Tom Moore enjoys a good bottle of wine.
Not the kind you get at your neighborhood liquor store.
The Wilmington psychotherapist says he doesn’t mind spending “$50, $60, $75, even $85 a bottle” for a “small production, high-rent” pinot noir from a boutique California vineyard.
The problem, Moore says, is that he can’t get those wines in Delaware — at least not legally. That’s because the wines that interest him most are produced in such small quantities that they’re only sold by the wineries that make them or through limited distribution channels that seldom reach Delaware.
And, most importantly to Moore, state law bans the direct shipment of wines to Delaware residents.
State Rep. Deborah Hudson (R-Fairthorne), is trying to change that. She has introduced H.B. 78, which would permit Delaware residents, at least 21 years of age, to receive direct shipments of up to 12 nine-liter cases of wine per year from licensed wine producers.
Hudson sponsored a similar bill during the last legislative session. That bill failed twice in committee. The House Economic Development, Banking, Insurance and Commerce Committee has scheduled a hearing on the new bill for June 1 at 2:30 p.m. in Legislative Hall.
“This legislation provides an opportunity for consumers to purchase certain types of wines that they couldn’t typically get through their local retailer,” Hudson said.
General Assembly considers bill to allow direct shipment of wine to Delaware residents
Excerpts of interview with Chaddsford Winery founder Lee Miller
Debate Over Bill that Allows Direct Shipping of Wines
Peg Raley, co-owner of Nassau Valley Vineyards in Lewes, who helped write and lobbied for the state law that made farm wineries like her own possible 20 years ago, has aligned herself in support of Hudson’s bill.
“There are an awful lot of small boutique wineries like myself out there that do not have the volume to be locked into the distribution system all around the country,” Raley said, explaining that the legislation would enable Nassau Valley to expand both its sales in Delaware and out of state, which accounts for about 10 percent of its current volume.
Thirty-seven states (plus Maryland as of July 1) already have similar laws. Raley’s winery now can ship to residents in most of those states; some have reciprocity provisions which restrict shipments from Delaware until the state passes its own direct shipment law, Raley said.
Critics of the legislation within Delaware’s powerful alcoholic beverage industry, who helped bottle up the bill last year, are back again. Opponents of the legislation include the Small Business Leadership Council, a political action committee representing package-store owners, and Teamsters Union Local 326, whose members include about 200 drivers, mechanics and warehouse workers employed at three of the state’s four major liquor distributors.
The wholesalers were previously opposed to Hudson’s legislation and have given no indication of a change in their position, but Bob Trostel, president and CEO of United Distributors of Delaware, said wholesalers preferred to lay out their views at the committee hearing rather than debating the issue in the media.
Mihir Patel, president of the Small Business Leadership Council and owner of Hi Spirits Liquors in Wilmington, contends that “every bottle that comes in [by direct shipment] hurts the retailer,” as well as the distributors and any of their workers who earn commissions based on the number of cases of wine they deliver to retailers.
Aficionados of limited-production boutique wines can purchase them through local retailers, who can easily place special orders through their distributors, Patel said.
“This bill is here simply because Debbie Hudson and a few of her rich, white-collar friends don’t want to get out of their houses and go to the liquor store,” he said. “All they would have to do is pick up the phone, call the liquor store and place an order.”
“This is strictly a bill of convenience,” said Mike Ciabattoni, vice president of Teamsters Local 326. “There’s some convenience, but there could be a devastating negative impact.”
If the bill becomes law, Ciabattoni and Patel said, the greater the volume of direct wine shipments, the more likely retailers and employees of distributors will lose income, thus reducing the state’s revenue from business taxes and the personal income tax.
Hudson has hit back at the bill’s critics, claiming they’re trying to preserve an outmoded distribution system. “It’s time we stop serving the self-interests of the distributors and their unions and better accommodating Delaware consumers,” she said.
Bob Kreston, third-generation owner of Kreston Wine & Spirits in Wilmington and Middletown, has concerns about the proposed legislation but isn’t anticipating dire consequences if it passes.
Like most retailers, he wants consumers to check first with their retailer if there’s a specific wine they want. “There are very few things that aren’t available to us,” he said.
But, Kreston added, “there are some limited-production wines … ‘collectible wines,’ that you can only get by mail order, that would never come to retail” that would be appropriate for inclusion under a direct shipment law. Limiting direct shipment only to wines that are not currently available through Delaware distribution channels is an option that might be considered, he said.
Finding boutique wines locally isn’t as easy as the retailers suggest, Moore said. “I shop at places like Total Wine and they say, ‘no, I can’t get that.’”
Local Vineyards Have Mixed Opinions About Wine Bill
Other than Nassau Valley, the area’s vineyards have mixed opinions about H.B. 78.
Kathy Pizzadili, one of the owners of Pizzadili Vineyard and Winery in Felton, admits that “if we could ship out, it would make people happy.” But, she added, the family-run operation has all it can do, hosting tastings and special events and keeping its own retail shelves stocked. “We have no thoughts of getting any bigger.”
In nearby Avondale, Pa., Anthony Vieti of the family-owned Va La Vineyards says that “conceptually, freedom for adults to ship seems of course a good thing in any civilized culture, if that is what the people want.” However, since Va La is small and so close to the Delaware state line, Vieti said he was “not sure that it (a direct shipment law) would have an effect on our operation.”
Lee Miller, proprietor of the Chaddsford Winery in Chadds Ford, Pa., thinks H.B. 78 is a good idea, even if it won’t have a big impact on her business. “This will benefit small winemakers in California. We don’t get calls for that local kind of shipping,” she said.
Delaware residents regularly visit the winery to make purchases and Chaddsford Wines are readily available at many Delaware retailers, sometimes at a lower price than at the winery, Miller said.
Miller also sees direct shipment as a logical extension of contemporary retail trends. “You can buy just about anything else on the Internet,” she said. “If you can’t buy wine online, that’s kind of stupid.”
Ultimately, Raley said, direct shipment could be a win-win for consumers and retailers.
As with craft beers, when boutique varieties become popular, wineries produce more, possibly in sufficient volume to justify their entry into standard distribution channels, she said.
Regulatory and Enforcement Provisions in Wine Bill
Regulatory and enforcement issues are also part of the H.B. 78 debate. Opponents question whether the state’s Division of Alcohol and Tobacco Enforcement (DATE) has the resources to monitor that residents aren’t receiving shipments in excess of their 12-case annual limit and that the wine isn’t being delivered to underage consumers. Ciabattoni, who said his union also represents United Parcel Service drivers, said those drivers don’t want the added hassle of having to check proof of age every time they make a delivery.
Hudson believes the controls spelled out in the bill are sufficient. She said that licensing fees ($100 for two years) and fines of not less than $250 for violations “are appropriate and consistent with similar laws in other states.” Direct shipment is not an attractive option for underage drinkers. “For this consumer, there are less expensive, faster and easier methods for illegally obtaining what they seek,” she said.
Meanwhile, Moore, the connoisseur of boutique wines, will continue to satisfy his yearning for Williams Selyem and Gary Farrell pinot noirs the same way as he’s been doing for years — having cases shipped to friends and relatives.
“I have a sister who lives in Florida. My best friend lives in South Carolina. And I’ve got a friend who lives in Maryland, where a new direct shipment law takes effect in July,” he said. “I shouldn’t have to drive to South Carolina every summer to get my allotment … but there are worse things than spending a couple of days in Charleston.”