Maryland Direct Shipping Bill (Part 2)

One of the arguments put forth by the Maryland wholesalers against direct shipping is that there is a direct shipping law currently on the books, so the proposed law is not needed. What they fail to say is that the law is cumbersome and onerous for all concerned, and it is designed to protect the three-tier system. Under the current law, all three tiers are involved and there is no value added by these extra layers of involvement. It is designed, according to the wholesalers, to ensure that a minor cannot get access to the wine, and to ensure that the sales tax is paid. The first part is controlled by requiring that the wine be shipped by the winery to a state-designated wholesaler, which then delivers the wine to a wholesaler-designated licensed retailer, where the consumer is permitted to pick up the wine. The second part is controlled by requiring the winery to pay the sales tax to the state. The proposed law addresses these concerns and is used successfully in 35 other states.

In the four years since the current law has been in effect, only two consumers have successfully purchased wine from out of state using this process. This has netted the state an estimated $100 in excise tax, sales tax, and the permit fees paid by the two wineries. Other consumers may have tried to use the current process, but they probably gave up when the wineries balked at the cumbersome process.

One of the wholesalers' lobbyist magnanimously proposed that the state-designated wholesalers would waive their per-bottle service charge of $2 to $4 per bottle which is permitted under this law. There is an additional $5 to $10 per bottle service charge permitted by the wholesaler-designated retailer. It is doubtful that the retailer would be so magnanimous as to waive this service charge. But beyond these extra charges for using this process, I think Maryland consumers (er, I mean Maryland voters) don't bother to use it because it is neither "direct" nor convenient.

In my next installment, I'll talk about the patronizing, prohibitionist wholesalers and their arguments for why Maryland can't be like the 35 other states that have successfully adopted direct shipping laws.