Guest view: Time for Delaware to join 47 states that allow wine shipping

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By Lyndon Yearick

Yearick is a Republican State Representative representing areas that include Camden-Wyoming in Kent County

If you recently tried to have a winery send you a bottle of your favorite vino for the holidays, you received some unwanted news.

It couldn’t be done. In an age of commerce where nearly anything can be quickly delivered to your doorstep, Delaware, Utah, and Mississippi stubbornly remain the only three states totally prohibiting the direct shipment of wine to consumers – an option available to nearly 98% of Americans.

To be clear, I do not support wine being sold to Delawareans through Amazon or any other online retailers. What I am advocating are direct-to-consumer (DTC) sales, with shipments sent from the producer to the home of the purchaser.

This is an issue of consumer choice, product availability, and the antiquated limitations of the nearly 90-year-old Delaware alcoholic beverage system. Delawareans wishing to buy wine not found on the shelves of their local stores can only legally obtain it through a process that channels all sales of beer, wine, and liquor through a three-tier system of distributors, wholesalers, and retailers that was established following the repeal of Prohibition.

According to the National Association of American Wineries, there are more than 10,000 wineries in the U.S., but the overwhelming majority of these enterprises are craft, small-volume operations – too small to have relationships with distributors, making it very difficult to get their products in Delaware.

Additionally, brick-and-mortar retailers have no economic incentive to engage in the fringe business of either stocking obscure wines or ordering such labels one or two bottles at a time. The profit margins simply do not justify the greater investment of resources when compared to marketing the top sellers for which there is a ready clientele and steady demand.

One Wine Institute survey indicates the nation’s top 50 largest wineries produce more than 90% of American wine. This is the domain of the retailer .There have been numerous attempts over the last decade in Delaware to allow limited direct home shipment of wine. Disappointingly, all these efforts have failed after lobbying by a coalition of package store owners, distributors, and unionized distribution workers who all benefit from the status quo.

As previous legislative testimony has indicated, this opposition has been driven by fear that direct wine shipment will undermine retail sales. However, even as the number of states that allow DTC wine shipments has steadily increased – from 26 in 2005 to 47 now – there has never been any credible evidence presented to support this apprehension.

DTC wine sales are a niche market, specializing in wines not found in shops. Such transactions typically complement, rather than compete, with those made by local vendors. Brick-and-mortar retailers have a different business model that focuses on mass marketed products.

This reality was borne out in a December 2012 report by the Maryland Comptroller’s Office on the impact of that state’s DTC wine shipping law enacted 17 months earlier. It found that the total gallons of wine sold in Maryland increased by only 0.34% as a result of direct wine shipping, while the volume of wine sold through retail establishments increased 3.61% after enactment.

Further, according to the report, there were no reported incidents of underage access and no significant complaints regarding the law’s implementation from the industry, permit holders, or consumers.

Delaware consumers are not the only ones hurt by The First State’s obsolete wine law. As the result of a pivotal 2005 U.S. Supreme Court ruling (Granholm v. Heald, 544 U.S. 460), Delaware’s four operating wineries – Pizzadili, Nassau Valley, Salted Vines, and Harvest Ridge – share the same fate as their counterparts elsewhere.

They are barred from shipping wine to Delawareans, depriving these small businesses from a consumer base most likely to have visited their vineyard and been familiar with their products.

There is bipartisan legislation currently pending action in the Delaware General Assembly that seeks to move our state forward. Introduced in May, House Bill 210 is model legislation that has been proven effective in other states. It would do the following:

• Require carriers, like FedEx and UPS, to obtain special licenses to handle wine shipments.

• Require drivers to receive training on how to responsibly make wine deliveries.

• Mandate special labeling of the packages.

• Require licensing of wineries shipping their products to Delaware.

• Impose the same state alcohol taxes levied on retail sales.• Restrict deliveries to adults over the age of 21 that must identify themselves and sign for the package.

• Set annual limits on how much wineries would be able to ship to individual households and to Delaware as a whole.Delawareans can already get sensitive materials, such as prescription drugs, delivered to their front doors.

Forty-seven states and most Americans can get wine shipped to their homes. It is time for our state to move into the 21st Century, give wine lovers more freedom of choice, and help our domestic wineries thrive. It is time to finally enact a direct-to-consumer wine shipment law in The First State.

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