When wannabe sommeliers consider domestic wines, they probably focus on producers in New York and California. But Maryland has a fair share of wineries, too. In fact, says Kevin Atticks, executive director of the Timonium-based Maryland Wineries Association, there are as many as 44 wineries in the state, with five or six new wineries having been licensed during the last few months of 2009.
In 2008, 38 Maryland wineries sold 270,280 gallons of wine. Estimating that a bottle of wine costs roughly $11, that translates into revenue of $15 million. That’s about a 20-percent increase over 2007, which itself saw a 20-percent increase over 2006.
“For many years, Maryland had only two wineries, and, in 2001, we had only 12," says Atticks. "Just over the last eight to 10 years, we’ve had a major expansion.”
That may sound like something to toast, but the reality is that the wine business in Maryland isn't going to get much bigger, says Atticks. Why? Because, in effect, it's being hamstrung by laws regulating the way wineries sell their products and confusion in the current liquor laws as to what a winery can and cannot do.
Problems with Distribution
Many of the restrictions inhibiting wineries’ growth have to do with the way wine is distributed in Maryland.
Currently, there is a three-tier system: The manufacturers (or wineries) sell to wholesalers; wholesalers sell to retailers, including liquor stores, wine shops, and restaurants; and the retailers sell to the consumer. For the most part, each segment is supposed to stay within its own category. But the practice of wineries shipping directly to consumers—which is, at present, forbidden—would assist the wine industry in its hopes of growing.
Adam Borden, executive director of Marylanders For Better Beer and Wine Laws, based in Baltimore, points out a number of little things that negatively affect under what circumstances a winery can sell to consumers. For example, a winery can sell at its location and at festivals and it can ship to retailers, but it cannot ship directly to consumers.
“In the case of direct shipping, in Virginia, for example, 51 percent of all Virginia wineries’ sales take place directly at or from the winery,” explains Borden. “That can’t be done in Maryland.
“In addition, Maryland wineries can have a website and sell on that website, but they can’t ship the wine directly to consumers [living in Maryland]. The consumer has to actually go to the winery and pick up their purchase or arrange for the winery to ship the order to a local retailer where the consumer can pick it up.”
Atticks, whose organization takes no position on whether wineries should be able to ship directly to Maryland consumers (as they are allowed to do for consumers in 33 other states), admits that the issues may appear mundane to many, but they can affect a winery’s ability to do business.
“There are questions as to how many samples a winery can provide to customers; about whether a person can purchase a glass of wine without taking a guided tour; even if wineries can sell cheese and crackers to customers who taste their wines, and if they can have tables and chairs in the rooms where the samples are given,” he says.
An Omnibus Proposal
Atticks and the Maryland Wineries Association are working with the alcohol industry and the state comptroller’s office to create and pass legislation—the Maryland Winery Modernization Act—in 2010 that would streamline and fix the confusing and outdated laws governing wineries’ manufacturing and agritourism operations.
“The goal of the bill is to define what it means to be a winery, and will clarify how a winery interacts with customers at the winery,” says Atticks. “Wineries are currently governed under Prohibition-era rules and, given how out of date they are, are at the mercy of regulator interpretations—a difficult circumstance under which to operate a small business.”
However, he continues, “Through the support of the comptroller, House Alcohol Subcommittee Chairwoman Mary Ann Love, and the alcohol wholesale and retail associations, we have consensus legislation that will be introduced.”
And consensus can only be a good thing—for wine lovers and supporters of Free State commerce alike.