But here is what is about to happen: A bill will be passed in Maryland and signed by the Governor that only gives Maryland wine lovers the right to American-made wines. The final bill will make it a felony for wines produced in France, Germany, Austria, Spain, Italy, Canada, Australia, New Zealand and every other country in the world outside of the U.S. to be shipped to Marylanders.

How could this be? Simple. The provision currently in the Maryland bills that allow shipments from out-of-state retailers will be amended out of the final bill while Maryland wineries, California wineries, all other wineries in America, Maryland retailers, Maryland wholesalers and Maryland politicians shrug their shoulders and say, "eh…whatever".

Put another way, wine consumers are once again completely ignored when wine legislation is considered, just as they have been in virtually every other state where direct shipping legislation has occurred since 2005.

What's most interesting is that in order for Maryland politicians to justify supporting a bill that outlaws the shipment of non-American wines into Maryland, these politicians will be required to rely on a Maryland Comptrollers Report On Direct Wine Shipping that demonstrates, ironically, that the Maryland Comptroller can't count.

In the very influential and important report prepared by the Maryland Comptrollers office and released in December of 2010, a survey of Marylanders determined that the top reasons they would buy wine from  from out of state entities, in order of importance are:

1) Not available at a local retailer,

2) Wanting to buy directly from a winery,

3) Convenience of Delivery ,

4) Price.

As you can see, one must count down to "4" in order to find "price" being a reason for Marylanders to buy wine from out of state.

And yet, somehow, the Comptrollers report was able to come to this conclusion:

"Direct wine shipment by out-of-state retailers to Maryland consumers would have a negative effect on in-state licensees, because purchases from retailers are primarily motivated by 'price.' "

Just to be clear, there is absolutely nothing in the Comptroller's Report on Direct Shipping that could lead one to conclude or even infer this result. There are only two possible explanation for its inclusion:  1) The Comptroller Can't Count or 2) The Comptroller's Office played politics with the report and threw a bone to Maryland retailers and wholesalers who oppose all direct shipping but figured with the help of the Comptrollers office they could at least find a way to stop out of state retailers from shipping in. They got that help.

Peter Franchot, the Comptroller of the State of Maryland received more campaign contributions from beer, wine and liquor interests in the 2009/2010 election cycle than any other special intersest save Lawyers & Lobbyists and Real Estate interests.

The other key player here is Delegate Dereck Davis, who chairs the Economic Mattes Committee of the Maryand House of Delegates where the bill will be heard in committee and where the amendments to the bill will be considered.

Speaking last week (and quoted in a Washington Post article) about the anticipated opposition to the bill from the Liquor Lobby, Delegate Davis said, "I'm going to do what I can to forge a consensus."

What would such a "consensus" look like? According to the Washington Post, "A compromise bill, for instance, could allow direct shipment from wineries – but not from out-of-state retailers."

And this is exactly what is going to happen. Of course, it should be noted that during the 2009/2010 election cycle, Delegate Davis received more campaign contributions from the Beer, Wine & Liquor lobby than any other special intersts save unions and electric utilities.

But what's interesting is that as far as I can see there already exists a consenus in Maryland to allow wine shipments form out-of-state wine retailers as well as wineries. The direct shipping bills, as currently written allowing both out of state wineries and out of state retailers to ship to Marylanders is sponsored by 83 of 141 members of the Maryland House of Delegates and an 32 out of 47 members of the Maryland Senate. This looks to me like a majority in both houses.

And then there is the constitutional issue to consider. Isn't it facial discrimination against imported wines to allow American, but not imported wines to be shipped into Maryland? That will be the impact when the bill is passed without giving Marylanders access to out of state wine retailers. Out of state wineries can't ship imported wines into Maryland under the bill. They may only ship their own home grown wines.

It makes you wonder when American importers and non-American wine producers are going to finally get tired enough of being left out of the legal direct shipping channel that they at last stand up and say enough blatant discrimination is enough!

Unfortunately, it's unlikely that this battle in Maryland will see any time given to the interests of importers of foreign wines. Clearly, the Maryland lawmaker and other who will support the bill will not be insisting that Maryland wine lovers have access to the real American wine market. When the debate over whether Marylanders should have access to out of state retailers is waged in the Maryland Senate and House of Delegate committees, we will most supporters of the bill do this:

"Yes, yes…we believe out of state retailers should have the right to ship into Maryland….but, if you decide not to allow this, we will still support the bill."

So, let me rundown succinctly how the Maryland Wine Shipping Battle will play out this year

1. Bill introduced that allow Marylanders to buy and have shipped to them wine from in-state and out-of-state wineries and retailers.

2. A majority of Maryland lawmakers sign on to bill as supporters

3. Opponents of wine shipping and campaign contributors to key players in the battle concede that wineries will have the right to ship, but put their foot down and demand retailers are taken out of the bill.

4. Key lawmakers say "we must find consensus" despite a majority of lawmakers supporting the bill as it is

5. Tom Wark complains that wine lovers and wine retailers are about to be shafted.

6. Opponents of wine shipping propose amendments to bill or introduce new bills that allow shipping from out of state wineries, but not from out of state retailers.

7. Committee hearings ensue during which 1) Comptrollers office can't explain how they came to conclusions about out of state retailers shipping into the state is different from out of state wineries shipping into the state other than…."they had a vision and inferred this conclusion"

8. Opponents of shipping claim that allowing retailers to ship into the state will kill in-state retailers, but won't point to any evidence of this other than to say they had the same "vision".

9. Proponents of the wine shipping will testify that they think retailers should be allowed to ship, but if they are denied this right, well, we still support the bill.

10. Representatives of Maryland wine consumers testify and insist that consumers be allowed to buy from out of state retailers after which they are patted on the head by lawmakers and asked to go away so the big boys can play this out.

11. Bill is amended to only allow Marylanders to buy domestically produced wines from wineries, while out of state retailers are not allowed to ship into the state.

12. Bill passes overwhelmingly in the House of Delegates and Senate.

13. Governor signs bill.

14. All those who now have the right to ship into Maryland hail the new law as a great victory for consumers.

15. Consumers left wondering why they can't buy and have shipped to them French, German, Italian, Spanish, Austrian, Greek, Australian, New Zealand, Canadian, Chilean, Argentinian and other imported wines along with wines from out of state auction houses, out of state rare wine dealers and out of state wine clubs.

16. Consumers struggle to remove the shaft from their bottoms.

17. Tom Wark writes blog post about the length and width of the shaft now wedged into the bottoms of Maryland wine consumers and retailers across the country.



10 Responses

  1. Jacob - February 2, 2011

    Thank you for this post. I hope that you are wrong, but know deep down that you are right about the eventual outcome of direct shipping legislation in MD.
    I think many MD consumers just want to be able to buy from wineries in CA, OR, WA, NY, etc… and are not thinking about the bigger picture. While direct shipping from wineries would be a victory, it is not a complete free-market scheme, as you lay out. Hopefully common sense will prevail, but I am not holding my breath.

  2. James McCann - February 2, 2011

    What is the position of MD retailers, including SWRA members?

  3. Wine-Know - February 2, 2011

    Tom, you are absolutely correct in every step you have outlined. I don’t even know if I’ll bother to go to Annapolis again this year to testify. Baby steps…maybe next year…

  4. Tom Wark - February 2, 2011

    Some are for the bill, others are against it.

  5. imobiliarias alegrete - February 2, 2011

    What is the position of MD retailers, including SWRA members?

  6. Les Hubbard - February 2, 2011

    Tom, Several weeks ago I floated the idea wiith the MD Wineries Assn. and Marylanders for Better Beer and Wine Laws as follows: Allow MD consumers to receive shipments from out of state retailers, but also allow Maryland retailers to purcahse wines directly from domestic and foreign producers if those wines were not available from any Maryland wholesaler. Many interseting replies, most saying that the wholesaler’s lobby will sure kill that idea. Yeah, I work for a MD wine retailer and know cutomer complaints about wine availability and also how many make their purchases in DC or VA via retailer or direct shipment, causing MD tax losses, to obtain some of the 85% of wines not available in MD at retail. Les

  7. Tim McDonald - February 2, 2011

    Dead on Tom, great, great post. really sad if your crystal ball is right. The wholesalers really got the MD wine lovers with the glass 90% empty. McD

  8. Tom Wark - February 2, 2011

    I do still have hope. There are hood legislators behind the current bill and good numbers of wineries and retailers in the state that support consumers being able to access wines from all sources. We’ll see.

  9. Tom Wark - February 2, 2011

    It’s a great proposal and makes too much damn sense.

  10. Solo_Manolo - March 25, 2011

    Hey Tom!
    Now that the MD Direct Shipping bill passed just like you predicted… I’m interested to learn your thoughts on point #17. “Tom Wark writes blog post about the length and width of the shaft now wedged into the bottoms of Maryland wine consumers and retailers across the country.”
    Thanks for your passion and dedication! Cheers!

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