Bill to Allow Delawareans to Buy Wine Directly Killed, Again

by Dave on June 10, 2010

Delawareans will not soon enjoy the convenience of having wine shipped directly to their homes. In a vote along party lines, a bill to allow the practice has failed to clear a key House of Representatives’ committee for the second time.

Unlike most Americans, who are allowed to receive direct wine shipments, Delawareans need to deal with an anachronistic system that forces consumers to place orders through state-licensed alcoholic beverage retailers and distributors. Representatives of both segments of the industry spoke out against House Bill 180 before a recent hearing of the House Economic Development, Banking, Insurance and Commerce Committee.

Mike Ciabattoni, representing unionized delivery and warehouse workers, called consumers “lazy” for wanting direct shipment and said the bill could potentially hurt his members. “For every case delivered by the Internet, it’s a case out of my guys’ pockets,” he said.

“Our current system does work and does serve consumers,” Ciro Poppiti told committee members. He noted consumers can currently obtain about 25,000 alcoholic products through Delaware retailers and distributors.

State Rep. Deborah Hudson (R-Fairthorne), the prime sponsor of the direct shipment legislation, said the criticisms are off the mark. “My bill would let consumers order wines that are not available locally. This isn’t going to adversely impact local package stores or Delaware distributors.”

Rep. Hudson, who said she sponsored the measure at the request of several of her constituents, noted there are approximately 6,000 wineries operating in the U.S. and that the bulk of these are too small to widely distribute their products.

“I think the experience of other states that have passed laws allowing direct shipping can shed light on the issue,” said Dennis Cakebread, the co-owner of Cakebread Cellars, a winery based in California’s famed Napa Valley. “These states, which include New York, Michigan, Texas, Virginia, West Virginia and Georgia, are all now collecting tax revenue and license fees on sales which help satisfy consumers’ desire for convenience and selection. While early on, there was a lot of concern from distributors that this was going to cut into their business, experience has shown that has not been the case. Direct shipments augment the sales of distributors, they don’t replace them.”

Under Rep. Hudson’s proposal, both wineries and carriers (e.g. United Parcel Service, Federal Express) would need to obtain state licenses or permits. The bill would also place a cap on the amount of wine a consumer could receive annually, would prohibit its re-sale, would require the payment of the state alcoholic beverage tax, and mandate that deliveries could only be made to someone of legal age who signs for the shipment.

Roger Roy, representing the Wine Institute, said approximately 87-percent of Americans already enjoy direct wine shipment. Answering those who expressed fear that such shipments could facilitate the delivery of alcohol to minors, Roy said that has not been the case in the 37 states where the practice is legal. “There is not one winery that has been cited for shipping to a minor,” he told the committee.

Delaware is among the shrinking number of states prohibiting direct shipment, as are the neighboring states of Maryland, Pennsylvania and New Jersey. Tennessee had been on the list, but enacted a direct shipping law last July.

Delaware law not only prohibits out-of-state wineries from directly shipping here, it also bars Delaware wineries from sending their products to state residents.

“The way the law is now, I can’t call Nassau Valley Vineyards near Lewes and ask them to send a bottle of wine to a friend in Georgetown,” Rep. Hudson said. “We ship powerful drugs all over the country by UPS, FedEx and the postal service, but I can’t send a bottle of wine down the road? That’s ridiculous.”

In fact, many Delawareans are breaking the law without realizing it, as State Rep. Mike Ramone (R-Middle Run Valley) recently learned. Rep. Ramone, who is a member of the committee who considered the direct shipment bill, mentioned during the proceedings that a friend had given him a gift membership to a “wine of the month” club. To his chagrin, Rep. Ramone learned that the two bottles he was receiving each month were in violation of Delaware law.

“This is another reason we need to enact my bill,” Rep. Hudson said. “State officials testified they have no way to police our current, outdated law. My bill would not only give consumers more freedom, it would provide accountability to ensure the system isn’t abused.”

The direct shipping bill had originally been introduced in 2009, but was tabled in committee about a year ago. In the intervening time, Rep. Hudson said she placed an amendment with it that had been written by Delaware Alcoholic Beverage Control Commissioner John Cordrey. The proposed change was designed to address a concern raised when the measure was first considered, cutting by half the amount of wine consumers could order each year.

In the end, all the evidence, arguments and amendments proved insufficient to sway five House Democrats on the committee, who voted as a block to keep the bill bottled-up.

“This bill is consumer-friendly, small business-friendly, and could generate a modest amount of revenue for the state,” Rep. Hudson said. “The experience of more than three dozen states has shown us that direct shipments don’t produce any significant problem. There was no compelling reason why this bill should not have been sent to the floor for consideration.”

-Submitted release from Delaware House of Representatives Minority Caucus

Comments on this entry are closed.

[CoastalSussex] on Twitter[Coastal Sussex] on Facebook[Our] RSS Feed[Our] Email