By Sandy Alexander
WASHINGTON – The Fiore Winery in Pylesville is known for its red wines, but out-of-state aficionados who want to sample its “very nice” cabernet sauvignon or the more unusual chambourcin wine are pretty much out of luck.
Strict alcohol shipping laws in Maryland and many other states prohibit wineries from shipping wine to individual buyers.
“We’ve turned down hundreds (of requests),” said winery co-owner Rose Fiore, even with a notice on their Web site that they do not ship wine.
Not only has Maryland refused to enter into reciprocal agreements with other states that would allow wine to be sent across borders, last year it became one of only seven states to make it a felony for out-of-state sources to ship alcohol to consumers here.
Supporters of the strict law say it is needed to keep underage drinkers from getting wine by mail and to ensure that taxes are paid on alcohol sales. The law also protects Maryland merchants from unfair competition from out of state, said Charles Ehart, director of the Maryland Comptroller’s Alcohol and Tobacco Tax Division.
But a lawsuit filed Thursday in federal court in New York could open borders to freer flow of wine, a move that would please many Maryland wineries.
Small wineries in Virginia and California, along with several consumers, challenged New York’s restrictive alcohol shipping laws in a suit in the Southern District of New York. The Washington, D.C.,-based Institute for Justice, which filed the suit, says these laws hurt small wineries and individual wine consumers while protecting wholesalers.
Small wineries in Maryland are finding themselves on the “margins of the new economy,” because they cannot take advantage of Internet orders, said Rob Deford, president of the Boordy Vineyards in Hydes. They are also missing out on interest from visitors and out-of-state orders generated by favorable reviews.
Many Maryland wineries are particularly concerned because they are so small that wholesalers in other states usually will not distribute their product.
But Ehart defended the current “three-tier system,” in which alcohol goes from the supplier through a wholesaler to the consumer.
When lawmakers upgraded the wine-shipping law to a felony offense, he said, they made it easier to prosecute sellers in other states. But the penalty remained the same as when it was a misdemeanor — a fine up to $1,000 and up to two years in prison for the shipper.
It is still a misdemeanor for producers to ship wine directly to consumers in the state and for Maryland residents to have untaxed alcohol that has been shipped from another state.
Ehart acknowledged some of the difficulties with the current system and noted that the state is working with an Internet wine seller to see if there is a secure way for Maryland residents to get their out-of-state wines and the state to get the tax it is due. But no deal is expected until the end of the year, he said.
Many Maryland wineries would prefer a more open market, and believe there are better solutions to the state’s concerns than the current law, including shipping services that require adult signatures and taxation systems for all mail-order products.
“Competition does nothing but increase quality and decrease prices,” said Anthony Aellen, president of Linganore Wine Cellars in Mount Airy. “If there were no restrictions, I believe we would see the industry as a whole grow, and revenue would grow.”
“In this day in age … to be tying our hands in one particular part of the market doesn’t seem right,” said Rose Fiore.