Del. lawmakers reject direct wine shipments

By RANDALL CHASE

DOVER, Del.

Wineries will not be able to ship their products directly to customers in Delaware after a House committee on Wednesday rejected a bill opposed by the liquor industry.

After more than an hour of debate, the economic development and commerce committee voted 5-3 not to release the bill that would have allowed the sales for consideration by the full House.

Supporters of the bill said it would give wine lovers a convenient way to buy their favorites that may not be available at local liquor stores. Some 35 other states already allow such direct purchases.

"This is a bill that's brought to me by citizens," said chief sponsor Rep. Deborah Hudson, R-Greenville.

But opponents said the bill would be hard to enforce, and that it would take money from wholesalers and retailers.

"You're clearly shifting the revenue base from in-state wholesalers and retailers to out-of-state wineries," said Mihir Patel of the Small Business Leadership Council, a group that represents package store owners and other alcohol licensees.

Michael Ciabattoni, a representative of the Teamsters union, said direct shipments would hurt drivers and warehousemen who work in Delaware's three-tier distribution system.

"This is something that will hurt all aspects of the industry," said Ciabattoni, who suggested that instead of allowing consumers to buy wine directly, Delaware should follow Maryland's lead and make it a felony.

Meanwhile, Congress is considering legislation proposed by wholesale distributors that opponents fear could limit wineries' ability to sell and ship directly to consumers by reinforcing states' rights to regulate alcohol sales.

Supporters of the Delaware bill said concerns about its impact, including that it would make it easier for minors to obtain alcohol, were being exaggerated.

"We've heard a lot of stories here today," said Roger Roy, a lobbyist for the Wine Institute.

"There is not one winery that has been cited by any government entity for shipping to a minor where it's allowed by law," Roy said.

Roy dismissed the notion that consumers would begin bypassing retailers all together, noting that a bottle shipped directly likely would be more expensive than the same bottle at a retail store because it will not be subject to bulk shipment discounts.

Hudson noted that, at the behest of other committee members, she had agreed to amend the original bill, which would have allowed a person to buy up to 24 cases from a particular winery per year, to allow only 12 cases per person per year from all wineries.

"You're not permitted to get 12 from this winery and 12 from the next," explained state Alcoholic Beverage Control Commissioner John Cordrey.

Under the bill, a winery would have to pay $100 for a shipping license that could be renewed every two years and pay excise taxes on sales to Delaware residents. Shippers such as UPS and FedEx also would have to obtain licenses from the state in order to deliver wine.

Siobhan Sullivan, director of the Division of Alcohol and Tobacco Enforcement said the paper trail created by the bill would make it easier to investigate complaints of illegal sales, but that it would be impossible to monitor carriers to make sure they are not making illegal deliveries, such as to minors.

"The reality is that I can't send an agent to watch a truck making a delivery," said Sullivan, who admitted that, absent a complaint, the division has no way of monitoring illegal deliveries already taking place.